American Red Line: Going To Inventory And Triggering A Channel Crisis For Franchisees

Within a day, the suspension will be announced before clarification.

Questions about inventory evaporation.

Recently, some media broke out the United States.

In the first half of this year, 800 million inventories were quickly eliminated and the market grew by 21%.

In October 15th, the US side temporarily suspended the cards and issued a detailed announcement in the early morning of the next day.

Just for the company's response, the market does not seem to buy it.

After 16 days resumption,

The share price fell 6.48%, and after 17 days, the stock price failed to stop bleeding and fell 1.31% again, and ended up at 16.53 yuan / share.

Within two days, the total market value was cut by 1 billion 280 million yuan.

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Industry commentator Ma Gang told reporters that large garment enterprises were in the bottleneck stage in recent years. Under the situation of low growth of channel outlets, the development of Smith Barton's brand was hard to provide the role of stretching.

"Semir clothing, which belongs to the same competition camp with American Apparel, has decreased by 16.54% in the half year report. Where did the good performance of Smith Barney come from?"

"In the first half of the year, the performance of the United States was at most a growth in the number of units. Regardless of whether the pfer of stocks was so serious, the practice could only be said to be an expedient measure and could not fundamentally solve the stock crisis.

The major reshuffle of Garment Retailing is ongoing, and it is impossible to lift the trouble of American Apparel without increasing the turnover rate of inventory.

A well-known clothing company leader told reporters.

Public information shows: in 2009, the United States apparel inventory reached 900 million yuan, and by 2011 this figure is further developed to 2 billion 560 million yuan.

Even with the huge body size of American state clothing, it is enough to require a high degree of vigilance, not to mention that over 1 billion 500 million yuan of goods are seasonal goods.

This side is the United States State dress chief Zhou Chengjian (micro-blog) many times in the enterprise internal determination to reduce inventory, on the other hand, Metersbonwe brand promotion tide is accused of mediocre, sales ineffective.

However, it is quite dramatic that in only half a year, the inventory problem that made the policymakers of the entire garment industry headache has been greatly relieved, and the stock figure has dropped to 1 billion 750 million yuan.

Referring to the highly suspected 800 million "evaporation" stock, Mei Bang clothing explained in the announcement: "old product sales reduced inventory by 1 billion yuan, and new products increased by only 200 million yuan (1 billion 600 million yuan for new product production and 1 billion 400 million yuan for sales and warehousing).

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

The United States said that the suspect's inventory evaporation is suspected of false sales and artificially adjusted income "ridiculous".

However, the fact that the five major customers of the United States and the United States have changed hands for half a year has made the response of the US state less convincing.

The five largest buyers disclosed in the semi annual report this year are the five new faces of AI Shang bang, Liaoning Dalian, Hunan Changsha, Henan Zhengzhou and Hebei Shijiazhuang.

Among the buyers who took over, apart from AI sang bang, the other four were United States franchisees.

The surge in sales demand of franchisees is suspected of being suspicious and related.

In response to the US bond announcement, AI sang Bang purchased a total of 320 million yuan in the first half of this year, amounting to 70 million yuan for other related parties.

The corresponding inventory reduction is about 200 million yuan, accounting for about 8% of the total sales cost of the company, which has little impact on reducing the inventory size of the company.

As for this statement, the head of the garment enterprise objection, he told reporters: "the top five customers of Mei Bang dress all of this year suddenly turned into other brand-new customers, which is very unreasonable.

The size of the clothing company's customers is unlikely to change so much in a short time. "

The leader is "weak in the second half"?

At present, JEANSWEST, Semir and other fast moving fashion oriented "American States" are also facing the problem of poor inventory turnover.

Similar to Smith Barney's clothing, companies like domestic wolves (21.66, -0.04, -0.18%) are generally financing through equity pledge.

This way of financing has stringent requirements for share prices, while there is also a high expectation for robust growth.

American border clothing, which has been listed for over four years, is also shouldering heavy performance pressure as a listed company.

Under such a strong pressure, the United States turned to the downstream dealers to suppress the goods.

In addition, the mode of walking on two legs by the United States "straight camp + Affiliate" is undergoing a fine adjustment. As the brand owner's own way of American States increasingly healthy, meanwhile, the channel of "being operated" franchisee is being rebounded, and the contradiction between the two sides is becoming increasingly fierce.

By the first half of this year, the number of franchise stores in the United States was 3817, accounting for 74% of the total number of stores, and wholesale sales accounted for 49.2% of the total sales revenue, while the former sales accounted for a 0.57% decrease in the same period.

Earlier media reports said that the US side signed a 3 year business contract with the vast majority of franchisees and set strict targets for 25% annual growth.

The three battalion itself did not fight for five hours at a low price, so that its franchisees who were barely equal in profit and loss were forced to join the sales promotion, and their profits were further diluted.

A person in charge of Southwest apparel area told reporters that the order price of the United States and the state itself is relatively high, and the purchase discount is usually between 45% off and 43% off.

In the purchase discount, we should deduct the rents of the stores (basically account for 15%-20% of the store's sales), and then figure out the 8%-10% of the total cost of the labor expenses, and the cost pressure can be imagined.

Constrained by the adverse impact of the domestic retail environment in recent years, and the fast fashion follow up of the US and the United States, the cycle from design to clothing sales is much longer than that of the foreign advanced brands H&M and Zara within a month. The pressure of inventory pressure has made it more common for brands to reduce their load to the downstream.

"We have heard about the pressure on some of the biggest franchisees in the US," said the head of the apparel division.

If the company wants to make a high performance, it will try hard to pressure the franchisee, but the pressure itself is not sustainable. To a certain extent, it will be rebounded by the franchisee, and eventually the long-term growth will be affected.

Ma Gang told reporters that the two brands of MC and Tagline, which are newly promoted by the United States, are only being promoted through the way of store display. This spontaneous sales promotion is far from being able to talk about consumer awareness and loyalty, and the promotion of sales will take a long time.

In recent years, the number of similar competitors has increased rapidly, making the threshold for establishing new brands much higher than in previous years.

"The growth of single outlets in traditional channels is very slow. After all, there is a limit to the growth of the number of outlets. It is very difficult to move down after five thousand or six thousand.

At present, there are more than 5000 outlets in the United States. Although there is still room for the development of the single brand to Lining and Anta 7000, but in the reality of the poor retail environment, the spreading of new outlets is very laborious.

Ma Gang pointed out that, "no new network support, multi brand strategy is not well stretched, resulting in the development of its upward space."

In fact, the subsequent shock of the US state business has only just begun.

According to the News quoted by the former media, the core management team of the US equity incentive list in 2010 has now left more than 40 people, including several senior directors at the director level, and the project resources they carry are also lost from the US state clothing system.