Meibang Apparel, which was once endorsed by Jay Chou, has been in a lot of troubles recently.
The two holding companies of Shanghai Metersbonwe Clothing Co., Ltd. have recently added information on persons subject to execution. Hangzhou Metersbonwe Clothing Co., Ltd. and Kunming Metersbonwe Clothing Co., Ltd. have been enforced for a total of more than 530,000 yuan. Not long ago, Meibang Apparel was involved in a wage dispute. Many employees broke the news on social media that they were owed several months of wages, but Meibang has remained silent on this.
The reporter sent an email to Meibang Apparel to verify relevant issues, but had not received a reply as of press time.
The performance of this old clothing company has declined sharply. The annual report shows that from 2019 to 2021, Meibang Apparel lost more than 2.1 billion yuan. Its 2022 semi-annual performance forecast shows that the net profit attributable to the parent company is expected to be a loss of 680 million to 620 million yuan. Compared with apparel companies that released performance forecasts in the same period, the losses are relatively serious.
Zhou Chengjian, the founder of Meibang Apparel, said in a previous interview that the company needs to survive and manage, so it needs to undergo extreme “shrinking”. It originally operated five brands, but now it focuses on the Metersbonwe brand.
This is not an isolated case. The dilemma has swept many casual and women’s clothing brands. Li Shiyue, an analyst at Toubao Research Institute, said in an interview with the 21st Century Business Herald that there are three main reasons. First, companies are greatly affected by the epidemic. Second, rising costs further reduce the profit margins of related companies. Third, the development of e-commerce platforms has impacted Traditional clothing brand.
Where is the future for established clothing companies?
sustained losses
Meibang Apparel, founded in 1995, is a memory of the era for many people born in the 1990s. However, recently, this company, which has been established for more than 20 years, has been caught in the whirlpool of employees demanding wages and cooperation negotiations for payment.
Reporters combed through and found that employees in Shanghai, Liaoning, Shandong and other places have reported that Meibang Apparel has been owed several months of wages. An employee in Shanghai said on social media that she received a notice from the company in mid-April this year that the payment of last month’s salary was delayed. At the end of April, she suddenly received a call from the company and was informed that she had been laid off. However, Meibang Clothing and she failed to reach an agreement on the compensation agreement. “After many communications and negotiations, the company promised to pay us compensation on June 15, and the remaining wages will be paid according to the normal payday.”
So far, she has not received compensation. In another video, she stated that she had refused mediation and was waiting for labor arbitration. At the same time, the human resources department no longer responded to messages.
In addition to employees, a partner that provides new media advertising services for Meibang Apparel also told the 21st Century Business Herald reporter that Meibang Apparel has been in arrears with their payments for more than half a year. He introduced that the company is mainly responsible for promoting new products launched by Meibang Apparel on social platforms. The contract date signed by the two parties is from January 1, 2022 to February 28, 2022. The two parties originally agreed to release relevant promotional content within ten days. The payment was about to be settled, but until now Meibang Apparel still has not paid them.
“Every time I ask their employees, they are told that the process is already going through, but the payment is still delayed.” The new media company said that they have hired a lawyer and sent a lawyer’s letter to Meibang Apparel. “We are ready to make the payment.” If Zhou Zai didn’t get the exact information, he went to their Shanghai headquarters to communicate.”
The financial report shows that as of the first quarter of 2022, Meibang Apparel’s monetary capital is 102 million yuan, a decrease of 69.25% from the 331 million yuan reported in 2021, operating cash flow is -182 million yuan, and current liabilities are as high as 3.674 billion yuan. From 2019 to 2021, Meibang Apparel’s asset-liability ratio increased from 68.02% to 86.05%.
On July 15, Meibang Apparel released its semi-annual performance forecast for 2022, predicting a net profit loss of 680 million to 620 million yuan attributable to its parent company, with net profit attributable to its parent company falling 1646.86%-1492.73% year-on-year.
