How To Cope With Inventory Challenges In High Fashion Apparel Industry

" clothing There are indeed surplus industries, and the entire manufacturing sector is even overcapacity. " When it comes to the inventory problem of China's apparel industry, CEO, a sports consulting firm, is the key to this industry's research for many years.

　 Net profit of inventories keeps falling

According to the inventory data of the garment industry, one industry person said to the newspaper, "the inventory scale of the whole industry is not more than this, the inventory of a single brand is hundreds of millions of yuan, and the stock size of the whole industry is estimated to be up to 100 billion yuan."

Public data showed that at the end of last year, the total inventory of Lining, Anta, XTEP, XTEP, PEAK and the 6 domestic sports brands reached 3 billion 721 million yuan. Among them, PEAK's inventory rose faster, in the first half of 2012, its stock has risen to 529 million yuan, or 25.65%. Insiders say that this high inventory situation has not been alleviated until now.

Under the pressure of inventory, the current situation of performance decline is undoubtedly exacerbated by these enterprises, and the decline in performance is also considered by the industry as "sooner or later".

According to media reports, the net profit of the 60% listed garment enterprises has dropped sharply. In the performance reports released by 14 garment enterprises such as Anta, 31st degree and Chinese clothing, the proportion of net profit falling has accounted for 61.5%, of which Anta has dropped 21.5% for the first time since its listing. In addition, this decline in performance is not only this year. From Lining's net profit, net profit fell 65.2% in 2011, and the income in the first half of 2012 dropped by 9.5% over the same period last year.

In view of the current situation of high inventory and declining performance, insiders told our reporter that the major sports brands had misestimated the market situation before the Olympic Games, which led to oversupply of the market, and inventory problems gradually emerged with the end of the Olympic Games. The most influential ones were Lining and Adidas.

However, Zhang Qing believes that Beijing Olympic sponsor Adidas is finding the problem earlier. "Adidas first experienced first hand, it has gone through such a process, in the purchase and channel management, many models have been adjusted accordingly, to the present situation will be relatively good." Besides the "Post Olympic effect", factors such as rising costs and serious homogenization of products have further exacerbated high inventory prices.

　 Big brands compete for inventory.

Such a high inventory is undoubtedly the present. Sportswear Brand is even the key challenge of the whole industry. How to deal with inventory challenges, save declining performance, test these Clothing brand Wisdom.

In recent years, horse racing enclosure and scale expansion have become the means of competition for many sports brands. What is particularly noteworthy is that discount stores, e-commerce and even self run factory stores become the main way for major brands to inventory. Reporters visited the top grade discounts and other discount stores, found that Lining, Anta and other sports brand clothing discount has even reached 77% off, in Taobao, Dangdang and other shopping websites, Nike, Lining and other brands discount advertising can also be seen everywhere, as low as seventy percent off, sixty percent off is not uncommon.

At the same time, the international brand Nike is also involved in the current domestic sports brand. Recently, some media reported that Nike will probably set up 40 to 50 self run factory stores in China, which will exceed the previous scale, and the coverage will also extend from the first tier cities to the two or three tier cities.

In view of the fact that Nike has not yet been confirmed abroad, CIC consultant light industry researcher Xiong Xiaokun told our reporter, "whether Nike really increases the investment scale of factory stores is still unknown. Although Nike has strong advantages in brand and distribution capabilities, Nike has a huge pressure to go to inventory, and clearing inventory through multiple channels is the focus of the current work of Nike."

However, in view of Nike's efforts to develop factory shops, many people in the industry expressed concern that domestic brands would be hit. Zhang Qing said, "Nike will do a certain degree of impact on local brands. Now it is not big enough to look at the volume, but if the stock is large, it will undoubtedly increase the intensity, which is bound to be an impact on the local brand."

While there may be some impact on local brands, there is media analysis that Nike and Adidas may occupy the two or three tier cities by clearing stock opportunities, while the two or three tier cities are usually the main battleground of domestic brands. Nike channel sinking, Zhang Qing said, "Nike's move may be killing two birds with one stone, but the main thing is to clear stocks." Xiong Xiaokun believes that in the short term, it will speed up its inventory clearance, but it will still bring some financial pressure to it. In the long run, Nike will enter the two or three line city through factory stores, which will lay the foundation for its future development.

From the current situation, no matter how big brands adopt, they are all for one purpose: clear inventory. To their respective ways, insiders told reporters: "no matter how the layout is, it will definitely not be a blind expression. The establishment of channels must be done gradually in the right product and distribution mode. At present, the situation is not suitable for quick action."