As LeTV's financial struggles persist, the company is facing significant challenges in maintaining its offline presence. Long-standing payment issues with mobile phone suppliers have led to severe inventory shortages, leaving both phones and accessories out of stock. This situation has resulted in the widespread closure or transformation of LeTV's offline experience stores. Many of these stores, which were once part of an ambitious ecosystem, are now either shut down or undergoing restructuring.
For those involved, such as the LePar Partners who collaborated with LeEco to create eco-experience stores, the outcome has been disappointing. Despite significant investments, many of these ventures have struggled to turn a profit and have even incurred losses. Two years ago, LeTV had promised its partners the chance to acquire equity subscription rights, along with the possibility of receiving a 5% stake in LeVision Holdings.
When questioned about the status of these physical stores, a representative from LeTV Mobile spoke to the Securities Daily, stating that adjustments are still ongoing. The second phase of the music store transformation plan remains in development, and no official announcement has been made yet.
The closures, withdrawals, and transformations of these stores reflect the broader challenges LeTV faces. Most of the once-thriving offline experience stores have closed their doors, leaving behind empty spaces. The remaining stores that are still operational have seen a sharp decline in revenue.
Just last year, Feng Xing, the former president of LeEco Mobile, announced that LeTV had surpassed 17 million unit sales. However, within a short time, sales have plummeted dramatically. The number of physical experience stores has also dropped sharply.
During a recent visit to several LeTV outlets in Beijing, reporters observed that some stores had already closed down entirely, with no operations ongoing. Most models of mobile phones were unavailable for purchase. In a prominent location in Beijing’s Haidian District, the LeEco eco-experience store signage had been removed, and the premises were undergoing renovation. A contractor informed us that the store had been closed for several months and was under new management.
This situation isn't confined to Beijing alone. Across the nation, LeTV’s offline eco-experience stores are rapidly shrinking. In Hangzhou, for instance, nearly all LeEco stores have been withdrawn from, and without inventory, it's nearly impossible for these stores to remain profitable. Rent costs are high, and without any income, partners at these locations find it unsustainable to maintain operations. Many are still owed money by LeTV, and landlords are reluctant to renew leases, leading to inevitable evacuations.
Most of LeEco's eco-experience stores are managed by LePar partners. LeTV launched the LePar initiative to allow fans to collaborate with LeSports in starting businesses or engaging in individual distribution. Initially, LeTV planned to expand LePar from online to offline operations. By 2015, LeTV promised its partners the opportunity to acquire equity subscription rights and offered LePar a share of 5% of LeVision Holdings over the next three years. Statistics show that this year, LeTV had over 9,000 eco-stores. However, in recent months, this number has decreased significantly.
According to a supplier, most music experience stores are operating at a loss. Current efforts to transform these stores focus on shifting away from mobile phone sales towards television sales. These storefronts were initially designed to showcase part of LeTV's offerings, making the transition to selling TVs a logical step to keep the stores viable.
The offline store adjustment plan is still under development. Besides music-focused stores, LeTV’s product lines also include Dixon Tong Le experience areas and franchises. Major mobile phone chain partners like DiStone are also experiencing difficulties. A representative from DiStone told reporters that they have encountered significant issues with LeTV’s funding. Parts have not been shipped for several months, and hundreds of LeTV phones in stores are awaiting replacement parts. Two years ago, DiStone collaborated with LeTV to open experience zones in several offline stores.
Traditional 3C channel partners collaborating with LeTV are also seeing their businesses affected. Early on, DiStone announced that its nationwide network of over 4,000 outlets would serve as pre-sale and after-sale service centers for LeTV’s ecosystem products. This included selling music super mobile phones and super TV products. Collaboration with LePar aimed to provide services like capillary logistics, delivery integration, and after-sales support.
Today, with LePar stores closing or transitioning on a large scale, and LeTV selling fewer mobile phones, Dixon Tongle’s mobile phone sales have essentially stalled.
On July 28th, when asked about the current status of mobile phone stores, a representative from LeTV Mobile stated that adjustments are ongoing. They did not disclose the exact number of stores LeTV currently retains.
She explained that the current LeEco eco-experience stores are in the second phase of strategic transition. The specific adjustment plan is still being refined. Currently, in places like Beijing, offline sales are still managed by various partners, and LeView’s independent physical stores are not yet open.
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