Clothing prices are fiercer than tiger clothing business insurance inventory quagmire
Clothing prices spurt on the tiger just after the Mid-Autumn Festival, a fall rain makes people feel cool, this should be a good time for autumn sales, but the sky-high autumn prices, but inhibited the consumer's desire to buy. In fact, as early as late August, autumn clothing has been low-keyed into the market, with the color and style of clothes last year, the price has a 10% -20% increase, an ordinary long-sleeved shirt must also be 300 yuan, the jacket will have 400-800 yuan.
"This autumn's prices have risen by 10% to 20% from last year. Last year, our newly-listed shirts were generally around $200, and this year it was almost $230." Sales staff at Beijing Contemporary Mall said that salespeople said.
In this regard, a number of industry sources said that although this year's fall prices rose about 10%, but compared with last year's fall of 10% to 20% increase compared to a smaller margin. In the cause, the two are different. The major increase in clothing last year was mainly due to the increase in the price of clothing raw materials, which led to an increase in the price of clothing at the end of the production chain. The price of raw materials has not changed so much this year. The reason for the increase in the price of clothing is the increase in prices and wages of workers.
In fact, the cotton price hit a new high at the end of last year and during the Chinese New Year this year. Then it went all the way down. From the end of February to August of this year, the price of cotton dropped by about 40%, and several trading days fell below the national reserve price. 19,800 yuan/ton. However, from picking cotton to spinning fabrics and sending them to garment factories to process finished products, this process takes time. Autumn fabrics on the market are currently purchased in the first half of the year, and the cost is still high. On the other hand, the costs of labor and transportation have also increased over the past six months. Mr. Liu, who has been in the apparel business for more than 20 years, told reporters, “Last year, a waiter hired was 1,500 yuan/month, and now it has risen to 1800-2000 yuan/month.†At the same time, the cost of labor in garment factories is also rising.
The increase in the cost of labor to offset the fall in the price of cotton to the autumn clothes to some extent, so that fall does not fall down. This is even more evident in the sporting goods industry. At the end of July, headed by Li Ning, Anta, Xtep, Peak and 361 Degrees and many other sporting goods manufacturers announced the news of the price increase of shoes and clothing products at the ordering meeting. Li Ning declared that in the fourth quarter of this year, the price of footwear products will increase by 7.8%, clothing will rise by 17.9% overall, and the remaining companies will increase their prices by 1-20%. The price increase was less than three months before the last collective price increase of the top five well-known sports brands in China.
As with sporting goods, down products also have a strong demand for price increases. According to the latest news, on September 7, at the 13th Jiangsu International Fashion Festival, a number of companies including Bosideng and Yalu expressed that due to the rising costs of raw materials and labor, the prices of new clothes launched in the second half of the year will increase compared to last year. The increase ranged from 10% to 20%.
Inventory quagmire, in fact, not only autumn, clothing prices have been "going on the go" since the second half of last year. The increase in product prices has directly boosted the performance of branded apparel companies.
According to public statistics, the apparel segment listed companies achieved sales revenue of 40.627 billion yuan in the first half of the year, an increase of 22.43% year-on-year; net profit attributable to the parent company was 3.629 billion yuan, an increase of 49.12% from the same period last year. Among them, Smith Barney's total operating income in the first half of 2011 was 3.792 billion yuan, an increase of 49.31%; net profit was approximately 376 million yuan, a year-on-year increase of 833.06%. In the first half of this year, Senma Garment achieved a total operating income of 3.009 billion yuan, an increase of 36.64% year-on-year, and a net profit of 437 million yuan, a year-on-year increase of 29.12%.
However, the price increase is a double-edged sword that, while driving the performance of garment companies, also inhibited a certain degree of consumer desire. Faced with high prices, some consumers have tightened their money bags.
According to the statistics of the Shanghai Garment Industry Association, sales of major categories of clothing in Shanghai's top ten shopping malls in May 2011 were 993 million yuan, a year-on-year increase of 21.1%; the average sales price was 508.5 yuan/piece (set), a year-on-year increase of 26.5%. Sales of 965,000 pieces (sets), a year-on-year decrease of 28.6%. Among them, the cumulative sales volume of women's dresses, which accounted for about one-third of the sales, was 1.952 million (sets) at the end of May 2011, a decrease of 88,000 (sets) year-on-year and a decrease of 4.3% year-on-year.
The increase in the performance of apparel listed companies is due to the increase in price rather than sales volume, coupled with the company's own production and operation reasons, some companies' inventory levels have increased significantly.
Take Meibang Apparel as an example, its financial report shows that the company's inventory is constantly increasing. Inventory at the end of the first quarter of 2010 was 706 million. At the end of the first quarter of this year, it was “swelled†to 3.162 billion, an increase of 347.88% year-on-year.
In response, Zhou Bangjian, chairman of Meibang, said that due to overly optimistic sales expectations, the company increased the amount of orders last year and placed orders ahead of schedule, resulting in a large number of spring and summer clothing delivery at the end of last year and early this year. However, the surge in order reserves has happened in an unusual climate, affecting the sales of products. At the same time, the corresponding inventory processing channels did not form a scale, causing the current inventory to be too high.
