The Clothing Industry Approaches The Stock Warning Line &Nbsp; &Nbsp; Discount Discount Stock Reduces Brand.

"If all garment enterprises in China are closed, they will be able to sell only three years in the clothing market." nowadays industry This sentence is circulating. Lining Foreign brands such as Metersbonwe, XTEP and other domestic garment enterprises, and even Adidas, are also facing such difficulties.

　　 Clothing industry

Approaching stock warning line

Recently, the "shrinkage" adjustment experienced by Lining, the domestic sportswear brand, is actually a microcosm of the domestic garment industry. high Stock High investment and low return are becoming a difficult problem for enterprises.

Metersbonwe's latest report shows that as of September 30, 2011, the company's inventory amounted to 2 billion 982 million yuan, accounting for 83% of its net assets. XTEP's inventory also increased by 92% to 887 million yuan last year.

A salesperson from a clothing company told reporters that Adidas has seen a negative growth in sales in some parts of China. Its output is on the rise and sales are declining.

High inventory has always been an important factor that perplexes the global garment enterprises. A large number of stocks directly affect the capital flow of enterprises, and even lead to the fragmentation of enterprise capital chain.

Insiders said that 4.5:1 is the critical point of clothing industry inventory, and many domestic clothing brands have reached the edge of the critical point. If this ratio is exceeded, the situation will be very dangerous. There is a saying in the clothing market that even if all garment enterprises in China are closed, the stock will be enough to sell for three years in the domestic clothing market.

A clothing brand operation director said that compared to other industries, the clothing industry is capital The demand is relatively large, because most of the money in garment factories is spanferred in factories. If the summer clothing has just completed the launch of the market, autumn clothes will soon be put into production. Repeated investment will make the clothing enterprises' funds tight all the year round. The high inventory will directly lead to the breakup of the capital chain of the enterprises. If it can not be effectively alleviated, the enterprise can only go to a closed business.

He also said that because of the pressure of high inventory, the early clothing makers in the market began to seek other ways of making money, and many garment enterprises began to switch careers. Domestic garment enterprises will face a change initiated by inventory, and the shuffling period of garment enterprises has arrived.

Hidden dangers after crazy expansion

In recent years, China's garment industry has been in a stage of rapid development, and fierce competition in the market has led to the expansion of competition. Why is there a lot of bad stocks in a good market?

Insiders said that in recent years, the growth rate of domestic clothing brands was too fast, and the purchasing power of consumers did not improve at the same time, thus forming a seller's market with oversupply. Secondly, some garment enterprises choose mass production to reduce costs, resulting in serious homogenization of goods and reducing the enthusiasm of consumers.

Peng Danrong, deputy general manager of HOSA group, said that in recent years, the sports and casual wear market was very popular. Many brands began to increase production scale and speed up shop opening. A brand store with an area of 40-50 square meters will need at least 200-300 SKU (inventory units) for the first time. Behind the crazy expansion, it is destined to be a huge inventory risk.

However, the failure of high inventories is not necessarily small businesses. Peng Danrong said that the biggest brands affected by inventory are large garment enterprises that have been expanding in recent years. A famous sports brand in the country was still expanding shop last year, but this year it closed its poor stores. The number of outlets has reached 30% of the total number of stores.

Kang Lanxin, the first person in Vocational Education in China's collocation division, and the dean of the clothing and collocation Institute, believes that although some of the brands that are mainly sold in exclusive stores are affected by the clothing online shopping, some stock has been generated, but the main reason is that the location of the clothing is not accurate and the market expectations are too high. {page_break}

Discounts and eliminate stock

Brand degradation

How to get rid of the huge bad inventory as soon as possible is the most important problem before the domestic clothing enterprises.

In order to solve the problem of high inventory, many enterprises have chosen to enter orlet or do online business. Insiders told reporters that this is effective in digesting inventory, but will make the market chaos, directly affecting consumers' shopping habits, and impact on traditional business models.

According to the press survey, many promotional campaigns for clothing brands are very popular. Taking Columbia as an example, the frequency of promotion in previous years is generally around 4 times a year, and last year its sales promotion activities totaled nearly 10 times.

An outdoor brand agent said that due to the pressure of inventory, the brand had to discount the sales promotion to attract consumers. Once a year, two discount promotions became three to five times a year, and a smaller discount schedule was also more abundant. But this will directly affect the image of the brand. Many of the former major brands have been reduced to mid-range brands in the process of discount sales promotion.

In this regard, Kang blue heart said, discount sales promotion, through let Lai Lai digestion inventory, is the enterprise has no way, it can be said to be the most stupid way. Some clothing brands, in order to save trouble, sell the backlog of stock directly to businesses dealing with brand discounts. The price is very low, and many of them are sold by catty or by volume. Clothing companies even lose costs.

Kang Lan Xin also said that clothing enterprises should not only focus on how to eliminate inventory as soon as possible, because inventory is formed by circular accumulation, and it should make an effort to improve design and fashion sense of clothing. For backlog of inventory can be bundled with the new sales, the combination of effort, can make the old clothes wear a new fashion fan. But this requires designers to have a forward-looking judgement and interpretation of the trend of the market. Domestic clothing brands can learn from the fast fashion brand order production, which can effectively avoid bad inventory, but also can stimulate consumers' desire to buy because of the effective quantity.