0001104659-13-042208.txt : 20130516 0001104659-13-042208.hdr.sgml : 20130516 20130516100344 ACCESSION NUMBER: 0001104659-13-042208 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20130516 FILED AS OF DATE: 20130516 DATE AS OF CHANGE: 20130516 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Mecox Lane Ltd CENTRAL INDEX KEY: 0001501775 STANDARD INDUSTRIAL CLASSIFICATION: APPAREL & OTHER FINISHED PRODS OF FABRICS & SIMILAR MATERIAL [2300] IRS NUMBER: 000000000 STATE OF INCORPORATION: E9 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-34904 FILM NUMBER: 13849784 BUSINESS ADDRESS: STREET 1: 22ND FLOOR, GEMS TOWER STREET 2: BUILDING 20, NO. 487, TIANLIN ROAD CITY: SHANGHAI STATE: F4 ZIP: 200233 BUSINESS PHONE: (86-21) 6495 0500 MAIL ADDRESS: STREET 1: 22ND FLOOR, GEMS TOWER STREET 2: BUILDING 20, NO. 487, TIANLIN ROAD CITY: SHANGHAI STATE: F4 ZIP: 200233 6-K 1 a13-12648_16k.htm 6-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

 

FORM 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE

SECURITIES EXCHANGE ACT OF 1934

 

For the month of May 2013

 


 

Commission File Number: 001-34904

 


 

MECOX LANE LIMITED

 

22nd Floor, Gems Tower, Building 20

No. 487, Tianlin Road

Shanghai 200233

People’s Republic of China

(86-21) 6495 0500

(Address of principal executive offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

 

Form 20-F   x

 

Form 40-F   o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

 

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

 

Yes   o

 

No   x

 

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):

 

82- N/A

 

 

 



 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

MECOX LANE LIMITED

 

 

 

 

 

By:

/s/ Paul Bang Zhang

 

Name:

Paul Bang Zhang

 

Title:

Chief Financial Officer

 

 

Date: May 16, 2013

 

 

2



 

EXHIBIT INDEX

 

 

Page

 

 

Exhibit 99.1 —Press Release

4

 

3


EX-99.1 2 a13-12648_1ex99d1.htm EX-99.1

Exhibit 99.1

 

Mecox Lane Limited Announces First Quarter 2013 Results

Gross Profit Margin Up 0.4% Year over Year

 

SHANGHAI, May 15, 2013 — Mecox Lane Limited (“Mecox Lane” or the “Company”) (NASDAQ: MCOX), a leading brand and multi-channel retailer of apparel and accessories in China, today announced its unaudited financial results for the first quarter ended March 31, 2013.

 

First Quarter 2013 Highlights

 

·                  Net revenues decreased 43.5% year over year to $21.0 million, compared to $37.1 million in the first quarter of 2012

·                  Gross profit1 decreased 42.8% year over year to $8.1 million, compared to $14.2 million in the first quarter of 2012

·                  Gross margin was 38.6% in the first quarter of 2013, compared to 38.2% in the first quarter of 2012

·                  Net loss was $4.2 million, compared to net loss of $4.2 million in the first quarter of 2012; net loss includes a non-recurring gain of $6.0 million in the first quarter of 2013

 

Mecox Lane’s Director and Chief Executive Officer Mr. Alfred Gu said, “With the launch of our new joint venture, Giosis Mecoxlane, in January of this year, the ownership and operation of our M18.com website transferred to the JV, which is under the control and management of Giosis Pte. Ltd. (“Giosis”). As expected, the change negatively impacted the website’s user base and our e-commerce channel sales. Although we expect this transition period to continue for some time, we are optimistic based on the successful track record of the Giosis management team, which has already begun to transform M18.com into a brand-neutral online marketplace to attract a number of independent sellers and brands. Moreover, we believe the M18.com website will continue to serve as an effective sale channel for Mecox Lane products.”

