The saddest thing in the world is surviving the epidemic but failing to survive the market!
Recently, the editor saw on the Internet that a friend expressed his regrets about a series of operations such as his relatives closing down business, selling machines at low prices, and selling off products.
The sequelae of the epidemic do not only affect small and medium-sized enterprises. Recently, several leading textile and garment companies have changed their names and become more professional. Transformation:
On the evening of September 15, Zhejiang Furun Co., Ltd. (hereinafter referred to as “Zhejiang Furun”) announced that the company’s main business will be Internet services, textile printing and dyeing and The processing and sales of seamless steel pipes are concentrated on the Internet.
On the same day, Caesar (China) Culture Co., Ltd. (hereinafter referred to as “Caesar Culture”), a high-end brand women’s clothing listed company, also issued an announcement stating that in order to further revitalize the company’s assets and optimize its asset structure , the company plans to transfer the brand clothing inventory of Caesar Culture and the corresponding supporting trademarks and other assets to Shantou Jihai Clothing Co., Ltd.
Indeed, who would choose to give up at this point in time if they couldn’t endure it, after all, for For sweater factories, the main battlefield is generally the second half of the year. The loom worth more than 2 million yuan was sold at a price of 10%, and the sweaters originally exported were also sold for a few yuan each. The boss almost ended his sweater factory by selling half of the products and giving them away.
This year’s epidemic is undoubtedly a big problem for bosses in the textile and apparel industry. challenges. The epidemic is like the wings of a butterfly in the tropical rainforest. A slight flap can make the world tremble. According to customs statistics, in the first eight months of this year, my country’s textile and apparel exports were US$187.41 billion, a year-on-year increase of 5.62%, and the growth rate was 0.05% higher than the previous seven months. Among them, textile exports were US$104.8 billion, a year-on-year increase of 31.99%, and clothing exports were US$82.61 billion, a year-on-year decrease of 15.74%. It can be seen that the epidemic has a greater impact on clothing exports. In this environment, some people quit, some people enter, and some people stick to it. Although the first wave of “Little Indian Spring” market in the second half of this year has continued from mid-August to the present, major clusters in Jiangsu and Zhejiang have shown varying degrees of recovery, and domestic trade and foreign trade market orders have also performed well. This also gave the weaving manufacturers who had been running out of inventory in the early stage a “breath of breath”!
However, judging from the current situation, the entire textile market is still facing severe tests. The market has overcapacity, fierce homogeneous competition, heavy corporate burdens, and low profitability… The market is washing out The cards are accelerating and the labor pains are obvious. For the upcoming fourth quarter, there are several major issues that textile bosses have to pay attention to.
1. Industry giants are tightening their belts, and it will take some time for demand to recover
Entering September, major companies are tightening their belts. Listed companies have also disclosed their semi-annual reports. From the perspective of the entire textile and apparel industry, sharp declines in revenue, sharp declines in net profits and even losses are still the norm.
Meibang Clothing, the former “leisure giant”, lost 478 million yuan in the first half of the year and closed 504 stores; the Chinese version of “ZARA” La Chapelle suffered a huge loss of 2.1 billion and sounded the delisting alarm; The former “women’s shoe giant” Daphne has closed more than 6,000 stores and announced its withdrawal from the mid-to-high-end physical retail business…
Originally, the clothing industry has been saturated in recent years and competition is fierce. In the first half of the year, the entire textile and apparel industry lacked rigid demand under the influence of the epidemic, resulting in a rare regression in terminal demand. Even if the new online trade model alleviated some of the demand pressure, it will still take time for offline sales to recover, and a large number of stores were closed. It is bound to reduce the demand for goods on the clothing side, which also shows that the bottom-up recovery of the industrial chain has not yet substantially improved.
Therefore, the procurement of raw materials by clothing brand companies in September this year Be more cautious. It is reported that there is a lack of large orders for autumn and winter clothing fabrics in the market recently. Garment factories and traders are currently placing orders in a “small batch, multi-batch” pattern, and the overall market is not as busy as in previous years.
2. Trade barriers are intensifying and future trends are unclear
In 2020, Trump is trying to divert the attention of the American people force, frequently issuing “the spirit of abandoning contracts”, and recently they have frequently taken action against Chinese goods:
In late August, in accordance with US customs border requirements, goods sent to the United States through all channels, foreign “Made in China” labels must be affixed to the boxes and products. Otherwise, imports are not allowed locally and you may face risks such as returns, confiscation of goods, or fines;
Reported on September 9, the United States Customs and Border Protection officials are preparing to ban imports of cotton and tomato products from Xinjiang, citing the source of the goods.�So-called “forced labor”;
On September 15, the U.S. Customs and Border Protection announced a ban on imports from 5 Chinese companies and 1 manufacturing plant on the grounds of suspected forced labor. product. Subsequently, H&M, a well-known Swedish clothing brand, immediately announced the termination of “indirect business dealings” with Huafu Company. At the same time, it would also conduct investigations on all Chinese suppliers to ensure that their employment conditions do not involve so-called “forced labor”;
In the past, the U.S. market was the “fat meat” in the eyes of domestic textile foreign trade bosses, but in the past two years, the Sino-U.S. trade war Due to the influence of the epidemic, the market share is gradually shrinking, and as the U.S. election time approaches, in order to gain more votes, it cannot be ruled out that the United States will have various “sexy operations” in its trade with China in the later period, thus affecting the recovering foreign trade exports.
3. The account period is significantly delayed, and companies are under greater pressure to collect payments.
There are arrears every year, especially this year! This has become the voice of textile bosses this year. Indeed, as global trade has been affected by the new coronavirus, many operating models have also changed, especially the collection of receivables. The fourth quarter of every year is the day when the textile industry collects due payments.
According to research, the account period has generally become longer this year, and there are cases of arrears. A trader said that the current account period is 3-6 months, and it is not uncommon to default on payment. Some textile bosses also said that 30% of the receivables have not been received.
It can be seen that in the current era of “cash is king”, funds will become a weapon for the smooth operation of enterprises. And at the end of the year, many textile companies need a lot of funds to purchase raw materials in advance, issue year-end bonuses to employees, etc., so the quality of receivables recovery is even more important.
This year is not only difficult for the textile trade sector, but also for the terminal apparel sector. As a result, customers do not default on payment maliciously, but do so out of necessity. But because of this, unless the global economy can unleash a good recovery and terminal consumption levels pick up, the capital chain circulation of textile bosses will not be particularly smooth.
The epidemic is like a mirror, he puts his roots in the enterprise Some internal problems have been exposed. At present, many small and micro textile companies say that their lives are not satisfactory. Especially this year, many large companies have been able to reduce costs and occupy the market in large quantities with their refined management. Some small companies have limited market space. will be squeezed, and the pace of survival of the fittest in the market is accelerating.
However, the fourth quarter should be the most promising day for achieving results this year. Enterprises need to control their own capital chain and inventory problems to prevent interruption and survive this year’s difficult test.
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