Meibang Apparel (002269.SZ)'s “survival with a broken tail” continues.

Today, Meibang Apparel announced in the pre-market announcement that it plans to sell its store at No. 43, Dakejia Alley, Jinjiang District, Chengdu to Ningbo Youngor Clothing Co., Ltd. (“Youngor Apparel”) for 680 million yuan through cash transactions. The store is located in Chengdu's Chunxi Road business district, close to Chengdu's IFS, Taikuri and other landmark businesses.

Youngor Apparel is a wholly-owned subsidiary of 600177.SH (). Prior to that, Youngor Apparel had already taken on Meibang Apparel's store assets as successors several times: in October and December of last year, Meibang Apparel sold stores in Wuhan and Guiyang to Youngor Apparel for 190 million yuan and 130 million yuan respectively. In June of this year, Meibang Apparel sold stores located in Shenyang City for 300 million yuan.

If the above deal is completed, the total sales amount of Meibang Apparel since October last year will be close to 1.3 billion yuan.

Meibang Apparel said in its announcement that the proceeds are mainly used to supplement the company's working capital. The transaction is conducive to expanding global business development and preparing liquid capital for supply chain investment. Furthermore, continuing to reduce liabilities through asset revitalization will have a positive impact on the company's financial situation and operating results.

In the first three quarters of 2023, Meibang Apparel finally reversed its losses, but still lost money after deducting non-net profit. The balance ratio was as high as 90.09%, down 1.58 percentage points from the previous month and 3.11 percentage points from the previous month. The current ratio and the fluctuation ratio are 0.57 and 0.31, respectively, both less than 1.

Once upon a time, Meibang Apparel enjoyed the “No. 1 casual wear stock in China” and had endless popularity. Founder Zhou Chengjian's family held the richest position in the “Hurun Clothing Rich List” for three consecutive years from 2008 to 2010.

However, the good times did not last long. On the one hand, starting in 2012, the domestic garment industry has entered a period of adjustment, and inventory clearance has become a top priority for all companies;

On the other hand, domestic casual wear brands have been impacted by fast fashion brands such as Zara and H&M, which can more accurately adapt to trends with faster supply chain response speed. From 2012 to 2018, Uniqlo and Zara will open about 80 and 20 new stores every year, while H&M will open about 100 stores in the Chinese market every year between 2013 and 2017.

Due to internal and external difficulties, Meibang Apparel's net revenue and profit fell into a slump for four consecutive years since 2012. At its peak in 2011, Meibang Apparel's revenue was close to 10 billion dollars, but in 2022, there was only 1,439 billion yuan, a huge loss of 10.5 billion dollars, and the number of stores also shrunk from over 5,000 to less than 1,000.

Only then did the Meibang clothing stores mentioned above continue to sell monetization and save themselves.

In November of this year, founder Zhou Chengjian even transferred 5.97% of his shares in Meibang Apparel to Shenzhen Gaoshen Asset Management at a price of 1.62 yuan/share, and cashed out 243 million yuan to support the development of Meibang Apparel.

However, this is not an era where Metz Bonway “takes an unusual path”, nor is it an era of rapid development of overseas fast fashion in China. H&M closed its flagship store in Beijing this year, while Zara closed its first domestic store.

In this context, it is still unknown why Meibang clothing took a turn.