Sunma Plans To Sell French Subsidiary To Divest Loss Making Business

On the evening of July 20, Zhejiang SEMAR Clothing Co., Ltd. (hereinafter referred to as "SEMAR clothing") announced that it would sell sofiza SAS, a French children's clothing brand company, which had just been acquired for two years. SEMAR said the sale of sofiza SAS was mainly aimed at reducing the company's operational risk and avoiding greater losses to the company's performance.

However, the price of the transaction has not yet been determined. The board of directors of SEMAR apparel said that the board of directors authorized the management to engage an audit and evaluation institution to audit and evaluate the assets and business of the underlying assets, and to determine the transaction price according to the audit and evaluation results.

According to public information, sofiza SAS was established in 2005, mainly engaged in holding, merger and investment management, and owns all the shares of the kidiliz group. Kidiliz owns a number of children's wear brands such as CATIMINI and absorba.

In the past two years, the group has acquired more than 100 million euro brands in China to promote the development of the group.

Due to the continuous economic downturn in Europe and the fact that kidiliz's brands have not yet adapted to the domestic market, the business revenue capacity has continued to decline, and the number of stores has decreased year by year. In addition, after the outbreak of the new crown epidemic in the world, the European markets mainly operated by the kidiliz group, such as France and Italy, suffered heavy losses, and the performance has been in a cliff like decline.

According to the announcement, in 2018 and 2019, the kidiliz group lost 48.84 million yuan and 307 million yuan respectively. In the first quarter of 2020, its loss has reached 121 million yuan, about half of the loss in the whole year of 2019.

Children's wear business and leisure clothing business have become the two major business segments of SEMA clothing. When SEMA acquired sofiza SAS, it aimed at the kidiliz group held by sofiza, so as to promote the high-end and globalization of the company's children's clothing business, and at the same time feed back the development of domestic children's clothing business.

Two years after the completion of the acquisition, the business of kidiliz group has not yet taken shape. In addition, due to the impact of the epidemic situation, the business of kidiliz group has been exerting a heavy burden on the company's performance.

According to the revised semi annual performance forecast disclosed on July 14, the company is expected to make a profit of RMB 0-72.2106 million in the first half of the year, down 90% compared with the profit of 722 million yuan in the same period of last year. As for the reasons for the performance correction, SEMA clothing explained that: affected by the epidemic, the company's overseas business losses increased.

However, Samma clothing can only give up the kidiliz group for the company's overall situation. After leaving this loss making business, the stock price of SEMA clothing closed on July 21, with a limit of 7.49 yuan per share, which changed the declining trend of the stock price for many days.