Clothing Brand Discount Seize Cash Flow

Affected by the economic downturn, clothing brands make a big discount and make profits become a way to stimulate consumption.

The economic situation has left many enterprises unprepared.

Just two months ago, Liu Yunqiang, the chairman of Hunan Qingzang Garments Co. Ltd., located in the central part of China, was very glad to tell reporters that the chill of the economic downturn did not cause much impact on Zhuzhou's enterprises. He even thought he could take advantage of this opportunity to expand his strength.

But just a day before the press release, he suddenly telephoned and told reporters that their enterprises were experiencing an unprecedented "inventory crisis". Now all his work is focused on how to deal with these high priced stocks to get "help" cash flow.

The root cause of the crisis is the sudden change in the raw material market.

The enterprise can not adapt to the price instability. "I can hardly keep up. Every day I dream of a pile of wool."

Liu Yunqiang could not conceal his anxiety. He had already felt the crisis hidden behind the market.

According to him, during that time, the price of wool raw materials suffered another round of price fall. Compared with the price of about one hundred thousand yuan per ton, it has fallen to tens of thousands of yuan a ton, and the price drop is nearly 40%.

However, Liu Yunqiang's bitter taste makes people feel a little strange.

Because according to common sense, the prices of raw materials will be a good thing for the cashmere clothing manufacturers of Qinghai Tibet velvet, which means that the direct decline of production costs, Liu Yunqiang should be full of joy, but why should he show such panic?

"It's hard to get a lot of stock in our hands."

Liu Yunqiang reluctantly said that these stocks were left behind before the price of raw wool was cut, and the cost was quite high, so the retail price was relatively high.

Now, the price of wool has fallen so fast that it is unexpected for him. Although the price of cashmere garments has not dropped much on the surface, once the pace of raw material price decline can not be controlled, it will directly affect the price of future garments, so that the enterprises with large inventory will suffer. These high cost stocks will spend more than one day in the dark room, which means that the white flowers will evaporate again.

It is understood that the current inventory of Qinghai Tibet velvet is around 10 million pieces. According to their retail pricing, the total market price of these stocks is between 400 and 5 million yuan.

For a medium-sized garment enterprise, if this batch of inventory can not be disposed of, it will be badly damaged.

What is worse is that there is widespread concern about deflation in the future market.

Over the past few days, Liu Yunqiang has asked many of his peers, as well as his upstream and downstream business partners, hoping to get some comfort from them, but he did not expect everyone to worry about the consequences of deflation.

"The market instability is too big, which is what we are most afraid of.

You think, the price of wool has been soaring since the beginning of this year, and many people even plan to hoard money, but now the price has returned to hell from heaven, and how can enterprises adapt to it?

Liu Yunqiang's voice was full of anger and helplessness.

"If consumers can cling to their money bags, 3 months later, they will find that many advanced clothing, bags and shoes that they can not enjoy will be substantially reduced, and domestic consumers will be able to enjoy the feast brought by low-priced goods."

This is a hot note in recent internet forums, which brings numerous post entries.

Consumers' wait-and-see psychology can be seen from this.

Will clothes be cut?

Reporters recently interviewed a number of people in the industry, different views, some people think that prices will not drop, the reason is that the real brand is less affected by market factors, insist on not reducing prices is to maintain brand image; while others believe that according to the current situation, clothing enterprises need to guard against the possibility of deflation.

Although everyone sticks to their own words, from the reporters' experience in shopping malls, many brands are indeed on sale, and the strength is unprecedented.

According to relevant media survey, sales of professional clothing stores in Beijing have dropped by 5% to 15% in the past three months.

According to the relevant people familiar with the matter, in the clothing wholesale market in Zhuzhou, the market sales compared with previous years also dropped a lot.

Liu Yunqiang even shouted that their product sales fell by half over the same period last year.

There are many indications that at present, the clothing retail market has been greatly affected by the lack of consumer confidence. "Grassroots consumption has fear, and we dare not spend money in a random way."

Liu Yunqiang said.

The direct consequence of selling products is that they cause a lot of inventory.

This is a vicious circle that can not be evaded.

It is understood that high priced inventory has brought serious trouble to Qinghai-Tibet velvet.

At this time, it is the preparatory stage for the Qinghai Tibet velvet to plan for the next year and give the channel manufacturers a positive preparation for the new products. But now the plan is completely disrupted. Any decision may have to go back and forth several times, making some sense of caution, fear of wolves and fear of tigers.

Shi Yongxiang, a brand management expert, cautioned that for small and medium-sized enterprises, the proportion of stocks must be paid attention to. The normal inventory will bring pressure to the garment enterprises. If these stocks still carry the burden of high price on the existing low-cost new product lines, it will probably become the last straw to crush enterprises.

To seize the cash flow "escape", besides worrying about deflation, another important reason for the psychological weakness of businessmen at this time is that they are facing the current year. Next month is the deadline for many enterprises to repay the loan. In the current economic downturn and the low consumption of the market, it is the general mentality of debt enterprises that the "bad year is bad".

"At the moment, cash flow is our lifeline. Zhuzhou has not yet failed because of the economic downturn, but this year's business is not good enough, and enterprises with serious cash flow problems may die."

Liu Yunqiang said.

From the reporter's understanding of the situation, many enterprises adopted a very conservative economic decision-making method in the last two months before the year's end: saving money and squeezing the front line to stabilize the new year.

In order to protect cash flow, Qingzang has taken a "radical" way of selling stocks, even washing goods in self owned stores at below cost.

"I am ahead of my losses, reduce inventory, escape quickly, escape is fate."

In reality, Liu Yunqiang seemed to be desperate.

Some people in the industry believe that from the current economic situation, we need to be vigilant against the negative effects of the collapse of small and medium-sized enterprises in the Pearl River Delta, which will spread to the mainland. Although the direct impact of garment enterprises in the central and western regions of Hunan and Chongqing has been much smaller in the past year, the delayed effect of the economy can not be ignored.

Against this background, economist Lang Xianping also came out to warn Enterprises: the best way for enterprises to spend the winter is to grasp the cash flow.

In view of the enterprise's panic psychology, Shi Yongxiang believes that it is not necessary to be so pessimistic. Selling inventory at the end of the year may also be a means to get cash flow to relieve pressure, and the most important thing is that the psychological factors of businessmen must be stable. If psychological collapse first, it will be the most lethal in the business war.