How to ＂survive＂ the love recycling of 600 offline stores after the partners leave？

　　A COVID-19 allowed time to freeze, and at the same time, some entrepreneurs who had pressed the fast forward button revealed their true colors, which made people think. The second-hand recycling platform loves recycling, perhaps one of them. Author: Wang Qiji ━ ━ ━ ━ ━ "When the tide ebbs, you know who is swimming naked". -Buffett’s COVID-19 made time freeze, and at the same time, it also made some entrepreneurs who had pressed the fast forward button show their true colors, which made people think. The second-hand recycling platform loves recycling, perhaps one of them. The Spring Festival in 2020 seems to be a watershed, which has changed many people and may also change the fate of many enterprises in the future. On January 9, 2020, Hurun Research Institute released "2019 Hurun China Top 500 Private Enterprises", ranking 468 th in love recycling; However, before the Spring Festival, there were rumors that Zheng Fujiang, a recycling partner, left his job and his cash flow was tight. Employees who leave their jobs with love recycling said on social platforms that Zheng Yujiang chose to leave his job before the Spring Festival and love recycling. After the Spring Festival, some people in the investment circle also broke the news that they had signs of leaving. At the same time, love recycling was also revealed by employees: the company’s five insurances and one gold in January 2020 have not been paid yet. What is the real situation? GPLP rhinoceros finance conducted a verification.

　　Zheng Yujiang, president of Chuanai Recycling, left?

　　

　　Has Zheng Fujiang retired from his job? GPLP Rhino Finance hereby calls itself for verification, but it is denied by the other party, and no further explanation is given. So what’s going on inside employees and in the investment circle? Judging from the information collected so far, everything is not groundless. On February 11th, 2020, on the platform of Love Recycling Enterprise-"Love Recycling Fresh Release" WeChat, an article called "Let’s Work Hard"
The article "Walking Against the Wind-Opening Meeting and Headlines of Love Recycling" shows that Chen Xuefeng, founder and ＆CEO of Love Recycling, and Wang Yongliang, partner and co-president of Love Recycling, all delivered relevant speeches, but only Zheng Fujiang was missing.

　　On January 22nd, GPLP Rhino Finance didn’t find Zheng Fujiang to speak in the annual meeting of Love Recycling.

　　There are indications that, as an important member of the recycling-loving senior management, even though Zheng Fujiang denied that he didn’t leave his job and love recycling, something may have happened inside this startup. According to public information, in the first half of 2016, Zheng Fujiang, a former CMO of Huawei China District, joined Airecycling. In the past four years, he has made great contributions to the expansion of Airecycling and has been loved by many internal employees. "Its internal prestige is very high," disclosed by people in the investment circle who have been in contact with recycling. It is reported that after joining Love Recycling, Zheng Fujiang once built an offline cooperation channel network of Love Recycling. According to public information, during Zheng Yujiang’s four years of love recycling, love recycling has 300 direct stores in the core business districts of first-tier cities, and besides direct stores, love recycling also has seven operation centers including Hong Kong, Shanghai, Changzhou, Chengdu and Wuhan, with a total operating area of over 40,000 square meters. According to the data released by Love Recycling, the company actually has more than 600 stores and thousands of employees in the country, with more than 1,000 employees only at the peak of the staff. It can be said that it is Zheng Fujiang’s joining that makes love recycling have the offline leg. Is it leaving now, or is it gradually fading out? Or just the job responsibilities have been adjusted? Regarding the follow-up developments, GPLP Rhino Finance will continue to pay attention.

　　Love recycling, tight cash flow?

　　An unexpected event after the Spring Festival in 2020 really surprised everyone. Similarly, this also includes love recycling. In this regard, in the internal enterprise platform of Love Recycling, "Love Recycling Fresh Release" is about "Gathering Hard Work"
In the WeChat of Walking Against the Wind, Chen Xuefeng, the founder and ＆CEO of Airecycling, said that "to live is to be strong", and the goal of Airecycling Q2 is to approach the break-even point of the group and achieve full profit in the second half of the year.

　　At the same time, Chen Xuefeng also said, "In the face of cruel figures and reality, we must make worse plans." "We carefully predict that at least in the next 3-6 months, all walks of life will face a crisis of life and death, which is far more severe than Sars in 2003. Then, can love recycling survive this life-and-death crisis and cruel figures and reality, as executives say, "live"? This will test the cash flow of love recycling. However, regarding the cash flow of recycling, it seems that it is not optimistic from the current information of all parties.

