Yoho! Group, a Chinese streetwear media and e-tail unicorn is facing escalating financial troubles, according to a Tencent News report.
It cited anonymous sources from within the group’s management team and several employees who said the company has lost 80 percent of its previous workforce as a result of layoffs and unpaid wages.
Former employees, who also did not want to be named, confirmed to BoF that the report’s information about the company’s financial situation and staff turnover was an accurate reflection of Yoho! Group’s current predicament.
According to public data, Yoho!’s parent company is currently facing more than 30 civil lawsuits.
The group started life as a print magazine, which became a cultural primer for many Chinese millennials. It has since developed platforms such as Yohood, a renowned streetwear fair and Yoho! Buy, an e-commerce platform. The group also runs Dazed China.
It was once the most powerful player in China’s streetwear arena and a hot target for investors. In 2018, it reported annual revenue of 3 billion yuan ($467.95 million), which represented an annual increase of 50 percent.
Former employees told BoF the company was in trouble because it has aggressively developed multiple businesses in order to expand its brand, leading to an asset-heavy model. At the same time, no particular business unit under its umbrella has strong profit margins and new streetwear platform competitors, such as Poizon, are applying enormous pressure.
Yoho! ‘s management is reportedly urgently exploring a variety of solutions, including continued financing and a takeover. JD.com, ByteDance, Tencent and Bilibili were mooted as potential suitors, as they all have demand for streetwear content and e-commerce experience.