“China’s Zara” finally liquidates after years of financial problems

The domestic women’s clothing brand La Chapelle – also known as “China’s Zara” – has officially started the liquidation process following years of sluggish sales and mounting debt.

On June 20, the official WeChat account of the Shanghai Bankruptcy Court issued a statement saying that Xinjiang La Chapelle Clothing Co., Ltd. is unable to pay off due debt and that the court had accepted the company’s liquidation application. La Chapelle reportedly owes 343 million RMB (47.4 million USD) in cases involving up to 133 creditors.

La Chapelle was once China’s fastest-growing women’s clothing brand and opened 10,000 directly operated stores across the country. It was the first Chinese fashion brand to be listed on the Hong Kong Stock Exchange and the A-Share stock market at the same time (A-shares are shares valued in RMB listed on the Shanghai Stock Exchange and the Shenzhen Stock Exchange.

The brand has been in dire straits financially as far back as 2020, when it was threatened to be delisted from the Shanghai Stock Exchange. La Chapelle struggled to seize significant market share in fast fashion, with rival SHEIN able to churn out new designs much faster, and e-commerce sites like Taobao offering far more competitive pricing. It eventually delisted from the A-share stock market in March 2022.

The hashtag “La Chapelle officially liquidates” has garnered over 200 million views on Weibo, China’s Twitter equivalent. A few former fans of La Chapelle noted that they had purchased good quality and long-lasting items there 10 years ago but stopped buying from the brand as the quality of the designs and materials steadily declined.

It is understood that La Chapelle’s liquidation will reportedly not affect operation of its flagship online store on Tmall at this juncture.


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