Well-known brands, one year to close 184 stores!
Author: Lin Dianchi
"in 2023, we experienced the coldest winter in history, when the periodic adjustment of the industry superimposed the false negative information of the brand, and the company's performance was under pressure." Zhang Guotao and Lu Yiwen, founder of DR Diamond Ring and founder of Dia shares, wrote in the "letter to shareholders" in the annual report.
Image source: DR diamond ring Mini Program screenshot
Net profit fell by 70% in the first quarter
Recently, Dia shares (301177)Top10playtoearnnftgames.SZ) released transcripts for the first quarter of 2023 and 2024, with a further decline. Revenue in 2023 was 2.18 billion yuan, down 40.78% from the same period last year, while net profit was 68.96 million yuan, down 90.54% from the same period last year. The proportion of net profit and loss of Dia shares returned to its mother narrowed slightly in the first quarter, down 70.81% from a year earlier to 29.4598 million yuan.
Photo source: Dia joint stock announcement
In the secondary market, Dia shares fell 1.54% to 24.28 yuan as of April 30, down 65.77% from their relative high in January last year.
Dia attributed the sharp decline in net profit to the impact of the external macro environment and the gold product market on the diamond mosaic market; the impairment of assets for stores that showed signs of impairment; and the loss of lease deposits that some stores could not recover as a result of early closure.
Despite the performance loss, Dia shares chose 5 yuan for every 10 shares and paid a total cash dividend of 2 yuan.
"as the proportion of tradable shares is only 10%, there is no way to repurchase shares to shareholders, but because the proportion of major shareholders is too high, the market voice of a dividend will think that it is a dividend to major shareholders, because the company has an undistributed profit of 1.4 billion yuan. Finally choose a dividend of 200 million yuan." Recently, the performance presentation of Dia shares was held online, which was explained by Zhang Guotao, chairman of the company.
Large area contraction! Close 184 stores in one year
In the jewelry industry, Dia shares and its DR brand are latecomers, after actively opening stores to increase market share, the company later realized that this strategy aggravated internal friction among stores, but was not conducive to the development of the company.
Therefore, in 2023, the closure of the shop became the main theme of Dia shares.
Last year, Dia closed 184 stores and opened 24 new stores, with a net reduction of 160 stores. By the end of 2023, the number of Dia joint-stock stores was 528, all of which were self-owned stores.
Among them, the domestic stores are mainly distributed in third-tier and above cities, of which 330 stores are distributed in first-and second-tier cities, accounting for about 62.74 percent, and 196 stores are distributed in third-tier and below cities, accounting for about 37.26 percent.
"evaluate the location and number of stores based on various dimensions such as urban population, marriage population and urban GDP." Zhang Guotao said when talking about the choice of stores.
By the end of 2023, the scale of Dia's store opening was greatly reduced, the number of new stores opened was 230 fewer than that of the same period last year, and the operating income of individual stores was 3.0298 million yuan, down 47.24 percent from the same period last year. The gross profit per store was 2.0997 million yuan, down 48.43 percent from the same period last year, and the flat efficiency per store was 34000 yuan, down 46.29 percent from the same period last year.
After optimizing the layout and reducing the number of stores, the revenue, gross margin and flat efficiency of Dia's single store have decreased compared with the first half of 2023.
Zhang Guotao said that when Shanghai is optimized from 31 stores to 13 stores, the city's revenue will be depleted by 20% to 30%, but the expense rate will be greatly reduced, equivalent to a 70% reduction in overall costs.
Close another 37 stores in the first quarter.
In the first quarter of this year, Diaz stores shrank further, closing a further 37 stores to 491 as of the end of March.
Zhang Guotao, chairman of Dia Co., Ltd., said that nearly 70 stores are expected to be closed across the country this year, and the new stores will revolve around the head shopping malls. at present, more than 20 head shopping malls have signed contracts, and more than 20 target shopping malls are in talks with each other.
In 2024, Dia shares will focus on same-store growth, there will be no plans to open a large number of new stores, the United States and Singapore will have layout plans.
Similarly, Huang Shuirong, secretary of the board of directors of Dia shares, added that store impairment on such a large scale as in 2023 and 2022 is not expected in 2024.
"send only one person in a lifetime", the product repurchase rate is very low.
As Dia always focuses on "sending only one person in a lifetime", the product repurchase rate is very low. Data released at the performance meeting show that the repurchase rate is 2% in 2021, 2.8% in 2022 and 6.6% in 2023. "on the whole, Dia really doesn't have any products worth repurchasing." Zhang Guotao said frankly.
Dia shares in 2023, all categories of revenue declined, marriage proposal to ring products category decreased by 41.46% year-on-year, revenue reached 1.699 billion yuan, accounting for 77.93% of revenue, revenue also declined the largest.
Photo source: Dia joint stock announcement
Despite major obstacles to product sales, the gross profit margin of Dia remained at a high level of 68.83%, almost the same as last year, and the customer unit price remained basically stable, down 3.28% from the same period last year.
Lu Yiwen, general manager of Dia shares, said that DR is not willing to cut prices, and it is easier to discount than to come back. "We think the short-term discount is very effective, but the long-term discount is a stimulant and hurts the brand."
Dia shares did not lie flat, after some groping, the company management admitted that there is still room for product optimization.
Zhang Guotao said that the company will not pursue rapid profit growth, Dia hopes to become a more solid and robust company.
The management of the company will respond to the adjustment of the business strategy one by one.
Where is the road?Top10playtoearnnftgames? Promote gold products cautiously
Starting from 2022, the domestic consumption environment is in the doldrums, the price of carat diamonds continues to decline, and the social willingness to marry continues to decline. Coupled with the rising price of safe-haven gold and strong demand for gold jewelry, Dia shares began to launch gold jewelry in 2023, but it still accounts for a small proportion of the company's overall sales and is still in the process of polishing.
Dia AG announces plans to carry out gold leasing transaction in 2024
Lu Yiwen believes that the company does not want to go to the Red Sea market to do homogenized products, hoping to create a differentiated value of gold jewelry.
因此，今年的DR将扩充产品品类。张国涛表示，迪阿将提升钻戒的专业度，提升门店的设计美学。首先，迪阿将加大对戒产品的投入，该品类仍然有增长的可能性，围绕已婚和准备结婚的人群，适配日常佩戴场景；其次，增加婚嫁场景和配饰礼物的产品研发。
张国涛表示，今年不采取激进的经营策略，DR品牌还没有特别完善，不追求营收高速增长，公司运营底子打扎实，提升经营利润，提升品牌质感。