Li Ning, which is adjusting its dealers, is also plagued by high inventory. In 2010, Li Ning's inventory value was 806 million yuan, an increase of 27.5% from 2009. In the first half of the year, due to inventory and other factors, Li Ning's revenue decreased by 4.8% year-on-year, and its performance was overtaken by Anta, which lost the top spot in domestic sports goods. China's trend in the first half of the year, which has not reached its expectations, has also been burdened by inventory. Among them, due to the serious overstock in retail channels, China's initiative to repurchase inventory and reduce the amount of wholesale, the company's comprehensive revenue in the first half of the year dropped by 45% year-on-year.
At present, some clothing companies have fallen into the quagmire of inventory. An industry source told reporters that the inventory of a sportswear company in Fujian can be sold for a whole year. The industry even has such a "joke": Even if all garment enterprises in China are discontinued, It is just that the warehouse stock can be sold at home for at least 3 years. The severity of the inventory backlog in the apparel industry is evident here.
"If a garment company makes money as inventory, it is equivalent to not earning. The most valuable thing for garments is inventory." Xia Guoxin, chairman of Shenzhen Songlishi Garment Industry Co., Ltd., pointed out that the inventory was harmful to garment companies. A large amount of product backlog not only occupies the company's operating funds, consumes manpower and material resources, but also increases the company's management costs and profit-making costs, lengthens the product turnover cycle and reduces the company's overall profit. And if simply selling at a low price damages the brand, it will also undermine the confidence of the channel business.
"The company will sell through the outlets at a lower discount. The discounts on these sales products are higher than the cost price and will not result in a loss of the Meibang apparel." Zhou Chengjian, chairman of the Meibang apparel company, said that Meibang Apparel and its dealers will open a special store Digestion inventory. It is understood that Smith Barney’s sales channels are under planned and controlled construction. This is only an auxiliary means of digesting inventory, and will not become a major reliance means to prevent the formation of bad influence on the brand image.
Zhang Zhiyong, CEO of Li Ning Company, also stated that it will invest 300 million yuan this year to recover inventory from dealers. The amount spent on inventory recovery next year will not exceed this year. Zhang Zhiyong said that at present, Li Ning's factory store works well, with an average monthly water flow of 400,000 yuan per store, which is higher than the monthly flow rate of Li Ning outlets and brand stores. The number of factory stores in the future will increase to 240. Around home, it mainly deals with inventory.
In fact, due to the fact that the inventory of garment companies at this stage is mostly generated in last winter and the spring and summer of this year, garment companies will focus on the construction of inventory-digestion channels in the second half of the year and “strategly resolve the issue of inventory in the first half of next year.†Zhou Chengjian said so.
"This autumn's prices have risen by 10% to 20% from last year. Last year, our newly-listed shirts were generally around $200, and this year it was almost $230." Sales staff at Beijing Contemporary Mall said that salespeople said.
In this regard, a number of industry sources said that although this year's fall prices rose about 10%, but compared with last year's fall of 10% to 20% increase compared to a smaller margin. In the cause, the two are different. The major increase in clothing last year was mainly due to the increase in the price of clothing raw materials, which led to an increase in the price of clothing at the end of the production chain. The price of raw materials has not changed so much this year. The reason for the increase in the price of clothing is the increase in prices and wages of workers.
In fact, the cotton price hit a new high at the end of last year and during the Chinese New Year this year. Then it went all the way down. From the end of February to August of this year, the price of cotton dropped by about 40%, and several trading days fell below the national reserve price. 19,800 yuan/ton. However, from picking cotton to spinning fabrics and sending them to garment factories to process finished products, this process takes time. Autumn fabrics on the market are currently purchased in the first half of the year, and the cost is still high. On the other hand, the costs of labor and transportation have also increased over the past six months. Mr. Liu, who has been in the apparel business for more than 20 years, told reporters, “Last year, a waiter hired was 1,500 yuan/month, and now it has risen to 1800-2000 yuan/month.†At the same time, the cost of labor in garment factories is also rising.
The increase in the cost of labor to offset the fall in the price of cotton to the autumn clothes to some extent, so that fall does not fall down. This is even more evident in the sporting goods industry. At the end of July, headed by Li Ning, Anta, Xtep, Peak and 361 Degrees and many other sporting goods manufacturers announced the news of the price increase of shoes and clothing products at the ordering meeting. Li Ning declared that in the fourth quarter of this year, the price of footwear products will increase by 7.8%, clothing will rise by 17.9% overall, and the remaining companies will increase their prices by 1-20%. The price increase was less than three months before the last collective price increase of the top five well-known sports brands in China.
As with sporting goods, down products also have a strong demand for price increases. According to the latest news, on September 7, at the 13th Jiangsu International Fashion Festival, a number of companies including Bosideng and Yalu expressed that due to the rising costs of raw materials and labor, the prices of new clothes launched in the second half of the year will increase compared to last year. The increase ranged from 10% to 20%.
