Service Enterprises: Reasonably Control Production And Guard Against Overstock

Digesting inventory has become Clothing industry There are countless ways to eliminate inventory, but in retrospect, think seriously about whether it is more effective for enterprises to reasonably control production and prevent inventory than to explore how to digest inventory afterwards?

Zhengzhou Railway Station is the largest clothing distribution center in Henan, with dozens of clothing wholesale and retail markets, large and small.

Ms. Wang, a Zhengzhou citizen, told the reporter that she did not like to go to shopping malls when buying clothes, but preferred to go to the silver based clothing market near Zhengzhou Railway Station, where there are both brand clothing and ordinary fashion styles, and the price is low.

But recently she found that many clothing stores here summer wear The signboards of "special price" and "low price" were put up. Even in Dennis, Dashang and other big stores, brand clothing has also increased discounts, ranging from 50% to 20%, and some brands have even reduced to 23%.

　 Market weakness, full discount and promotion

At the elevator on the third floor of Yinji is Ms. Kang's main women's clothing store. Recently, her clothes have also been marked with a sign for sale at a discount, and the discount is extremely low.

"The discount season is at least one month ahead of schedule. Even the new models just launched, the discount is unprecedented. Soon after some new clothes went on sale, they got a discount of 60% or 70%. When autumn clothes came on the market in August, the discount will be increased." Ms. Kang told reporters.

Hangzhou Sijiqing Women's Wear Market is the largest women's wear distribution center in Zhejiang Province, with thousands of shops, large and small. At the beginning of August, Boss Li, who manages clothes in Erma Road, Zhengzhou City, Henan Province, came to Sijiqing to wholesale clothes as usual. To his surprise, the customers in the hall of Hangzhou Sijiqing Women's Wear Market were in twos and threes, and few vendors came to batch goods, which made him feel cold.

Compared with Zhengzhou Erma Clothing City, Hangzhou's situation is not much better. At present, most of the merchants in Hangzhou Sijiqing Market have placed advertisements for price reduction in the most obvious positions on their doors and windows. A shopkeeper surnamed Wang said that in previous years, he gave the wholesalers a 30% discount. "This year is still a new model, and I directly reduced it to less than 20%. There is no way, we have to go with the volume." Boss Wang told reporters that this year, the cost of raw materials, labor and logistics of clothing has increased, but because of poor sales, the product pricing did not dare to increase.

"In the past, at this time of year, at least 100 customers came to batch goods every day, but this year, it was almost noon, so there were only a dozen customers." A boss of Cifa Clothing City told reporters that the retail price of his main brand T-shirts was 110 yuan at ordinary times, but now the special price is 100 yuan for two pieces. "If you sell one, you will lose more than 10 yuan, but if you don't sell it, you will not get back the funds."

The operation data of commodity trading market in the first half of 2012 released by Hangzhou Administration for Industry and Commerce recently shows that the sales of the famous Sijiqing clothing characteristic street in the first half of this year were 3.852 billion yuan, down 8.07% year on year, while the sales of Hangzhou Hangpai boutique clothing market, another regional key market in Zhejiang Province, fell 23% year on year.

Fujian, a big clothing province near Zhejiang, also has such a situation. In most department stores in Shishi City, almost all stores have launched discounts, and most of the discounts are below 50%. Among these discounted products, many of them are new models just launched a month ago. Signs such as "30% off for one piece, 50% off for two pieces", "three folds for the whole court" and "buy one get one free" are everywhere.

Guided by "maximize sales"

The boss of a foreign trade brand women's clothing enterprise in Hangzhou told reporters that the enterprise produces more than 100000 pieces of clothing annually, mainly exported to northern Europe. In July, she went to Paris. The deserted scene of the European Clothing Fair worried her, who had been engaged in clothing foreign trade for nearly 20 years: "With the most conservative estimate, the company's profits will also drop by half this year."

Affected by the European debt crisis, foreign customers are also more cautious in ordering, but this year the Nordic market is relatively stable, and some garment enterprises mainly exporting to Italy and Spain are difficult to receive orders.

