SHANGHAI, Aug 28 (Reuters) - Shares in Shanghai Metersbonwe Fashion & Accessories Co 002269.SZ, the first major fashion retailer to list in China, rose 34 percent in their market debut on Thursday, at the low end of analysts' forecasts due in part to a weak stock market.
Metersbonwe, whose rivals include Giordano International Ltd (0709.HK: Quote, Profile, Research, Stock Buzz) and Esprit Holdings Ltd (0330.HK: Quote, Profile, Research, Stock Buzz) in one of the world's fastest growing fashion markets, raised 1.38 billion yuan ($202 million) by issuing 70 million domestic A shares, or 10 percent of its expanded share capital.
Its initial public offering attracted massive subscriptions of more than 1 trillion yuan, as investors flocked to the relative safety of the primary stock market while the secondary market is slumping.
China's highly fragmented casual wear market has attracted more than a dozen major foreign brands, including Gap Inc (GPS.N: Quote, Profile, Research, Stock Buzz) and Sweden's H&M (HMb.ST: Quote, Profile, Research, Stock Buzz). Fashion retailer Zara, owned by Spain's Inditex (ITX.MC: Quote, Profile, Research, Stock Buzz), has also been adding new stores in major Chinese cities.
Metersbonwe's local-currency A shares were at 26.50 yuan on the Shenzhen Stock Exchange in early afternoon trade, compared with the IPO price of 19.76 yuan.
Analysts had forecast a trading range of 26 to 30 yuan for Metersbonwe's shares on the first day, partly citing the slumping stock market. While a 36 percent rise is healthy by international standards, it is not unusual for Chinese IPOs to double or triple in price on their first day of trade.
China's benchmark stock index .SSEC has plunged 62 percent from its peak last October, hit by a slew of negative factors including worries over a slowing economy and corporate earnings.
Shanghai-based Metersbonwe, which has a 0.95 percent market share in China's fashion retail sector, has said it would use the proceeds to expand production and its network of stores.
Metersbonwe, founded 12 years ago, operates about 2,000 stores nationwide that sell casual clothing targeted at 18- to 25-year-olds. ($1=6.83 Yuan) (Reporting by Lu Jianxin; Editing by Edmund Klamann)
Relative information:
Metersbonwe Group is China's leading casualwear apparel company. Metersbonwe opened their first store in Wenzhou on April 22nd, 1995. By the beginning of 2007, the company operates around 1,800 stores across China and has over 5,000 employees. In 2006 the Group's retail sales exceeded RMB 4 billion, making Metersbonwe the largest casualwear retail brand in the country. The company targets 18-25 year old male and female consumers. Their corporate slogan is "Be Different".
Metersbonwe was created by President and Founder, Mr Zhou Chengjian. In the early 1990s he ventured to Wenzhou after borrowing 200,000 yuan (US$24,691). He worked everyday selling clothes in the daytime and tailoring clothes in the evening. In 1992 he tailored thousands of winter coats for other factories and started to make enough to build his own brand.
By using franchisees and building a strong team of French and local designers, the company grew by more than 30% every year. The brand quickly catered to the needs of a young and increasingly fashion conscious consumer base. By focusing on good quality and reasonable prices, the company gained increasing popularity.
The company invited TaiWan star Jay Chou to become the brand's image ambassador in 2003. As a result, MetersBonwe became the best selling brand for the year 2004, evaluated by the China National Garments Association. In 2005 its annual earnings with the sale of the brand's clothes netted some 3 billion yuan (US$370 million).
In its new Shanghai Headquarters, opened in late 2005, the company opened a fashion museum for the public. In the museum, there are ancient and ethnic costumes and accessories, many not even found in national museums. Some parts of the collection will now be relocated to a new store opening up in late 2007 on Nanjing Road in Shanghai.
