Sino-Singapore Jingwei Client (July 1st, Luo Kun, Intern Tang Xiaoyu) In the past six months, Shanghai Metersbonwe Apparel Co., Ltd. (hereinafter referred to as Meibang Apparel) has had many business opportunities. In April, the US state apparel announced a fixed increase of 1.3 billion yuan. At the end of June, a storm of restrictive consumption orders made this former casual clothing leader stand in the spotlight. Both of these things seem to point to a problem: American clothing is running out of money.
The recently published quarterly report also confirmed the above speculation: the company’s liabilities are all current liabilities, reaching 4.167 billion yuan, while the currency funds on the account during the same period were only 325 million yuan.
Restricting high consumption makes the storm
According to China Executive Information Disclosure Information, on June 24, the Shanghai Huangpu District People's Court issued an order to restrict consumption. According to relevant regulations, it took measures to restrict consumption of American clothing, restricting US clothing and chairman Hu Jiajia against High consumption and consumption behaviors not required for life and work.
On June 29, Meibang Apparel responded that the housing lease contract dispute concerning the consumption restriction order involves two owners, each of which holds 16 square meters of property. According to the previous court ruling, Meibang Apparel needs to pay the house owner 361,400 yuan and 75,600 yuan in breach of contract damages. In addition, it also needs to pay the house usage fee after the lease expires until the actual removal date.
Meibang Garment said that after the judgment came into effect, the company actively cooperated with the court to execute the judgment and paid all the due payments to the above owners on schedule, but because the property held by the above owners is part of the company's overall leased building, the overall building The specific location area in is difficult to determine and involves other owners, and the return of the property cannot be completed temporarily. As of the date of the announcement, the consumption restriction order on the company and its legal representative and chairman Hu Jiajia has been lifted.
Hu Jiajia's father is Zhou Chengjian, the founder of Meibang Clothing, and is known as the "Big Zhou Dong" in the industry. On the 30th, Zhou Chengjian posted on Weibo that he felt deeply guilty about the high limit order. Zhou Chengjian also said that under the actual circumstances that cannot be enforced at present, the United States continued to pay rent in accordance with the previous year's contract during the execution of the judgment, hoping to minimize the economic losses of the two owners within the range that the United States can afford.
Screenshot source: Weibo
Performance decline, closed shop layoffs
As Zhou Chengjian said in Weibo, the current economic situation in all walks of life is not optimistic. This is especially true for the US state that has gone downhill for several consecutive years.
In 2008, Meibang Apparel went public. The following year, Meibang apparel signed Jay Chou to become a spokesperson. The advertising word of "not taking the usual road" was instantly popular. Meibang's stores also opened all major shopping malls and were sought after by many consumers in third- and fourth-tier cities. According to institutional data, during the peak period, Meibang had 5,000 stores.
After going public, its net profit has also been increasing, rising from 588 million yuan in 2008 to 1.206 billion yuan in 2011. Meibang apparel is therefore highly sought after in the capital market, and many institutions issued research reports "strongly recommend" that it is expected to become the Chinese version of "H&M".
In 2015, Meibang Apparel ushered in the first loss since listing. In November 2016, Hu Jiajia took over the post of chairman and president of the US-listed apparel company. Of the four years in which it took over, three years suffered losses. Although there were short-term profits in 2018, this did not reverse the situation.
According to the 2019 annual report, the annual revenue of Meibang Clothing was 5.46 billion yuan, a decrease of 29.84% compared with the previous year, and the net profit loss was more than 800 million yuan. The loss continued in the first quarter of 2020, with a loss of 219 million yuan, a decrease of 671.67% over the same period last year. Meibang Apparel explained in the report that it was affected by the epidemic and reduced the number of offline stores, resulting in a decline in revenue.
Ma Gang, an analyst in the shoe and clothing industry, told the Sino-Singapore Jingwei client that the outbreak is an infrequent event that tests the company's ability to survive in extreme environments. At the same time, the outbreak will also become a watershed for excellent and outdated enterprises. An excellent company will survive the epidemic and live better. "It's like an exam in front of the company. Everyone didn't prepare, but the results turned out to be different."
In an interview with Sino-Singapore Jingwei Client, Jiang Han, a senior researcher at Pangu Think Tank, also pointed out that the apparel industry under the influence of the epidemic is showing a pattern of two sides of the sky. Have better performance. But if the brand relies on the offline market for a long time, the impact will be very great.
Along with the negative growth in net profit, the number of stores in Meibang Clothing also decreased significantly. Institutional data for 2019 shows that after closing inefficient stores, the number of US stores in 2019 is about 3,500, a decrease of 1,500 from the peak period. At the same time, the number of employees in the United States has also been declining sharply in recent years. From 2017 to 2019, the number of active employees was 10772, 7969 and 5288, respectively, and nearly half of the employees have been laid off in the past three years.
High debt pressure
Early blind expansion and consecutive years of losses have made this former casual wear leader's debt burden even heavier.
As of April 29, 2020, the liabilities of Meibang Apparel totaled 4.166 billion yuan, and all were current liabilities. Wind data shows that its net asset-liability ratio increased from 96.92% in 2016 to 228.81% in the first quarter of 2020.
At the same time, monetary funds have declined year-on-year from 907 million yuan in 2016 and have fallen to 324 million yuan by 2020. The gap between unrestricted monetary funds and current liabilities has increased, making current liabilities facing huge repayment pressure.
In the face of high debt pressure, Meibang Clothing once planned to "make up blood" through a fixed increase. On the evening of September 19, 2019, the US announced the second revised version of the fixed increase plan. The total amount of raised funds raised by the US state is expected to be no more than 1.305 billion yuan, of which 1 billion yuan will be used for brand upgrades and product supply chain transformation projects, and the remaining 305 million yuan will be used to repay debts.
However, after planning for six months, this must increase the plan eventually abortion. In April of this year, the American apparel submitted an application to terminate the fixed increase plan. It is worth noting that this is not the first time that the American apparel has increased. In 2015, the US state had planned to increase 9 billion yuan for the construction of the "intelligent manufacturing" industry supply chain platform, O2O omni-channel platform construction and the Internet big data cloud platform center. A year after planning, the fixed increase plan was announced.
In addition, the Sino-Singapore Jingwei client noted that since 2015, Meibang Apparel has not financed the bond market.
On the one hand, its own hematopoietic capacity is reduced, and on the other hand, it has no way to "make up blood". How should the US state rescue itself under the epidemic? Jiang Han believes that for the current US state, what needs to be done is to really break the circle and break through its own comfort zone, rather than blindly do the sinking market, and further reverse the aging of the brand. "Actually, high-design and high-value clothing is becoming mainstream these years. The US needs to think about what to do. It has no way back." (Zhongjing Jingwei APP)
All rights reserved by Sino-Singapore Jingwei. Without written authorization, no unit or individual may reproduce, extract or use in other ways.