Analysis Of The Reasons For The Bankruptcy Of Leisure Clothing Enterprises

In the past year, many enterprises have come to the crossroads of development.

In December 31, 2011, the day before the new year's day, Dongguan wilderness Clothing Co., Ltd. informed all employees of the new year's holiday, and the company seemed to be doing the same thing.

However, in January 2nd, which just entered the new year, employees suddenly found the seal of the second people's court in Dongguan City, and the company's "bankruptcy notice" and a "Notice of all employees".

The company executives are missing together and can not be contacted.

The "Notice of all employees" posted out briefly reviewed the causes of the company's bankruptcy and the difficult process of the boss's rescue of the company, and explained how the recent wages were paid, hoping to get employees' understanding.

The dozens of material suppliers and processors who were caught by surprise caught up with the Humen town government and asked the government to solve the problem. Police dispatched a large number of people to maintain order.

According to incomplete statistics, Chen Churong, owner of the field company, owed about 20000000 yuan in arrears of raw materials and processing money.

"Premeditated" bankruptcy

In January 2nd, the phenomenon of wage failure at 7 a.m. was the prelude to bankruptcy of the company.

"In the morning, when the company settled all the salaries, it was not long before the court came to seal the seals."

Zhou Xiaogong is the outgoing manager of the wilderness company, but, like other middle-level and junior colleagues, he has not received any notice in advance.

"The news of bankruptcy is too sudden."

Zhou Xiaogong said that 40 days ago, the company also participated in a well-known clothing trade fair held in Humen.

And on the two day of December 30 and 31, 2011, the company still works as usual, and requires all suppliers and processing enterprises to rush to deliver goods. The two day's total import and export orders amounted to tens of millions of yuan.

According to staff Miss Song, on the eve of the new year's holiday, the company is still operating as usual.

But when she came back from business, she found that the company was empty.

"I signed the order No. 26, and I went bankrupt in a couple of days. It's out of line."

Mr. Shen, who made the fabric, was working with the company for the first time.

Like Shen, dozens of franchisees and suppliers have the same experience, and some processors are in arrears of processing costs up to 2 million yuan.

After bankruptcy, statistics show that, like Wang Chuanbao, there are hundreds of suppliers who are in arrears of payments. "More than 100 OEM enterprises and dozens of raw material suppliers are owed 7 million yuan and 13 million respectively. If the franchisee's deposit and payment are added, the company's arrears are far more than 20 million yuan."

In fact, in 2011, the Humen court of the second people's Court of Dongguan had accepted 8 cases against the wilderness company, with a total target of about 2660000 yuan.

Moved seals

In the process of cleaning up the fixed assets of the field company, suppliers and company employees found that the time of the court seal was on December 30, 2011, but the seal was only posted at five or six a.m. in January 2, 2012, which is rather odd.

Wang Chuanbao, the head of the OEM company who has been in arrears with nearly $1 million, said that "all the valuable fixed assets and Inventory were pferred away on the day of the seizure."

In this regard, Dongguan Second People's court Humen court investigation found that wilderness company chairman Chen Churong because of the company's debts, decided to close the company.

But he was worried that suppliers would grab goods and had consulted with their attorneys about whether they could shift the seal before the court to seal the company's entry.

Although the lawyer warned him that the act was illegal, he still discouraged it from being invalid.

In the morning of January 2nd, Chen Churong posted the 6 seals posted on the second people's Court of Dongguan in December 30th, hoping to avoid the looting.

The company's "statement of circumstances", also known as the "bad case", was in a state of semi - stop operation in November 2011. The sole reason for the existence of the company is to raise funds to pay wages.

As for the pfer of court seals, it was stated that as at December 30, 2011, the company was still in arrears of wages for nearly 2 months. "The company's management is afraid that the employees will see unnecessary incidents after they see the seal of the court, and the company decides to remove the seal after the judge has left, and at the same time close the third floor product workshop" to protect the company's property from being pferred to the court for processing.

As for the reason for the disappearance of the senior executives of the field company on January 2nd, the "situation statement" also explained.

The company said that in January 2nd, the company commissioned a media to publish the dissolution announcement. "Shareholders and management can imagine that the creditors of the company can see the sharp reaction after the announcement", so they decided to "temporarily avoid" to avoid unnecessary incidents.

For some creditors who suspect that the company has pferred the property seized by the court, the company has promised to all creditors in the "circumstances note": "if any person in the company, including nearly 200 employees, has pferred the company's assets seized or not sealed by the court, the company's legal representative and the directly responsible person are willing to take all legal responsibilities. At the same time, we hope that the people's court will verify the company's check up property list in December 30, 2011 and confirm whether the company has pferred the property seized."

Finally, the "situation statement" states that the company's recognition of its "pfer of the court seal" and "temporary avoidance" is extremely inappropriate and may even be suspected of violating the legal provisions. However, under such exceptional circumstances, the company's behavior is also a "helpless measure" to safeguard the interests of all creditors.

Inventory of "crushed people"

Statistics show that Dongguan City wilderness Garments Co., Ltd. was founded in June 1999 in Humen Town, is a professional R & D, production and sales of large well-known clothing enterprises.

