An Examination Of La Chapelle’s Financial Situation From The Standpoint Of Multi-brand Strategy

In 2014,China overtook the United States to become the world’s largest garment consumer.China is also the world’s largest apparel producer.The apparel sector has drastically slowed down after a period of strong growth,and rivalry between apparel businesses has become more intense.Several garment companies opt to employ a multibrand strategy in order to increase market share in the face of strong market competition.The pursuit of volume growth will put significant pressure on the firm’s following operations,which might easily result in the "death" of the company from indigestion if the market situation changes and the expansion plan is ineffective.Following the offering of Hong Kong shares in 2014,La Chapelle officially entered the delisting phase in April 2022.In 2017,La Chapelle landed in Shanghai,becoming "the first domestic ’A and H’ two listed clothing company." On the eve of La Chapelle’s A-share listing in September 2017,the then-secretary of the board of directors assured A-share investors that the company would increase its influence channels and strengthen its brand diversification capabilities.After five years.It appears that this tactic served as the catalyst for La Chapelle’s business to turn around.The company’s assets have gradually increased with the development of its multi-brand strategy,but issues such as inventory backlog,lack of brand competitiveness,deteriorating profitability,ongoing operating losses,and limited cash flow have surfaced.Given this context,the primary research issue in this paper is to examine La Chapelle’s corporate financial conundrum from the standpoint of a multi-brand strategy.While the majority of academic research on La Chapelle has concentrated on its direct offline sales strategy,this paper examines the reasons for La Chapelle’s financial distress,measures the financial risk imbalance from the perspective of multibrand strategy,and offers recommendations for its future growth.The conclusions of this paper are:(1)La Chapelle has increased the number of brands in the implementation of its multi-brand strategy without considering the lack of market competitiveness of its products,according to the paper’s conclusions.(2)Notwithstanding the significant financial risks brought on by the multi-brand strategy’s overexpansion,Lachapelle did not increase the level of internal control.(3)In 2017,the multi-brand approach dealt La Chapelle a serious financial hit;however,at the time,La Chapelle failed to promptly modify the strategy’s implementation.