Industry Review And Prospects For 2017

The world clothing shoes and hats net reported that in 2016, it was over. At the gate of 2017, we felt the chill of industrial management in 2016 and the twists and turns in the transformation road. We also sniffed the atmosphere of 2017 technological change, consumption upgrading and capital blowout. The garment industry in 2017 needs to stabilize its body and mind in an uncertain situation, do its best and embrace the new future of big capital and big fashion.

　 Review of garment and fashion industry in 2016

As the saying goes, look up at the sky and walk down. While firmly looking at the future of the fashion and fashion industry, we must also see the real situation and the road to take a good foot. If we want to resume the fashion industry in 2016, we must see that the overall tone is cold. The information that clothing enterprises generally transmit outwards is that the clothing business in 2016 is not very good.

(1) review of the main business of garment industry: the retail terminal is in a downturn, and the clothing enterprises generally feel the pressure.

Let's start with the typical men's wear industry. 2016 Men's wear Industry, shuffling, restructuring, huge losses and other plots have been staged.

Dayang creation market delisted. In October 2016, the founder of Da Yang was renamed and renamed by the express pass, which made the first share of A share express. Li Guilian, chairman of Dayang creation, resigned from the listed company with 4 executives.

Busen shares will divest men's clothing business. In December 2016, Busen issued a notice that the company planned to divestiture its original clothing assets at the right time. Busen shares said that the domestic terminal clothing brand retail market has not improved significantly, and garment enterprises are facing greater business pressure.

The bird of first report loses its fortune. In the first half of 2016, the first loss of the performance of the company was listed. In the first half of 2016, the company achieved operating income of 925 million yuan, down 7.90% compared to the same period last year, and its net profit attributable to shareholders of listed companies was -9744 million yuan, down 229.58% from the same period last year. Reported bird said that the decline in the performance of the terminal retail boom continued to decline.

He sold his house to boost his performance. Hinur's 2016 China Daily reported that business income in the first half of the year was 351 million yuan, down 30.68% compared to the same period last year. The net profit attributable to shareholders of the parent company was 27 million 274 thousand and 300 yuan, an increase of 421.94% compared with the same period last year. The net loss after deducting the net profit was 21 million 108 thousand and 800 yuan, a sharp decrease of 617.39% compared to the same period last year. The reason is that he sold a real estate in Beijing, earning a net profit of 47 million 25 thousand yuan. Hinur said that by the external environment, the traditional men's clothing industry boom continued to decline, terminal retail overall weakness.

These men's clothing listed companies have said that the market is bad, terminal retail is sluggish, and the market is weak. Such expressions are prevalent in the announcement of clothing enterprises. They are not limited to men's wear, but also casual wear, women's clothing, shoes and clothes, luxury goods. Not only are A share listed companies, but also Hong Kong stock companies and even American stock companies, not only the mainland market, but also the Hongkong market, and even worse.

In the case of Hong Kong share apparel enterprises, Li Bang issued a loss warning in June 2016, saying that the performance of the group has been affected due to the continued slowdown in the retail market in Hongkong and Macao due to the decrease in Chinese tourists and the local consumer downturn, and the weakening of sales and consumer sentiment in the mainland market generally worsened. The results showed that the loss in the half year ended June 30, 2016 exceeded HK $200 million (2015 in the whole year, 47 million 412 thousand yuan), and closed 19 mainland stores. In December 2016, Li Bang announced the sale of a 20% stake in Ferragamo to SalvatoreFerragamo, which costs about 125 million yuan and is expected to yield 16 million 300 thousand yuan.

