Metersbonwe this week said it would launch an IPO on the Shenzhen Stock Exchange to help it compete with overseas brands such as Zara, H&M and Uniqlo, which are opening stores in the country.
It hopes that the funds raised will enable it to open another 68 stores across China. The Shanghai-based casualwear retailer plans to sell 70 million shares, which would account for 10 per cent of its enlarged share capital.
The retailer, which was set up 12 years ago, claims to be China’s largest fashion chain and operates more than 2,000 stores, targeting customers aged 18 to 25.
Last year, Metersbonwe’s net profits soared more than five-fold to Yn364 million (£27.1 million). Sales doubled on the previous year to Yn3.16 billion (£234.9 million).
According to Euromonitor, China’s casualwear market is worth about US$519 billion (£264.07 billion) and growing at a rate of 14 per cent a year.
Its total retail market grew to about Yn5,075.6 billion (£376.87 billion) last year, attracting the attention of expanding international retailers.
Planet Retail analyst Robert Gregory said there is still great potential for Chinese apparel retailers to grow, despite the influx of overseas competition. “Many international retailers target the largest cities but there is still lots of potential for growth in third- and fourth-tier cities,” he said.
He added that China has traditionally been targeted by higher-end brands, which have aimed their offer at the country’s growing middle class. In recent years younger fashion brands including Zara and H&M have also entered the burgeoning market.
However, Gregory said that he does not see the larger Chinese retailers looking at markets outside China just yet. He added: “There is still so much potential left in China – why expand into a more risky mature market?”
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