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Why is Metersbonwe going on an unusual road?
While maintaining its strong stance, Metersbonwe has been actively implementing its investment philosophy: it avoids investing in projects that don't generate profit, and also steers clear of ventures that are profitable but lack the necessary resources or feasibility. Furthermore, it refrains from investing in projects that promise profit but lack the right team or vision. This approach reflects a careful balance between ambition and practicality.
The phrase "not going the usual road" was one of the key factors behind Metersbonwe's rapid growth in the casual wear market. However, the company is now shifting its strategy—moving from an unconventional path to embracing a more innovative yet calculated approach. The brand is gradually transitioning from heavy asset operations into a more diversified model that combines industry with investment. At the same time, its brand selection has evolved, moving away from local names like Baleno Road and Jeanswest to global fashion giants such as ZARA and H&M. This shift may signal a growing maturity in the leadership of Smith Barney, but it also shows that the company is willing to take risks in pursuit of long-term success.
On December 9, 2009, Metersbonwe officially announced the establishment of Changan Fund in collaboration with Armed Forces Finance and Xi'an Trust. This marked a formal entry into the capital investment sector, similar to earlier moves by companies like Youngor and Shanshan. While others took the “industry + investment†route independently, Metersbonwe chose a more cautious path, partnering with established players and starting with stable fund investments.
In the same month, however, the company faced a setback. Li Jindai, former vice president of Metersbonwe, was arrested for alleged bribery related to the development of store locations. His actions reportedly caused significant damage to the company’s interests. This incident highlights the risks associated with the company’s aggressive expansion plan in 2009, which involved opening numerous new stores across the country.
According to the company’s 2009 plan, expanding store presence was a top priority. The goal was to open 68 new stores throughout the year, including 31 directly operated and 37 franchised locations. By the eighth month, the company had already secured 39 locations, surpassing half of the target. This large-scale expansion came at a cost, as net profits dropped by about 14% in the third quarter. The heavy investment in real estate and store development created financial pressure, but also raised concerns about potential mismanagement.
Metersbonwe has since taken a more measured approach to its investments. It has allocated over 33 million yuan into the fund, entrusting it to a professional team while retaining only a shareholder role. Compared to other companies that manage their own investments, this strategy reduces risk, although it also limits potential returns. In China’s volatile capital market, even experienced business leaders can be tempted by quick profits. As one executive once noted, “When you see the amount of money you can make in a day in the stock market equal to what you earn in a lifetime from clothing, who wouldn’t be tempted?â€
Beyond financial investments, Metersbonwe has also ventured into commercial real estate. During its store expansion, the company has begun acquiring properties to support its retail operations. According to reported purchases, the company has acquired nearly 30 pieces of commercial real estate, including a 370 million yuan purchase of the "Kyoto Building" in Chengdu. These assets are helping to strengthen the company’s financial base. Moreover, with average store sizes reaching around 1,400 square meters—comparable to ZARA and H&M—the company is positioning itself for continued growth in both retail and real estate.
Currently, Metersbonwe’s ME&CITY brand is targeting the same market as ZARA and H&M, focusing on fast fashion with a strong emphasis on design and speed-to-market. However, as it continues to grow, the company must remain disciplined in its investment decisions. Will it truly stick to its philosophy of not investing in unprofitable or impractical projects? Only time will tell if Metersbonwe can avoid the pitfalls of overexpansion and maintain its unique edge in the competitive fashion industry.