 

Mr. Gu continued, “This transition allows us to refocus on our core strength of providing value-for-money, fast-fashion products to consumers across China. We now offer our products across a number of platforms, including our physical stores and popular third-party e-commerce websites, such as TMall.com, to increase our customer base and e-commerce channel revenues. Given that we operate in a rapidly evolving and competitive market, we will continue to improve our operating efficiency, control our costs and increase our investment in product R&D to better position ourselves as a leading multi-channel retail company in China.”

 


1 Gross profit excludes the impact of depreciation and amortization expenses.

 



 

First Quarter 2013 Results

 

Due to the seasonal nature of its business, the Company presents its financial results on a year-over-year basis between the first quarter of 2013 and the first quarter of 2012, as in the following paragraphs.

 

Total Net Revenues

 

Total net revenues were $21.0 million in the first quarter of 2013, representing a decrease of 43.5% from $37.1 million in the first quarter of 2012. The decrease was primarily due to the decrease in net revenues from the Company’s e-commerce channel, as well as the decrease in net revenues from the Company’s call center and physical stores.

 

E-commerce Channel2

 

Net revenues from the Company’s e-commerce channel were $5.7 million in the first quarter of 2013, representing a decrease of 66.8% from $17.1 million in the first quarter of 2012. The decrease was primarily attributed to a decrease in the Company’s sales on M18.com during the period when the website was transferred to Giosis management and relaunched as a brand-neutral open platform.

 

Call Center

 

Net revenues from the call center were $9.7 million in the first quarter of 2013, representing a decrease of 12.7% from $11.1 million in the first quarter of 2012. The decrease was primarily attributed to a decline in orders placed through the call center as a result of a reduction in the Company’s catalog circulation.

 

Directly Operated Stores & Franchised Stores

 

Net revenues from directly operated stores were $3.1 million in the first quarter of 2013, representing a decrease of 37.3% from $5.0 million in the first quarter of 2012. The decrease was primarily due to the decline in the number of directly operated stores from an average of 115 stores

 


2  Since January 2013, one of the Company’s reportable segments, i.e. Internet platform segment has been renamed as E-commerce channel to reflect the fact that the M18.com website has been operated by Giosis Mecoxlane and  subsequently re-launched as a brand-neutral and open marketplace platform to attract a number of independent sellers and brands while the Company’s branded merchandise has also been offered on other third-party e-commerce websites in China.

 



 

in the first quarter of 2012 to an average of 65 stores in the first quarter of 2013, partially offset by the increase in average store sales.

 

Net revenues from franchised stores were $2.4 million in the first quarter of 2013, representing a decrease of 37.2% from $3.9 million in the first quarter of 2012. The decrease in net revenues was primarily due to the decline in average store sales and the decline in the number of franchised stores from an average of 275 stores in the first quarter of 2012 to an average of 263 stores in the first quarter of 2013.

 

Cost of Goods Sold3

 

Cost of goods sold was $12.9 million in the first quarter of 2013, representing a decrease of 43.9% from $23.0 million in the first quarter of 2012. The decrease is consistent with the overall decrease in revenues.

 

Gross Profit and Gross Margin

 

Gross profit was $8.1 million in the first quarter of 2013, representing a decrease of 42.8% from $14.2 million in the first quarter of 2012. Gross margin was 38.6% in the first quarter of 2013, compared to 38.2% in the first quarter of 2012.

 

Operating Expenses

 

Total operating expenses were $11.7 million in the first quarter of 2013, representing a decrease of 37.5% from $18.7 million in the first quarter of 2012. The decrease was primarily due to the Company recording a gain of $6.0 million in connection with the partial disposal of the contributed intangible assets to its joint venture, Giosis Mecoxlane, and the decrease in selling, general and administrative expenses in the first quarter of 2013.

