The Hemostasis Of Meibang Clothing Should Start From The Fundamental Problems

Is it an effective way to stop the loss of Meibang clothing?

Recently, Beijing Business Daily reporter found that the online flagship store of MetS Bonwe is carrying out a 50% discount promotion. Offline, in addition to promotional activities, closing inefficient stores is also stepping up. For Meibang clothing which has been losing money for two years, whether it can stop the loss is particularly important.

Industry insiders said that the essential problem facing Meibang clothing is the business model, and sales promotion is not a long-term solution. After years of development and facing bottlenecks, what Meibang needs is to change its current business model.

Sales promotion closing

Recently, a reporter from Beijing Business Daily found that the flagship store of MetS Bonwe was carrying out a discount promotion. According to the activity information on the front page of the store, there are various promotion activities in the store, such as 50% discount for one piece at 20:00 a day, 1000 yuan for 1000 yuan for actual payment, one free for one new product, 5.5% discount for 4 pieces, and coupons for members.

Although various brands have launched different discount activities at the end of the year, compared with other brands, the discount intensity of MetS Bonwe is much greater. Taipingniao tmall flagship store only launched a 7.6% discount, while UNIQLO did not. SEMAR launched activities such as 30% discount for 3 pieces and coupons.

At the same time, in the offline physical stores of MetS Bonwe, there are also discount activities. Sales staff of a Metersbonwe store in Beijing told Beijing Business Daily that the offline sales promotion was being carried out at present, with 30% discount for 3 pieces.

In response to the discount promotion of its brands, Meibang clothing is also accelerating the process of closing inefficient offline stores. Beijing Business Daily reporter found that at present, many stores in Beijing, including Xidan Joy City and impression store, have been closed. According to the financial report, in the first half of 2021, Meibang clothing closed 73 Direct stores and opened 12 new stores; 292 franchise stores were closed and 131 new ones were opened, that is, 365 direct and franchise stores were closed. In 2020, Meibang clothing has closed 937 stores.

At the end of 2021, the official of Meibang apparel told the media that it had closed all offline inefficient and loss making stores. Previously, Meibang apparel said in the announcement that it would speed up the closure of all continuously loss making stores to ensure the enterprise's profit-making operation as the basis of positive strategy, and it may make adjustments to unprofitable stores in the future.

For the large-scale discount promotion and store closure, Beijing Business Daily reporter interviewed Meibang clothing, but as of the time of publication, no reply has been received.

In addition to sales promotion and store closing, Meibang clothing has been selling off its assets in order to stop losses. For example, it plans to sell off 100% equity of Shanghai Modong Industrial Co., Ltd. for RMB 448 million, and sell 10.1% shares of Huarui bank by RMB 424 million.

Wang Chikun, an independent economist, said that after years of development, Meibang clothing has begun to decline. At this time, without increasing investment, the performance is sluggish; With the increase of input, the input-output ratio will decrease, and the sales will decrease instead of increasing. Based on this, Meibang clothing can only reduce the business scale and reduce the loss as much as possible.

Long term deficit to be settled

Whether it is the previous sale of assets, or the current tightening of shop closures or discount promotion, the reasons behind it are closely related to the optimistic performance of Meibang clothing.

According to the performance data, in 2020, Meibang clothing achieved revenue of 3.819 billion yuan, down 30.1% year-on-year; The loss was about 860 million yuan, down 4.11% year on year. In 2019, Meibang clothing achieved revenue of 5.482 billion yuan, a year-on-year decrease of 28.59%, and a net loss of 826 million yuan. From 2015 to 2018, the net profit of Meibang clothing was rmb-432 million, RMB 36.16 million, RMB 305 million and RMB 40.36 million respectively.

The current performance of Meibang clothing is far from its peak. Meibang clothing, which was listed on the Shenzhen Stock Exchange in 2008, ushered in its own development peak in 2011. According to the financial report data, the total business income of Meibang clothing reached 9.945 billion yuan, and the net profit attributable to its parent reached 1.206 billion yuan.

In the view of industry insiders, in recent years, due to the fierce competition in the leisure clothing industry, overstocking of goods in stock, and the decline of franchise income, the overall situation of domestic leisure clothing is in a low state, so is Meibang clothing.

For Meibang clothing, which has been losing money for two years and may continue to lose money, stopping the loss has become the top priority, and its large-scale shop closing seems to have played a certain role. According to the data, in the first three quarters of 2021, Meibang's revenue was 1.933 billion yuan, a year-on-year decrease of 28.15%, and a net loss of 125 million yuan, narrowed compared with the loss of 710 million yuan in the same period of 2020.

For the changes in the performance of the third quarter of 2021, Meibang clothing in the announcement attributed the reasons to the sale of assets and optimization of channel structure, initiative closure of loss making stores.

In Wang Chikun's view, the essential problem that Meibang clothing faces is the problem of business model, and it is not a long-term plan to sell money and close stores. Through many years of development facing bottlenecks, what Meibang needs is to change its current business model and invest its existing resources and capital flow into the products and companies of new forces.

Repositioning

　　 It is worth mentioning that at the beginning of the development of Meibang clothing, although it was positioned as "fast fashion", it seems that it has nothing to do with "fast". According to an online public report, due to the lack of stamina in the supply chain and designer team of Meibang clothing, the new product has a low update rate, and the whole cycle from design to store sales lasts for more than two months; However, it only takes 12 days for Zara's new products from design to store sale; The speed of Taiping birds is also measured in weeks.

Wu Daiqi, CEO of Shenzhen siqisheng company, said that closing stores can not cure the symptoms but root causes. At present, Meibang clothing can't really adopt the "fast fashion" brand method. The brand is aging and lacks real innovation. The service and supply chain system can't keep up with each other. The consumer group is gradually shrinking and the brand is gradually forgotten by consumers.

In 2021, Meibang clothing seems to be determined to transform its brand. At the end of 2021, Meibang clothing upgraded its fast fashion brand Metersbonwe, positioning itself as "pioneer fashion brand", and launched a series of new fashion products for the "post-95" and even "Post-00 generation". At the same time, it redefines its brand mecity as a new luxury fashion, focusing on medium and high-end groups.

Meanwhile, in the first half of 2021, in view of brand upgrading, Meibang clothing held three investment promotion meetings, signing nearly 180 franchisees and 250 franchise stores.

In addition to repositioning and upgrading products, it has also made changes in personnel changes. At the end of 2021, Tu Ke, vice president of Meibang apparel, who has worked for 13 years, resigned from the relevant position. In the information disclosed by Meibang clothing, Tu Ke's resignation is personal reason. However, there is also a saying in the industry, that is, based on the strategic upgrading of Meibang clothing brand, focusing on and attracting young groups again, and "blood exchange" is carried out inside Meibang clothing. At this time, Meibang clothing needs a group of employees who are more aware of the needs and preferences of young people.

Industry insiders said that as a popular fast fashion brand before, Meibang clothing is facing problems such as aging brand, slow product update and unable to adapt to the new trend demand of young consumers. Closing stores to promote sales or even selling assets can not fundamentally solve the problem of loss. For Meibang clothing, we need to work hard on the iteration of new product research and development in the future.