The Four Blowout Of Apparel Enterprises On The Market

In November 2009, the Ministry of industry and information technology, the national development and Reform Commission, the Ministry of Finance and other 7 departments jointly issued the "guiding opinions on speeding up the construction of independent brand of clothing home textiles" (hereinafter referred to as "guidance"), and pointed out that it would encourage qualified clothing brands, home textile enterprises to go public, issue bonds, make direct use of capital market financing, and encourage enterprises to carry out mergers and acquisitions with independent brands as the link.

The overall goal of the guiding opinion is that by 2015, a healthy and standardized market and social environment for the development of healthy and standard brands of clothing and home textiles has been basically formed. A number of garment and home textile enterprises with strong competitive advantages and independent innovation as the core and famous brand as the core have been nurturing and developed. The share of clothing and home textile independent brands has significantly improved in the domestic and international market, and a number of independent brands of clothing and home textiles with international influence have been formed.

The "guidance" put forward to support independent brand clothing and home textile enterprises to enhance their core competitiveness.

To provide financial services for clothing and home textile brand building.

Establishing a new relationship between banks and enterprises, guiding financial institutions to innovate business operation mode, and encouraging clothing and home textile enterprises to use their own brands as collateral, according to law.

According to Li Kai Luo, President of Guangdong Institute of fashion industry economics and President of Bi LAN International Investment Consulting Co., Ltd., capital tentacles have long been extended to the apparel industry. After ten years of development, there is a trend of wave band development in the continuous integration of garment enterprises and capital, and in each band, there are representative garment enterprises.

For example, the first band before 2007, such as Shanshan, YOUNGOR and other listed companies, 2007-2008 years of clothing industry ushered in second bands, representing enterprises such as BELLE, Anta, good bird, and so on. After the financial crisis, the clothing industry has been temporarily silent for some time, starting from 2009, with the Fujian plate as the main factor.

With the gradual emergence of capital as the value of competitiveness, Li Kailuo believes that the capital operation of Chinese garment enterprises will soon enter the fifth band.

The rapid entry of capital into traditional industries will change the way of thinking and operation of traditional enterprises with unprecedented efforts, and explode business potential energy, thus changing and affecting the development path of China's garment industry.

Example force to stimulate the tide of listing

Li Kai Luo pointed out that in these four waves, there were four stimulus points to speed up the listing process of Chinese garment enterprises.

In the capital market, BELLE listed nearly HK $9 billion, which launched a series of big takeover actions in the same year, bringing many former competitors back to fame. At the same time, BELLE group's business scale increased rapidly after listing, and quickly widened its gap with its competitors.

In August 2008, the US state clothing entered the Shenzhen Stock Exchange, and its holdings instantly reached about 16000000000 yuan.

The publicity effect is equivalent to 50 million yuan of advertising investment. Zhou Chengjian, the chairman of the United States, ranks 307 in the latest Forbes global richest list, and it also inspires a large number of people.

Li Kailuo said that the newly listed clothing companies are quite different from the old clothing companies such as Shanshan, YOUNGOR, Dayang creation, and open industries. The old fashioned clothing enterprises such as Shanshan, YOUNGOR and Kai Kai are all products of the industrial age, and their advantages are mainly in the field of processing and production.

Such clothing enterprises are very strong in terms of hardware conditions. They have modern factory buildings, comparable to the most advanced production lines in Europe and the United States such as Italy, improved production and processing capacity, strong innovation ability in fabric research and development, and so on.

YOUNGOR even extends the industrial chain of clothing industry to the cotton field in the upper reaches, and has a high quality cotton planting base in Xinjiang, which has opened up all links from raw material planting, textile, printing and dyeing, clothing production, sales and so on.

But such companies can only be attributed to manufacturing companies, and it is difficult to show rapid growth.

The reason is that the profitability of this heavy asset company is mainly reflected in the process of production and production. The number of machinery and equipment determines the company's profitability. The growth of performance is mainly driven by a larger investment in machinery and equipment.

At the same time, the OEM mode determines that they can only get the lowest profit of the industrial chain, and their growth is not strong, and their performance is easily subject to the fluctuation of orders.

Once orders decline, the company's performance will also decline.

Therefore, the capital market is unlikely to give high valuation.

By comparison,

From the point of listing, there are mainly three choices of domestic clothing enterprises, namely, China's mainland A shares, China's Hongkong stock market and NASDAQ (Mcglaughlin landed on the stock market in October 2009).