 

Selling, general and administrative expenses were $16.3 million in the first quarter of 2013, representing a decrease of 11.5% from $18.4 million in the first quarter of 2012, primarily due to a decrease in headcount and labor costs related to IT, customer service and logistics, partially offset by severance packages paid to departing employees.

 


3 Cost of goods sold excludes depreciation and amortization expenses.

 



 

Loss from Operations

 

Loss from operations was $3.6 million in the first quarter of 2013, compared to loss from operations of $4.6 million in the first quarter of 2012. Loss from operations includes a non-recurring gain of $6.0 million in the first quarter of 2013.

 

Net Loss and Loss per ADS

 

Net loss was $4.2 million in the first quarter of 2013, compared to net loss of $4.2 million in the first quarter of 2012. Net loss includes a non-recurring gain of $6.0 million in the first quarter of 2013. Non-GAAP net loss4 was $3.2 million in the first quarter of 2013, compared to non-GAAP net loss of $3.5 million in the first quarter of 2012. Basic and diluted loss per American depositary share (“ADS”) attributable to Mecox Lane shareholders was $0.36 in the first quarter of 2013. One ADS represents thirty-five ordinary shares.

 

Cash and Short-term Investments

 

As of March 31, 2013, Mecox Lane had cash and cash equivalents totaling $11.2 million, compared to $13.3 million as of December 31, 2012. Restricted cash as of March 31, 2013 totaled $0.9 million, compared to nil as of December 31, 2012. Short-term investments on March 31, 2013 were $23.9 million, compared to $20.7 million as of December 31, 2012, all of which were structured term bank deposits.

 

Secured Short-term Borrowing

 

As of March 31, 2013, Mecox Lane had secured short-term borrowing totaling $13.6 million, compared to nil as of December 31, 2012, all of which was secured by restricted cash of $0.9 million and short-term investments of $16.0 million.

 

Conference Call Information

 

Mecox Lane management will hold an earnings conference call at 9 p.m. U.S. Eastern Time on May 15, 2013 (9 a.m. Shanghai/Hong Kong Time on May 16, 2013) to discuss results and highlights from the quarter, as well as to answer questions. A brief presentation to accompany the earnings call will be available on the Company’s website, http://ir.mecoxlane.com/events.cfm, at

 


4 Non-GAAP net loss and non-GAAP net income exclude share-based compensation expenses.  The non-GAAP measures and related reconciliations to GAAP measures are described in the accompanying sections of “About Non-GAAP Financial Measures” and the accompanying table of “Mecox Lane Limited — Consolidated Statement of Operations Information — Reconciliations of Non-GAAP Financial Measures to Comparable GAAP Measures” at the end of this press release.

 



 

7:30 p.m. U.S. Eastern Time on May 15, 2013 (7:30 a.m. Shanghai/Hong Kong Time on May 16, 2013).

 

The dial-in numbers and passcode for the conference call are as follows:

 

U.S. Toll Free:

 

+1-855-500-8701

International:

 

+65-6723-9385

Hong Kong:

 

+852-3051-2745

Passcode:

 

68709466

 

Additionally, an archived webcast of this call will be available on the Investor Relations section of Mecox Lane’s website at http://ir.mecoxlane.com.

 

About Mecox Lane Limited

 

Mecox Lane Limited (NASDAQ: MCOX) is a leading brand and multi-channel retailer of apparel and accessories in China.  The Company offers a wide selection of affordable fashion products through e-commerce channels including the M18.com website, which is operated by the Company’s joint venture, Giosis Mecoxlane Limited, and other independent e-commerce platforms, as well as through the Company’s physical store network and call center. Product offerings include apparel and accessories, beauty and healthcare products and other items under Mecox Lane’s own proprietary brands, and select domestic and international third-party brands.  For more information on Mecox Lane, please visit http://ir.mecoxlane.com.

