Behind The Hangzhou Clothing Discount

Tradition is at the end of the year or mid year.

In the off-season, low price clearance has become the norm.

But this year's discount in Hangzhou is not only coming early, but also unprecedented.

What is hidden behind the discount? The journalist conducted a series of in-depth surveys of clothing retailers, wholesalers and manufacturers.

Miss Chen, a Hangzhou citizen who likes shopping, has found that since June, many summer clothes in Hangzhou have been featured with "special" and "low price" signs.

In Hangzhou Tower, Jie Bai, Yintai and other shopping malls, many brands of clothing have also increased the intensity of discount, ranging from half off to twenty percent off, and some brands even lower to 77% off.

"At least one month ahead of the discount season, the discount on the newly listed new products is unprecedented."

Miss Chen, who calls herself a Shopaholic, is very happy.

"Shortly after the new clothes were put on the shelves, they hit 33% off and waited for the autumn market in August to increase the discount."

The person in charge of a shopping mall told reporters.

The weak market can not afford to hurt.

Hangzhou Sijiqing women's wear market is the largest distributing center for women's clothing in Zhejiang province.

In sharp contrast to the hot weather outside the market, customers in twos and threes do not see many of the vendors who come to pick up the goods.

Most of the most obvious locations of shop doors and windows are advertisements with reduced prices.

In the central Zhou women's wear market, a shopkeeper who owns a brand of women's clothing has mentioned the latest sales.

In previous years, he gave wholesalers a price of 70 percent off.

"This year, it's all new, and I drop to 1.5 to 82% off.

There's no way to go.

Wang told reporters that this year's clothing raw materials, artificial and logistics costs have risen, but because of the sales are not strong, the price of products dare not improve.

"In the past year, at least 100 guests came to pick up the goods every day, but this year you see it is noon, and there are 10 guests.

Business is bad. "

Care about the clothing city, a week boss told reporters that his main brand T-shirt retail price at ordinary times is 110 yuan, now the special price 100 yuan two pieces, "sells a piece also to lose more than 10 yuan, but does not sell also cannot return the money."

Zhou boss calculated a book to the reporter, his 22 square metre pavement, rent 550 thousand yuan a year.

"Every day I open my eyes, the minimum cost of a day is 2000 yuan. How much pressure do I have to think about it?"

The Hangzhou trade and Industry Bureau recently released the first half of 2012 commodity trading market operation data show: the famous Sijiqing clothing characteristic block, in the first half of this year sales volume was 3 billion 852 million yuan, down 8.07% compared with the same period last year, another province's regional key market Hangzhou Hangzhou boutique clothing market clothing sales fell 23% compared to the same period.

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Shrinking profits of foreign trade enterprises

In this way, clothing companies are also having a hard time.

Mao Xiaoyun runs a trade dress brand woman business in Shandong Road, Jianggan District, Hangzhou.

The company produces more than ten thousand garments a year, mainly exported to northern Europe.

In July, Mao Xiaoyun took a trip to Paris, the cold spot of the European clothing fair, which worried her about nearly twenty years of foreign trade in clothing trade: "with the most conservative estimate this year, the company's profits will also drop by half."

Affected by the European debt crisis, foreign customers became more cautious when ordering. "We used to make 30 kinds of products in one season, but now there are at least 50 products to keep the original order profit, because many clothing prices have been reduced by 20%."

Mao Xiaoyun is lucky that the Nordic market is stable this year, but it is very difficult for the clothing companies around her to export orders to Italy and Spain.

In Mao Xiaoyun's business, reporters also met with a person in charge of the Hangzhou entry exit inspection and Quarantine Bureau.

He told reporters, "in the first half of this year, the value of garments exported by our bureau directly decreased by 12.5% compared with the same period last year, which is hard to imagine before."

He wanted to introduce an export order to a trousers manufacturer in Gongshu District 20 days ago, but the phone call came to him and told him that he had shut down the garment factory which had been operating for ten years and 300 thousand trousers per year at the end of June.

Domestic manufacturers "pressure mountain"

The shortage of market demand and the lack of consumption directly led to the increase of the inventory in the clothing industry.

"Last winter was very cold, and the Spring Festival came earlier. We also overloaded many winter clothes.

"Pressure mountain"! The boss of a children's clothing factory in Jianggan District Jiu Bao told reporters that the company produced 35 million yuan worth of down jacket last year. Because of the weather, there are still about 20000000 yuan of goods in the warehouse.

"Because of fashion trends, capital circulation and other reasons, clothing storage time is up to a year."

Mr. Yang, the head of a company, told reporters that "the tight financial funds of garment enterprises this year is an indisputable fact, and high inventory has taken up a lot of financial capital, leading to a sharp rise in financial costs."

In 2011, a number of well-known garment enterprises in China declined in performance.

Data show that Lining group last year, the stock amount of 1 billion 133 million yuan, an increase of 40.57% over the same period, such as fan Ke Cheng, Hai Lan home, Semir and other well-known enterprises have similar problems.

Last year, after nearly a year's de stocking, its inventory balance remained as high as 2 billion 560 million yuan.

"Some enterprises with insufficient risk tolerance are easily crushed to death by high inventory."

Qian Feng, vice president of Zhejiang garment industry association, told reporters that these seasonal commodities are constantly depreciating, and to a great extent, they have tightened the cash flow of enterprises.

In Qian Feng's view, although clothing is different from other industries, it is difficult to achieve "zero inventory". But deep down, this year's stock surge has highlighted many enterprises' weak management ability.

"By the impact of this year's overall economic environment, part of it is not guided by" profit maximization ", but the" sales maximization "clothing enterprises, because there is no accurate market budget and reasonable, efficient and accurate planning ability, can not quickly respond to changes in the market.

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Control the Eight Immortals crossing the sea

In the view of industry experts, behind the high inventory is the comprehensive reflection of clothing enterprises in brand, design and channels.

Behind the frenzy of discount sales, the marginal effect of clothing brands is decreasing, and it is easy to damage the brand image.

Reasonable control and prevention of inventory is far more strategic than how to digest inventory.

"Now is the double day of ice and fire."

Wang Ying, director of the textile department of the Hangzhou Municipal Commission, said that for clothing companies, this year is the most difficult year after 2008.

But some enterprises are developing fast on e-commerce.

Responsible person of Hangzhou Blue Fashion Clothing Co., Ltd. said that since last year's involvement in e-commerce, the company's online sales this year gained nearly 300% profit growth.

E-commerce platform can alleviate the pressure of enterprise inventory, but it is not a panacea.

Wang Ying believes that enterprises themselves must constantly improve their R & D capabilities, pay attention to the impact of weather, economic and political factors on the clothing industry, and further strengthen the control and management of enterprises' pre production and afterwards affairs.

Many experts also said in the interview that the current difficulties facing the garment industry in addition to the market downturn affecting exports and high inventories, there are many factors such as rising prices of raw and auxiliary materials, rising labor costs and so on.

Relevant departments should also focus on stimulating consumption and expanding domestic demand.

Special funds are set up to provide support, relaxation and simplification of loan conditions and approval procedures for the research and development of clothing enterprises, increase the intensity of small loans to solve capital flows, and introduce policies on special tax and fee reduction for small and micro garment enterprises.