Advantages and disadvantages of apparel enterprises going public

Li Kailuo said that capital is the booster of the development of enterprises, and there is a qualitative leap after the listing of enterprises. Many enterprises were evenly divided in the domestic competition.

After the listing of enterprises, the capacity and scale increase; the funds needed to solve the development of enterprises will provide a stable and long-term financing channel for the sustainable development of the company, and this can form a benign fund cycle; it will help attract talents and open up market space; it is conducive to the pformation of private enterprises; it is beneficial for the market to resist risks and diversify production, and enhance the public image of entrepreneurs.

Although listing has many advantages, just like a coin has two sides, the disadvantages of listing are constantly being mentioned.

The obligation of the public (including competitors) to disclose information fully, including information on main business, market strategy and so on, sometimes has a negative impact on a listed company. After the listing, in order to protect the interests of small and medium shareholders, a major business decision of a company needs to fulfill certain procedures, which may lose part of its business flexibility as a private enterprise. After the listing is diluted, management will inevitably lose part of its control over the enterprise. After listing and listing, enterprises need to pay higher fees; such as public relations costs, investment banking costs, audit fees of financial statements, etc., and listed companies need more obligations and more responsibilities than the private enterprises, and management will also be more stressed. After listing, enterprises are no longer Private Companies, but have regular direction.

At the same time, more than 90% of the domestic garment enterprises are private enterprises, most of which are based on family management, which is not compatible with the rules of the stock market game used in the capital market. If we want to go public, we must carry out the shareholding system reform.

As for the different problems exposed in the process of applying for listing, the analysis of the investment department of a securities company may be due to the incomplete reform of the enterprises themselves, resulting in a hidden danger that is difficult to change in the short term. Some textile and garment enterprises have short preparatory time for listing and lack the guidance of professional organizations, resulting in their lack of timely recognition of the lack of management mechanism.

The official said that there were three kinds of consequences for the unsuccessful Enterprises: the first outcome was to start the "big shuffle", to replace all the key personnel and institutions responsible for the listing work, and to re declare them; the second outcome was to sort out the problems of the enterprises themselves, carry out rectification, and report them again after the completion of the rectification; the third outcome is that the enterprises completely abandon the idea of listing, and no longer apply for listing, or turn to the overseas listing path.

Revaluation of listed companies' motives

Li Kailuo said that compared with the rationality of capital inspection of enterprises, enterprises are very puzzled about finding capital, and even do not know why they are listed.

He said that there is no particular outstanding performance and profit model of textile enterprises, it is difficult to get the attention of the capital market, whether it has unique characteristics is the weight of the handshake of the clothing enterprises and capital.

It is reported that clothing companies apply

Hinur wants to use the listing financing to speed up the construction of Direct stores. In the prospectus of the company, the company will invest 540 million yuan in marketing network construction projects, and build flagship stores and 46 Direct stores.

It is estimated that the remaining 37 outlets will be completed in 2011.

Kaiser's initial fund-raising plan adds 23 self marketing network points, and its expansion will also be dominated by self purchase stores.

Metersbonwe will set up 85% of the listed funds to be used for shops (channel terminals), and 15% to invest in IT platform to build B2C network channels.

There are 2211 stores in the United States.

The fund is used to build 68 stores, 31 of which are direct flagship stores and image stores, and 37 are flagship stores and strategic franchisees.

Similarly, after the listing of BELLE, 27%-31% will be used to raise funds for various expansion plans, including acquiring company or alliance with strategic partners.

24%-25% will also be used to open new stores and plan to open 1000 new stores a year, and refurbish the stores every 3 years.

In addition, it needs to build more retail sports mall.

However, after the listing, it did not invest its hosiery assets into the underwear business.

For this reason, chairman Weng Rongjin of Lingsha socks Co., Ltd. explained that the "plate" of socks business is too large to enter the operation of the listed companies in a short time. They hope to use the capital market platform to rapidly expand the underwear industry and make it another pillar industry after the hosiery industry.

However, some experts pointed out that blindly cross industry investment risk is relatively large, for example, clothing enterprises to invest in real estate and other industries, from an enterprise perspective, but for those who want to make big brands, they should put more capital in R & D and other links to promote brand value.

"When clothing companies are diversifying in different areas, they should decide on their investment direction and specific projects according to their own resources and advantages."

Lu Yang, an industry analyst at Huaxia Securities Research Institute, said.