 

Safe Harbor: Forward Looking Statements

 

This press release contains forward-looking statements made under the “safe harbor” provisions of Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements can be identified by terminology such as “may,” “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “aims,” “estimates,” “confident,” “likely to” and similar statements. Among other things, the quotations from management in this press release, as well as the Company’s strategic and operational plans, contain forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: the Company’s business strategies and initiatives as well as its business plans; the Company’s future business development, results of operations and financial condition; changes in the Company’s revenues and certain cost or expense items; the Company’s expectations with respect to increased revenue growth and its ability to sustain

 



 

profitability; the Company’s products under development or planning; the Company’s ability to attract customers and further enhance its brand recognition; trends and competition in the e-commerce and apparel and accessories industry; the e-commerce and apparel and accessories industry in China may not grow at the rates projected by market data, or at all; the failure of the markets to grow at the projected rates may have a material adverse effect on the Company’s business and the market price of its ADSs; in addition, the rapidly changing nature of the e-commerce and apparel and accessories industry in China subjects any projections or estimates relating to the growth prospects or future condition of the Company’s market to significant uncertainties. If any one or more of the assumptions underlying the market data turns out to be incorrect, actual results may differ from the projections based on these assumptions. You should not place undue reliance on these forward-looking statements.  Further information regarding these and other risks is included in the Company’s annual report on Form 20-F as well as in its other filings with the Securities and Exchange Commission. All information provided in this press release is current as of the date of the press release, and the Company undertakes no duty to update such information, except as required under applicable law.

 

About Non-GAAP Financial Measures

 

To supplement Mecox Lane’s consolidated financial results presented in accordance with United States Generally Accepted Accounting Principles (“GAAP”), Mecox Lane uses in this press release non-GAAP net income (loss), which excludes share-based compensation expenses. The presentation of the non-GAAP financial measure is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP.

 

Mecox Lane believes that the non-GAAP financial measure facilitates investors’ and management’s comparisons to Mecox Lane’s historical performance and assists management’s financial and operational decision making. A limitation of using the non-GAAP financial measure is that share-based compensation expenses are recurring expenses that will continue to exist in Mecox Lane’s business for the foreseeable future. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from the non-GAAP measure. The accompanying table has more details on the reconciliation between the non-GAAP financial measure and its most directly comparable GAAP financial measure.

 



 

For investor and media inquiries please contact:

 

In China:

 

Ryan Shi

Mecox Lane Limited

Tel: +86-21-6495-0500 or +86-21-5464-9900 Ext. 8161

Email: ir@mecoxlane.com

 

Nicholas Manganaro

Ogilvy Financial, Beijing

Tel: +86-10-8520-3073

Email: mcox@ogilvy.com

 

In the U.S.:

 

Jessica Barist Cohen

Ogilvy Financial, New York

Tel: +1-646-460-9989

Email: mcox@ogilvy.com

 



 

Mecox Lane Limited

Unaudited Consolidated Balance Sheet

 

 

 

December 31,

 

March 31,

 

 

 

2012

 

2013

 

 

 

$

 

$

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

13,291,063

 

11,232,950

 

Restricted cash

 

 

877,349

 

Short-term investments

 

20,682,480

 

23,927,700

 

Accounts receivable, net of allowances of $55,660 and $55,660 as of December 31, 2012 and March 31, 2013, respectively

 

1,452,864

 

2,164,886

 

Amount due from a related party

 

 

1,079,523

 

Other receivables

 

5,149,844

 

4,048,188

 

Advances to suppliers and prepaid expenses

 

6,297,463

 

1,212,072

 

Merchandise inventories

 

27,349,540

 

25,862,776

 

 

 

 

 

 

Total current assets

 

74,223,254

 

70,405,444

 

Property and equipment, net

 

46,528,057

 

45,458,177

 

Prepaid land use right

 

6,125,104

 

6,109,639

 

Intangible assets, net

 

1,263,644

 

1,221,418

 

Investment in an affiliate

 

 

10,101,816

 

Other non-current assets

 

