Hodo (Red Bean) — a familiar name in China’s traditional menswear market — is confronting a simultaneous collapse in sales and a corporate governance shock that together threaten its recovery. The listed company posted a 2024 net loss of ¥238 million and on January 20 warned that 2025 losses would deepen to between ¥280 million and ¥360 million as revenue falls and margins compress. The company blames a weak macro economy, subdued consumer demand and fierce industry competition for a 15% decline in core operating income in 2025, while cost reductions were insufficient to offset lost gross profit.
The deterioration is visible in the numbers. Revenue slipped from a steady ¥2.3–2.4 billion range in 2020–23 to ¥1.959 billion in 2024, and the first three quarters of 2025 produced only ¥1.133 billion, down 23.9% year-on-year. Men’s wear still accounts for more than 70% of sales — with casualwear alone contributing roughly 31.5% — leaving the company highly exposed to structural weaknesses in that segment. Brick-and-mortar pressure is acute: total stores declined to 907 by September 2025, with same-store performance suffering and franchise-operated outlets showing razor-thin profitability.
Operational measures have been taken. Hodo restated its 2024 accounts after consolidating the group’s home-living e-commerce business and said it cut selling, administrative and R&D expenses by about ¥120 million in 2025. Management also proposed a ¥485 million intra-group purchase of an online homewares asset bundle — a bid to reallocate resources toward higher-growth categories and capture synergies between apparel and home-living e-commerce.
Yet the company’s balance sheet and short-term liquidity paint a cautious picture. Total assets fell to ¥3.689 billion at the end of Q3 2025 from ¥4.376 billion a year earlier, while shareholders’ equity slid to ¥2.332 billion. Although the reported asset-liability ratio remains moderate near 35%, declining current and quick ratios point to increasing near-term repayment pressure.
Compounding operating and liquidity stress, the firm’s controlling shareholder, Red Bean Group, has seen large blocks of its listed shares subject to judicial freezes and pre-judgement (轮候) freezes. The group holds roughly 59% of the company and has had hundreds of millions of shares restrained, reflecting creditor enforcement tied to Red Bean Group’s own deepening debt problems and large-scale asset disposals earlier in 2024. Management says the freezes do not affect day-to-day operations and that the listed company remains operationally independent, but the public enforcement actions damage investor confidence and complicate strategic financing.
The troubles at Hodo are emblematic of a broader recalibration in China’s apparel market. Traditional mid-market menswear labels face a multi-year headwind from shifting consumer tastes toward fast fashion, premium lifestyle brands and online-native labels, while overall discretionary spending has softened. For legacy brands with heavy offline footprints and single-category concentration, the path forward requires faster channel migration, sharper product repositioning and fresh capital — options that become harder to execute amid shareholder distress and frozen equity stakes.
For suppliers, regional landlords and financial creditors, Hodo’s predicament is a cautionary tale. The company’s attempt to buy the group’s online homewares assets signals one plausible survival play: redeploying brand equity into adjacent lifestyle categories and digital channels. But that strategy will demand execution at scale, new marketing sophistication and credible independent governance — all of which are harder while the parent company grapples with creditor actions and asset sales. The likely near-term outcomes are further store rationalisation, more asset-light partnerships or franchising, and the search for strategic investors or state-backed stabilisers if private financing remains constrained.