Brand Clothing Retailers Continue To Enjoy High Profits

Guoxin Securities latest research report shows that although the growth and profitability of the textile and garment sector continued to be lower than the overall market in the first half of 2008, profits of domestic brand clothing retail enterprises increased rapidly.

According to the China Apparel Association, China has the annual production capacity of 50 billion pieces of clothing.

At present, China produces about 46 billion garments annually, and exports about 21 billion garments each year, and exports account for more than 1/4 of the total export volume of global garments.

However, this year, the slowdown in the external economy poses a threat to exports, and garment industry exports continue to fall.

In 2008 1~7 textile and apparel exports totaled 100 billion 360 million US dollars, an increase of 10.5% over the same period last year, and the growth rate dropped 8.6 points compared with the same period last year.

In the month of 2008 1~6, imports and exports of textiles and garments in the United States decreased by 5.17% over the same period last year, and the amount fell by 3.3% compared with the same period last year, and the ring continued to deteriorate.

The Guoxin Securities Research Report shows that only 9 of the 31 textile and garment enterprises in China concerned have achieved positive growth in the first half of 2008, and 3 companies have suffered losses.

The income and net profit of the 31 Enterprises in the first half of 2008 were 19 billion 600 million yuan and 1 billion yuan respectively, up 12.4% and 2.9% compared with the same period last year, and the net assets return rate was 4.1%. The overall growth rate, operation level and profitability level of the industry were still lower than that of the whole market.

However, Guoxin Securities's report also shows that the profit of domestic brand clothing retail enterprises has increased rapidly.

Profits of Metersbonwe, seven wolves and news birds continued to grow at a high speed. The net profit of American bonnet rose by 472% compared to the same period last year, while the net profit of the seven wolves reported in the same period was 190%.

Statistics from the National Bureau of statistics show that the volume and price of domestic clothing industry has increased steadily, which is the driving force for the sustained growth of profits of domestic retail brands.

In July 2008, the retail sales of clothing, shoes, hats and needles and textiles increased by 26.8%, which is 3.5 points higher than that of social consumer goods.

Nationwide retail sales data show that retail sales in 2008 1~5 increased by 12.55% over the same period last year, and retail sales grew by 20.9% year-on-year.

"There is still much room for domestic clothing market."

Hu Changshui, deputy general manager of Dongguan Song Ying Industrial Co., Ltd., told reporters that the business men's clothing was mainly faced with the domestic market, so it was not affected by the external economic recession.

"Now, in order to continue to expand the domestic market and increase market share, the company has visited Chongqing, Chengdu, Wenzhou and other cities many times, and has opened the order meeting, and has opened some direct stores and franchisees in these cities.

Although this year is affected by many macroeconomic factors, the profit is slightly higher than last year. "

"Although the whole industry is in recession, most of the brand clothing enterprises have their own pricing power, and the profit level will not rise."

Qin Yingfu, director of the Humen (International) clothing trade fair in Dongguan, Guangdong, told reporters that there are more than 2000 garment enterprises in Dongguan, most of which are domestic sales. Although many domestic enterprises have been affected by the price of raw materials and other factors this year, Humen's brand enterprises have expanded their domestic market through various channels such as joining, acting and monopolization.

Profit growth of domestic garment enterprises stimulates the fragile nerves of export clothing enterprises.

"Since this year, due to the small profits of export, orders have also decreased a lot. Domestic sales and product upgrading are the countermeasures that enterprises are considering."

Fu Sunhuan, chairman of Fujian Jinjiang Fei Yue shoes and Garments Co., Ltd., which is mainly engaged in garment export, said.