YGMTRADING, another company, announced that in the 6 months ended September 30, 2016, the company achieved a revenue of HK $341 million, down 21% from the same period last year, gross profit of HK $191 million, a decrease of 25.8% compared to the same period last year, and operating losses of HK $71 million 54 thousand, an increase of 40.5% over the same period. YGMTRADING said earlier that the retail business of the group's main business has shrunk, especially in the Hongkong and mainland markets, leading to a marked decline in retail sales and wholesale sales of branded garments, leather goods and apparel. In October 2016, YGMTRADING announced that the sale and related intellectual property rights of the "Aquascutum" brand product will be sold at $120 million (about HK $930 million 700 thousand).

As a high-end apparel retailer, YGMTRADING and Li Bang both suffered huge losses in 2016 and were also planning to sell their brand businesses. Reflecting the downturn in the retail market in 2016, it is "global hot."

(two) review of the transformation of garment enterprises: transformation is generally in the investment stage, dragging the financial performance of enterprises.

Hua Shang Hui has counted the first half of 2016, the double profit growth of listed companies, only a dozen or more (see the 10 phase of the 83 phase of China's inventory of net profit and double growth in the first half of the year). These ten enterprises, including Semir costumes and Hai Lan home, have been relatively stable in the main garment industry over the past two years. They have also made phased growth through diversified business expansion, such as the search of the supply chain management business, the animation management business of Maison culture, and the promotion of the company's revenue growth.

However, the transformation of more garment enterprises is still in the stage of "only pay, no harvest", which is a drag on the performance of garment enterprises.

In the outdoor industry, Pathfinder's announcement in the three quarter of 2016 showed that the company's operating profit showed a certain decline during the reporting period, due to the overall downturn in market consumption, intensified competition in the industry, and the influence of the Pathfinder on the increase of user service functions and the transformation and upgrading of the travel service business.

The announcements showed that Pathfinder's operating income in the first three quarters was 1 billion 699 million 980 thousand and 300 yuan, a decrease of 12.43% over the same period last year, and net profit attributable to shareholders of listed companies was 100 million 348 thousand and 600 yuan, a decrease of 31.51% over the same period last year. Pathfinder said that the decline in revenue from the two major business segments of the company's outdoor and tourism sectors resulted in a decrease in overall business revenue, especially in the tourism sector, and the operating income in the first three quarters fell by about 20%.

In the home textile industry, Luo Lai lived in the first three quarters of 2016 to achieve a business income of 2 billion 155 million yuan, an increase of 5.34% over the same period. The net profit attributable to shareholders of listed companies was 259 million yuan, down 19.88% from the same period last year. The company said that the cost of investment in the initial stage of household transformation was relatively large, but the output was relatively lagging behind.

In the shoe and garment industry, the three quarter report released by the company showed that the company's operating income dropped 1.68% to 1 billion 378 million yuan compared with the same period last year. The net profit attributable to the shareholders of the listed company decreased by 12.93% to 178 million yuan. In the first half of this year, 152 shops were closed. While declining in performance, the precious birds are constantly seeking transformation of sports industrialization. In 2016, the company acquired 50.01% of the retail channel retailer "Jishang" and 51% of the online retailer's "shoe store", and won the brand authorization of the internationally renowned basketball brand AND1 Greater China. The investment activity was active.

However, in January 2017, the company announced that it was going to write off the insurance company. Xiang an insurance was established in April 2016 with Xiamen fusion network technology Co., Ltd. This is to reduce the company's operating costs and external investment risks.

Such companies as Pathfinder, Luo Lai life and noble bird are all frequent transformation actions, which are more representative in the process of transformation and upgrading of garment industry. But the performance of these enterprises in 2016 shows that transformation is not smooth sailing.

(three) review of the development of the clothing industry: sportswear and children's wear are still highlights.

Although garment enterprises generally feel the pressure of the retail market and transformation process, sportswear and children's clothing are still the highlight areas of the clothing industry from the perspective of market segmentation. Take the Hong Kong share clothing enterprises as an example, Hua Shang observed that in the highlights of the sports and children's clothing business as a Hong Kong apparel enterprise, Anta and Lining and other sports apparel enterprises generally have bright eyes in 2016, while children's clothing business is in the growth cycle.