The company has more than 20000 square meters of design, research and development, production base, more than 8000 square meters of senior office buildings, more than 1000 employees.

The company has three famous clothing brands: "foreigner", "Excelstor" and "arrogant road".

The "foreigner" has won the title of "China exemption product" and "Guangdong famous brand". There are more than 20 agents in the country and more than 400 stores in the country.

According to Zhou Xiaogong, in recent years, the size of the company is gradually shrinking.

Its brand has gradually shrunk from 3 to only a "foreigner" brand.

In July 2011, the company began to try the corporatization operation to remove the factory, at present, there are only more than 200 staff members.

In the domestic casual wear market, the share of the field company is not low, especially in the northern market, and the company has more than 400 stores in China through direct and franchising channels.

Miss Wilson, an accountant in field company, entered field company in 2003.

She told reporters: "the company's development has been booming all along."

Miss Xian said, but in 2010 many of the company's clothing sales did not go out, resulting in a large number of stocks, capital flows began to break.

Zhou Xiaogong also admitted that since 2009, the company's capital chain has begun to feel tense. At that time, the delivery speed of the company slowed down obviously, for example, some OEM products which need to be settled in cash, the company had to drag on for a long time, but the order volume of the company was relatively stable.

Before bankruptcy, even in the absence of stock, the company's summer orders in 2012 were as high as about 300000, compared with the same period in 2011, this figure has also risen slightly.

At the same time, because of the fierce competition in the casual wear industry, the brand recognition of "foreigners" is declining year by year at the retail terminal.

"A foreigner's product style is not very innovative," he said in a Fujian based franchisee. "Compared with other casual wear brands, it looks very" Earth "and out of the needs of the times.

Therefore, the average monthly sales of the store dropped from 200 thousand yuan to eighty thousand or ninety thousand yuan, and many franchisees also withdrew from the brand.

The consequence of order and market hedging is that the stock of the company has increased substantially.

Zhou Xiao Gong revealed that before December 2011, the company's more than 4 thousand square meter warehouse was filled up and estimated that there were about hundreds of thousands of warehouses.

If the product is kept in the warehouse, it can not be converted into actual sales, and as long as a garment is overloaded in the warehouse, it will consume the profits gained by the enterprise in selling 2-3 clothes.

By 2011, the operation of the company continued to deteriorate, so that suppliers were reluctant to take the "goods to the back settlement" approach to the field, and demanded cash settlement.

Although the boss Chen Churong has mortgaged all the private property, he has raised 8 million 500 thousand yuan from the bank for the two time.

But the company still has tight funds, unable to pay the processing fees and payments on time, resulting in dozens of factories and suppliers suing, and the company decided to go bankrupt.

This is just the beginning.

"Last year, the cost of raw materials and labor increased, leading to an increase of about 30% of business expenditure, which is too much pressure on enterprises."

Li Shengzhi, executive director of Guangzhou's company, talked about the collapse.

At present, the appreciation of the renminbi, the rise in costs and the decrease in demographic dividend have also affected the clothing industry.

Take the field company as an example, labor costs have doubled.

In the past, a turner earned more than 1000 yuan a month, but today's monthly salary of 3000 yuan is simply not enough.

In 2007 and 2008, raw materials such as cotton, yarn and chemical fiber purchased by the company were about 40-50 yuan per kilogram, but rose to 60-80 yuan in 2010.

The company's purchasing department manager Liu revealed that with the cost of rent, water and electricity, the cost of a down coat and windbreaker products increased by at least 15-20 yuan.

However, banks' tightening of money has brought about a fatal impact on the development of garment enterprises.

Some scholars say.

Obviously, for many enterprises, the sudden tightening of bank loans has become the last straw to overtake many enterprises.

Indeed, in the past year, many enterprises have come to the crossroads of development.

At present, the collapse of clothing enterprises in the Pearl River Delta has not yet appeared, but the capital chain is very tight, and many enterprises have already appeared in arrears.

Wang Chuanbao also revealed that among other customers, other enterprises have formally informed them that they will close down.

And clothing companies are slashing production scale.

The head of a garment enterprise admitted that he had 3 processing plants, and now he has shut down 2, and the number of enterprises with nearly 50% reduction in their peers is rare.

Similarly, the town of Shaxi, Zhongshan, which uses casual clothes as its business card, has gathered thousands of large and small garment enterprises in this town.

However, since 2011, thousands of garment enterprises in the town have suffered unprecedented difficulties due to rising raw material prices, rising labor costs and reduced international orders.

According to the investigation and statistics of relevant departments in Zhongshan, more and more small and medium-sized clothing enterprises may be faced with a cut-off or failure because they can not bear the pressure of production cost.

A survey also shows that the financing costs of small and medium-sized garment enterprises are difficult, and the channels for preferential policies are narrower. Taxation, labor costs, electricity shortage and inadequate implementation of universal policies are still common problems faced by enterprises.

It is certain that if the comprehensive living environment of small and medium-sized enterprises can not be significantly improved, then bankruptcy is definitely not just a "alien" family.