Discount Has Become The Trump Card For Many Clothing Brands To Consume Inventory.

At the time of the Dragon Boat Festival, reporters in Tianhe and Yuexiu Business District of Guangzhou found that the discount card has become the trump card for many clothing brands to consume inventory. Although many new stores are listed, but for this spring or even last year's old section, some products have played a discount of 4~7 discount, and some even directly 3 fold. On the one hand, the growth of international fast selling fashion brands ZARA and H&M financial reports on sales and net profit, and the news that they continue to expand new stores in the domestic market. On the one hand, many domestic clothing brands frequently send out news of sharp increase in inventory and three years' sales. Domestic clothing "inventory door" has once again triggered market thinking.

Analysts say from one family clothing The inventory level of the enterprise can be fully seen its management level. According to the analysis of insiders, the source of domestic clothing inventory is mainly due to the impact of fast selling international fashion brands, which leads to a serious backlog. The pressure on channel ordering indicators and the limited digestion capacity will inevitably lead to unopened stock. In order to achieve rapid expansion of the channel, there will be some undesirable outlets. With the high inventory constantly perplexing clothing enterprises, some brand clothing discount strength is also growing.

Phenomenon:

Domestic and foreign brands "ice and fire"

Last Wednesday, H&M announced its profit in the second quarter of 2012, showing that sales reached US $4 billion 540 million (about 28 billion 880 million yuan) in the three months ended May 31st this year, up 14.59%. Driven by the "strong sales" of its spring clothing series, its net profit increased by 23.04%, reaching 750 million yuan, or about 4 billion 770 million yuan, and the profit situation obviously exceeded the expectations of the outside world.

At the same time, ZARA performed fairly well in the first quarter. The Inditex earnings data of the parent company showed that its sales increased by 15%, to 3 billion 420 million euros (about 27 billion 360 million yuan), and net profit increased by 30%, to 432 million euros (about 3 billion 456 million yuan RMB). Last year, however, China's textile and apparel listed companies had the highest net profit. Youngor (8.90, -0.15, -1.66%), the net profit of the year is only 1 billion 762 million yuan, a year-on-year decrease of 34.08%, including financial and real estate business income. Net profit in the first quarter of this year was 2 billion 560 million yuan, but the year-on-year growth rate still dropped 34.26%.

Industry:

High inventory problems Clothing industry

In fact, in recent two years, the discount of brand clothing in shopping malls is increasing, and the discount area is expanding. The relevant person in charge of the shopping mall said that the mall will regularly launch some areas to allow the brand to promote the sales of goods, on the one hand, to increase sales volume, and also to deal with the stock of these brands. Reporters in Tianhe City, Guang Bai Department Store Sports West Road shops at the top level, the top floor has been opened up to a special brand discount area, used to consume brand clothing of old goods.

The high storage problem has made the garment industry headache for nearly one or two years. If we sell the garments in the national stock market at present, we are afraid that we will not be able to sell them in three years. It has been reported that there are three traditional ways to solve these problems: discount, electricity supplier and direct camp. As a matter of fact, discount sales is a common way for apparel textile companies to handle the over season goods, but this method will reduce the gross profit margin of the company. If it slows down expansion, that is, slowing down the shop opening speed, then the new store needs to reduce the stock of stocking, although its stock will also be reduced, but this is a way that the stock has risen to a certain extent and is difficult to solve after years of difficulty.

Industry analysis:

Price war can not solve inventory problem

The industry believes that clothing companies continue to try these ways to inventory is still very difficult to really solve the inventory problem. More people in the industry say frankly, "if we do not find the root cause, discount, electricity providers, direct sales, repurchase and other ways can not really solve the inventory problem, and can only play a temporary effect of headache and pain."

The clothing industry should have a lot of innovations in the business mode, but unfortunately, more clothing brands can never jump out of the vicious circle of price war.

The independent critic of the shoe and clothing industry, Ma Gang, pointed out in his public blog that mainstream clothing enterprises all adopt futures system. If Brand Company sells commodities to channel merchants or retailers, the risk will be transferred successfully, and the brand dealers will not form risks sharing with the retailers or go back together. In order to increase market share, retailers often ask retailers (retailers) to overstock, and retailers can not afford to go forward. In order not to let Brand Company know their true sales and inventory, retailers can selectively make errors in system data, thus forming evidence of egoism. When a brand can not judge the data, it is a reason for the retailers to persuade themselves to grow in order to complete the established growth data and induce them to take stock rebate assessment. The total demand of the market does not increase because of this, and the price change becomes a helpless choice, and the market deteriorates further.