Clothing Prices Collectively "Shout Up", Consumers Are "Borne"

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. Clothing brands have reached a consensus on price increases.

Cheng Yuan, an analyst with the Dongxing securities and apparel industry, said: "the growth of raw materials and labor costs since last year has helped to drive up the price surge."

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

"The cost is not enough".

Recently, the spring front summer clothes such as shirts, cotton and thin coats have been on the shelves in the major brand stores such as the front line, the seven wolves, the wedding birds, and the price has increased slightly since last year. The price of the shirts is mostly between 200~499 yuan and pieces, while the double faced cotton wear is also around 300 yuan / piece; the spring clothes newly listed on the front line of the tidal current are mostly around 200 yuan; the clothing prices of the stores such as Wangfujing and Ito are even higher, and the spring clothing shirts are generally around 500 yuan / piece.

Chen Guangping, director of Bosideng area, said: "the price of clothing is about 10% higher than the cost of raw materials and pportation costs."

Zhou Shaoxiong, chairman of the seven wolves, bluntly said: "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%."

Dongxing securities clothing industry analyst Cheng Yuan said: "

Sports clothing has clearly disclosed the price range.

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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."

Behind the increase in prices, the rise in raw material and manpower costs has almost become the same reason.

According to the survey of China Cotton Textile 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%.

Listed companies profit normal consumers "bear" 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, all 29 garment enterprises interviewed indicated that the orders were full, and the orders of individual enterprises had been discharged from June to July.

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 enterprises showed little impact.

This means that the impact of rising clothing raw materials and labor costs on garment enterprises is not as great as expected.

Wang Liping, an analyst with Shenyang Wanguo textile and garment industry, said: "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 report of the textile and clothing research department of CICC recently revealed that, compared with men's clothing, the prices of men's clothing such as the seven wolves, the good news birds and the lucky men were obviously rising.

Cheng Yuan said that the cost of mid-range brand clothing 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 embodiment of clothing is not very obvious. Therefore, the pfer of costs is easy to carry out."

Business gap widening, garment industry shuffle acceleration

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.

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

Some experts said that the brand clothing price tag is generally 2 times to 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.

The head of the brand communication department of Mei Bang said that the pressure brought by the rising price of raw materials is relatively large. "We have worked hard to improve the brand, but the added value has increased."

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, said the gap between ordinary enterprises is also widening.

He said: "in the more than 6000 garment processing enterprises in Chengdu, most of them 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, the pressure is relatively small. "The gap between them is bigger for the enterprises that reserve raw materials in advance and have a wide range of sources of capital and have bargaining power."