Meibang Apparel said that due to the epidemic, the company’s logistics headquarters in Pudong, Shanghai, was unable to deliver goods normally to offline stores and online shopping across the country for about 2 months, resulting in a decline in the company’s operating income and operating profits. At the same time, some franchisees performed poorly during the epidemic, with overdue repayments and aging accounts receivable. The company accrued credit impairment losses, which had a greater impact on net profit in the first half of the year.
Even if you struggle hard, you will inevitably fail.
In fact, the decline of Meibang Apparel did not start in 2022, or even started with the epidemic.
Financial report data shows that as early as 2012, Meibang Apparel’s net profit showed negative growth, and it began to suffer losses in 2015. The net profit attributable to the parent company that year was -432 million yuan. In 2019 before the epidemic, it reached a loss of 825 million yuan. This This makes the tens of millions of profits achieved in 2016 and 2018 seem insignificant. In 2020, Meibang Apparel’s losses have reached 859 million yuan.
Since the crisis was felt, the company has attempted transformation in all directions. In 2014, in order to resist the impact of e-commerce and find growth, Meibang launched the self-operated e-commerce Bangou.com, and launched the community e-commerce “Youfan” APP the following year, spending up to 117 million yuan in advertising expenses to appear in “Qi Pa” explain”. It’s a pity that the advertisement was successful but failed to gain popularity. “Youfan”, which had high hopes, only lasted for two years and was hastily withdrawn.
In 2021, Meibang Apparel’s online sales revenue accounted for 27.92%. The only channel is Tmall, and its gross profit margin is only 20.15%. This is also an important reason why its performance has fluctuated greatly due to the impact of the epidemic.
Meibang Clothing has also moved closer to the national trend, with the “national trend”The company launched a series of “workwear-style” clothing under the theme “Youth Don’t Pretend”. However, this move had little effect, and some clothing was also involved in plagiarism.
“There are Meibang stores in every city, and there are Meibang stores in every street” was once the declared goal of Meibang Apparel. The large number of stores that were expanded during the peak period could not withstand the pressure of huge losses. The financial report shows that from 2019 to 2021, Meibang stores decreased by 785, 683 and 403 respectively. At its peak in 2012, the number of Meibang Clothing stores was as high as 5,220.
Selling assets has also become a “self-rescue” move for American Barney. In March 2021, Meibang Apparel and its holding subsidiary Shanghai Bangou Information Technology Co., Ltd. planned to sell 100% of the equity they jointly held in Shanghai Model Industry Co., Ltd. for a total planned sale amount of 448 million yuan. In April, Smith Barney planned to sell its 10.10% stake in Huarui Bank to Kaiquan Pump Industry for 424 million yuan. However, the relevant plan has not yet received approval from the China Banking and Insurance Regulatory Commission.
Zhou Chengjian once said, “It is a fact that the company’s performance is huge. If Smith Barney is to continue on its path, it must save itself. (Selling assets) is the only chance and the last chance.”
Right now, Smith Barney is still struggling to find a new way out.
Industry dilemma and seeking innovation
Meibang’s stumbling silhouette is lamentable. The entire women’s clothing and casual clothing industry is on thin ice.
Just last month, a number of women’s clothing and casual clothing companies issued pre-reduction announcements for the first half of 2022. Peacebird expects half-year net profit to be 133 million yuan, a year-on-year decrease of 68%; Semir Apparel expects net profit to be 90 million yuan to 130 million yuan. , a year-on-year decrease of 80.46% to 86.47%; Ribo Fashion expects a net profit of 3.58 million yuan, a year-on-year decrease of 87.14%; Langzi Shares expects a net profit of 8 million yuan to 12 million yuan, a year-on-year decrease of 87.14% to 91.43%.
Among them, the epidemic is the main reason mentioned most. The company generally stated that due to the impact of the domestic COVID-19 epidemic, offline stores were closed and retail performance was poor, resulting in a corresponding decrease in operating income and gross sales profit year-on-year.
