Listed Companies Encounter High Inventory Nightmare

High inventory nightmare

According to this year's report, the turnover days of brand clothing enterprises are lower than that of the same period last year (see Table 1), especially fashion and leisure brands. In the first half of 2011, the company achieved a net profit of 376 million yuan, an increase of 833.06% over the same period last year, and became the champion of the growth of the clothing sector. But savoring the American bond newspaper, we found that inventories increased significantly this year, and the turnover days were much higher than the industry average and the same period last year. The reporter found that the inventory of the company was 903 million in the same period last year, compared with 2 billion 889 million this year, a significant increase of 222% over the same period last year. Ironically, the company's net assets were only 3 billion 200 million during the reporting period, and inventories accounted for 90% of the net assets of the same period.

" Smith Barney Inventory problem has reached a very serious situation. " Some analysts expressed concern. Xiangcai Securities said that last year's aggressive winter stock production led to high inventories, up to 2 billion 500 million. It is about to enter the peak season of winter clothing sales. This year, the company digested the stock through discounts, but the discount rate for discount retailers was 3~3.5, which is far below the 5.5~6 discount of normal goods. Therefore, although the business of China Daily maintained 47% of gross profit, the gross profit margin in the second half of this year has downward pressure.

Kaiser stock, which belongs to brand menswear, is also much higher than its industry average. Some analysts pointed out that this is due to the fact that the time of purchase and opening is not synchronized, and that some stores have entered the redecorating period, which has led to a sharp rise in the share of inventory sales revenue. According to Kaiser daily, inventory goods increased by about 13 million 920 thousand from the end of 2010, mainly preparing for the opening of about 28 special counters in Guangzhou Kaiser in the second half. Company officials said, "inventory will be sold according to the length of the backlog, which will be processed mainly through outlets or sale."

Since the women's shoes company went public on Saturday, high inventories have been holding down its stock performance. The company's stock hit a new high of 718 million yuan, an increase of 69 million yuan compared with the first quarter, mainly due to the company's sales strategy errors and the stock of new stores. Haitong Securities said that management hopes to continue to maintain a relatively high growth rate after the listing, and has adopted a multi push sales strategy. However, in 2009, fewer new stores opened up, resulting in high channel inventory.

Inventory risk also depends on the surplus grain in hand.

Overall, brand clothing inventory management is not as good as last year, but Stock Companies with slow turnover do not necessarily face greater risks. "Red weekly" reporter selected inventory turnover rate, inventory / current assets and cash balance and cash equivalents balance these three indicators to assess the size of inventory risk and screen out some companies with higher inventory risk.

Judging from the statistical results, the stock / liquidity ratio of Smith Barney clothing is only inferior to that of Hong Dun and YOUNGOR, but these two companies are positioned in diversified development and are not comparable. Therefore, Smith Barrow's stock / current assets ranks first in the industry. But overall, the risk level of the US state is not at the forefront of the industry. This is mainly due to the balance of cash and cash equivalents in the hands of more than 700 million. Similarly, Saturday's stock / current assets ratio is larger, and inventory turnover is in the reciprocal number, but because of its cash abundance, the risk needs to be further observed.

For brand clothing, reporters made two sets of data (Table 2), a set of data is defined as Stock Companies with bigger risks account for a large proportion of liquid assets, low turnover of inventories, and little cash in their pockets. Because excessive inventory will increase the use of funds and space resources, reduce cash flow and increase operating risk. If the cash balance of the company is insufficient, then the inventory will be in danger if the inventory problem is found. Another group of data is defined as a company with a smaller inventory risk, which has a small share of current assets, a higher turnover rate of inventory and a large cash in pocket.

After a comprehensive analysis of the three indicators, the search for Semir and costumes is the best. But this is directly related to their expansion mode, mainly franchising, and more risk is reflected in accounts receivable. Although the franchisee and the direct store mode have no advantages and disadvantages, but the United States strategy is too radical, the problem is to digest inventory pressure, and Semir strategy is conservative, there is not much inventory problem. The brand of young casual wear is also mainly based on its future expansion. As of December 31, 2010, there were 1166 stores, including 89% franchisees, and 8 or more shops in three or four line cities. Although the search for special terminal coverage is not yet able to compete with the United States, its inventory burden is much lighter than that of the United States.