In just four months, the “unconventional” Meibang Apparel has transformed from a low-performing stock on the verge of delisting to one of the big bull stocks in the A-share textile and apparel industry.
According to statistics, on February 5, 4 months ago, the stock price of Meibang Apparel fell to as low as 1.12 yuan, which was only 1 yuan away from the “delisting line”. One step away; however, with the outbreak of the Xinjiang cotton incident in China, Meibang Apparel became a beneficiary stock of the incident, and the stock price rose sharply. Now the stock price has risen to 4.27 yuan, an increase of 280% from the lowest point in February. , the delisting crisis has also been lifted.
However, although the stock price has risen sharply, the operating difficulties of Meibang Apparel have not yet been resolved.
According to media reports, in the past two years, many stores of Meibang Clothing have ceased operations or closed down due to poor management. Among them, the large store with an area of over 2,000 square meters on Beijing Road in Guangzhou has even It announced its closure last year; according to annual report data, Meibang Apparel has suffered huge losses for two consecutive years, with a loss of 825 million in 2019 and a loss of 859 million in 2020.
As one of the former national brands in China, its stock price has soared but its operating difficulties are difficult to solve. Where should Meibang Apparel, which has escaped the delisting crisis, go?
1 From rapid expansion to current store closures
Speaking of the development history of Meibang Apparel, 2012 was a watershed. Meibang Clothing was founded in Wenzhou in 1995 by Zhou Chengjian, a tailor.
The success of Meibang Clothing in the early stage is largely due to its unique business strategy. Most of the production is outsourced, and I am only responsible for design and brand operations, so my assets are relatively light.
Not only that, Meibang also combines the direct operation model and the franchise model to achieve the purpose of rapid expansion.
With this business strategy, the number of Meibang Clothing stores exceeded 1,000 in just ten years. In 2015, the number of Meibang Clothing stores reached 1,260.
In 2008, Meibang Apparel was successfully listed on the Shenzhen Stock Exchange, and founder Zhou Chengjian became the champion of Hurun China’s Apparel Rich List that year.
After its listing, the development of Meibang Clothing continued smoothly, and its stores continued to expand. At its peak, the number of stores exceeded 5,000; it was not until 2012 that a turning point for Meibang Clothing occurred.
With the rise of e-commerce, offline clothing brands have been strongly impacted. In addition, a large number of international brands such as ZARA and UNIQLO have begun to enter the Chinese market. Meibang Clothing performance began to decline.
In 2011, Meibang Apparel’s revenue was 9.945 billion, which was only 55 million short of reaching the 10 billion revenue target, with a net profit of 1.206 billion; in two years In 2013, Meibang Apparel’s revenue plummeted 17.03% to only 7.89 billion, and its net profit plummeted 52.27% to only 405.5 million.
And this is just the beginning. In the following eight years, Meibang Clothing’s performance has been declining. By 2020, Meibang Clothing’s revenue is only It was 3.819 billion, less than half of the revenue nine years ago, and the net profit was a loss of 859.4 million.
According to media reports, at the end of last year, the over 2,000 square meter Metersbonwe Beijing Road store located on Beijing Road in Guangzhou announced its closure. The former clothing giant has become what it is today. This step is really disappointing.
2 The sharp rise in stock prices cannot hide the operating difficulties behind it
Recently , affected by the Xinjiang cotton incident, Meibang Apparel’s stock price began to rise sharply.
In February 2021, Meibang Apparel’s stock price fell to as low as 1.12 yuan, only one step away from the one-yuan “delisting line”. After the Xinjiang cotton incident broke out, , Meibang Apparel transformed from a stock on the verge of delisting into a beneficiary stock, and the stock price rose sharply.
According to statistics, the current stock price of Meibang Apparel has reached 4.27 yuan, which has increased by 280% from the lowest price in February, and has also got rid of the risk of delisting.
However, behind the surge in stock prices, Meibang Apparel’s operations have still not improved.
According to data, Metersbonwe currently has five major brands, including the cost-effective Meters/bonwe, mid-to-high-end line ME&CITY, slow life brand CH’IN mattress, Moomoo and Mi Xidi children’s clothing, and these five brands are currently facing problems such as unclear positioning, old styles, and lack of market competitiveness.
Some consumers bluntly said that with more and more clothing brands to choose from, Meibang Clothing is no longer one of their choices. Even if they enter the store to choose, it will be very difficult. Part of the reason is for emotion.
In addition, even in the first quarter when the Xinjiang cotton incident broke out, Meibang Apparel’s performance did not improve. Its revenue in the first quarter of 2021 was only 797.4 million.� It was even lower than the first quarter of 2020, which was affected by the epidemic, by 120 million yuan; although net profit turned positive, it still lost 168.8 million yuan after deducting non-net profit. In fact, it has not yet got out of the loss predicament.
3 With the transformation of the national trend, can Meibang Clothing still be successful?
In the past two years, the national trend has swept across the entire clothing industry, and many companies that have transformed into the national trend have tasted the benefits.
For example, Anta and Li Ning have experienced substantial stock price increases after the transition to the national trend. Among them, Anta Sports’ stock price has risen sharply by 129.22% in the past two years, and Li Ning’s stock price has risen sharply. The stock price has risen sharply by 218.38% in the past two years.
Meibang Clothing naturally sensed the opportunity behind the national trend and began to transform into the national trend.
According to media reports, in 2019, Meibang Apparel launched a series of workwear-style clothing with the theme of “National Trend Youth Don’t Pretend”; and to In 2020, Meibang Clothing launched the Quintessence of China, China Museum series clothing and the derivative series “China Meibang” to focus on original cultural trends, and officially announced that the well-known rapper Rich Brain has become the spokesperson of the China Meibang series.
However, this transformation of Meibang Apparel has not achieved very good results. In addition to the still sluggish performance, its national fashion series of T-shirts are also not selling well. The product was even questioned by netizens as plagiarizing Li Ning.
As a national brand in the past, the current situation of Meibang Clothing is disappointing.
Although we got rid of the delisting crisis after the stock price rose sharply, the stock price hype is only temporary. To truly stay away from the risk of delisting, we need to get out of the business dilemma. And This is also a challenge that Meibang Apparel has to face head-on.
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