Chengdu: Raise The Price Soon! 15 Brands Of Clothing Are Rising.

Since the end of last year, cotton prices in the futures market have been running high, and the clothing prices associated with them are also high.

Recently, the reporter received many phone calls from the readers to consult the trend of clothing prices.

Reporters are investigating the earnings of 15 listed apparel companies.

Spring clothes go on again

For the reasons for raising prices, Dongxing securities clothing industry analyst Cheng Yuan said yesterday: "since last year, the growth of raw material and labor costs has boosted price surges."

However, he also pointed out that the profits of listed companies are still growing substantially, and "cost pressures have basically shifted to consumers."

Chart 1. Economic operation data of Sichuan Province in recent 5 years

Project Name 2006, 2007, 2008 2009 2010

CPI trend 1.5% 5.9% 5.1% -0.8% 3.2%

Disposable income per capita (town) 11%, 18.7%, 13.8%, 9.62% 11.7%

Clothing price 0.4% 0.6% -2.7% -1.7% 0.8%

trend

Commodity retail price trend 1% 5.3% 5.3% 5.3% 0.1% 3%

Wandering low in the first five years

Spring clothing prices are high this year.

In March 5th, reporters in Chengdu Chunxi Road Metersbonwe, the trend frontline, seven wolves, good news birds and other men's clothing store saw shirts, cotton and thin coat and other spring summer clothing began to rack.

Looking at labels, the price of clothes is really great: most of the seven wolf long sleeved shirts are between 200~499 yuan / piece, while the double faced cotton wear is also around 300 yuan / piece; in the front line of the trend, the newly listed spring coat is mostly around 200 yuan; the clothing prices of the stores such as Wangfujing and Ito are even higher, and the spring loaded shirts are generally around 500 yuan / piece.

Chen Guangping, the head of Bosideng area, told reporters: "the price of clothing is about 10% higher than the price of raw materials and pportation costs, which is also a helplessness."

Zhou Shaoxiong, chairman of the seven wolves, recently said in an interview with the media: "the more obvious change of clothing in 2011 is that the product will rise in price, and the price range will be 10% to 20%."

The reporter inquired the National Bureau of statistics from 2006 to 2010, published in Sichuan province CPI, per capita disposable income, clothing prices and other data (see chart 1) found that in 5 years, Sichuan's clothing retail prices have been lingering low: in 2006, the CPI rose 1.5%, the retail price of goods rose 1.30%, but clothing prices rose only 0.4%; in 2007, the retail price of goods rose 5.3%, the price of clothing rose only 0.6%; in 2008 and 2009, clothing prices even fell; even in the 2010 of CPI three, clothing prices rose by only about 1%.

{page_break}

Claiming to be "too much to eat"

The price of 15 brands of clothing is "rising"

However, according to a survey by Chengdu business daily, the situation of low clothing prices will change in 2011.

Dongxing securities clothing industry analyst Cheng Yuan told reporters yesterday: "driven by various factors such as raw materials and manpower costs, the listed brand clothing is generally raised by 10% to 15%."

A survey report released recently by the textile and apparel research department of CICC showed that the three men's clothing prices of the seven wolves, the wedding birds and the young men were between 10% and 20%.

Sports clothing has clearly disclosed the price range.

In the third quarter of 2011, XTEP and PEAK indicated that the price of clothing products increased by 10% and 5% to 10% respectively this year in the 2011 quarter of the year. In 2011, the order clothing will increase by about 8%.

For the reasons for the price increase, Chen Guangping analysis said: "this year the entire garment industry is facing greater pressure, raw materials and labor costs increase, pportation costs are substantially improved."

For example, he said, "from Changshu to Chengdu, a garment cost about 10 yuan, and now it costs 20 yuan."

According to incomplete statistics, the rise of raw materials and manpower costs has almost become the same reason behind the price increase (see chart two).

According to the survey of China Cotton Textile Industry Association, the average labor cost of textile and garment industry increased by 20% in 2011, and the cost of raw materials such as cotton yarn increased by more than 10%.

Profits of listed companies are not affected.

Consumers bear the cost burden

Although the clothing price collectively "shouted up", but the clothing enterprise's financial report shows that the industry has maintained a relatively fast growth momentum, the volume and price rise, making most Brand Company's net profit increased significantly.

According to a survey released recently by the China Textile Industry Association, 29 garment enterprises surveyed indicated that orders were full, and orders for individual enterprises had been in the 6~7 month.

For the pressure of raw materials and manpower rising, 35% of the respondents said they had a greater impact, but they could bear it. 64% of the enterprises showed little effect.

Wang Qian, China's first textile network analyst, told the Chengdu Commercial Daily reporter yesterday that the impact of rising clothing raw materials and labor costs on clothing companies is not as big as expected.

Wang Liping, an analyst with Shenyang Wanguo textile and garment industry, said in a research report published in March 2nd: "brand enterprises can pfer costs by raising prices, and gross margins remain unchanged."

He also said, "it is estimated that the income of listed companies can be maintained at an increase of 20% to 30%, and net profit can be maintained at an increase of 30% to 40%."

The research report released by CIC's textile and clothing research department recently revealed that, compared with men's clothing prices, such as the seven wolves, the news birds, and the Lun Lang, the overall price increase is obvious, "the cost increase is completely passed on to the downstream consumers."

Cheng Yuan told reporters that the cost of mid-range brand clothing and cotton yarn accounts for about 10% of the wholesale price, accounting for only 5% of the retail price. "The price of clothing is in the hundreds of yuan, and the cotton yarn is up 10%. The reflection on clothing is not very obvious. Therefore, the pfer of costs is easy to carry out."

Widening gap between the second and second tier companies

Garment industry welcomes shuffling differentiation accelerated

In addition to the obvious trend of price increase, many analysts believe that the apparel industry is experiencing a shuffling pattern due to changes in costs.

Wang Qian told the Chengdu Commercial Daily reporter that the high cost will speed up the polarization of the textile and garment industry. "The impact of the brand business is not large. The small and medium enterprises in the weak position in the industry are under tremendous pressure, and this differentiation is particularly evident this year."

He said that the brand clothing price tag is generally 2~3 times the cost price, and some high-end brands have a higher markup rate, so there is a higher profit margin to deal with all kinds of changes.

Mr. Qiu, head of the Department of apparel brand communication, also said yesterday that the pressure brought by the pressure of raw material prices is relatively large. "We have worked hard to improve the brand, and the brand has improved."

Newspaper bird and Hinur also emphasized in the earnings report that the enhancement of added value and brand is another embodiment of the rising cost.

Zheng Wanxun, President of Chengdu apparel (apparel) Industry Association, told reporters yesterday that the gap between ordinary enterprises is also widening.

He said: "at present, most of the more than 6000 garment processing enterprises in Chengdu belong to small and medium-sized enterprises, with less than 100 machines. These enterprises are under great pressure to survive, and some of them are bankrupt.

At the same time, there are five hundred or six hundred large enterprises that process machines, but on the contrary, they are less stressed. "Advance reserves of raw materials, have a wide range of sources of capital, and have certain bargaining power, and their gap is increasing."