The Price Of Cotton Has Dropped Sharply Since March; Hidden Worries Of Small And Medium-Sized Textile Enterprises Appear

In autumn and winter, when the ex factory price of new products generally rises, it is necessary to reserve time to produce new products and worry about cotton Price fluctuation causes the order meeting to be held in advance

The autumn and winter clothing order meeting, which started in early August last year, was almost two months ahead of schedule this year. Recently, the reporter learned from Guangzhou Liuhua Garment Business District, Zhongba Children's Wear Market, Shisanhang, Shahe Garment Market, Zengcheng Xintang Jeans Production Base and other large garment distribution centers in Guangdong that most garment enterprises this year took the lead in launching the 2011 Autumn and Winter New Product Order Fair in early June.

The industry insiders pointed out that clothing manufacturers generally raised prices by more than 20% this autumn and winter, which requires enterprise Enough time should be reserved for improving design capability and controlling product quality, which leads to the advance of orders; On the other hand, some service enterprises are worried that the cotton price will rise and fall like last year, so they will prepare for new products in advance when the cotton price is stable.

Cotton prices fell more than 25% Service enterprises Prepare goods in advance

In the Khmer Rouge International Fashion City, some brand merchants have been busy preparing their own brand's autumn and winter new product release conference and order meeting since the end of May. At present, there have been western region iron horses EP3、MEXEM、 A large number of clothing enterprises, such as Backstreet Boys and Yuanyuan, opened the autumn and winter order meeting.

The price of cotton has dropped sharply since March

Bu Xiaoqiang, general manager of Kapok International Fashion City, said that there were three main reasons for the advance of new product orders this autumn and winter compared with previous years. First, clothing enterprises were worried about the excessive fluctuation of cotton prices, and they would sell ahead of time and place orders for production when they returned to reasonable prices; Second, the off-season of clothing sales in spring and summer this year has come ahead of schedule, and clothing in the summer of July in previous years only showed signs of fading; In addition, the ex factory price of clothing keeps rising, and many dealers dare not place large orders. There are many orders in small batches, so the service enterprises need to make preparations in advance.

It is reported that the price of cotton exceeded 20000 yuan and 30000 yuan per ton successively last year, with a maximum increase of about 75%. After reaching a historical high of 34870 yuan/ton in February this year, the cotton price has dropped by more than 25% since March, falling below 26000 yuan/ton. Many service enterprises believe that the price of cotton has become reasonable at present, so they prepare the goods in advance.

Summer off season comes half a month ahead of schedule

As for the early arrival of summer clothes off-season, the reporter can see in the terminal market that in previous years, the discount tide of Guangzhou department stores generally started in early July, but this year it was more than half a month ahead of schedule. "Since June, clothing consumption has been weak, which is also a headache for us." The head of a large department store told reporters that clothing brands hope to clean up their summer clothing inventory as soon as possible.

However, He Weiqiang, the general manager of Yima Clothing Wholesale Plaza, believes that the decline of cotton prices for two consecutive months has not led to the decline of clothing prices. "Enterprises generally lag behind from fabric purchase to production. The decline in the price of raw materials can reduce the cost of clothing enterprises, but it will not be reflected in the terminal sales immediately." He said that this year, the prices of major brands of clothing are rising, ranging from 10% to 30%. For reasons of price increase, service enterprises pay more attention to the grade of new products and quality. "Hold an order meeting earlier, and the production cycle will be longer, so enterprises can have time to give feedback on product quality in a timely manner."

Shi Xiaoming, the person in charge of men's clothing of the Backstreet Boys' Brand, said that in addition to the main products produced by clothing enterprises themselves, other products are generally processed through OEM in other factories. "But this year, more than a few garment processing plants were closed because they could not recruit people. Good processing plants were all scrambling, and they queued up to get orders late, which would affect the listing of the entire product." So everyone held an order meeting in advance to try to arrange the construction period in advance.

The order meeting is good, and the annual performance locks in growth

Judging from the autumn and winter order meeting of some brand clothing enterprises this year, their order growth is good, with the year-on-year growth rate basically above 20%~30%. Due to the increase of ex factory prices, most textile and clothing enterprises have locked in the performance of this year. Therefore, the industry estimates that the average profit growth of the textile and clothing industry this year may exceed 40%.

According to Wind data statistics, 40 listed companies in the textile and clothing industry have predicted their medium-term results in 2011, and most of the companies' profits have maintained a good growth momentum year on year. Among them, 34 companies accounted for 85% of the expected growth, and 6 companies suffered from performance losses or year-on-year declines in the first half of the year. It is worth noting that there are 12 companies with a year-on-year growth rate of more than 50% in the forecast medium-term net profit, accounting for 30%.

Zhang Ang, an analyst at Guotai Jun'an, said that since this year, the overall operating environment of the textile and clothing industry has improved well against the backdrop of both the export and domestic demand markets. The fall in cotton prices is clearly good for the performance of brand clothing this year. Most brand clothing enterprises lock in some of their performance in the form of order meetings, and clothing prices are generally increased by 10% to 20%; With the fall of raw material prices, the production cost of autumn and winter clothing is expected to decline significantly, which is conducive to improving the gross profit margin and profitability in the second half of the year.

Zhang Ang predicted that the overall positive trend of the industry in the first half of this year will continue in the second half of this year. Toread (14.880, -0.28, -1.85%) expects its medium-term net profit to increase by 50% to 100% year on year. The reason for the substantial growth of its performance is that the company's main business is well developed, the market scale is constantly expanding, and the product futures booking for autumn and winter 2011 is good, and it is expected that it can basically be effectively implemented. In addition, brand clothing enterprises such as Kaiser (19.87, - 0.10, - 0.50%) and Septwolves are also expected to increase their performance due to the good order situation at the order meeting.

Hidden worries of small and medium-sized enterprises revealed further concentration of market share

Although the overall operating environment of the textile and clothing industry is getting better, some experts pointed out that some hidden worries this year should not be ignored, such as the rising cost of raw materials and labor, multiple pressures on exports, and unstable domestic consumption environment, which led to difficulties in the operation of some small and medium-sized enterprises.

According to the latest data from the General Administration of Customs, from January to May 2011, China's textile and clothing exports totaled US $88.835 billion, up 26.55% year on year, 0.84 percentage points lower than the 27.39% growth rate of the previous four months.

Some garment enterprises reported that the sales in the first half of this year increased significantly, mainly due to the increase in product prices, while the number of shipments that truly reflected the level of production capacity did not increase significantly. In addition, under the change of the world economic situation and economic demand this year, the export growth rate will inevitably decline. It is expected that the textile export growth rate will fall to about 15% in 2011, and the price increase will become the main driving factor for export growth. Under the double pressure of the rapid rise in production costs and the shrinking market, a large number of small and medium-sized garment processing and manufacturing enterprises and shoe factories are in a semi stop state.

The reporter learned from some garment factories in Xintang, Zengcheng that the orders in the first half of this year generally fell by 20% to 30%. Mr. Li, who is in charge of a specialized OEM brand of children's jeans, said that the factory used to ship 220000 to 250000 pieces a month, but since March, the orders have decreased significantly; Today, the monthly shipment is less than 100000 pieces, which has been reduced by more than half. He said that recently in Xintang area, many small garment factories have closed down, and even large factories do not have much goods to do. There are also some enterprises that do not worry about orders, but dare not take orders casually because they cannot recruit workers.

Some securities analysts pointed out that in the process of industry reshuffle and pain, the market share will further concentrate on leading enterprises with real competitive advantages in the industry.