At The Bottom Of Raw Material Price History, How Can Textile Workers Save Themselves?

Textile and clothing industry is experiencing the most serious "big retreat" since the reform and opening up.

The clothing market will evaporate by 400 billion this year

Chegongmiao Fengsheng town is one of the favorite shopping and card punching places for many young people in Shenzhen, where many clothing stores are gathered.

"@ everyone, dear ones, we have withdrawn from Fengsheng Town store. Thank you for your support all the time. We are waiting for the follow-up." One day in July, a children's clothing store in Fengsheng Town, which has been operating for nearly 10 years, suddenly popped out of the wechat group, which surprised the reporter.

According to the owner of the shop, he withdrew from the site where he had been operating for nearly 10 years. Due to the impact of the epidemic, the shop's business performance was poor, but the landlord was not willing to appropriately reduce the rent. Finally, the contract expired, and the owner was forced to withdraw, although he might lose some customers.

In China's well-known, Shenzhen's largest wholesale market for women's clothing, clothing industry recession is also vaguely visible. In a certain area of a building in the wholesale market, shops 502A, 503A, 505a and 507a are all closed and open for rent. At the transparent glass door of the shop, there is an eye-catching sign of "rent at the original price of the management office, Li Sheng 159..." "Sublease, contact number..." Wait for the rent advertisement.

Similar store closures can be seen everywhere in other business districts in Shenzhen, such as Meilin subway station and Futian subway station.

"This year is the most difficult year for the clothing industry since the reform and opening up." Cheng Weixiong, an expert in textile and garment brand management and general manager of Shanghai Liangqi Brand Management Co., Ltd., said in an interview recently that after decades of rapid development, the domestic garment industry itself has been in a state of overcapacity, and the epidemic has accelerated the decline of the industry.

"2020 is bound to be a turbulent year. It is estimated that China's clothing market will evaporate at least 400 billion revenue, and the overall market size will shrink by 15%." Liu Jinyan, vice president of convertlab marketing department, said in a keynote speech at a fashion conference in Shenzhen recently.

It is worth mentioning that under the epidemic situation, the global clothing industry has a hard time. According to public information, Nike has started to lay off employees publicly, and it has a huge loss of 5.6 billion yuan in the fourth quarter of fiscal year 2020. In addition, Levis has a net loss of $364 million in the second quarter of 2020, and a profit of $28.507 million in the same period of last year. The company announced that it would cut about 15% of its global employees. In addition, H & M will close 170 stores and Zara is considering closing thousands.

"Total annihilation" in the first half of the year

Who is the forerunner of the industry? As the outstanding students and representatives of the industry, the performance of the clothing listed companies can best reflect the face of the whole industry.

Other women's wear, shoe companies, sports brands, etc., are almost "plaintive". Langzi is expected to lose 19 million to 28 million yuan in the first half of the year, with a profit of 89.1253 million yuan in the same period of last year; the net profit of Jiangnan cloth Clothing Co., Ltd. is expected to decline by 25% - 30% in the first half of the year; the profits of Pathfinder, Sanfu outdoor and Saturday are all changed from profit to loss, and "affected by the new crown epidemic" has become one of the reasons for the decline of the industry performance.

In addition, the export business affected by Xinguan epidemic is also one of the common reasons for the decline of garment enterprises' performance.

By the end of the first half of the year, there were 21% of the total number of textile companies that reported a decline in net profit, accounting for 7% of the total.

Raw material price has reached bottom

The shrinkage of clothing consumption in the downstream will inevitably impact the operation of upstream raw material enterprises and the prices of upstream raw materials.

The annual output of chemical fiber is more than 200 million tons, which is the same as that of chemical fiber, which accounts for about 10% of the global output of chemical fiber.

"In recent years, the raw materials of textile fiber and chemical fiber have plummeted in recent years, which will inevitably lead to a sharp decline in raw materials such as cotton and chemical fiber Shanghai international cotton trading center information director Wang Qianjin told reporters.

Wang Qianjin believes that the current cotton price has fallen below the global planting cost, "this year, Zheng cotton has the lowest breaking 10000 yuan, only twice in 2009 and 2016 in history." But he added that the basic income of cotton farmers can still be guaranteed because of the direct subsidy policy for cotton planting in Xinjiang.

Looking at chemical fiber, it is understood that in the first half of the year, the absolute prices of PTA, eg, polyester filament staple and other varieties in the chemical fiber industry chain, including crude oil, reached the lowest point in more than ten years or even in history. Especially after the negative value of crude oil price, the price of chemical fiber products dropped.

At present, in addition to PTA (one of the bulk organic raw materials), there are still profits in the whole chemical fiber industry chain, other PX and polyester are basically in loss, and layoffs and production restrictions often occur in the industry.

The road of self salvation of costume man

Facing the rare industry impact, how to carry out self-help is the focus of attention from all walks of life.

From the perspective of the first half of the year, one of the main approaches is to promote online sales through innovation through live delivery and social e-commerce to make up for the current shrinking sales.

Typical cases such as the main men and women's clothing peace bird. Compared with the same period of last year, the net profit of taipingniao decreased by 2.732 billion yuan, and the net profit of the first half of this year decreased by 2.293 billion yuan, showing a year-on-year increase of 2.732 billion yuan.

Taipingniao said that during the epidemic period, the company actively and rapidly promoted new retail business, and the company's new retail and e-commerce retail sales increased significantly. In particular, the e-commerce retail sales increased by more than 30% year-on-year in the second quarter, making the company's operating revenue increase by 3.09% compared with the same period. The rapid promotion of the company's new retail business, the substantial growth of e-commerce retail sales, and the rapid adjustment and recovery of offline retail business in the second quarter, to a certain extent, made up for the losses of offline stores during the epidemic period, as well as the preferential support of rent reduction and social security relief given by the channel partners and the state, and the company's operating profit increased significantly year-on-year.

Of course, behind the adverse growth of taipingniao, the company actively optimizes and adjusts loss assets, which is also one of the mainstream self-help methods.

Cheng Weixiong, general manager of Shanghai Liangqi Brand Management Co., Ltd., believes that it is difficult for the garment industry to get out of the development dilemma in the short term, and the industry adjustment will last for one to two years. During this period, the backward production capacity is eliminated, and the strong ones are always strong, and the domestic clothing industry is gradually starting to move from extensive to refined.