Common Phenomenon In Clothing Industry: Brand Dealers Pressing Goods To Distributors

Ben wants to become a model of "going to stock".

Media questioned that the reason for the decline in its high inventory is to pressure the franchisee and the related parties to buy the deal.

Affected by this news, Smith Barney dress 15 emergency suspension, and in the evening of the night, issued a Clarification Announcement questioned the overall negation.

After the resumption of trading yesterday, Smith Barney once dropped 7.37%, but it still fell 6.48% at the close.

It was disclosed that the company had a stock of 2 billion 560 million yuan last year, while the stock fell rapidly to 1 billion 750 million yuan in the first half of this year, and the inventory was 800 million yuan in half a year. At the same time, the net profit in the first half of the American apparel industry increased by 15%.

Although it is not clear whether the American Apparel is related to the large amount of pactions reported by related companies, many industry insiders and franchisees told reporters that because of the pressure of inventory, it is a common phenomenon for brands to press goods to channel traders.

More American state clothing dealer said, because

The purchase discount is higher than the discount discount inventory discount of the direct store. Sometimes, the dealer is more willing to purchase the special price from the direct store.

American state negates doubts

High inventory is not a cold day.

In the first half of the year, the environment weakened.

The overall decline of the industry, the United States State clothing inventory fell 800 million yuan between six months is a "miracle."

In the first half of 2012, the company's direct retail terminal system maintained a growth of 22%, which provided a strong support for effectively reducing the scale of inventory. At the same time, in order to control the scale of inventory, the purchase of new products decreased by 29% compared with the same period last year.

Thus, by the end of 6 2012, inventories had fallen by 800 million yuan compared with the beginning of the year.

"In fact, there is no direct correlation between the growth of the terminal system and the reduction of inventory. Sometimes the terminal expansion is too fast, but it will also increase the stock."

A long term concern for leisure

The industry said.

For the report referred to "the state's inventory of 7~8 billion sold to AI sang Bang purchase.

And AI sang Bang is a wholly owned subsidiary of Shanghai apparel, a controlling shareholder of American state clothing, and the actual controller is Zhou Chengjian, micro-blog chairman of the United States.

Mei Bang clothing denied this directly, and said that in the first half of this year, the total sales of goods to AI sang Bang amounted to 320 million yuan, and the sum of goods sold to other related parties amounted to 70 million yuan. The total sales amount to the related parties was 390 million yuan, and the corresponding inventory reduced by about 200 million yuan, accounting for about 8% of the total sales cost of the company, which had little effect on reducing the inventory size of the company.

In the report, the reason for the emergence of "gorgeous report" is attributed to pre allotment, and the company is called "virtual out of stock" and "suspected financial fraud".

American Apparel is explained by the "industry rules". "The clothing industry is not matched by the retail season and the allotment season. In order to meet the needs of sales, before the retail cycle comes, the company's product preallocation is based on the futures contract of the franchisee, which is the basic operation mode of the industry. It is also the mature mode of operation of the company over the past decade."

People in the industry told reporters: "it is somewhat far fetched to explain by regulations. Whether the company's operation mode is a mature industry operation mode remains to be verified."

Dealers prefer to buy goods from direct outlets.

In fact, pre sales are very common in the clothing industry.

Usually, brand operation clothing companies adopt the futures commodity mode. In order to get the goods coming in advance, the Brand Company will sell the products ahead of schedule.

These people, for example, say that if they are "fast fashion" brands, the characteristics of their brands and commodities determine the characteristics of rapid listing. For example, in May, customers in the South began to appear in the autumn ahead of schedule.

Type, short T, June will fall on the long T, jacket.

However, the commodities that are too early to be listed are not enough to be sold in season, so they can not immediately generate sales, which will occupy the funds and storage space of retailers and form stocks.

In the face of diversified sales channels, the most passive is the franchisee, many brands allow franchisees to "eat" stocks, but they are easy to battle.

Zhejiang, a member of the United States apparel business, a soldier told reporters, the franchisee's purchase discount of nearly 40 percent off, but the direct store is often doing 50 percent off, 40 percent off clear inventory activities, it is very affecting the franchisee business.

Sometimes he goes directly to the direct shop to pick up the special price, because the price of the direct store is cheaper than that of the company.

This kind of squeeze on channel profit is not only one of the United States, but also Lining's franchisees have told reporters that the selling price is even lower than the purchase price.

A soldier said that this month's order in 2013, the United States State dress Brand Company gave him a high order index, if the order can not be completed, his decoration subsidy will not be available.

A brand agent in Jinjiang says that each regional agent has different orders for each purchase. If the index exceeds the order, the brand will pay one percent to five percent cash in excess of the quota.

But with the continuous increase of orders, it is very difficult to achieve or even exceed the target.

"For Brand Company, to achieve high growth, we can only raise the index, but for franchisees, we can not undertake the pressure from the brand when forming larger stocks."

The analysts said.

The announcement shows that as at the end of 6 2012, the number of stores in the United States was 3817, accounting for 74% of the total number of stores. In the first half of 2012, the company joined the wholesale sales revenue of 2 billion 240 million yuan, accounting for 49.2% of the total sales revenue, an increase of 20% over the same period last year. Compared with the same period last year, the sales volume of the wholesale sales decreased by 0.57 percentage points.

How to resolve inventory pressure

Some professionals have statistics that the market is on the market.

During the peak period, the stock of Mei Bang clothing reached 3 billion 160 million yuan, and the turnover time reached 243 days. Similarly, the Semir clothing (002563.SZ), which was located in casual clothing, had a total inventory of about 1 billion 600 million yuan in the first half of this year, an increase of about 30% compared with the 1 billion 200 million yuan at the beginning of the year.

The analysts made an account of the reporters. "Smith Barney sold 4 billion in the first half of the year."

The direct store sold 2 billion, and there was a stock of 1 billion 700 million yuan, which included direct stores.

If the inventory is zero, then all stores will be closed. The franchised stores must operate normally and must be built on a certain stock level.

So with this calculation, such inventory is also normal.

In order to clear the stock, Smith Barney clothing promotes sales in various ways.

Shanghai's Cambridge East Road Metersbonwe headquarters warehouse stakeholders told reporters that in recent years, they will hold several special sales every year to clear inventory.

However, a salesperson of the largest supplier of American Apparel, Pinghu Kun Meng Da clothing company, Zhejiang Province, told reporters that the products in the warehouse were still overloaded with the products of the United States several years ago.

The salesperson said.

But the question is how much inventory can be digested through retail channels, which is not difficult to see from the popularity of various stores.

At present, more than 90% of fashion brands in China have adopted the agent mode to expand channels, and pferring pressure to channel manufacturers has become a common practice for major brands.