How Does The Garment Industry Sink Deep To Adjust The National Brand To The Sun?

In 2019, the domestic clothing industry could be described as "ice and fire". Looking back on this year, Anta and Lining boarded the international fashion week, leading the trend of "national tide" to achieve rapid growth in performance. Some of the leisure brands were in a loss due to stalling speed and diversified operation, and finally had to close the shop for the winter. At the same time, the international fast fashion brand Forever21 also withdrew from the Chinese market in this year.

According to a recent data released by the Ministry of industry and commerce, in 2019 1~10, 13760 enterprises in the garment industry above Designated Size, with a total operating income of 10777 billion yuan, down 0.2% compared to the same period last year, with a total profit of 68 billion 500 million yuan, down 3.4% from the same period last year.

There is no doubt that the transformation and upgrading of the garment industry is imminent when the old garment enterprises collide with the individualized demand of new consumers.

Focus on main business

After the inventory crisis, the domestic garment industry entered the adjustment period. In the fast fashion, sports, leisure and other subdivision tracks, the fate of the major brands is also different. Some are still on the road of rapid development, some of them choose to lose weight and return to the main business, and some have been eliminated.

In December 2019, the La Natsu Bell clothing Limited by Share Ltd of Shanghai (hereinafter referred to as "La Natsu Bell", 603157.SH) decided to divestiture the holding company's interbank industry in the way of share transfer and focus more on the development of the core women's clothing business. With the completion of this transaction, the main brand of life brand of the company will also exit from the listed company system. This is also the third sale of assets in 2019 after La Natsu Bell stripped of the seven gage and O.T.R two fashion brands.

Behind the sale is La Natsu Bell's expansion stall. It is understood that La Natsu Bell adopted the "multi brand + direct camp" business model. In 2011~2018, it opened 9369 stores nationwide. In the first half of 2019, La Natsu Bell closed more than 2000 retail outlets, but its revenues also declined by 9.78% to 3 billion 951 million yuan, and net profit was 498 million yuan. So far, this clothing company under the banner of "China Version ZARA" has ushered in the first business crisis after A+H.

In response to the interview with China business newspaper, La Natsu Bell said that at present, the company is closing down its losses and inefficient stores, and implementing joint and franchise cooperation modes for the municipal market with a blank county level market and a weak direct management capability.

La Natsu Bell, an independent critic of garment industry, told reporters that the funds were concentrated on the expansion of Direct stores. However, when the store opened on a large scale, the store's performance of the main brand was not well improved, and the target consumers of each brand were different. It was necessary to clean up inventory all year round, which to a certain extent led to the deterioration of the company's capital chain.

The "China outdoor products first" Pathfinder holding group Limited by Share Ltd (hereinafter referred to as "Pathfinder", 300005.SZ) is also shrinking the front line, began to cut off sideline, and strive to focus on the main business development. After 2017~2018 years of continuous losses, in November 2019, the Pathfinder announced that it intends to transfer Yi You's 29% stake in the world. In addition, a series of actions such as repo, Midorino Kuniryo, and related assets such as green field network, six feet and so on are all the explorers' focus on outdoor main business.

At the same time, since 2019, the fast fashion brand Forever21 has also announced its withdrawal from the Chinese market. The leisure sportswear brand, the "noble bird", has been plunged into a 500 million yuan debt default whirlpool. The famous bird named "China real leather shoes" is declared bankrupt by the Quanzhou intermediate people's court.

These clothes brands that are in trouble have opened up a difficult problem in the industry transformation. Tang Xiaotang, an analyst with fashion information firm No Agency, said: "in the period of high growth, diversification can give consumers more choices. But the era of flood irrigation and" taking over "is over. The key now depends on whether the synergy between brands can be produced. If the network is too large, when the cash flow can not cover the cost of leverage, the overall profit of the enterprise will be eroded.

Tang Xiaotang believes that with the development of e-commerce channels and social media, consumer preferences are easy to change. At present, the external environment of the domestic garment industry is not optimistic. In 2019, the clothing consumption market is weak as a whole, while the garment industry is a high turnover and high cash flow industry. Enterprises should mainly focus on conservative management. In 2020, the leverage will continue to push forward, and the garment industry will further differentiate.

Sports brand leads the "national tide"

Reporters noted that in recent two years, sports brand Anta and Lining are transforming into the fashion industry. For example, since the acquisition of fashion brand FILA, in December 2019, Anta and a number of domestic investment institutions formed a consortium to purchase all the shares of the original parent company, AMF, which is also the largest overseas acquisition in the history of China's clothing industry. Lining also adopted many new marketing methods. In June 2019, Paris fashion week was the fourth time for Lining brand to enter the international stage.

According to the view of the industry, the rise of the national tide is closely related to the national economic strength, national revitalization, and the process of the millennial generation becoming the main consumer force. Many new generation consumers have shifted from the demand for food and clothing to the needs of fashion and culture.

For Anta and Lining's transformation movement, textile and clothing brand management expert, Shanghai Liang habitat brand management company general manager Cheng Wei hung is cautious. He told reporters that any transformation needs to support its core competitiveness. What the market really needs is the brand growth, product strength, store strength, technology and service capabilities. After displaying the brand image, Lining's "two pioneering" national sports brand needs to think deeply about how to land the strategy and how to put the fashionable gene rooted in the brand. From this point of view, it also faces the challenge of "de aging".

Although there are some challenges on the road of transformation, a good sign is that in September 17, 2019, the general office of the State Council issued the opinions on promoting national fitness and sports consumption to promote the development of high quality sports industry. It was mentioned that by 2022, the added value of sports service industry will account for 60% of the added value of sports industry.

The statistics from a forward-looking Industry Research Institute show that the size of China's sportswear market in 2019 will reach 44 billion 600 million yuan, an increase of 11% over the same period last year. By 2023, the scale of China's sports apparel market will continue to grow to about 65 billion 800 million yuan.

Ma Gang said that Anta and Lining have found an incremental market in the field of fashion, but the growth of sports brands such as 331 degrees is still relatively weak. In addition to the reasons of the enterprises themselves, the scale of the domestic sports apparel market is not big enough, the ceiling needs to be broken, and the old and new brands of the shoe and clothing retail industry are still in an alternating stage.

"Jinjiang Department" a sports brand in the central part of China's provincial branch director told reporters, "in the domestic sports field, Adidas and Nike have the largest market share, and they are sinking in the channel, which has a certain impact on the two or three line brand, but it does not mean that they have no chance, because there is a problem of consumption stratification in the Chinese market, and the middle and low end market has to be done by some people. These brands will attract a large number of consumers and provide people with traffic."

A number of interviews with the industry have talked to reporters about a view that by 2020, the domestic garment industry will be in a deep shuffle period, and the Matthew effect will further intensify, when the market will gradually gather to the head enterprises, and those enterprises whose advantages are not outstanding in product and channel mode will gradually be marginalized by the market. And who will dominate in the future clothing industry? Time will finally give the answer.