　　According to its employees who broke the news on social platforms, as of February 19, 2020, Love Recycling has not issued its five insurances and one gold to employees in January. Is this true? At present, its official has not responded. However, before it gives the goal of achieving breakeven in Q2, GPLP Rhino Finance can judge that the current love recycling has not achieved breakeven and is obviously at a loss, and the current operation should mainly rely on financing. In this regard, in "Let’s work hard"
In the article "Walking Against the Wind", Chen Xuefeng, the founder & ＆CEO of Love Recycling, also publicly stated, "Last Friday, we had clearly won the strong support of JD.COM for the first time. Therefore, there is a big tree behind JD.COM. What are we panicking about?" However, can investment institutions solve the problems of enterprises and various cash flows? I’m afraid this is a bit difficult. On June 3, 2019, Airecycling announced that JD.COM Group General Airecycling had a new round of financing and strategic integration transactions of more than 500 million US dollars, and the two sides had reached a final agreement. According to the official website announcement of the Securities and Exchange Commission of the United States, JD.COM Group actually invested nearly $20 million in cash for the investment that loves recycling. Now, according to June 2019, seven months have passed. So, how much money is there in the unfunded love recycling account? Can this cash support Airecycling more than 600 offline stores and thousands of employees to survive Q1 or Q2 in early 2020? This is a problem. If the cost of employees can be controlled by layoffs that have been reported before, in front of more than 600 offline stores, it is obviously difficult to control cash flow. Just like Xinchao Media, which started to lay off employees in 2020, even though there is still 1 billion yuan in cash in its account, at the staff meeting on the first day of work, Xinchao Media announced that it would lay off 500 employees, accounting for 10% of the total number of employees, and the senior management collectively reduced their salary by 20%. So, how will love recycling spend this cash flow problem?Will love recycling save itself by cutting off the closing of offline stores and reducing wages and layoffs? I’m afraid only love recycling is clear inside. However, as of press time, the inquiry request of GPLP Rhino Finance has not been answered. In addition to cash, this sudden epidemic has actually brought thinking to startups. Does the blind expansion of offline stores conform to the strength of the enterprise itself? Put the hope of survival on the investor’s thigh, and how much continuous blood transfusion can you get when the capital market is getting colder? Put the hope of living in the hands of others, how long can you last without online traffic that can make your own decisions?

　　"God helps those who help themselves"

　　Whether love recycling can survive hundreds of offline stores safely, and the dilemma of "stopping" and lack of traffic caused by the serious lack of passenger flow at present is obviously a very big test for it in 2020.

　　The reason is not unrelated to its rapid expansion for many years, so both cash flow and its management, including its operation mode, are worthy of reflection.

　　Perhaps, love recycling has found problems and started to adjust, so the news of personnel changes came out.

　　In addition, this emergency has also taught more enterprises the most important lesson, that is, don’t be blindly optimistic, don’t be overly obsessed with the satisfaction brought about by expansion, and must have a clear understanding of their own capabilities; At the same time, it is very important to pay attention to cash flow management.

　　Regarding the importance of cash flow, Allen Zhu, a partner of Jinshajiang Venture Capital, said on February 2, 2020, "When I was still starting a business in SARS in 2003, the management only took the basic living expenses that year, and the salary was reissued after the balance at the end of the year. This year is more severe than SARS, which is a matter of life and death for many start-ups. We must strictly control the cost and keep the cash for at least 6 months, preferably 12 months, assuming that there is no income. According to this, we can calculate the cost. Live on your knees, and it will be spring in the past! "

　　Allen Zhu also said, "After the epidemic, it will take two or three months for the enterprise to recover its operational data, and it will take another two or three months for it to raise funds after data recovery, so it may take four to six months from the end of the epidemic to getting the money. Entrepreneurs must prepare for the worst, and their income will be less in the first half of the year. They must make the most conservative plan and control cash. "

　　However, it is difficult to change the matter of controlling cash in a short time. Especially when sudden events bring difficulties to a large number of offline-oriented enterprises, how much time will be left to the decision makers of enterprises? After all, the rent of 600 stores and the salary of thousands of employees are already extremely high.

This article first appeared on WeChat WeChat official account: GPLP. The content of the article belongs to the author’s personal opinion and does not represent Hexun.com’s position. Investors should operate accordingly, at their own risk.