249,903

 

647,409

 

 

 

 

 

 

 

TOTAL ASSETS

 

128,389,962

 

133,943,903

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Secured short term borrowing

 

 

13,559,030

 

Accounts payable (including accounts payable of the consolidated VIEs without recourse to Mecox Lane Limited of $3,101,935 and $3,655,956 as of December 31, 2012 and March 31, 2013, respectively)

 

19,063,827

 

17,695,779

 

Advances from customers (including advances from customers of the consolidated VIEs without recourse to Mecox Lane Limited of $1,345,714 and $1,297,038 as of December 31, 2012 and March 31, 2013, respectively)

 

4,570,595

 

4,255,418

 

Amount due to a related party

 

547,478

 

266,231

 

Accrued expenses (including accrued expenses of the consolidated VIEs without recourse to Mecox Lane Limited of $281,152 and $184,582 as of December 31, 2012 and March 31, 2013, respectively)

 

5,153,056

 

3,075,495

 

Other current liabilities (including other current liabilities of the consolidated VIEs without recourse to Mecox Lane Limited of $1,955,777 and $1,669,577 as of December 31, 2012 and March 31, 2013, respectively)

 

7,358,589

 

6,540,944

 

Income tax payable (including income tax payable of the consolidated VIEs without recourse to Mecox Lane Limited of $34,718 and $32,624 as of December 31, 2012 and March 31, 2013, respectively)

 

1,779,978

 

1,778,516

 

 

 

 

 

 

 

Total current liabilities

 

38,473,523

 

47,171,413

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

Ordinary shares ($0.0001 par value; 10,000,000,000 shares authorized, 408,727,673 and 414,014,994 shares issued, and 403,790,426 and 406,783,420 shares outstanding as of December 31, 2012 and March 31, 2013)

 

40,873

 

41,401

 

Additional paid-in capital

 

165,934,265

 

166,985,493

 

Treasury Stock

 

(572,168

)

(732,751

)

Accumulated deficit

 

(82,811,023

)

(87,035,652

)

Accumulated other comprehensive income

 

6,292,753

 

6,482,260

 

Statutory reserve

 

931,739

 

931,739

 

 

 

 

 

 

 

Total Mecox Lane Limited equity

 

89,816,439

 

86,672,490

 

Noncontrolling interests

 

100,000

 

100,000

 

 

 

 

 

 

 

Total equity

 

89,916,439

 

86,772,490

 

 

 

 

 

 

 

TOTAL LIABILITIES AND EQUITY

 

128,389,962

 

133,943,903

 

 



 

Mecox Lane Limited

Unaudited Consolidated Statements of Comprehensive Income (Loss)

 

 

 

Three-month Ended March 31

 

 

 

2012

 

2013

 

 

 

$

 

$

 

 

 

 

 

 

 

Net revenues:

 

 

 

 

 

E-commerce channel

 

17,103,843

 

5,685,751

 

Call center

 

11,107,323

 

9,701,669

 

Directly operated stores

 

5,000,440

 

3,133,640

 

Franchised stores

 

3,899,161

 

2,448,981

 

Total net revenues

 

37,110,767

 

20,970,041

 

Cost of goods sold (excluding depreciation and amortization)

 

 

 

 

 

E-commerce channel

 

13,270,563

 

5,065,652

 

Call center

 

4,306,495

 

4,194,517

 

Directly operated stores

 

2,857,157

 

1,760,141

 

Franchised stores

 

2,518,144

 

1,853,566

 

Total cost of goods sold (excluding depreciation and amortization)

 

22,952,359

 

12,873,876

 

Operating expenses:

 

 

 

 

 

Selling, general and administrative expenses

 

18,380,342

 

16,274,502

 

Depreciation and amortization

 

1,060,294

 

1,443,939

 

Other operating income, net

 

(703,768

)

(6,000,723

)

Total operating expenses

 

18,736,868

 

