Clothing Industry To Inventory Half A Year Net Profit Fell More Than 30%

The first half of this year for the textile and clothing industry, is a difficult period.

According to the data of the National Bureau of statistics, from January to July, the total retail sales of textile and clothing were 595.9 billion yuan, a year-on-year decrease of 17.5%, which was 7.6 percentage points lower than the growth rate of retail sales of social consumer goods in the same period.

This also fully shows that, compared with the rigid demand products such as food and household appliances, the textile and clothing industry lacks rigid demand during the epidemic period, which leads to a rare regression in market demand in history. In particular, the clothing industry, the original market competition is extremely fierce, under the influence of the epidemic situation, clothing offline sales are facing risks, and big brands are also difficult to protect themselves.

A quarter of the enterprises suffered losses, and the overall profits fell by more than 30% year on year

In the A-share and Hong Kong stock markets, there are more than 100 textile and garment related listed enterprises.

Among them, there are 82 textile and garment enterprises in a share, which have disclosed the semi annual report of 2020. There are more than 20 textile and garment enterprises in the Hong Kong stock market. At present, 17 enterprises have also disclosed their semi annual reports.

According to the semi annual reports of these 99 textile and garment enterprises, in the first half of the year, almost all of them were losers. Their net profits were slashed, their losses expanded, a large number of stores were forced to close down and their subsidiaries were sold for survival, etc., which sketched out that the whole industry is experiencing a miserable situation that has not been encountered for many years.

Wind data shows that in the first half of 2020, the 99 enterprises achieved a total revenue of 203.1 billion yuan, a decrease of 20.97% compared with 257 billion yuan of the same period of last year, and the accumulated net profit of 12.17 billion yuan, a decrease of 34% compared with 18.429 billion yuan of the same period of last year. Both revenue and net profit decreased, which means that the market scale of the whole industry has declined to a large extent. Some experts predict that this year's clothing industry as a whole will reduce revenue by at least 400 billion yuan, and the overall market size will shrink by 15%.

However, in the first half of this year, only 25 textile and garment enterprises with a share and Hong Kong stock realized net profit growth. In other words, more than 3 / 4 of the 99 enterprises in the two markets experienced a decline in net profit in the first half of this year.

In terms of loss making enterprises, a total of 25 enterprises made losses in the first half of this year, accounting for more than 1 / 4 of the whole sector. Among them, many enterprises such as urban beauty (02298-hk), Giordano International (007019-hk), shinur (002485-cn) and Sanfu outdoor (002780-cn) have changed from profit to loss during the period. These enterprises have obvious similarities, that is, they rely on offline income and gradually decline in the market with intensified competition in the past few years.

From the perspective of the whole industry, because the market has already been saturated and the incremental space is limited, small and medium-sized enterprises, including many listed companies, are faced with such factors as market share being squeezed by the head enterprises, the production costs are constantly rising, and the transformation track is not smooth. It seems that the capital market is not optimistic about the whole industry. The clothing and home textile index of tonghuashun A shares has been continuously declining from the high point at the beginning of 2017, and the cumulative decline has reached 41.5%, which is close to the waist cut, and the Shanghai index with a 9.95% increase in the period has failed to win.

Polarization of head Enterprises

In thirty-six lines, there is No.1 scholar in every line. Although the future growth of the industry has met the ceiling, this does not prevent the leading enterprises which occupy the discourse power in the subdivision field. Of course, the sudden epidemic has also disrupted the operation of some leading enterprises in the sub sectors, leading to the disturbance of business performance.

At present, the clothing industry can be divided into men's wear, women's wear, children's wear, shoes and sportswear. In the stable growth of the clothing industry, different segments show significant differentiation. In the past few years, sportswear has gone out of the trough and recovered rapidly. Children's wear has maintained a high growth trend for many years. The public leisure field has grown steadily. The shoe market scale has experienced a process from decline to recovery, while the growth rate of men's and women's wear has decreased significantly.

In the above market segments, each has its own head enterprises. According to the above order, the top enterprises in each field can be listed as follows: Anta sports (02020-hk), SEMAR clothing (002563-cn), SEMA clothing, Aokang International (603001-cn), Hailan home (600398-cn) and winner fashion (03709-hk). Among them, SEMA clothing is relatively strong and is a leading enterprise in children's wear and leisure fields. Among the five enterprises representing various sub sectors, the black swan of the epidemic also led to the differentiation of business performance of these top enterprises in the first half of the year.

