Clothing Industry Under High Storage

The demand for men's clothing has been suffering for the first time in more than ten years. Youngor Shanshan stock and Dayang's creation had to be transformed. Whether it is temporary emergency or long-term strategic decision, the accumulation of goods in warehouses is a key to their transformation.

According to statistics, YOUNGOR stock accounts for more than 75% of the current assets, and the stock of clothing The main industry slump has been abandoned by many garment industry analysts, and the turnover rate of big business inventories of garment manufacturers has dropped by 32%.

The "inventory crisis" is spreading, and the industry believes that the most difficult "winter" will be in the first half of next year.

　 　 Stock Achievement killer

This year's spring and autumn new product order, YOUNGOR will increase its order for the first time, trying to restore order decline. At some ordering sites, the order index is cancelled, and the abnormal situation such as dealer's direct ordering is also frequent. "This year's order is unprecedented." A person who runs a mid-range menswear brand has revealed for many years.

A large number of stocks scare away the enthusiasm of dealers, and clothing listed companies are also not easy. According to the statistics of the reporters, YOUNGOR, Shanshan stock and Dayang creation, the old listed companies of men's wear, respectively, reached 23 billion 760 million yuan, 870 million yuan and 220 million yuan in this year's report.

In the first half of this year, YOUNGOR's operating profit dropped 3.6% to 1 billion 178 million yuan compared with the same period last year. High inventory is considered to be its performance killer. This year's report shows that inventories account for 73.9% of current assets. In fact, since last year, YOUNGOR's share of inventories has suddenly increased. At the end of last year and mid year, the figure was 75% and 76.8% respectively, compared with 65.3% at the end of 2010.

Inventory pressure is reflected in inventory turnover. In this year's report, the company's inventory turnover fell to 0.12 times, down 4% from the same period last year, far below the average of the 0.94 men's listed companies. Correspondingly, YOUNGOR was significantly higher than its peers in the days of inventory turnover. The days of inventory turnover in the company were 1558 days, 4 times the average of 382 days in the industry. That is to say, from inventory to full digestion, YOUNGOR takes 4 years, and the industry only needs 1 years.

On the cash flow, franchisees' repayment is deteriorating. The number of days of receivables turnover fell from 23 days in 2010 to 17 days in 2011, the 11 day of this year's report.

Relatively speaking, the stock backlog situation of Shanshan stock and Dayang entrepreneurship seems to be not obvious. It is worth noting that the two companies' net profit growth is also not optimistic. This year's China Daily Spin Net profit was only 4 million 60 thousand yuan, down 73% compared with the same period last year. Dayang's business revenue fell 1.41%, net profit fell sharply by 31.45%.

"This year's spring and summer goods were ordered in August last year, crazy ordering has hidden dangers, and last year's autumn winter clothing and spring sales this year are lower than in previous years, naturally resulting in a large number of inventory, many dealers do not dare to order now." The industry insiders said.

"From the macro data, the growth demand of men's wear industry has dropped from 20% in previous years to 10%, and demand is insufficient. The clothing industry usually organizes production 6 to 9 months ahead of schedule, and most of the enterprises are in the process of going to stock. An analyst at a large brokerage firm in Shanghai said that inventory pressure on clothing companies increased, especially in the first half of next year.

　 YOUNGOR is heavily promoted.

Shanshan stock reduction clothing component

The shares of YOUNGOR and Shanshan are Garment industry Two samples of diversification. Clothing, real estate and investment were once the three carriages of YOUNGOR's business. Similarly, in addition to clothing, the main business of Shanshan stock also includes lithium battery materials and investment of two blocks. These two "Ningbo businesses" who have been doing nothing serious have taken the first place in the market share of domestic clothing.

The difference is that this year, YOUNGOR declared that "return to the main garment industry", while Shanshan shares gradually fade out of the ranks of clothing.

"That company can no longer be a clothing Brand Company." Speaking of Shanshan stock, many garment industry analysts say they haven't studied it for a long time. This year's China Daily reported that the net profit of Shanshan clothing business fell by more than 7, and the company said it was consolidating several brand operations, which resulted in a higher cost of net profit.

People in the industry questioned the real reason for the difficulty in clothing sales. The inventory of the company increased by 6.23% compared with 815 million yuan last year.

At the same time, the net cash flow generated by the activities of Shanshan stock group was 11 million 820 thousand yuan, a sharp decrease of 58.60% compared to the same period last year.

In the apparel industry's massive entry into the electricity supplier's industry background, Shanshan stock has hardly been involved in the field of e-commerce, and the sales channel is dominated by low gross margin joining mode. "Clothing is its traditional main business, but gross profit margins continue to decrease, contributing less and less net profit, and gradually transforming into new materials industry." A brokerage analyst in Shenzhen said.

Like Shanshan, YOUNGOR's main product is men's suit, and also operates several brands. At present, YOUNGOR's inventory is more than two times of that of Shanshan, but the way of YOUNGOR's inventory digestion is more active.

In the first half of this year, YOUNGOR added 109 stores to 2525 stores, mainly with new shopping malls and self owned stores, including a huge Hangzhou flagship store, which was built at 450 million yuan, and closed some franchises. Last year, the company added 157 stores.

A salesperson from a shopping mall in a large shopping mall in Shenzhen told reporters that sales promotion activities of YOUNGOR this year are much more frequent than in previous years. "Last weekend, we just had 2 days' activities, 50 percent off of the total, and two weeks later.

YOUNGOR began to intervene in real estate in 90s. For a major broker who once again returned to the apparel industry, a long-term brokerage research analyst said, "it is unlikely to be dominated by clothing. It is expected that the transformation has been expected for several years, but it still can not be seen. It is estimated that it is digestion of inventory. "

　　 Dayang inventor inventory turnover fell 32%

Unlike Shanshan Group and YOUNGOR, Dang Yang, who has been struggling in the apparel industry, is seeking "internal transformation". From clothing processing to marketing and private brand.

Dayang is mainly engaged in producing and marketing various kinds of medium and high class formal products. It also processes suits, jackets, women's wear, sportswear and cotton clothing. Most of its products are sold to apparel retail giants in Japan, the United Kingdom, the United States and Germany, including M&S, Macys, P&C and Aoki.

In this year's report, Dayang's net profit fell from 52 million 270 thousand yuan to 39 million 160 thousand yuan, down 33.5% from the same period last year. According to the company insiders, the current processing business accounts for more than 6 of sales revenue. The inventory growth of Dayang creation is not obvious, but inventory turnover is slowing down.

According to statistics, the inventory turnover rate of Dayang creation this year is 1.25 times, 32% slower than that of the same period last year. The turnover time of inventory is 144 days, which is 34 days more than that of the same period last year.

Compared with the scale of hundreds of thousands of stores, the expansion of Dang Yang who has been listed for more than 10 years is extremely slow. The 2011 Annual report shows that one of the three major brands of the company is about 25 companies.

Last year, there were 4 new stores in Beijing, Qingdao, Chengdu and Zhengzhou, compared with 5 new stores in 2010.

"Yang can not be regarded as one. Clothes & Accessories Brand, private brand business accounts for too little. " A large brokerage analyst in Southern China bluntly said.

According to the company insiders, at present, the sales of private brand business of Dayang creation company account for more than 20%. "The clothing industry is a fully competitive industry, and the best way to digest their inventory is to start their own brand and build channels."