The War Of Clothing Industry: 90% Of The Company'S Performance Declined In The First Half Of The Year

Under the new epidemic situation, catering, tourism, film and television industry as recognized by the more seriously affected by the epidemic, has become the focus of attention from all walks of life. For example, some other clothing industries are still suffering from severe setbacks.

On July 21, big white horse and the industry leader SEMAR clothing announced that it would sell French children's wear loss making subsidiary to reduce business risk, exposing the difficulties of the clothing industry.

The reporter of stock times · e company has learned from various investigations that the clothing industry is experiencing the most serious "great retreat" since the reform and opening up. Some experts predict that the overall revenue of the clothing industry will decrease by at least 400 billion yuan this year, and the overall market scale will shrink by 15%. Most clothing brands are facing risks. Under the micro level, as the industry leader, clothing listed companies almost uniformly forecast the performance of the first half of the year to decline or loss. In addition, squeezed by market demand, the prices of front-end raw materials once hit a record low, and are still hovering at low levels.

The clothing market will evaporate by 400 billion this year

A lot of young people like to shop in Gongcheng.

"@ everyone, dear ones, we have withdrawn from Fengsheng Town store.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." It's been ten years since the news of Tongsheng store has been running for ten years.

The owner of the shop told the securities times that it had withdrawn from the site it had been operating for nearly 10 years. Due to the epidemic situation, 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.

to see only one spot. This old Fengsheng Town store is the epitome of many clothing enterprises. On the evening of July 17 (Friday), a reporter from the securities times visited Fengsheng town of chegong temple and found that the flow of people in the business district was much colder than that before the epidemic. At the same time, during the reporter's visit, there were sporadic stores in the state of closure and rent-seeking along the way, and several shops in some areas were closed for rent.

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..." "Contact, sublet..." Wait for the rent advertisement.

"This year, affected by the epidemic situation, business is cold. Some shops in Nanyou are forced to close down because they can't support it. However, it is not a case of large-scale closure. There are both in and out, and the industry is adjusting." Nanyou women's wholesale market owner told the Securities Times reporter.

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." After several decades of interview with the general manager of Shanghai Weixiong Fashion Co., Ltd., the general manager of the clothing industry, Cheng Liangqi, said that after several decades of rapid development of the clothing industry, the company was in a state of rapid development.

"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.

According to authoritative data, the total revenue of China's textile and garment industry was 9.4 billion yuan in 1952. By the end of 2019, the total revenue of domestic textile industry had reached nearly 4.5 trillion yuan, and the total revenue of textile industry had increased by 478 times in 67 years.

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.

SEMA clothing is a leading enterprise in leisure clothing and children's wear industry in China, with more than 10000 stores all over the country, and its leisure brand SEMA and children's clothing brand Balabala are almost household names. However, under the impact of the epidemic, the leader is also hard to escape.

Sofiza plans to sell its wholly-owned subsidiary sofiza in July to reduce the operating loss by 21%. Prior to this, the company had announced that it was expected to achieve a profit of 72.2106 million yuan in the first half of this year, a year-on-year decrease of 90% - 100%. According to the company, due to the impact of the epidemic, the company's overseas business losses were large.

Another children's clothing leader, anel, was more affected by the epidemic. The company expects a loss of 13 million yuan to 18 million yuan in the first half of this year, and a profit of 56.2979 million yuan in the same period of last year, a year-on-year decrease of 123.09% to 131.97%. Anel said that affected by the new coronavirus epidemic in China, residents' going out activities were reduced, the domestic large shopping malls, shopping centers and other places' customer flow was low, children's clothing consumption scenes were reduced, the company's business was greatly affected, and the half year's business income decreased year on year; Compared with the firm, the company's net shop rent increased in 2019, which affected the company's new management fee.

Seven wolf, a well-known old men's wear brand, is not alone. The company expects to achieve a net profit of 20 million to 30 million in the first half of this year, down 83.80% ~ 75.70% year on year. The company said that the new crown pneumonia epidemic and its prevention and control measures had an impact on the company's production and operation. The company's operating revenue decreased in the half year of 2020, while the market competition was more intense, resulting in a decrease in gross profit margin of products and a corresponding reduction in profits.

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. As Huasi shares said, the company's revenue fell sharply. On the one hand, the company's export business was concentrated in European countries, including Italy, France, Germany and so on, and its orders were cancelled substantially. In order to reduce further losses, the company adopted the method of processing and promoting sales below the cost price for the semi-finished products originally planned to reserve for production of finished clothing according to the new production and sales plan. At the same time, domestic cooperation brand orders also decreased.

According to the statistics of reporters from securities times · e company, as of July 21, 19 textile and garment enterprises in a share disclosed the performance forecast or performance express in the first half of the year, of which 17 enterprises showed a year-on-year decline, accounting for nearly 90%, and 15 enterprises were expected to decline their net profit by more than 50%.

