Behind The Closure Of Wanda Department Store In Longwan, Wenzhou

Recently, a publicity message from Wanda Department Store in Longwan, Wenzhou has attracted market participants' attention. Wanda Department Store in Longwan, Wenzhou, said in the publicity information that all contracted merchants of Wenzhou Wanda Department Store in Longwan will terminate operation before March 15th of this year. It is notified that customers who have stored the value cards of Wenzhou Wanda Department store have been consumed as soon as possible or negotiate with merchants for refund cards.

In response, some market participants believe that this should be one of the signs of Wanda Group's contraction of department stores. It is expected that more Wanda stores will close.

The reporter called Wanda Commercial real estate company stakeholders to ask him to comment on the current situation and development strategy of Wanda Department store, but as of press release, the other side failed to comment.

However, the news from local media in Wenzhou shows that the publicity of Wanda Department Store in Wenzhou Longwan is not enough to predict Wanda Group's shrinking Wanda Department store business.

In response to the publicity information, Wanda staff in Longwan, Wenzhou explained that in fact, the announcement had been announced before the Spring Festival. The announcement of Wanda Department Store reminded customers to make early consumption or to negotiate refund, because Wanda Department stores had stored value service, and the contracts between the vast majority of shops and Wanda Department stores in Wenzhou Longwan will expire before March 15th of this year. At present, these shops have withdrawn eighty or ninety of the total, and Wenzhou Longwan Wanda Department stores will also have a more comprehensive investment plan after March 15th this year.

Wanda Department Store in Longwan, Wenzhou has also announced a preliminary adjustment plan to the media. Wanda Department stores will set up fashion brand Museum, children's amusement park, fine life hall, tide playing experience area and training new field in accordance with the planning of the 5 floors after adjusting the commercial complex. Wanda Department Store in Longwan, Wenzhou believes that after the adjustment, investment will be more abundant than the original Wanda Department store.

The publicity information of Wanda Department Store in Longwan, Wenzhou, triggered the speculation behind the market. Actually, it was due to the frequent personnel changes experienced by Wanda Department last year and Wanda's low profit or even loss in recent years. Management condition 。

Public reports show that at least since the end of 2013, Wanda Department stores in the country's general manager of several stores and general manager of the department store have been transferred. Wanda Group Chairman Wang Jianlin also admitted that the loss of Wanda Department stores, on the one hand, was affected by the eight Central regulations and the impact of the electricity supplier. The overall development environment of the department stores was not good enough, and the most important problem was the internal management of Wanda Department store.

Wang Jianlin has said that Wanda's department needs to make profits in two years, that is, a timetable for Wanda Department store to be profitable by the end of 2015. At the annual meeting of Wanda Group at 2013 annual meeting, Wang Jianlin asked for Wanda Department Store's income of 25 billion 200 million yuan in 2014 and 24 new stores in 2014.

According to the latest 2014 performance released by Wanda Group, Wanda Department stores opened 24 new stores last year, and opened 99 stores, earning 25 billion 600 million yuan, completing 101.6% of the annual plan, an increase of 65.3% over the same period last year, and completed the profit target.

Wang Jianlin said at the annual meeting of 2014, Wanda Department can achieve the goal of group release under the superposition of multiple factors such as economic slowdown, electricity supplier impact and cost rise.

However, Wanda Group did not disclose Wanda Department store. profit However, it can be known that Wanda Department Store is still in a state of deficit in 2013.

In 2013, when Wanda Department adjusted its revenue plan in half a year, Wanda's revenue in 2013 was 15 billion 490 million yuan, only 91% of the adjusted revenue plan and 7% of net profit loss. At the annual meeting, Wang Jianlin described Wanda's performance in the year, saying, "this is the first time that Wanda has not completed its profit plan in history, and it is also the only company that has failed to fulfill its target."

　　 Wanda Department Store Wanda Group is one of the important business segments. According to Wang Jianlin's goal of making profits for two years in Wanda Department store, it actually requires Wanda Department store to make profits this year.

According to the financial figures disclosed by Wanda Commercial Real Estate in the first half of 2014, the rental income of Wanda Department contributed 14.5% of Wanda Commercial real estate rental income to the largest tenant of Wanda Commercial real estate company.

According to the forecast of Wanda Commercial real estate, Wanda Commercial real estate company will charge more than 1 billion 400 million yuan of rent and property management fee collected from Wanda Department store last year, and the management and rent revenue expected to be contributed by Wanda Department store this year and next year will reach 1 billion 800 million yuan and 2 billion 100 million yuan.

At least from Wanda Group's planning and layout of Wanda Department last year, Wanda Group still has no plans to shrink department stores. Wanda Commercial Real Estate disclosed in the prospectus last year, Wanda Department stores this year and next year, the newly opened department stores will reach 25 and 22 respectively, and the scale of Wanda Department store will further expand.

"Wanda Department has contributed a very high proportion of rental income to Wanda Commercial real estate company, and this situation should be difficult to have structural adjustment and change in a short time." An analyst who asked not to be named pointed out that "Wanda Department store and Wanda Commercial real estate have close related transactions. Wanda Commercial real estate company will strive to protect the stable cash flow brought by rental income. Therefore, for Wanda Department store, how to ensure adequate revenue and profits should be the next major business challenge for Wanda Department store.