Lining resuscitation. The Li Ning Co announced in October 2016 that the order of the franchisee's Lining brand products at the order meeting increased 12 consecutive quarters. The order for the second quarter of 2017, which was held in September of this year, was recorded at a high annual rate. The announcement revealed that as of September 30, 2016, the number of sales outlets of Lining brand in China totaled 6247, and the net sales increased to 114 by 2016, and 78 more than the end of last quarter.

BELLE's international performance is supported by sports and apparel business. BELLE International released 2016/17 semi annual report in fiscal year six. Compared with the same period last year, sales of footwear business decreased by 12.7%, sales of sports and clothing business increased by 14.9%, total sales revenue increased by 0.9%, operating profit decreased by 19.8%, and profits and losses of company equity holders decreased by 19.7% in the first half of August 31, 2016. The company said that sports and clothing business benefited from the substantial growth of consumer sports fitness demand, and continued to maintain a good growth trend. Footwear business continued to show declining sales and declining profitability as a result of passenger flow decline and consumption preference changes.

The profit margin of Li core brand is doubled in the medium term core business, and children's clothing is the engine of future growth. The brand of Li Biao issued a notice in November 2016. As of the 6 months ended September 30, 2016, the company achieved a turnover of US $1 billion 844 million, an increase of 15% over the same period last year, and the core business profit of 78 million US dollars, up 129.9% from the same period last year. The adjusted net profit of the shareholders should be increased 344.2% to 44 million US dollars. The company expects that although the children's clothing business is relatively mature in the US market, Europe and Asia will also face encouraging growth opportunities. Benefiting from China's implementation of the two child policy, we believe that the main driving force of the Asian market is children's clothing.

Anta reported that in the fast-growing FILA brand business, as of June 30, 2016, there were 687 FILA and FILA children's wear stores nationwide. The company plans to have 700-750 FILA and FILA children's wear stores by the end of 2016. It is estimated that the income of FILA brand will grow more than 30% in 2016 compared with the same period last year. In the first half of 2016, the income of Anta children's clothing increased by more than 30% over the same period last year, accounting for about 10% of the total revenue.

　 Prospects for the development of fashion industry in two and 2017

The garment industry in 2017 can be expected to continue roughly the trend of 2016. The main garment industry needs to improve its operational efficiency, create products with brand and texture, and improve the success rate of transformation and integration in terms of transformation and upgrading. In China, the economy is in the L development trend, and the retail market channel is in the stage of transformation and upgrading. Garment enterprises need to better respond to market changes and enhance the competitiveness of the main industry. At the same time, we can also see that behind the plight, the power of some changes has become more and more obvious. In 2017, the trend of these changes will further increase.

(1) the power of technological change will further change the fashion industry.

China's largest market capitalization company is Tencent Inc, which pushed the industrial and commercial bank, which has always been top of the list, to second place, and Alibaba is also at the forefront. Globally, Amazon's market value has exceeded the total value of the major retail entities in the United States. According to US media reports, Amazon's market capitalization reached $358 billion 100 million as of January 3rd, exceeding the total market capitalization of about $297 billion 800 million of major retail entities in the United States. As we all know, WAL-MART always ranks first among Fortune magazine's top 500 in the world, but WAL-MART and the rest of the United States still have less market capitalization than the Amazon.

These landmark events show that the new economy is replacing and transforming the traditional economy faster than people expect. According to reports, Amazon announced that it will open a shop without queuing checkout in Seattle, and the store will use technologies similar to driverless cars: including computer vision, sensors and deep learning, which will bring new competition to the entity supermarket industry and even the electricity supplier. According to statistics, clothing is the most popular category of online shopping in the US retail industry, and Amazon has occupied the leading position in the apparel online retail market. Amazon has launched 7 private fashion brands in 2016, and in 2017, there are reports that Amazon and the fast fashion brand Forever21 are considering offering a bid to buy the bankrupt us clothing brand AmericanApparel.