11,717,718

 

Income (Loss) from operations

 

(4,578,460

)

(3,621,553

)

Interest expense

 

 

(59,679

)

Interest income

 

612,389

 

282,054

 

Other income, net

 

45,514

 

72,733

 

Income (Loss) before income taxes, equity in affiliates and noncontrolling interests

 

(3,920,557

)

(3,326,445

)

Income tax expense

 

(323,911

)

 

Income (loss) before equity in affiliates and noncontrolling interests

 

(4,244,468

)

(3,326,445

)

Loss from equity in an affiliate

 

 

(898,184

)

Net loss

 

(4,244,468

)

(4,224,629

)

Accretion of noncontrolling interest

 

38,934

 

56,848

 

Net loss attributable to noncontrolling interests

 

(38,934

)

(56,848

)

Net gain (loss) attributable to Mecox Lane Limited shareholders

 

(4,244,468

)

(4,224,629

)

Loss per ordinary share:

 

 

 

 

 

Basic

 

(0.01

)

(0.01

)

Diluted

 

(0.01

)

(0.01

)

Loss per ADS (1)

 

 

 

 

 

Basic

 

(0.37

)

(0.36

)

Diluted

 

(0.37

)

(0.36

)

Weighted average ordinary shares used in per share calculation

 

 

 

 

 

Basic

 

405,193,309

 

405,498,252

 

Diluted

 

405,193,309

 

405,498,252

 

Weighted average ADS used in per share calculation (1)

 

 

 

 

 

Basic

 

11,576,951

 

11,585,664

 

Diluted

 

11,576,951

 

11,585,664

 

 


(1) ADS amounts adjusted for a change in the ratio of the Company’s American Depositary Shares (“ADSs”) to ordinary shares (“Shares”) from 1:7 to 1:35 (“Ratio Change”), effective as of February 1, 2013.

 

Other comprehensive income, net of tax of nil

 

 

 

 

 

Change in cumulative foreign currency translation adjustment

 

57,726

 

189,507

 

Other comprehensive income, net of tax

 

57,726

 

189,507

 

 

 

 

 

 

 

Comprehensive income attributable to Mecox Lane Limited shareholders

 

(4,186,742

)

(4,035,122

)

 

 

 

 

 

 

Reconciliations of Non-GAAP Financial Measures to Comparable GAAP Measures

 

 

 

 

 

Non-GAAP net income (loss) (1)

 

(3,487,467

)

(3,172,873

)

 


Note (1) We define non-GAAP net income (loss), a non-GAAP financial measure, as net income (loss) excluding share-based compensation expenses. We review non-GAAP net income (loss) together with net income (loss) to obtain a better understanding of our operating performance. We also believe it is useful supplemental information for investors and analysts to assess our operating performance without the effect of non-cash sharebased compensation expenses, which have been and will continue to be significant recurring expenses in our business. However, the use of non-GAAP net income (loss) has material limitations as an analytical tool. One of the limitations of using non-GAAP net income (loss) is that it does not include all items that impact our net income (loss) for the period. In addition, because non-GAAP net income (loss) is not calculated in the same manner by all companies, it may not be comparable to other similar titled measures used by other companies. In light of the foregoing limitations, you should not consider non-GAAP net income (loss) in isolation from or as an alternative to net income (loss) prepared in accordance with U.S. GAAP.

 

The following table sets forth the reconciliation of non-GAAP net income (loss), a non-GAAP financial measure, from net income (loss), our most directly comparable financial measure presented in accordance with U.S. GAAP, for the periods indicated.

 

 

 

Three-month Periods Ended March 31

 

 

 

2012

 

2013

 

 

 

$

 

$

 

Net loss

 

(4,244,468

)

(4,224,629

)

Add back: Share-based compensation expenses

 

757,001

 

1,051,756

 

Non-GAAP net loss

 

(3,487,467

)

(3,172,873

)