HLA Group Joins A-Share Rush to Hong Kong as China's Menswear Giant Battles Slowing Growth
HLA Group, China’s largest menswear retailer, is joining a wave of leading mainland-listed companies seeking a secondary listing in Hong Kong, as the industry giant attempts to counter slowing domestic consumption and declining efficiency in its core operations.
Under the stewardship of second-generation Chairman Zhou Lichen, the Jiansu-based textile titan is navigating a critical transition period. Having dominated the A-share menswear sector for a decade with its ubiquitous "Wardrobe for Men" branding, HLA Group is now grappling with eroding profitability and inventory pressures common across the apparel sector, prompting an aggressive pivot toward brand diversification and overseas expansion.
The strategic shift arrives as the company faces headwinds in its primary segment. For the first three quarters of 2025, HLA Group reported revenue of RMB 15.6 billion (US$2.15 billion), a modest 2.23% increase, while net profit slipped 1.69% to RMB 2.42 billion. The sluggish performance reflects broader weakness in China's retail apparel market, where growth has decelerated significantly compared to previous years, forcing the company to seek new capital channels and growth engines.
Investors are closely watching whether Zhou’s dual strategy of "rejuvenation and internationalization" can reinvigorate the legacy brand. While the company has expanded into womenswear, kidswear, and sports retail partnerships with global heavyweights, the declining efficiency of its massive store network remains a central concern for its valuation prospects in a new capital market.
Diversified Portfolio and Strategic Partnerships
Founded in 2002 by Zhou Jianping, HLA Group built its dominance on the loyalty of male consumers, securing the top spot in China’s menswear market by 2014. However, recognizing the limitations of the low-frequency male consumption cycle, the company has aggressively transformed into a multi-brand conglomerate covering all demographics. This portfolio now includes the workplace womenswear brand OVV, fast-fashion label Black Whale, and the acquired premium children’s brand YeehoO.
Recent expansion has moved beyond traditional brand manufacturing. In 2024, HLA Group secured exclusive retail rights for Adidas’s FCC series in mainland China, expanding the network to 529 stores by mid-2025. Simultaneously, the company obtained authorization for the Austrian sportswear brand HEAD, mirroring the brand acquisition strategies of rivals like Anta Sports. Additionally, a strategic partnership with JD.com aimed at the "city outlet" sector has launched 23 stores, targeting the high-growth value-for-money segment.
The company’s customized clothing business—serving government bodies and large enterprises—has emerged as a bright spot. Revenue from this segment rose 23.7% year-on-year to RMB 1.34 billion in the first half of 2025, outperforming the broader industry.
Erosion of Core Profitability
Despite the expanding portfolio, HLA Group faces diminishing returns from its sheer scale. The company operates 7,209 stores, but operational metrics have deteriorated. since 2023, key indicators including average selling price, transaction volume, and gross merchandise value (GMV) per store have largely trended downward.
The core HLA menswear brand, which accounts for the bulk of earnings, is contracting. Revenue for the main brand fell 6.84% in 2024 and declined a further 5.54% in the first half of 2025. While new ventures like the Adidas partnership and city outlets boost top-line revenue, the capital-intensive nature of these expansions is currently weighing on overall margins. In 2024, the company’s net profit fell nearly 27% year-on-year.
These challenges mirror a slowdown in China's wider apparel sector. Retail sales for apparel above a designated size grew just 0.1% in 2024, a sharp deceleration from 2023. By June 2025, monthly growth rates had slowed to 1.9%, signaling weakening consumer momentum that poses systemic risks to mass-market retailers.
Next-Generation Leadership and Global Ambitions
Zhou Lichen, who formally took the helm as Chairman in 2020, is attempting to shed HLA Group’s aging "father’s wardrobe" image, which has struggled to resonate with younger generations. The company has overhauled its marketing strategy, engaging younger brand ambassadors and adopting internet-driven product strategies. Recent campaigns, such as the high-tech "Aurora" down jacket series, emphasize functional innovation over traditional retail appeal.
International expansion serves as the second pillar of Zhou’s reform agenda. HLA Group, which entered Malaysia in 2017, has accelerated its push into Southeast Asia, Africa, and Australia. By the end of June 2025, the company operated 111 direct overseas stores, with overseas revenue climbing 27.42% to RMB 206 million in the first half of the year. While HLA Group now ranks as the world's second-largest menswear brand by scale, its transition to a globally recognized label remains in the early stages.