Inventory Is Overwhelmed And Where Is China'S Garment Industry Heading For?

Since the beginning of summer, clothing has started a round of discount sales.

And behind the big discount, too fast.

The expansion strategy reflects the phenomenon of high inventory in China's apparel industry.

At present, the high inventory of Lining, Metersbonwe and Hai Lan home is particularly prominent. The total inventory of Hai Lan's home has accounted for 56.82% of the total assets.

Such a high inventory makes the cash flow of enterprises unaffordable and the capital chain may break.

According to the 2011

Data disclosed that Lining's total inventory amounted to 1 billion 130 million yuan, accounting for 15.5% of total assets; Metersbonwe's inventory was about 2 billion 550 million yuan, accounting for 29.8% of total assets; the total inventory of Hai Lan's household was about 3 billion 860 million yuan, accounting for 56.82% of total assets.

Not only that, the number of stocks of seven wolves, nine bru kings, Semir and other brands is also high.

In 2012, Lining released the fourth quarter order meeting data showed that the order amount and order volume has a 20% decline, the company planned to control the total amount of orders, hoping to make the stock return to normal level by the end of the year.

Similarly, Metersbonwe started the establishment of discount stores in 2011.

By the end of 2011, nearly 300 discount stores were expanded.

On the face of it, these measures can solve the urgent need of the enterprise, but it is not a long-term development strategy, said Wang Yixuan, assistant analyst at the Qing research center.

In fact, China's apparel industry has accumulated a lot of production capital from the extensive production in the past, but it has caused many problems such as the demand amplification, the subdivision of product categories, and the unclear positioning of the brand.

At present, the brand remolding and resource integration of China's garment enterprises make the industry tend to be more sophisticated. However, over time, brand problems such as excessive brand expansion are gradually exposed.

At present, the phenomenon of high inventory is highlighted in many enterprises, which means that a large amount of capital is occupied by enterprises, which affects the cash flow of enterprises, and even makes the capital chain of enterprises break.

For garment enterprises, the discount of merchandise brought by inventory backlog is also affecting their normal operation.

Wang Yixuan believes that although the origin of high inventories of different enterprises is partly from within the enterprise, there are two reasons for the high inventory of Chinese clothing enterprises from the perspective of the whole industry.

First, the lack of consumer demand, extensive production mode caused demand expansion; secondly, supply chain links lack of information technology.

Clothing enterprises commonly use "brand dealers and retailers" in sales channels.

The intermediate links can be communicated through two orders a year (spring, summer, autumn and winter), and agents decide the order quantity through the local sales estimate. This inaccurate judgement has great errors with the actual demand of consumers. Agents often order more goods for goods to be discontinued, and brands store more commodities for replenishment.