Lining, who is also recovering from his performance, also stressed that the growth of his performance came largely from the rapid growth of the electricity business. The company said that the electricity supplier business is no longer an online sales and marketing channel, but is exploring and practicing the direction of digital operation. The future plan is to optimize the online and offline shopping experience by improving the online and offline shopping experience through the use of mobile terminal network platform, and enhance multi-channel and cross platform user experience.

According to reports, Zara's parent company Inditex group CEO Pablo Isla believes that the growth of performance over the past two years has benefited from the fully integrated business model under the online and offline business. "With the promotion of technology innovation such as mobile payment, the group's online business and traditional entity store business can be seamlessly connected, and we will continue to promote these innovations." Prior to that, Inditex announced that it had launched its mobile payment function in all its brand stores (Zara, MassimoDutti, Stradivarius, Bershka, Pull&Bear, ZaraHome, Oysho and Uterq E) since September 1, 2016. This business will be implemented from Spanish stores and then extended to other countries.

With mobile shopping becoming the mainstream shopping mode, O2O mode will be more common. UNIQLO Tmall official website opened a store in 2016 with double eleven, which featured 13 selected costumes and the same price on the same line. UNIQLO said that consumers were allowed to buy in the official website under the support of the stores, and they were able to pick up goods by SMS vouchers. From the double eleven Carnival Shopping Festival, we can see that the online and offline integrated retail channel, consumer experience scene and efficient supply chain as the core competitiveness of the new retail mode are emerging. Fashion and fashion industry needs to deal with this trend.

(two) the tide of consumption upgrading is coming. Fashion brands will become more lifestyle.

In 2016, in the process of transformation and upgrading of garment industry, many garment enterprises chose cross-border diversification, or downsizing and changing their main businesses. At the same time, many clothing enterprises extended themselves to the upstream and downstream of the industrial chain, especially to downstream logistics, canal, retail, service and other industrial chain links, focusing on the main garment industry, and linked them to multi brand, multi category, product + service life style brand. In the context of consumption upgrading, this is a mainstream trend and important mode for garment enterprises to make the main garment industry bigger and bigger.

Shopping centers and shopping centers, which combine shopping and leisure, will become more popular. In 2016, YOUNGOR spent 30 million of its decoration on a store and hired an international designer PhilipHandford team, which had designed interior space for luxury brands such as Burberry. In September 2016, La Natsu Bell injected capital and joint venture into Hongche industry to create "LifeCircle" lifestyle brand. La Natsu Bell said that the joint venture set up a "LifeCircle" brand, and will create a series of home furnishing to cater for the group's strategic concept of "life of La Xia".

In December 2016, Muji announced that the world's first Muji flagship store, restaurant and hotel three in one project was located in Shenzhen. The hotel is expected to open in the second half of 2017 and is the first Muji hotel in China. Just like some people imagine, in the future, you will wear MUJI clothes, walk into MUJI cafe, read MUJI's book, drink MUJI's tea, go to MUJI's Restaurant hungry, go tired to go to MUJI's Hotel, lie down on MUJI's sheets and go to sleep. This is the ambition of MUJI.

Lifestyle includes the differentiation of fashion products and the differentiation of market. In addition to the second tier cities and the "middle class" that we all aim at, the consumption potential of the three or four cities will be further released. "Fashion to the countryside" will become a trend. At the end of June 2016, Adidas announced its cooperation with Wanda Group, which will sponsor the latter's triathlon, which will provide a wider store support for the former. In Adidas's plan, the company will plan to open 3000 additional stores by 2020.

According to another report, based on the survey of over 520 million online products in the world, Edited, a fashion big data company, forecasts the main trends of retail and fashion brands in 2017, and gives several key words: artificial intelligence, sustainability and lifestyle. Edited's customers include RalphLauren, eBay and Asos. The company's chief analyst said that in 2017, retailers will further deepen the niche market and small market to cater to the lifestyle of consumers, and retailers will also expand the quality services of physical stores, such as providing coffee and beauty services, allowing consumers to stay in stores longer and provide more differentiated services.

