Rise Again! Clothing Industry Continues To Raise Prices

Other than garment enterprises

"Now that raw materials have gone up very badly, raw materials at home and abroad are rising, and clothing costs are also rising. This is a thorny problem.

"Recently, Chen Lingmei, chairman of Shenzhen winner clothing, told reporters that the company is the leader of China's high-end high-end women's clothing".

What makes Chen Lingmei feel awkward is the rising labor cost besides raw material costs.

Reporters yesterday learned that in order to alleviate the cost pressure, many brands of clothing this year have raised the price of "sword", and the retail price of brand clothing has generally risen by 10%-15%.

Some clothing companies said that the price will continue to increase in the second half of the year. Some people in the industry expect that the wholesale price of clothing products in autumn and winter will also increase by 10%-15% this year.

Rising prices have become the mainstream of this year's clothing industry.

Yesterday, a reporter looked at the latest earnings and quarterly reports of several listed companies, and found that a number of clothing brands were making up the price this year.

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In the field of casual wear, Haitong Securities research materials also show that YOUNGOR launched new products in 1-5 months this year, the average price increased by 15-16%, resulting in its clothing sales increased by 4-5%, sales volume increased by about 20%, and gross profit was more than 50%.

"Price increase" provides protection for the major garment enterprises to maintain their performance.

XTEP said its overall revenue rose 22% to 2 billion yuan in the first half of the year, 2.1 percentage point to 40.7% in gross profit margin and 2.4 percentage point to 22.2% in sales in the first half of the year.

Anta semi annual report also showed that the company's turnover increased by 22.6% to 3 billion 453 million yuan in the first half of the year, net profit rose 25% to RMB 760 million, gross margin increased 2.2% to 43.7%.

Anta explained that one of the main reasons for the increase in turnover was the increase in average selling price and sales volume.

Soaring costs push enterprises to raise prices and reduce pressure

Behind this year's collective price increases in the garment industry is a substantial increase in raw material and labor costs.

A few days ago, Chen Lingmei, chairman of Shenzhen winner Clothing Co., Ltd., in an interview with our reporter, pointed out that the labor cost and fabric cost of the company have increased sharply this year, and the pressure has suddenly increased.

"Just got a raise again, on average, every worker adds 200 yuan a month, now the workers' monthly salary is basically more than 2000 yuan, and still needs to eat and lodge."

Chen Lingmei said that if such a level is not reached, it is difficult to retain skilled workers in Shenzhen.

On the other hand, the price of raw materials has gone up very badly. "The price of imported fabrics has increased by more than 30% this year".

Other garment enterprises are also troubled.

According to XTEP semi annual report, staff costs increased from 81 million 318 thousand yuan in the same period last year to 95 million 345 thousand yuan, an increase of 17.2% over the same period last year. The cost of raw material sales was 537 million yuan, an increase of 18.7% over the same period last year.

Anta spent 287 million 200 thousand yuan on raw materials in the first half of this year, an increase of 51.6% over the same period last year, and a direct wage expenditure of 144 million 900 thousand yuan, an increase of 20.6% over the same period last year.

Insiders pointed out that in addition to the above cost pressures increased, some fashion, fashion brand advertising marketing, publicity costs are also growing.

In addition to the means of raising prices, some enterprises have expressed the pressure to digest high-end brands.

Chen Lingmei, chairman of Shenzhen winner Clothing Co., Ltd., said that the brand clothing of the company was sold for about 5000 yuan, and some dresses even sold to 10000 yuan.

It is reported that the sales target set up by the company increased by 42% this year, which has been completed according to the original plan in the first half of the year.

Some people in the industry suggest that the best way to reduce the pressure of garment enterprises is to adjust the product structure.

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Cotton price rises and profits of Guangdong garment enterprises

In fact, the international cotton prices of upstream raw materials are soaring this year, which is an important reason for the rise of the whole textile industry.

Since the end of last year, the price of international cotton has been rising. The rising tide of cotton has been rapidly pmitted to the raw materials, processing, clothing and consumer terminals.

According to China's cotton price index, the price of standard cotton has risen from the average price of 12831 yuan / ton in 2009 to 18165 yuan / ton in July this year.

Guangzhou customs also said that since last October, the price of textile raw materials such as cotton and chemical fiber has risen. As of June 30th this year, the domestic 328 cotton spot index was 18309 yuan / ton, up 42.6% over the same period last year.

According to Qingdao customs statistics, in the first 7 months of this year, Shandong Port imported 739 thousand tons of cotton, worth 1 billion 310 million US dollars, up 65.1% and 1.3 times respectively compared with the same period last year. The average import price was 1776 US dollars per ton, up 39%.

International and domestic cotton and other raw materials are rising fiercely, coupled with the pressure of RMB appreciation, making domestic textile and garment enterprises profit again and again.

Guangzhou customs pointed out in a circular that Guangdong's textile and clothing exports grew well in the first half of this year. However, textile and garment export enterprises still face two major pressures: first, the pressure brought by the slow appreciation of the renminbi has never been weakened. Guangdong textile and garment enterprises are mainly sensitive to small and medium-sized enterprises, and are very sensitive to the appreciation of the renminbi. When the profit margin is approaching the breakeven point, most SMEs will not be able to find out if the RMB appreciation restarts or even accelerates.

Two, the price of raw materials has not dropped. "As a labor-intensive industry, the profit of textile and garment industry has been relatively low. Because of fierce competition, textile and garment enterprises are hard to pass on to consumers in the face of rising raw material prices, thus reducing profits of enterprises."