Affected by the epidemic, the performance of the textile and apparel industry last year “falled more than rose”, and brand owners who survived the cold winter encountered a “cold spring” again. Huge inventory provisions, house sales, and even “cross-border” self-rescues were successively launched in shoes and clothing. The company “stages”. Under the “sequelae of the epidemic”, the pressure on inventory and cash flow of the footwear and apparel industry is still undercurrent.
Unsold
clothing in stores and warehouses around the world is worth between 140 billion and 160 billion Euro
The global apparel industry is still faltering in 2021, vaccine rollout continues to have twists and turns in some countries, and there is little hope for global economic recovery. According to reports, major overseas retailers are still worried about last year’s inventory of clothes, which usually have been sold out during normal clearance sales.
▲British chain Primark told Reuters that the company’s spring and summer inventory in 2020 was worth approximately 150 million pounds (approximately 1.33 billion yuan). Autumn and winter inventory is 200 million pounds (approximately 1.772 billion yuan).
▲The global demand for pajamas and loungewear is unprecedentedly high. But not every factory can make pajamas!
To give an idea of the scale of the backlog, consulting firm McKinsey said the value of unsold clothing in stores and warehouses globally was between 140 billion and 160 billion euros (about 1.24 trillion euros). yuan to 1.41 trillion yuan), more than twice the normal level. Britain’s Marks & Spencer and Germany’s Hugo Boss said they had fewer orders for this year’s spring collections than in previous years.
Ron Frasch, former president of Saks Fifth Avenue, said retailers are keeping sales smaller and tighter delivery times. He is now an operating partner at private equity firm Castanea Partners, which works with many apparel brands. Frasch said: “Most brands’ shipments are very tight right now, and agents are also very nervous. I think everyone is purchasing very conservatively. I know a lot of people are delayed in paying. That’s for sure.”
Hong Kong-based purchasing agency Li & Fung told Reuters that some retailers had asked for payment delays but declined to provide details. Li & Fung manages more than 10,000 factories in 50 countries for retailers including global retailers.
As a result, the pain flows to major garment manufacturing hubs such as Bangladesh, whose economies depend on textile exports. Factories are struggling to stay afloat.
Losses in the global textile and apparel industry
It is expected to take two years to recover!
“In addition to accidental factors such as the epidemic and weather, what affects the recovery is the cash flow pressure and inventory pressure caused by the epidemic, as well as the fact that consumer confidence has not yet been fully restored, resulting in the decline of brands. Intensified competition and price wars will still have a negative impact on brand operations.” Industry insiders analyzed the recovery situation in 2021.
The above-mentioned person further explained, “Individual outstanding companies may be the first to break through, and some companies may not be able to survive the difficulties and be eliminated. The industry as a whole will still be more difficult, but whether it can break through Ultimately, it depends on the company’s brand power, channel power and product power, whether it can be recognized by consumers.”
Reports say that the new crown epidemic has forced many well-known European and American brands to cancel and postpone orders (even some already in progress) or deferring payments to protect their liquidity. A head of a Spanish clothing company who did not want to be named said: “During the lockdown in Europe, our payment time for all suppliers has been extended by 30 days. This has a big impact on them, but this is a matter of It is a matter of our survival. It was not until August last year that we more or less restarted the supply chain.”
The report pointed out that the initial impact has been alleviated, and production and trade Activities gradually returned to normal, but subsequent waves of epidemics brought new restrictions on trade and movement of people. According to consulting firm McKinsey, by the end of last year, the global textile and apparel industry had lost 20% to 25% of its sales, with Europe losing 25% to 30% and the United States losing 20% to 25%. Depending on the specific circumstances of each country and region, it is expected that the industry data level of 2019 will not be restored until the end of 2022 or 2023.
The textile industry in front of us has not yet recovered from the impact of last year’s epidemic. The inventory of clothing and fabrics that far exceeds previous years has not yet had time to digest. This year The sharp rise and fall of crude oil has once again dealt a heavy blow to the textile industry. After the price of raw materials stopped rising, traders also stopped purchasing large quantities of goods. At this stage, gray fabric inventories are concentrated in the hands of traders, and the cost of these gray fabrics will be higher than in the future. The price of new gray fabrics produced by weaving enterprises is generally lower. With the performance of terminal demand in doubt, this part of gray fabric inventory may become the biggest “pit” for textile people in 2021. In short, textile…The recovery of the industry still has a long way to go! </p