Li Shiyue, an analyst at Toubao Research Institute, said that women’s clothing and casual clothing have strong fashion attributes and the products have a certain “shelf life.” However, due to the epidemic, clothing warehouses in many areas have been hoarded and unable to ship normally, which has affected the delay in the arrival of products in stores. , the styles sold in stores are lagging behind, and the mismatch between products and market demand compresses profit margins.
In fact, the plight of established apparel companies began to emerge around 2012. At that time, e-commerce was just beginning to emerge, and new brands were springing up, seriously impacting offline stores. The influx of fast fashion brands such as ZARA and H&M from Europe and the United States further squeezed the living space of these old companies.
Cheng Weixiong, an independent analyst in the footwear and apparel industry, told a reporter from the 21st Century Business Herald that users in a single circle, as well as users in different cities and regions, are diverging. The advantages of full-category brands in category segmentation are being eroded by emerging brands. Emerging brands In-depth exploration of category matching, focusing on product research and development, brand promotion, and category operations, to stand out.
“Each brand needs to be clear about its core competitiveness and deepen its core competitiveness, rather than blindly expanding, blindly denying and innovating in all aspects. It needs to innovate based on the characteristics of its own business model.” Cheng Weixiong said.
More refined positioning and development is the road to self-help chosen by various brands. In 2009, in order to change the seasonal sales restrictions of down jackets, Bosideng began to diversify into the fields of men’s clothing, women’s clothing, and children’s clothing, and gradually expanded overseas. Although this move is a big change, it has many brands and its categories are not outstanding enough, and it has not brought significant improvement to Bosideng’s performance.
In 2018, Bosideng transformed and proposed to specialize in the mid-to-high-end market, thus starting the road to price increases. According to a research report by Guojin Securities, the price increase of Bosideng’s main brand in 2018 was as high as 30% to 40%. The proportion of down jackets with a unit price of 1,000 to 1,800 yuan increased from 47.6% to 63.8%, and the proportion of down jackets with a unit price of 1,800 yuan or more increased from 4.8% to 24.1%. %. It was also this year that Bosideng’s performance ushered in a change, with its revenue and net profit achieving growth of 16.9% and 59.51% respectively.
In the 2021/22 fiscal year (as of March 31, 2022), Bosideng Group achieved total revenue of 16.214 billion yuan, a year-on-year increase of 20%, net profit increased by 20.6% year-on-year to 2.062 billion yuan, and the gross profit margin was as high as 69.4%.
Semir chose to enter the children’s clothing business. Financial report data shows that in 2017, children’s clothing revenue accounted for 52.6% of Semir’s total revenue, and by the first half of 2021 it had reached 63.05%, accounting for nearly twice that of the adult casual clothing sector. It is reported that the Balabala brand owned by Semir has ranked first in the domestic market share for many years.
This transformation idea brings new space. Euromonitor data shows that from 2015 to 2020, the domestic children’s clothing market has a compound annual growth rate of 10.4%, making it one of the fastest growing tracks in the clothing industry. It is expected that the children’s clothing market will exceed 400 billion yuan in 2024. At the same time, the gross profit margin of the children’s clothing business is higher. According to Semir’s financial report, the gross profit margin of children’s clothing is higher than that of casual clothing every year, exceeding 40%.
Industry insiders said that the children’s clothing business has alleviated Semir’s failure in the field of casual clothing. Shi Chen, an analyst at Toubao Research Institute, believes that precise positioning of the main target customer groups will undoubtedly help companies reduce costs and increase efficiency, establish a more distinctive brand image, and create differentiation in the red ocean of the clothing industry.
Cheng Weixiong also believes that only by doing good product planning, product R&D and design, price strategy, marketing strategy and supply chain advantage resource integration for advantaged categories can we lead the market, have the right to speak, and resist the risks brought by the economic downturn.
Only by doing a good job in product planning, product R&D and design, price strategy, marketing strategy and the integration of supply chain advantageous resources can we lead the market, have the right to speak, and resist the risks brought by the economic downturn.
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