Ice In The Underwear Market: The Market Is Still In The Adjustment Period.

From the performance point of view, the overall performance of the underwear market in 2016 was poor. Hui Jie shares achieved a double growth in net profit, but the growth rate has slowed down compared with that in 2015. In 2015, the company's revenue and net profit increased by 14.13% and 24.63% compared to the same period. In 2016, the two figures were only 8.54% and 10.77%, and the slowdown was obvious.

The decline of the underwear market has also been confirmed on the other two Hong Kong stock underwear listed companies. This refers not to Ann Li Fang and city beauty, but to two underwear manufacturers, Vijani and Dai Li Si international. The 2016/17 fiscal year interim report released by Virginia showed that in the six months ended September 30, 2016, the total operating income of the company was HK $2 billion 150 million, down 14.37% from the same period last year, with net profit of HK $23 million 240 thousand, down 89.31% from the same period last year.

The 2017 half year report of the financial year released by the international company showed that the sales revenue of the company reached HK $535 million in the 6 months ended December 31, 2016, a decrease of 13% compared with the same period last year, and the gross profit was about 97 million 186 thousand Hong Kong dollars, down 11.43% from the same period last year. The company's owners should net profit of HK $1 million 701 thousand, a year-on-year decrease of 90.90%. The half year net profit of the two companies has plummeted by about 9.

What is the reason for the decline? The largest urban beauty in the market believes that the market downturn and the corresponding changes in consumer demand are not enough. According to reports, Zheng Yaonan, chief executive officer and chairman of the city beauty, listed on the annual performance press conference that China's underwear market has entered a period of adjustment, coupled with a cautious consumer climate and an overall increase in operating expenses, resulting in poor performance of the company in 2016. He also said consumers were right. Underwear With the rising demand for comfort and quality, the company was caught off guard in structural adjustment last year, and no steel ring underwear was out of stock, so it would speed up the study of more comfortable underwear products.

Ann Li Fang attributed the decline in performance to changes in the market consumption environment. According to reports, Zheng Bihao, chief executive of an Li Fang, said at a performance press conference that in 2016, the domestic cost of living rose and the consumption desire of the people decreased. Some of the "two child policy" consumers tended to save personal expenses, which led to the sale of sub essential consumer goods under pressure. The Future Ltd will adjust its strategy to enhance operational efficiency, and adjust the distribution of retail outlets appropriately by closing or resetting low benefit stores, so as to enhance the overall efficiency of the sales network.

In the earnings report, Virginia said that because of the depressed retail market and the challenging business environment, and the changes in the sales strategy of some of the group's brand partners or the challenge on the inventory, the order in the US market was lower than expected. In addition, the first Vietnamese workshop of the group was put into operation in March 2016 and is still in the period of expansion, so it has diluted the gross profit margin of the group.

Dai Li Si International says, American market Sales accounted for 50% of the group's total sales. European market Accounted for 35%, while the rest of the market accounted for 15%. During the period, sales increased slightly to European market. However, weak demand in the US market led to a 13% decrease in group revenue and continued difficulties in the business environment. The rising cost of manufacturing business remained the main challenge for the group. It can be seen that at the retail end of the brand, changes in the retail market, changes in consumer demand and changes in sales channels have caused underwear sellers to encounter difficulties. At the manufacturing end, the increase in production costs and the weak global market demand led to a reduction in orders, resulting in a sharp decline in net profit for underwear manufacturers.

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