This week, the epidemic situation in many European countries has rebounded rapidly. It has almost become a consensus among epidemic prevention, medical and even the public that the world will usher in a second wave of epidemic this winter. In response to the rebound of the epidemic, various countries have adopted mandatory epidemic prevention measures, some of which are even higher than those in March this year. It became even stricter in March, and the British government even claimed that it would not hesitate to use the military to maintain continuity under special circumstances to deal with citizens who violated epidemic prevention measures.
Since the epidemic and the economy complement each other, if a second wave of the epidemic strikes, central banks may not be able to Another example is the massive cash distribution at the beginning of the year to stimulate the economy, which is undoubtedly a further devastating blow to the textile and apparel industry.
The apparel giant slashed 3,700 jobs, and bad news spread again in the fashion industry
Ralph Lauren Corp. ( NYSE:RL) Ralph Lauren Group is wielding a layoff knife and plans to lay off 15% of its employees. Based on the company’s 24,900 employees in the fiscal year ending in March, more than 3,700 employees will lose their jobs.
The American group announced a reorganization focusing on streamlined architecture and digital transformation on the grounds of accelerating the “Next Great Chapter” plan. Ralph Lauren, the group’s eponymous founder and chief creative officer, said the move was necessary to ensure the company’s continued position as one of the industry’s most beloved and inspiring brands in the future.
It is futile to predict the impact of the new coronavirus epidemic on the textile and apparel retail industry now, because it depends on the actual situation of the epidemic, but the current epidemic situation around the world is still unclear. With this year being compared to the Great Recession, Ralph Lauren may be having a tougher time than most as a seller of high-priced, non-essential goods. Cowen analyst John Kernan wrote in a recent report: “Ralph Lauren remains a strong brand with one of the best management teams in the apparel and textile industry.” Still, due to the weakening environment , he still downgraded his rating on Ralph Lauren stock.
There are several factors that could alleviate the difficulties faced by Ralph Lauren Corporation. Most of the company’s profits come from core products that have been best-selling for many years, such as Polo shirts, flag-pattern sweaters, knitted sweaters, etc. Even if these products are unsaleable this year, they can wait until next year to continue selling. “Ralph Lauren is not a trend brand. It’s not Prada. That’s its strength,” said Kathy Gersch. At least as important to Ralph Lauren, Murphy noted, is its “assets.” The balance sheet is in very strong shape, with negligible long-term debt.” No analyst seems to doubt that Ralph Lauren Co. can weather this crisis and emerge stronger than most of its rivals.
Ralph Lauren announced a major layoff of about 3,700 employees on Tuesday. As another retail company that has streamlined its structure and transformed digitally, it also reflects the weakness of consumer discretionary goods under the COVID-19 pandemic. status quo.
In the upcoming fourth quarter, three major issues may further accelerate the reshuffle of the chemical fiber market
This year’s epidemic is undoubtedly a big challenge for the textile and apparel industry. 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%.
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 The shuffle accelerated, and the labor pains were obvious. For the upcoming fourth quarter, there are three major issues that textile companies must pay attention to.
1. Industry giants are tightening their belts, and it will take some time for demand to recover
In September, major 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 Apparel, 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 announced its delisting Alert; 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, with fierce competition. Due to the impact of the epidemic in the first half of the year The entire textile and apparel industry lacks rigid demand, resulting in a rare regression in terminal demand. Even if the new online trade model alleviates some of the demand pressure, it will still take some time for offline sales to recover. A large number of store closures will inevitably reduce the hoarding of clothing. The demand for goods also shows that the bottom-up recovery of the industrial chain has not materially improved.
Therefore, in September this year, clothing brand companies were more cautious in purchasing raw materials. 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 have intensified and future trends are unclear
2020 In order to divert the attention of the American people, Trump frequently issued a “treaty abandonment spirit”.Recently, Chinese goods have been frequently targeted:
In late August, in accordance with U.S. customs border requirements, goods sent to the United States through all channels must be affixed on the outer boxes and products. “Made in China” label, otherwise imports are not allowed locally, and you may face risks such as returns, confiscation of goods, or fines;
Reported on September 9, U.S. Customs and Border Protection officials Preparing to order a ban on the import of cotton and tomato products from Xinjiang on the grounds that these goods are derived from so-called “forced labor”;
On September 15, the U.S. Customs and Border Protection announced that On labor grounds, it was announced that imports from five Chinese companies and one manufacturing plant would be banned. 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 and foreign trade bosses. However, due to the impact of the Sino-U.S. trade war in the past two years, the market share has gradually shrunk, 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 China’s trade in the future, thus affecting the recovering foreign trade exports.
3. The account period is significantly delayed, and companies are under greater pressure to collect payment
As global trade is 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 dues. 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 clothing sector. As a result, customers do not default on payment maliciously, but as a last resort. 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. It has exposed some problems rooted in the company. At present, many small and micro textile companies say that their lives are not satisfactory, especially this year, many large companies Enterprises can reduce costs and occupy the market in large quantities by virtue of their refined management. The market space of some small enterprises will be squeezed, and the pace of survival of the fittest in the market is accelerating. </p