According to the data of the National Bureau of statistics, affected by the shrinking terminal demand, the industrial added value of clothing and clothing industry and household textile industry decreased by 12.8% and 10.6% respectively from January to May. From January to May this year, the retail sales of clothing, shoes, hats and knitwear of units above the national quota decreased by 23.5% year-on-year.

Upstream raw material prices have hit 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.

It is understood that the upstream raw materials of clothing mainly include cotton and chemical fiber. Cotton needs to import nearly 2 million tons of cotton every year, but the situation is different in terms of chemical fiber. China's chemical fiber production accounts for more than 70% of the global output, and the annual output is about 10%. Generally, it is exported and digested.

"If clothing consumption is not good, it is bound to form negative feedback on upstream raw materials, and then there will be a sharp drop. This year, cotton, chemical fiber raw materials and other upstream textile materials all hit a new low in recent years, and chemical fiber has even hit a new low in history due to the sharp drop of crude oil." Shanghai international cotton trading center information director Wang Qianjin told the Securities Times reporter.

Take cotton as an example, on March 24, 2020, the main market of zhengmian fell to 9935 yuan / ton. After that, although it came out of the market of slow recovery, its main focus is still in the low price range near 12000 yuan / ton.

Last week, the main CF2009 contract of Zheng cotton futures broke the 12000 yuan / T level, and continued to drop to 11875 yuan / T before the afternoon of July 21. China's cotton price index was 12162 / T on the same day, maintaining near 12000.

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." At the same time, he said that the cotton planting policy in Xinjiang was basically guaranteed.

Chemical fiber, namely chemical fiber, refers to the fiber made of natural or synthetic polymer materials, including polyester fiber, regenerated fiber, spandex, nylon, acrylic fiber, polypropylene fiber and other fiber raw materials. It is understood that in the first half of the year, the absolute prices of PTA, eg, polyester filament and staple fiber in the chemical fiber industry chain, including crude oil, reached their lowest level in more than a decade or even in the history. Especially after the negative value of crude oil price, the price of chemical fiber products dropped.

In addition to the current situation of the loss of raw materials in China's polyester and chemical fiber industry, there is also a loss in China's polyester industry.

However, the market is still looking forward to the bottom, depending on the overall situation of the end material consumption Zhuo Chuang information also believes that cotton prices are at a low level, providing a good basis for the later rise.

In terms of listed companies, A-share guannong shares, * ST Dunzhong, Xinjiang Tianye, Lutai a, Xinsai Co., Ltd. have set foot in cotton raw materials. The main listed companies in the chemical fiber sector are Hengli petrochemical, Hengyi petrochemical, Tongkun shares, Rongsheng petrochemical and xinfengming. Among them, Hengli petrochemical, Hengyi petrochemical, Tongkun and Rongsheng Petrochemical all have refining and chemical projects, and xinfengming is the leader of downstream filament enterprises. Guoxin Securities analysts believe that if the future crude oil prices continue to remain in the middle and low range, the profitability of polyester filament will increase significantly.

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. According to the performance express, in the first half of this year, taipingbird achieved a revenue of 3.217 billion yuan, a net profit of 121 million yuan, a year-on-year increase of 3.09%, a year-on-year decrease of 8.55%, and a deduction of non net profit of 56.2227 million yuan, a year-on-year increase of 129.14%.

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.

Taipingniao said that in the first half of the year, the company actively promoted the optimization and adjustment of its organizational structure and business model. Ningbo Beitian Fashion Clothing Co., Ltd., which was formerly in a loss state, formed a stable and sustainable profit model and entered a profitable state during the reporting period. The previously unrecognized deferred income tax assets were confirmed during the reporting period; In addition, the losses of Mg, bird's nest and other incubation brands decreased year on year.

On July 20, SEMAR apparel also announced that it plans to sell 100% equity of France's sofiza sas10, a wholly-owned loss making subsidiary, in order to reduce the company's operational risk and avoid greater loss of performance. The move was approved by the capital market on July 21.

After several decades of low-end clothing industry management, Cheng Liangqi, the clothing industry manager of weiqi, said that after the rapid development of clothing industry, such as low-end clothing industry and high-end securities industry, after decades of rapid development of clothing industry, such as the low-end clothing industry and the clothing industry of weiqi When it has to change, the epidemic accelerates and exacerbates industry change. He believes that the clothing industry is difficult 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 will be eliminated, and the strong will continue to be strong, and the domestic clothing industry will gradually begin to move from extensive to refined.

In Cheng Weixiong's view, in the current plight of the clothing industry, the top priority for enterprises is to do a good job in internal control, ensure cash flow, and strive to survive. Secondly, we should activate the new industry platform and make full use of the new industry platform and new tools. In addition, the overcapacity of the domestic clothing industry is mainly due to the homogenization and low-end competition of the industry. Therefore, it is suggested that enterprises should make great efforts in technology research and development, strengthen the innovation and application of original design and surface accessories application, such as the development and application of environmental protection and healthy fabrics, so as to enhance the added value of enterprises and products and enhance the competitiveness.