Chapter 175: Xu Heye looked at the calendar and fell into memories...
Xu Heye looked at the calendar and fell into memories.
In addition to Dong Fuyun and Lu Jun getting married and having children, a lot of things also happened in the company.
In early 1991, the three stores were renovated one after another, and Xu Heye bought the main store and the second store. With the property rights in hand, she no longer had to worry about being constrained by the landlords, and she no longer had to worry about the landlords demanding unreasonable rent increases due to the stores' booming business.
In the middle of the year, during the summer vacation, Xu Heye and Dong Fuyun went to Beijing. This time they opened six southern women's clothing stores in Beijing.
Xu Heye also took the time to meet Wu Yulan.
Reuniting with old friends, Wu Yulan happily accompanied Xu Heye to watch the flag-raising ceremony at Tiananmen Square, climb the Great Wall, and admire the scenery at Shichahai. Wu Yulan felt a pity, however. Had they come in winter, Shichahai would have frozen over. The thick ice would have become a natural playground for Beijingers, with countless young men and women skating and having fun.
The two stayed in Jing City for more than a month, and only returned to Hucheng after making sure that the four stores were on the right track.
In October, after much discussion, they decided to change the factory's name from Chonghe Garment Factory to Nanfang Garment Factory, to align with the store and brand names. However, Nanfang Garment Factory still couldn't find a suitable building and remained hidden within the Jiangcheng Garment Factory.
Time flew by and it was 1992. Just when everyone was immersed in the joy of the Lantern Festival, a fire broke out at the Shenyi Textile Factory where Dong Xinghua used to work.
The fire was severe, destroying the entire warehouse and several factory buildings. Fortunately, it was the Lantern Festival holiday that day, so there were no workers at the factory and no casualties.
Xu Heye originally believed that the fire at the Shenyi Textile Factory in her previous life was caused by the lax behavior of warehouse employees and smoking in the warehouse. However, a police investigation revealed that the factory leaders had embezzled state-owned assets.
This fire was also deliberately set by someone with ulterior motives in order to destroy the evidence and cover up the fact that they had embezzled state-owned assets.
After this incident, the factory completely closed down, and the Shenyi Textile Factory, which had prospered for decades, came to an end.
The factory has a lot of bad debts, not only the money owed to the raw material suppliers and the penalty for failure to pay the goods, but also the employees' wages. The city is preparing to sell the factory, and the requirement is that the buyer must take over these bad debts as well.
Many private entrepreneurs wanted to take over the factory, but after checking the accounts, everyone backed off. The factory had at least tens of millions of bad debts piled up.
An average private entrepreneur simply cannot afford such a huge debt.
Besides, even if they had so much money, they could just buy some land somewhere else and build a new factory in a decent manner. Why did they have to stick to this half-burned old factory?
The matter came to a stalemate. Manager Wang from the sales department of Shenyi Textile Factory somehow heard that the Southern Garment Factory was looking for a factory and found Dong Xinghua. He hoped that Dong Xinghua could take over his old employer.
What can Dong Xinghua do?
Of course I refused.
She did some calculations. Shenyi Textile Factory was a massive factory, employing tens of thousands of people in its heyday. After several years of downsizing and layoffs, it currently had just over 5,000 employees.
Assuming a salary of 5,000 yuan, or 300 yuan per person per month, with wages owed for months, ranging from a few months to half a year, the company would have to pay out 4 to 5 million yuan in employee wages alone. Not to mention the stale debts owed to the raw material factories and liquidated damages for late delivery, which would amount to at least tens of millions.
A small company like Southern Garment Factory simply cannot handle so much debt.
But Manager Wang had no choice. In the past two years, the factory's performance has been poor, and many employees have had their wages delayed for at least half a year.
In the past, everyone was able to persevere because they wanted to get through the difficult times with the factory. Now that the factory has completely closed down and the employees are left with nowhere to go, they must at least get the wages they are owed.
With this idea in mind, Manager Wang kept running around and negotiating terms. As long as the Southern Garment Factory could take over the Shenyi Textile Factory and pay the employees' wages, they would not be responsible for the outstanding debts and liquidated damages outside the factory.
But even so, Xu Heye and the others still couldn't come up with that much money.
Throughout 1991, the factory actually made very little money. It's not that we didn't make any money, but rather that our earnings covered our expenses. We spent nearly two million yuan on the two shops in Hucheng, and six more in Beijing. The monthly rent varied, but averaged six thousand yuan. With a three-year contract and annual payments, the total was 430,000 yuan. Add in the renovations and furniture, and the total cost was over 400,000 yuan.
Factory rent, employee salaries, purchasing raw materials... everything costs money.
The average customer spending on summer clothes is generally lower than that on winter clothes. Year after year, none of the three stores in Hucheng have reproduced the sales myth at the end of the year. It is normal for each store to have sales of 200,000 to 300,000 yuan per month. In good cases, they have sold more than 500,000 yuan, but that has only happened twice.
After deducting employee salaries, rent and clothing costs, the profit is about 100,000 to 150,000 yuan. The profit from the three stores is just enough to buy the property rights of the other two stores.
The six stores in Beijing opened in the middle of the year and really started making money in the month before the Chinese New Year at the end of the year, and have not yet achieved a break-even point.
At the beginning of 1991, the company had more than 6 million in cash in its account. By the spring of 1992, the cash in the company's account was still around 6 million, not a penny more, or even a little less.
Six million yuan would be enough to pay the workers' wages, but the factory would be left with no money in its accounts.
With nine shops, such a large factory, nearly two hundred employees, and no money on hand, if anything goes wrong, their Southern Garment Factory will probably have to repeat the mistakes of the Shenyi Textile Factory.
Although the temptation to take over Shenyi Textile Factory was indeed great, Dong Xinghua had no choice but to reject Manager Wang because her financial situation did not allow it.
Things took a turn for the better in May 1992. The two hundred shares of Feilo Audio and the one hundred shares of Yuyuan Shopping Mall that Xu Heye had bought ushered in their most glorious moments.
The price of Feile Audio directly rose to 3,550 yuan, and the price of Yuyuan Shopping Mall exceeded 10,000 yuan. Xu Heye sold them at the peak of the stock price. Two hundred shares of Feile Audio were sold for 700,000 yuan, and one hundred shares of Yuyuan Shopping Mall were sold for one million yuan.
If they add this 1.7 million yuan, they will still have about 2.7 million yuan left after acquiring the Shenyi Textile Factory. This amount of money can at least support the operation of the factory for a year.
With this year's turnaround, Xu Heye is confident that he can overcome the difficulties of lack of funds and get the factory operations back on track.
Of course, Xu Heye wanted to buy the Shenyi Textile Factory not only because of its large factory building, but also because of its exquisite textile craftsmanship. In the past few decades, the fabrics produced by the Shenyi Textile Factory have been famous throughout the country.
After more than a year of operation, Xu Heye discovered that the winter clothes were what really made Southern Women's Wear profitable.
Xu Heye wants to concentrate on making winter clothes, especially down jackets.
But to make a good down jacket, both high-quality down and high-quality fabrics are indispensable.
If he could acquire Shenyi Textile Factory, he would be able to inherit its excellent textile technology and production lines. Xu Heye wanted to develop a three-proof fabric with better density, finer count, waterproof, oil-proof and velvet-proof.
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