Textile And Garment Enterprises Are Facing Big Problems. Inventory Has Increased Only In Recent Five Years.

In recent years, the clothing industry has encountered a cold wave. Textile and garment enterprises in this case, the stock is increasing year by year, some companies vigorously control inventory, but still most companies can not solve.

According to the data, as of April 5, 2016, the total inventory of 32 textile and garment industry listed companies increased from year 2011 to 2015 in the 5 years, increasing by 18 billion 588 million yuan, 19 billion 349 million yuan, 20 billion 259 million yuan, 21 billion 51 million yuan and 22 billion 209 million yuan respectively.

If the inventory growth rate was calculated from 2011 to 2015, the total inventory of 22 billion 209 million yuan in 2015 increased by 19% over the 18 billion 588 million yuan in 2011.

"The growth of inventory in textile and garment industry is related to the continuing downturn in demand environment."

According to the analysis of the personages in the industry, at present, the spirit consumption and the pursuit of high performance price ratio have become the trend of consumption, while the popularity of the Internet and electric business, and the new business mode give consumers more information and choice, which greatly squeezes the survival space of the traditional garment industry and enhances the competition of the garment industry.

90% the company's inventory is over 100 million yuan.

The above 32 textile and garment industry listed companies have 28 companies inventory over 100 million yuan, accounting for nearly 90%.

Among them,

Inventories grew for 4 consecutive years.

Statistics show that in the 4 years from 2012 to 2015, the stock of the company was 566 million yuan, 657 million yuan, 743 million yuan and 843 million yuan respectively.

If the inventory growth rate was calculated from 2012 to 2015, the company's inventory of 843 million yuan in 2015 increased by 49% compared with the 566 million yuan in 2012.

According to the annual report of seven wolves, the company's inventory balance at the end of 2015 amounted to 1 billion 325 million yuan, the total provision for depreciation was 482 million yuan and the book value was 843 million yuan.

Among them, in the huge inventory, the highest proportion is the seven wolves inventory goods, the end of the book balance is 936 million yuan, the provision for depreciation is nearly 400 million yuan.

Insiders analyzed that the biggest reason for the seven wolf assets impairment is the unsalable inventory.

Seven wolves said that in 2015, the company faced with a weak external economic environment, but also faced with rapid changes in the retail consumption situation, requiring companies to constantly carry out restructuring and reform, and seek breakthroughs in the adjustment.

However, although the main business mode of the company needs to be changed, it can not be achieved overnight.

The industry believes that the reason why the seven wolves are unmarketable products, on the one hand, is that the offline channel has been hit by the brand of the electricity supplier, and on the other hand, the goods have been repeatedly detected unqualified.

Export volume is key to inventory.

Some people in the industry analyzed the reason why the inventory growth of textile and garment industry was due to the relatively low domestic demand market, which is the most fundamental demand problem that has not yet been resolved.

In this regard, Zhu Qinghua, a light industry researcher at CIC, said: "if the international economic growth is slow or trapped in the" economic mire ", textile and clothing inventory is hard to return to normal.

Zhu Qinghua believes that China's textile and garment industry has a greater dependence on exports, and the improvement of export volume is the key to ease the high inventory of textile and clothing.

Take the product A as an example, the inventory of the company in the past two years has increased by nearly 100 million yuan.

In the 2015 annual report, the company pointed out: "in 2015, the external situation faced by the textile industry is complex, and more prominent are a series of factors, such as the low market demand, the rising cost of production factors, the sharp reduction of the import quota of cotton, and so on. These unfavorable factors lead to further improvement of the production capacity of the enterprises, the weakening of the export competitiveness of their products, and the addition of Southeast Asia.

The rapid rise of garment processing makes the company feel the dual pressure of demand and cost.

In 2015, the company achieved operating income of 6 billion 173 million yuan, an increase of 0.06% over the same period last year, operating profit of 841 million yuan, a decrease of 19.09% compared with the same period last year, and net profit attributable to shareholders of listed companies was 712 million yuan, down 25.71% compared to the same period last year. Net profit after deducting non recurring gains and losses was 718 million yuan, down 18.02% from the same period last year.

In response to the pressure of demand and cost, it said "promoting the construction of Southeast Asian production base". In 2015, Lu Tai (Kampuchea) two phase project and Lu Tai (Burma) project were successfully put into operation. At the same time, the company also established Lu Tai (Vietnam) Textile Co., Ltd. and Vietnam garment factory project.

The company said that with the increasing cost of domestic production factors, the trend of textile and garment processing trade, especially the garment processing industry to Southeast Asian countries has been established, and the "go out" of the dominant enterprises is inevitable.

Supply side reform helps inventory

How to solve the problem of textile and garment enterprises in the face of weak demand and cost pressure?

Li Yining, a member of the CPPCC Committee, has suggested that the reform of supply side structure should focus on product personalization, service humanization and brand internationalization, leaving the needs of customers at home.

For textile and garment industry, there are many jobs to be done in every link.

The textile machinery industry is big but not strong. It can not stop a large number of enterprises from taking pride in importing equipment; the terminal industry is large but not loud; the brand lacks the power to attract the people; the short board of the industry is the goal of supply side reform, finding that the short board is to find the direction to enhance effective supply; to explore new demands with innovative thinking and to realize the guidance of new demand is the rich ore that the textile and garment industry has to dig for effective supply.

Zhu Qinghua, a light industry researcher at CIC, said: "the launch of the supply side reform will have an important impact on the textile and garment industry to go to stock and to produce capacity.

First, the supply side reform promotes effective investment, which will urge enterprises to make capacity plans according to market demand, avoid blind development and cause waste of resources. Secondly, reform policies indicate that we should comprehensively improve the level of standardization and improve the quality supervision system, which will help to eliminate backward production capacity and promote industrial upgrading. Thirdly, the policy emphasizes innovation and innovation is an important way for enterprises to inventory.

Insiders say that the main reason for the fierce competition in textile and garment industry is the serious homogenization of products.

In this connection, with a number of textile and apparel listed companies in the exchange of understanding, many companies are increasing investment in research and development of products, and in order to meet the needs of consumers, and listed companies began to launch personalized orders to meet the high demand of consumers.

The head of relevant departments of clothing listed companies indicated that

As demand is growing, companies are ready to develop intelligent factories and begin to accept personalized orders in consumers in some areas.

Zhu Qinghua said that the competition in the market will shift from price to quality and innovation. Large and medium-sized textile and garment enterprises will be more competitive in terms of quality and innovation.

"After the reform of the supply side is put forward, the large and medium-sized garment and textile enterprises will benefit from it, because many backward production capacity will be eliminated in the future."