Inventory quagmire, in fact, not only autumn, clothing prices have been "going on the go" since the second half of last year. The increase in product prices has directly boosted the performance of branded apparel companies.
According to public statistics, the apparel segment listed companies achieved sales revenue of 40.627 billion yuan in the first half of the year, an increase of 22.43% year-on-year; net profit attributable to the parent company was 3.629 billion yuan, an increase of 49.12% from the same period last year. Among them, Smith Barney's total operating income in the first half of 2011 was 3.792 billion yuan, an increase of 49.31%; net profit was approximately 376 million yuan, a year-on-year increase of 833.06%. In the first half of this year, Senma Garment achieved a total operating income of 3.009 billion yuan, an increase of 36.64% year-on-year, and a net profit of 437 million yuan, a year-on-year increase of 29.12%.
However, the price increase is a double-edged sword that, while driving the performance of garment companies, also inhibited a certain degree of consumer desire. Faced with high prices, some consumers have tightened their money bags.
According to the statistics of the Shanghai Garment Industry Association, sales of major categories of clothing in Shanghai's top ten shopping malls in May 2011 were 993 million yuan, a year-on-year increase of 21.1%; the average sales price was 508.5 yuan/piece (set), a year-on-year increase of 26.5%. Sales of 965,000 pieces (sets), a year-on-year decrease of 28.6%. Among them, the cumulative sales volume of women's dresses, which accounted for about one-third of the sales, was 1.952 million (sets) at the end of May 2011, a decrease of 88,000 (sets) year-on-year and a decrease of 4.3% year-on-year.
The increase in the performance of apparel listed companies is due to the increase in price rather than sales volume, coupled with the company's own production and operation reasons, some companies' inventory levels have increased significantly.
Take Meibang Apparel as an example, its financial report shows that the company's inventory is constantly increasing. Inventory at the end of the first quarter of 2010 was 706 million. At the end of the first quarter of this year, it was “swelled†to 3.162 billion, an increase of 347.88% year-on-year.
In response, Zhou Bangjian, chairman of Meibang, said that due to overly optimistic sales expectations, the company increased the amount of orders last year and placed orders ahead of schedule, resulting in a large number of spring and summer clothing delivery at the end of last year and early this year. However, the surge in order reserves has happened in an unusual climate, affecting the sales of products. At the same time, the corresponding inventory processing channels did not form a scale, causing the current inventory to be too high.
Li Ning, which is adjusting its dealers, is also plagued by high inventory. In 2010, Li Ning's inventory value was 806 million yuan, an increase of 27.5% from 2009. In the first half of the year, due to inventory and other factors, Li Ning's revenue decreased by 4.8% year-on-year, and its performance was overtaken by Anta, which lost the top spot in domestic sports goods. China's trend in the first half of the year, which has not reached its expectations, has also been burdened by inventory. Among them, due to the serious overstock in retail channels, China's initiative to repurchase inventory and reduce the amount of wholesale, the company's comprehensive revenue in the first half of the year dropped by 45% year-on-year.
At present, some clothing companies have fallen into the quagmire of inventory. An industry source told reporters that the inventory of a sportswear company in Fujian can be sold for a whole year. The industry even has such a "joke": Even if all garment enterprises in China are discontinued, It is just that the warehouse stock can be sold at home for at least 3 years. The severity of the inventory backlog in the apparel industry is evident here.
"If a garment company makes money as inventory, it is equivalent to not earning. The most valuable thing for garments is inventory." Xia Guoxin, chairman of Shenzhen Songlishi Garment Industry Co., Ltd., pointed out that the inventory was harmful to garment companies. A large amount of product backlog not only occupies the company's operating funds, consumes manpower and material resources, but also increases the company's management costs and profit-making costs, lengthens the product turnover cycle and reduces the company's overall profit. And if simply selling at a low price damages the brand, it will also undermine the confidence of the channel business.
"The company will sell through the outlets at a lower discount. The discounts on these sales products are higher than the cost price and will not result in a loss of the Meibang apparel." Zhou Chengjian, chairman of the Meibang apparel company, said that Meibang Apparel and its dealers will open a special store Digestion inventory. It is understood that Smith Barney’s sales channels are under planned and controlled construction. This is only an auxiliary means of digesting inventory, and will not become a major reliance means to prevent the formation of bad influence on the brand image.
Zhang Zhiyong, CEO of Li Ning Company, also stated that it will invest 300 million yuan this year to recover inventory from dealers. The amount spent on inventory recovery next year will not exceed this year. Zhang Zhiyong said that at present, Li Ning's factory store works well, with an average monthly water flow of 400,000 yuan per store, which is higher than the monthly flow rate of Li Ning outlets and brand stores. The number of factory stores in the future will increase to 240. Around home, it mainly deals with inventory.
In fact, due to the fact that the inventory of garment companies at this stage is mostly generated in last winter and the spring and summer of this year, garment companies will focus on the construction of inventory-digestion channels in the second half of the year and “strategly resolve the issue of inventory in the first half of next year.†Zhou Chengjian said so.
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