Volatility in cotton prices implicated in poor home textile business may be closed

At the end of the year, many consumers are ready to replace their home curtains or bedding. When prices are asked, they find that the price of home textile products has risen by 20% to 30%. The middle and low-end home textile companies that have no intention of accepting price hikes by consumers are generally confused about the next year's development. Some people in the industry believe that it is not ruled out that the home textile companies may be closed down.

The annual sales of 45 yuan a meter of cotton curtain fabric, now rose to nearly 60 yuan / meter. Mr. Huang, who runs the curtains business, said yesterday that when the price of cotton rose sharply in the preceding period, curtain fabrics also rose. The maximum peak time was one meter or more and rose by more than ten yuan in a day or two. Although the price of cotton has recently declined, the price of fabric manufacturers has been quoted. Still rising, there was a curtain fabric rose by 4.5 yuan/m the day before yesterday.

“Our business conditions are not very good. On the one hand, some customers saw the price increase much, they dismissed the idea of ​​buying new curtains; on the other hand, due to the fluctuation of cotton prices, fabric manufacturers take a wait-and-see attitude and reduce the purchase of raw materials and inventory. And local governments have limited power, production is also affected, and supply is not stable, which makes us delay the time for our customers to make curtains,” said Huang.

The person in charge of a middle-and-low-grade bedding home textile company in Foshan, Guangdong Province, also reported that the price of cotton was so badly burned that the price of raw materials kept changing, and it was necessary to repeatedly communicate with hundreds of retailers in the downstream about price matters. On the other hand, they wanted to The fabric factory constantly negotiated, when the price of cotton rose, the fabric factory deliberately delayed delivery and started selling at a price. Now that the price of cotton is falling, the fabric factory expects the price of raw materials to continue to decline and reduce the amount of cotton purchases, resulting in intermittent supply of fabrics. This is a brand operation. The stability caused damage and I do not know how to formulate the next development plan. I can only take a step forward.

In contrast, the operation of high-end brand home textile companies is still relatively optimistic. The reporters found that Luolai Home Textiles, Fu Anna, and Mengjie Home Textiles have all recently raised prices for new products in different degrees. In the past, the four-piece cotton bedding made by Luolai Home Textile Co., Ltd., which was priced at RMB 100, has generally risen to more than RMB 1,000. Less 10,000 yuan worth of silk premium beds. Fu Anna had many beds last year between RMB 400 and RMB 700. Currently it is generally between RMB 500 and RMB 800. Promotional discounts are also raised. In December last year, Fu Anna’s minimum discount was 3% off in Wangfujing Mall, Guangzhou. And now there are few discounts.

Fu Yan, Deputy Secretary of the Board of Directors Hu Zhenchao, said yesterday that he has raised the price of new products by about 20% at the spring/summer fair next year. Through the increase in value added through design and new processes, the price can be raised relatively smoothly. Faced with fluctuations in raw material prices, listed companies can clearly demonstrate their financial strength and other advantages. Using cash to purchase cotton will lock up the price of raw materials to a certain extent, and brand companies will have the right to set prices and absorb new products to absorb costs and maintain certain profits.

Xiao Jiancheng, deputy secretary-general of the Guangdong Home Textiles Industry Association, said yesterday that high-end home textile companies have relatively high selling prices, and that their volume is not too large. The ability to cope with fluctuations in cotton prices is relatively strong, and low-end home textile companies have low profits. Large output, cotton price fluctuations have seriously affected the new product development and delivery speeds of these companies. The association’s survey found that medium and low-end home textile companies generally have no clear operating plan for the next year.

Xiao Jiancheng mentioned that home textile products are not essential consumer goods. On the basis of retention, consumers’ acceptance of market price increases is limited. Once prices rise sharply, consumers may suspend purchases, and current consumer psychology has a tendency to decline. . Therefore, many small and medium-sized enterprises begin to compress their profits internally and absorb some of the rising costs themselves. However, these companies' profits are originally low, and it is easy to cause internal injuries.

“At present, low-end home textile companies are in a more dangerous situation. If the costs of raw materials, labor, and logistics continue to rise and the exchange rate fluctuates, it is possible not to rule out the possibility of closure of a number of enterprises, especially export-oriented processing companies,” said Xiao Jiancheng.