Meibang, which had expanded 5,000 stores, is expected to lose 90 million yuan in the first quarter.

Recently, in the relevant debt tracking rating report released by Winshang.com, Meibang Apparel stated: As the pressure of domestic and foreign brand competition continues to increase, the impact of changes in e-commerce and retail channels will continue, and the company’s operating income will decline in 2015. "There were losses and unfavorable factors such as inventory turnover efficiency." Dagong International, a domestic rating company, maintained AA for the company's credit rating, and its rating outlook was adjusted to negative. This follow-up rating is for bonds previously issued by Smith Barney totalling 800 million yuan, which will expire in October 2018.

Revenue Profit Continues to Decline No More for Garment Giants

Metersbonwe, which once swept the light-asset operating model, has continued to encounter revenue and profit declines in recent years. The financial report shows that since 2011, the revenue and profit of Smith Barney have continued to decline. In 2011, operating income had approached the 10 billion mark, but declined year after year. In 2015, it was only 6.295 billion yuan, a decline of more than 30%.

The net profit from 2011 was more than 1.2 billion yuan, which dropped sharply. By 2015, it had a loss of 432 million yuan. In the first quarter 2016 financial report, Smith Barney once again expected the company to have a loss of 90 million yuan in the first half of the year.

Rapid expansion, but the tide of stoppages quickly hit

Prior to the profit crisis, Mebon Fashion experienced a rapid expansion, with the number of direct-operated stores and franchise stores approaching 5,000. Due to the competition from domestic and foreign brands and the impact of e-commerce, Mebon has gradually shut down its loss-making and inefficient stores since 2013 and promoted channel transformation and upgrading. The financial report shows that in 2013 the company owned nearly 5,000 stores and franchise stores. As of the end of 2015, there are about 3,700 stores with a quarter of sales.

The apparel apparel brand that has suffered from the pressure of performance is not merely a family of beauty apparel. Underwear Co., Langsha Co., Ltd.’s revenue fell by 37.94% in 2015, and its net profit decreased by 11.55% year-on-year. Footwear industry and sports brand retail giant Belle International (1880.HK) had a net profit of 2.934 billion yuan for the latest fiscal year, a sharp drop of 38.41% from the previous year, and also shut down some shops with low performance.

In recent years, Meibang Apparel has attempted to improve its performance through e-commerce and O2O online and offline interactions, but it still faces many uncertainties.

Dagong International stated in its evaluation report that “In the next 1 to 2 years, the company will continue to promote the transformation of experiential stores and the establishment of an online and offline full-flow model, and will continue to face increasing competition in the apparel retail industry and changes in consumer channels. The impact of the unfavorable factors such as the decline in the number of store operations, the short-term effect of the transformation of the company has not yet fully presented, still face certain operating pressures."

Since the stock market disaster last year, the share price of M.B.M. apparel has fallen by close to 70%. The stocks of many high-end holders have been deeply stuck. The unexpired bonds have also encountered the negative outlook of the assessment company. Can bondholders sleep peacefully?