The reporter learned that in the first half of this year, the export value of clothing that passed the inspection application of Hangzhou Entry Exit Inspection and Quarantine Bureau directly decreased by 12.5% compared with the same period last year. "It was hard to imagine before," an insider told reporters.

The boss of a children's clothing enterprise in Huzhou City, Zhejiang Province, said that last winter was late and the Spring Festival came early. They also had a lot of winter clothes in stock. "Because of the fashion trend, capital circulation and other reasons, clothing can be stored for up to one year." A person in charge of an enterprise told the reporter, "This year clothing enterprises' financial capital is tight, and high inventory occupies a large amount of financial capital, leading to a sharp rise in financial costs."

According to the reporter, the decline in the performance of many well-known domestic garment enterprises in 2011 was caused by the sharp increase in inventories. Data shows that the inventory value of Li Ning Group last year was 1.133 billion yuan, up 40.57% year on year. Vancl, Home of Hailan, Sima and other well-known enterprises have similar problems.

"Some enterprises with insufficient risk resistance ability are easily crushed by high inventory," said Qian Feng, vice president of Zhejiang Garment Industry Association. These out of season commodities are depreciating, which has strained the cash flow of enterprises to a large extent.

In Qian Feng's view, although clothing is different from other industries, it is difficult to achieve "zero inventory", but from a deeper perspective, this year's surge in inventory highlights the weak management ability of many enterprises. "Influenced by the shock of the overall economic environment this year, some clothing enterprises that do not take the 'profit maximization' as the orientation, but take the 'sales maximization' as the orientation, because they do not have accurate market budgets and reasonable, efficient and accurate overall planning capabilities, enterprises cannot respond quickly to market changes."

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It is more meaningful to prevent inventory generation

In the opinion of industry experts, the high inventory is a comprehensive reflection of clothing enterprises' problems in brand, design and channel. Behind the short-term sales peak brought by crazy discounts, the marginal effect of clothing brands is decreasing, and it is easy to damage the brand image. Reasonable control and prevention of inventory production is far more strategic than how to digest inventory.

Many experts also said in the interview that the current difficulties faced by the clothing industry, in addition to the market downturn affecting exports and high inventory, also have 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.

This year is the most difficult year after 2008, but there are also some enterprises taking the e-commerce express train with strong development momentum. The person in charge of Hangzhou Lanse Qingqing Clothing Co., Ltd. said that since it set foot in the e-commerce field last year, the online sales of the company in the same period this year have achieved nearly 300% profit growth.

Shishi is one of the major garment production bases and distribution centers in China, and is known as "everywhere on the street without business, covering all kinds of clothes". The reporter learned that Shishi City has recently issued Several Measures on Encouraging and Supporting the Construction and Operation of Shishi Clothing Industry Creative Park (Provisional) to speed up the construction and operation of the project and promote the transformation and upgrading of the city's industry.

It is reported that Shishi Garment Industry Creative Park is a joint venture between Shishi Municipal People's Government and China Garments (7.48,0.00,0.00%) designer For the strategic cooperation projects of the Association, the incentive policies issued this time include three aspects: support measures for project construction and operation, and relevant safeguard and constraint measures. 20% - 50% discount interest will be given to the bank loans of newly registered design institutions for the development of clothing creative industry; For designers at or above the national level who start their businesses in the creative park, the development and operation company shall advance 50% of the company's registered capital, and the interest of the funds advanced shall be fully posted by the municipal finance to the operation company; For cultural projects with Shishi and Fujian Taiwan characteristics that can play a leading role in the industry, 20% - 50% of the project loan discount will be given.

Experts suggest that the clothing industry and relevant government functional departments should set up special funds as soon as possible to support the research and development of clothing enterprises' products, relax and simplify the loan conditions and approval procedures, increase the efforts of microfinance to solve the flow of funds, and introduce the policy of special tax relief for small and micro clothing enterprises. Enterprises themselves must constantly improve their research and development capabilities, pay attention to the impact of weather, economic and political factors on the clothing industry, further strengthen the control and management of enterprises before, during and after production, and accelerate the transformation and upgrading of the clothing industry.