As can be seen from the above figure, the performance polarization is very obvious among the leaders in various sub sectors. Among them, Anta, the leader of sportswear, and the winner of women's wear were the most resistant. In the first half of 2020, the decline speed of performance was reduced to a low level. Anta's revenue in the first half of the year decreased by only 1% to 14.67 billion yuan, far surpassing that of other enterprises. The net profit decreased by 20.1% to 2.38 billion yuan, mainly due to the flexible strategy given to distributors on the credit period, resulting in an increase in the provision for loss of trade receivables. As a market leader, Anta achieved remarkable strategic adjustment in the first half of the year, promoting the rapid integration of online and offline. Through innovative marketing means such as full retail, live e-commerce, star with goods, KOL grass planting and other major marketing events, Anta, as the market leader, achieved remarkable results in promoting sales volume.

In addition to Anta, the performance decline of sports apparel enterprises such as Li Ning (02331-hk) and 361 degree (01361-hk) in the first half of the year is not too large, which is controlled within 20%. This shows the importance of anti risk brought by the high prosperity of the industry.

Before the winner fashion, known as the popular known collettier, it vigorously increased the online channel in the first half of the year and achieved good results. In the first half of the year, the revenue generated by the winner fashion tmall e-commerce platform and vipshop e-commerce platform increased by 48.07% and 232.45% respectively year-on-year, and the total income of the two platforms further increased to 265 million yuan in the first half of the year.

These two enterprises have something in common. They are both the leaders of large-scale subdivision fields. During the epidemic period, the integration of online and offline was quite successful, and they had good performance in opening up inventory in various fields. Both pay attention to multi brand and omni channel development. Anta has launched the strategy of "single focus, multi brand and omni channel". At present, Anta has Anta, FILA, Descente, sprandi and other brand matrices. All direct sales mode has become an effective growth channel. Winner fashion's high-end women's wear market is scattered, leaving a lot of room for its development. Its brand matrix is rich. The sales scale of the main brands Clarette and nals are among the top ten in the industry. We all know that the market of high-end women's wear under the epidemic situation is not as low-end as the low-end brands.

However, under the epidemic situation, SEMA clothing, Hailan home and Aokang international are difficult to reverse the unfavorable situation in the market, and the achievements in online channels are not obvious. Among them, many financial indicators behind the rapid expansion of Hailan home showed hidden worries, with an inventory of 8.2 billion in the first half of the year "toppled"; the overseas business of SEMAR clothing was hit hard, and announced to sell 100% equity of France's sofiza sas10, a wholly-owned loss making subsidiary, to reduce the company's operational risk.

Epidemic situation forces industry reform

At present, many clothing stores in China have old product image, single service function, and deteriorating business conditions. Therefore, it is normal for stores to withdraw rent.

Behind this situation is the epitome of the decline of offline clothing stores in the past few years. Many enterprises are also looking for the direction of transformation, but under the pressure of operating costs and business model exploration, the transformation effect of the whole industry is not ideal. On the other hand, it does not require a lot of time to integrate with offline enterprises; on the other hand, it does not require a lot of time to integrate with offline enterprises; on the other hand, it does not require a lot of time to integrate with offline enterprises.

As mentioned above, switching to online is one of the most effective ways for the clothing industry to face the impact of the epidemic. The online and offline integrated marketing mode accelerates penetration and gradually moves towards normalization. Although the current pressure is huge, it is also a good opportunity for garment enterprises to really develop the Internet sales system.

Of course, the transformation of clothing enterprises is not only relying on transformation, e-commerce and live broadcast. How to better balance the physical stores and online stores is also a big challenge for clothing manufacturers.

Offline stores are not going to die out eventually, but need to innovate according to the needs of consumers. After the epidemic, consumers tend to pursue the ultimate cost performance of products without reducing their consumption level and quality of life with limited consumption funds. As the main force of consumption after 90 and 00, focusing on personalized consumption experience has become the characteristics of young people. The changing situation of clothing industry has come. Enterprises should first improve their core competitiveness and constantly respond to the changes of the market and consumers.

The current plight of clothing enterprises, the top priority is to do a good job in internal control, ensure cash flow, reduce inventory, strive to survive to think about how to transform.