Expert Analysis: Clothing Industry "Warmer" Still Need Time?

Every year 7, 8, and two months are the six months' report cards issued by listed companies. With the discovery of the first half of the year in 2015, the A apparel industry listed companies began to disclose semi annual reports in July.

From the published results or performance forecasts, more than 70% of the net profit of enterprises increased compared with the same period last year, compared with less than 30% in 2014.

Among them, Shan Shan, YOUNGOR, Jin Fei Da and many other enterprises net profit grew by more than 50%.

The change of data seems to indicate that the domestic garment industry has improved after the downturn in the past four years. But after careful analysis of the semi annual report, the reporters found that, on the one hand, the profit growth of many companies mainly came from cross-border investment which had nothing to do with garment industry. On the other hand, the effect of online offline and online reform and trial in apparel industry itself was not significant.

Diversified investment supports growth in profits, and it is too early for the market to pick up.

In the first half of this year, the net profit growth of Jin Fei Da was 1530%, the main reason for its growth was the company's 100% stake in the acquisition of Nanjing's Amperex Technology Limited in May. Shanshan stock gained investment income from the sale of Ningbo bank shares, and its net profit increased by 413.79% in the first half of the year. Kaiser shares are expected to grow by 60%~110% in the first half of the year, and the acquisition of the game business is the main growth point of the company's profits.

After sorting out the semi annual reports of some listed garment enterprises, it is found that most of the profits of many companies come from cross-border investment which has nothing to do with the clothing industry.

After deducting the income from cross-border investment, Shanshan shares only achieved 302 million yuan in the first half of the year in the first half of this year, down 55.36% compared to the same period last year. In the first half of 2014, the net profit of net profit in the first half of the year was 81.9% lower than that of the same year.

In the half year's performance notice issued by the company, only a few companies, such as search engine, Hai Lan's home and AOKANG international, have attributed the growth of profits to the optimization of terminal sales and the expansion of e-commerce channels.

Even so, financial investment with high added value is also an important point of profit increase.

In addition, although the overall situation is up, there are still seven wolves, a group of shares, and cards and so on. The performance of these companies has continued to decline, and for the decline in performance, the companies mentioned the reasons for "reduction in orders" and "no rebound in retail sales".

{page_break}

Facing the half year report card of the listed garment enterprises, Yu Xiangpin, Secretary General of China Textile Planning Research Association and director of the industry research department of China Textile Construction Planning Institute, frankly, this is the natural stabilization of the domestic garment industry after several years of decline.

Wang Zhuo, vice president of China Apparel Association, said: "this can only show that the initial adjustment of the internal adjustment of enterprises can not prove that the market situation has improved.

It is too early to persuade the industry to get warmer.

With the outdated competition, the industry continued to decline for four years. The downturn in the domestic garment industry began in 2011. The first year sales of sportswear with a continuous increase in sales volume declined for the first time in the year.

Take Lining as an example, data show that in 2010, the company's sales volume was 9 billion 479 million yuan, down to 8 billion 165 million yuan in 2011.

Over the next four years, the downward trend gradually spread to casual wear, men's clothing,

In other fields, China's clothing industry has entered a low ebb.

He talked about the reasons why the clothing industry was going down. Yu thinks that the most important thing is that the franchise mode no longer meets the needs of the market.

When the market supply is less than the demand, the franchised store mode makes the number of brand stores grow extensively, which has increased the sales volume of the enterprises, but has also created many stores with poor operating conditions.

With the increasing number of garment enterprises, the market is saturated and the supply exceeds demand. Because of the separation from franchised stores, enterprises are always out of touch with the market, and can not be adjusted rapidly according to the product sales situation, resulting in many commodities on the market, but they can not meet the needs of consumers.

At the same time, due to the accumulation of large quantities of inventory in poor stores, the increase in corporate accounts makes it difficult to develop liquidity funds for new products, and eventually form a vicious circle.

In the franchisee mode to restrict the development of enterprises, the Internet brand and foreign brands are also competing for the domestic clothing market.

The Internet brands such as Yin man and Korea have attracted a number of consumers who like online shopping for their high performance price ratio, and these brands have successfully extended to offline stores after being successful online.

In addition, in recent years, foreign fashion brands such as ZARA and UNIQLO have entered China in succession. Their direct mode can adjust their stores and products quickly according to the market, and also firmly occupy some markets while meeting the needs of consumers.

Yu Xiangpin said that the healthy growth of foreign clothing brands is a strong proof, "proving that the domestic apparel industry's downturn is internal and has nothing to do with the slowdown in the world economy."

Textile School of Donghua University

Xiao Lan, teacher of the Department of design and industrial economics, also pointed out fourth reasons for the downturn of the clothing industry: in the past few years, China's clothing exports were booming, and some of the surplus products were digested. However, with the gradual pfer of garment processing from China to Southeast Asian countries with lower cost in recent years, the problem of the saturation of the domestic clothing market has become more prominent.

{page_break}

Optimize the terminal to open up the electricity supplier, and garment enterprises seek to break through the dilemma of internal and external factors. In recent years, China's clothing companies have begun to seek breakthroughs, so that cross-border investment in the performance of many listed companies is a common attempt.

In the view of Wang Zhuo, no matter what line it is, the capital is the foundation of market competition. Garment enterprises seize the investment opportunities such as real estate and finance, which will help to increase their economic strength and provide financial support for the innovation and pformation of the main garment industry.

After relying on diversified investments to stabilize profits, more and more enterprises realized that

The ills of pattern.

In the first half of the newspaper, search channel, Hai Lan's home and AOKANG international all listed "channel terminal optimization" as one of the reasons for promoting performance growth.

At present, there are mainly two ways to optimize the terminal: first, close down poor stores and support quality stores.

Wang Zhuo explained to reporters that by adjusting, the goods had shorter stay time in the quality stores and faster turnover, and the output per unit area had been improved. "The faster the rotation of goods in stores, the higher the sales volume will be."

Another way to optimize the terminal is more thorough, that is, changing franchised stores to direct stores.

According to Yu Xiangpin, there are already some enterprises that buy better locations and businesses as direct outlets, but franchises still account for a large proportion.

Moreover, after being pformed into a direct store, it is necessary to respond quickly to market changes, and also to reform from design to production to pportation.

It is understood that the fastest reaction period of domestic apparel industry is one month, while many foreign brands only need a week.

It is also a choice for apparel companies to find subdivision industries in saturated markets.

Hai Lan family, which has high cost performance, is attacking the low-end market of men's clothing. Semir has attributed the rapid development of children's clothing business to an important reason for its growth.

In addition, some enterprises have extended their business to online. They have invested in Guangzhou Hui Mei Garments Co., Ltd., which is famous for its brand names such as Yin man and Chu language.

American fashion launched fashion

APP has "fan", AOKANG international has increased sales through online group buying.

What is worth noting is that although the development of the electricity supplier channel is regarded as a new growth point of the performance, the listed companies' report does not clearly mention the profit of the electronic business platform in their total profits.

Yu Xiangpin bluntly said that for many garment enterprises, the biggest role of online channels is selling inventory.

In order to get out of the predicament, the domestic garment industry must fundamentally change the franchised store mode and really connect with the market.

Xiao Lan also said that compared with previous inputs and publicity, the key to successful pformation of garment enterprises is to control cost effectively and effectively, and to enhance consumer's brand consumption cohesion.