Guangdong Textile And Garment Industry: Serious Stock Accumulation

"In the past year, we started to work very well in the early sixties. Now I am afraid that the Lantern Festival will not be resumed. The basic elements of the resumption of raw materials and accessories procurement, outsourcing, logistics, organization and production are unknown, but it is foreseeable that by the impact of this epidemic, millions of streams of water have gone. Shenzhen clothing brand "post conception" responsible person Xu Qiaoyun told China net financial reporter.

Since the large-scale spread of the new coronavirus, Guangdong has become the province with the largest number of confirmed viral cases except Hubei. As of 12 February 7th, Guangdong has reported 1034 cases of pneumonia confirmed by new coronavirus. Due to the extension of the Spring Festival holiday, production and shutdowns, logistics and sales were hindered, and the performance of most industries was affected, including the textile and garment industry. At present, not only front-line medical staff lack the necessary protective equipment such as masks, but also the managers of garment enterprises are too hard to prepare masks for the workers. In addition, clothing enterprises also look forward to orderly management system to welcome back to work.

Song Qinghui, a famous economist, told the China Internet Financial reporter: "during the Spring Festival, this should be the biggest peak season for consumption under the annual line, which is conducive to the profit level of the thickening textile and garment companies. However, due to the outbreak of pneumonia caused by a new coronavirus, the epidemic has had a huge impact on textile and garment companies, which has led to a rapid decline in terminal consumption and a serious accumulation of inventory.

Pang Chaoran, an Associate Research Fellow of the international trade and Economic Cooperation Research Institute of the Ministry of Commerce, told China Internet Financial reporter that the epidemic will have a certain impact on the industry structure. Enterprises with relatively weak technology and management capabilities are facing the risk of withdrawing from the market.

Sales are in a semi stagnant state.

China net financial reporter learned from the relevant person in charge of the blonde Rabbi that due to the obstruction of logistics and rework, the epidemic had certain effects on the normal operation of the stores and the operation of some OEM factories throughout the country. The epidemic is expected to reduce the revenue and net profit of the first quarter.

Xu Qiaoyun told China Internet Financial reporter: "at present, the fabric market is closed, and most of the logistics companies have stopped. Our sales are in a semi stagnant state. This time in previous years, it was the time when the whole company was preparing for the spring and summer fashion week and grabbing the first wave of traffic volume on the new year's line. This year, affected by the epidemic, the products sold are being reclaimed by customers. The reason is that they are unable to deliver the goods. It is foreseeable that millions of streams of water will be gone by the impact of the epidemic.

According to Pang Chaoran analysis, from the sales point of view, during the Spring Festival, the sales season of brand clothing retail products is very high. The outbreak of the epidemic suddenly leads to the shortage of the main shopping centers, and the total consumption is declining, which seriously affects the sales revenue of clothing companies. Among them, stores directly battalion companies are more seriously damaged, mainly by adding store rents and salesmen's wage expenses, and rely on distributors' companies to share their losses. Internet clothing product retail is affected by logistics, and holiday income falls. On the export side, it is mainly affected by the strict inspection and Quarantine of China's export commodities by some countries (regions), and the export business has been affected.

In addition, from the end of production, enterprises in the industrial chain have to postpone the resumption of work time, the supply of products in the intermediate links fluctuates greatly, and some raw materials prices rise. The fixed expenditure, including employee wages, is superimposed on the cost in the process of postponing the start-up of the factory, which leads to the extrusion of the clothing companies at both ends of production and sales.

It is difficult for employees to resume work without respirators and other protective products.

It is understood that the recovery time in Guangdong was not earlier than 24 hours in February 9th. For the resumption of work arrangements, Xu Qiaoyun said, at present, our industrial area has implemented measures to control the entry and exit. In principle, No. 10 can resume work, but it needs 5 days in advance. We call the streets, and the streets need to find party members in the industrial area, but there is no contact. At present, the industrial park is closed, and I don't know who to report it to.

In addition, according to the documentation requirements, enterprises need to solve their own respirator disinfection products, Xu Qiaoyun said, the company simply can not rush to buy. Even so, we will notify all employees of the Chinese New Year (even those who are not from Hubei) to stay away from work, because once they get back, they need to take public transport. We do not want employees to take the risk. If the workers are coming back, we will ask for an isolation for 14 days, whether from the serious epidemic area. But frankly, the company can not afford to carry it too long, but pray that the epidemic will be over as soon as possible.

Xu Qiaoyun told China Internet Financial reporter: "I hope there will be clear arrangements, guidance, assistance and no difference in management and co-ordination. Enterprises can carry out self supervision and management, but they hope to provide us with procurement channels for protective materials, or distribute them directly to enterprises. "

According to the head of the blonde Rabbi, the company will resume work in February 10th and prioritize some of the children's disinfection and sterilization products (such as baby hand washing bubbles and hand blowing bubbles), which are helpful to the epidemic prevention and control. However, at present, the company urgently needs to provide protective supplies for employees, and contact all parties' resources to strive to solve the problem of staff masks. However, we hope to get the government's key support to ensure the epidemic prevention and control and staff's health and safety after the commencement.

"No way to reduce losses, but not through layoffs."

"We can not find a way to reduce losses now, because the whole industry chain is stopped. The basic elements of the resumption of raw materials and accessories procurement, outsourcing, logistics, organization and production are unknown, but we are sure that we will not deal with losses through layoffs. " Xu Qiaoyun hopes to be able to get loose policies and corresponding standards on how to reduce the pain, so that enterprises and employees can face the difficult choice of the epidemic situation together. Never let one company and workers coordinate themselves with one size fits all.

Blonde Rabbi said that no matter how the epidemic situation develops, the company will not lay off workers, and pay wages according to the relevant regulations of the state during the epidemic. At the same time, it is suggested that the government should appropriately refund the unemployment insurance premium and delay the social insurance premium for the insured enterprises who do not lay off or lay off the workers during the epidemic period. In order to lighten the burden on enterprises, it is suggested that the government should appropriately reduce the tax and fee and postpone the payment of taxes.

Huang Jian, a general manager of an investment organization, flew to China net financial reporter to analyze that the textile and garment industry's future countermeasures should strive for more cash flows, including some support for the government or the banking channel for more credit. In addition, in the future production process, we should minimize manual links, but mainly rely on machine production. In line with the proportion of offline sales and online sales, it is possible to strengthen online marketing and sales capabilities in order to withstand some unexpected incidents. In addition, textile and garment enterprises donate some of their clothing to people in need of the epidemic area, which can not only enhance the brand influence and reputation of the company, but also contribute to the epidemic.

For the future development of the textile and garment industry, Pang Chao ran said that the consumption products including clothing will usher in a compensatory consumption period after the impact of the world's epidemic. Consumer demand suppressed during epidemic prevention and control will be released after the epidemic has basically ended. If the epidemic is over as early as possible, some manufacturers' spring clothing inventory can also be digested. But in the future, enterprises need to further enhance the status of value chain, do a good job in cost management, quality improvement and brand building, adapt to the needs of domestic consumption upgrading, and actively explore the international market, and share production costs and all kinds of sudden risk shocks through diversified market strategies.