Three, blowout of capital will accelerate the integration and optimization of fashion and fashion industry.

In the past two years, there are two very Popular And contradictory words: "capital cold winter" and "asset shortage". This is actually the same thing. More and more capital is looking for good industries and good projects while avoiding risks. Under this trend, capital will play a more significant role in promoting the transformation and optimization of garment industry.

In 2016, China's capital overseas mergers and acquisitions hit a new peak. It is reported that according to the Ministry of Commerce's external investment data released by China's Ministry of Commerce, from January to October this year, investors in China made non-financial direct investment in 7020 overseas enterprises in 162 countries and regions in the world, with a total investment of 961 billion 930 million yuan and an increase of 53.3% in the same proportion. Relevant information shows that from 1990 to 2014, more than 20 years, the most important part of overseas mergers and acquisitions of Chinese enterprises is energy and resources. By 2015, the top three were transformed into high technology, manufacturing and consumption.

Another opportunity comes from the rapid development and reform of the capital market. In January 7th, the SFC official disclosed that in 2016, IPO and refinancing (cash portion) totaled 1 trillion and 330 billion yuan, an increase of 59% over the same period last year. The number of IPO households and the amount of funds raised nearly five years ago, and the scale of refinancing increased to a record high. The new three board listed company nearly doubled, breaking 1, and financing 140 billion 500 million yuan a year. Mergers and acquisitions of listed companies are more active, involving 2 trillion and 390 billion yuan in transaction volume, which has greatly promoted the transformation and upgrading of industries and the reform of state-owned enterprises. The financing of the Shanghai and Shenzhen Stock Exchange bond market has also increased significantly. The total issuance of bonds by non-financial enterprises is 2 trillion and 870 billion yuan, up 1.7 times compared with the same period last year.

It can be predicted that the scale of capital market will further expand in 2017. PWC's 2017 IPO market outlook data show that in 2016, the Shanghai and Shenzhen stock markets reached 227 IPO and the scale of financing was 150 billion 400 million yuan. In 2017, the A share IPO was 320~350, and the scale of financing was 2200~2500 billion yuan. There is no doubt that more clothing companies will visit the capital market in 2017.

With the expansion of the capital market, the institutional reform of the capital market itself will also be pushed forward. It will change the current investment structure dominated by retail investors, and push China's capital market towards a mature capital market dominated by institutional investors, thereby changing the phenomenon of "stock speculation" blindly pursuing the theme of capital market and paying more attention to the quality of the enterprise itself. Potential clothing SMEs will be able to find effective ways to increase blood transfusion or cash in through direct financing.

The new three board market is an example. The development speed of the new three boards is amazing. At present, there are more than 1 listed companies, but we need to further improve the quality of the company, improve market liquidity and improve the financing function. In 2016, when more and more small and medium-sized clothing enterprises listed the new three boards, there were more and more clothing listed enterprises through the overall mergers and acquisitions, participation in fixed increase, two tier market holdings, holding, equity participation, capital raising, splitting the listing of the subsidiary companies and other ways to layout the new three board market, the new three board market will become a "merger pool" of the listed garment enterprises. This will in itself promote the development of the new three board market in a more mature and dynamic way.

Money never sleeps. The transformation of garment enterprises is primarily the transformation of financing mode, which is a microcosm of the transformation and development of China's industrial economy. The clothing and fashion industry in 2016 is still hard and the transformation is still on the way. But on the road of transformation and upgrading, the garment industry has caught up with an era of technological change, consumption upgrading and capital blowout. The clothing industry in 2017 may not mean everything, but it needs to hold on to it. As long as we stick to it, we will usher in a big brand, big capital and big fashion future.

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