American Apparel Is Tested By Cash Flow

The inventory of more than 3 billion 100 million yuan will be "digested" for (002269.SZ) to the first half of next year.

The high inventory allowed Mei Bang to explain in detail at the shareholders' meeting.

according to

It does not cause "indigestion". "In fact, 60% of our stocks are new products in 2011. We are prepared for the shortage of labor."

Zhuang Tao, a securities affairs representative, said, "we will sell the rest of our stock through special discount stores."

In 2010,

Operating income reached 7 billion 500 million, but inventory was 2 billion 500 million, and inventory grew by 192% over the same period last year.

Among them, the United States and the main brand accounted for 1 billion 800 million, ME&CITY and online shopping brand AMPM accounted for 700 million.

After eliminating the impact of new products on warehouse and new brand inventory, the inventory size is still 1 billion 500 million yuan, up 62% over the same period last year.

More than 30% of inventory is absolutely high voltage for other garment enterprises. Several garment enterprises have indicated that inventory control is reasonable at 10% to 15%.

Too high inventory can lead to cash outflow.

"The expected growth rate of direct business growth is relatively high, the late winter and the premature arrival of spring goods and other factors caused the increase in inventories."

Zhuang Tao said.

But behind the warm winter, it is the fast growth of the battalion of single battalion.

As of September last year, the United States Barrack's single store grew by more than 90%, and the stock in winter and this spring increased.

Insiders say that the high proportion of self run stores seems relatively easy to lead to disjointed sales and production in the early days, resulting in high inventory. However, when adjusted, the management advantages will also be reflected and the growth of enterprises will also be enhanced.

"The inventory can be sold according to the factory store mode, and differentiated from conventional shops."

High reservoir existence

It seems to be only temporary because the sales ratio of the direct store is proud of it.

"45% of sales results come from direct sales."

Zhuang Tao said, "Direct stores must be the basis for high growth in the future."

By the end of the first quarter of 2011, there were more than 3800 stores in the United States, including more than 700 direct shops and 3100 stores.

And discount stores, or factory stores, have been put on the agenda by the United States.

"Discount stores are complementary to the sales outlets, and discount stores will be promoted as a regular sales mode."

Han Zhongwei said.

But even so,

The cash pressure has been there since last year.

According to the annual report, as of the end of 2010, its listing and financing net amount of 1 billion 335 million yuan, leaving only 44 million 710 thousand yuan.

The net cash flow generated by operating activities was -10.53 billion, down 223% from the same period.

"The phenomenon of operating cash flow deficit in 2010 was caused by the peak time of product storage and the peak of sales, not because the product was unsalable."

Han Zhongwei explained that "the first quarter operating cash flow deficit has dropped to -718 million, and will not affect daily operations."

In its view, even if the storage capacity of the summer clothing remains high, the capital flow is normal.

At present, there are still about 2000000000 credit lines not used.

"In addition to lending through banks, we can issue short-term financing bills to raise the funds needed for operation, and the financing cost is relatively low, so the temporary cash flow deficit will not adversely affect the subsequent operation of the company."

Han Zhongwei said.