Fabric Products,Fabric Information,Fabric Factories,Fabric Suppliers Fabric News European and American brands reduce autumn purchases, and global textile orders are expected to begin to recover in the fourth quarter

European and American brands reduce autumn purchases, and global textile orders are expected to begin to recover in the fourth quarter



In the second quarter, industry risks brought about by the global COVID-19 epidemic broke out intensively. The reported loss amount of textiles nationwide was US$433 million, a year-on-year increase of 255.2%, …

In the second quarter, industry risks brought about by the global COVID-19 epidemic broke out intensively. The reported loss amount of textiles nationwide was US$433 million, a year-on-year increase of 255.2%, the accident rate was 3.1%, and the risk indicators increased significantly. The overall reported loss amount of China Sinosure Shanghai Branch increased by 201.1% year-on-year, and the accident rate reached 2.2%.

01 Industry risk characteristics

Data from Sinosure Shanghai Branch shows:

From the perspective of underwriting continents

The reported losses in all continents increased significantly year-on-year, among which the amount of reported losses in Oceania increased by 3141.6% year-on-year; the accident rates in Africa, Oceania and Latin America all exceeded 4%. As the bankruptcy process in Europe slowed down during the epidemic, the compensation process in some cases slowed down accordingly, so the compensation rate in Europe is low.

From the perspective of underwriting countries

The risks in the textile industry have increased across the board High, the top ten countries with insured amount all saw a significant year-on-year increase in reported losses in the second quarter, with losses reported in Australia and Russia increasing by more than 1,000%; reported losses were concentrated in the United States, Hong Kong, the United Kingdom and other countries and regions.

According to the analysis of industry risk characteristics by China Credit Insurance Corporation Shanghai Branch:

1. Cases of large-scale losses exceeding one million yuan have increased, and bankruptcy cases have increased. The defaulting buyers are mainly large European and American retailers or well-known clothing brands. Directly affected by the epidemic, cash flow has been cut off, unable to pay suppliers, and even forced to initiate bankruptcy. program.

2. Buyers with long-term losses, high debt ratios, and weak liquidity are accelerating their exit, such as JC PENNY, JCREW, etc., which are already very difficult to operate, and the impact of the epidemic has become the breaking camel’s back. The last straw.

3. Buyers with no financial information or outdated financial information may have potential risks that have not been investigated in a timely manner. In particular, industry middlemen and traders are more susceptible to defaults due to the risk transmission of downstream retailers, such as Hong Kong buyers MUST GARMENT, etc.

02 European and American brands reduce autumn purchases

Although global Fashion retail stores have reopened, but the brands’ Asian suppliers are facing greater difficulties: demand from brand retailers around the world is uneven, and spring inventory backlog has led to autumn orders being cut by as much as two-thirds. As shoppers remain concerned about being exposed to the coronavirus when going into stores, retailers have repeatedly delayed restocking and are planning to sell remaining basics from spring in the fall.

According to investment bank Bryan, Garnier & Co., the COVID-19 epidemic will disrupt the global fashion industry worth US$2.5 trillion. It will shrink by up to 30% in 2020.

American sports giant Nike

has canceled about 30% of its factory orders before the autumn and year-end shopping seasons.

H&M Company

will sell some out-of-season spring inventory in the fall.

US fashion retail group PVH

the parent company of Tommy Hilfiger and Calvin Klein, said last month that it was very cautious about autumn purchases. , as same-store sales fell by about a quarter at its reopened North American stores.

American fashion luxury goods group Ralph Lauren

has canceled about two-thirds of its autumn orders.

American casual denim clothing brand Levi Strauss & Co.

will put some unsold basic clothing on shelves in the fall.

03 Recent orders and production capacity status of major global textile countries

The negative impact of the epidemic is still deepening, and major players in the global textile industry have been affected by it. Global data analysis companies predict that this year’s apparel and footwear in the Asia-Pacific region will The industry lost $95.4 billion in sales. Global textile industry sales will decrease by US$395.6 billion, down 19.5% from last year, accounting for 29.1% of the total retail industry revenue loss (US$1.3617 trillion).

Only by knowing the enemy can we take the lead in the ever-changing international market. Here, we take a look at the recent orders and production capacity of the world’s major textile countries.

China is not only the largest exporter of ready-made garments but also the number one supplier of textiles to other clothing exporting countries

In recent years, China has exported The country is exporting less ready-made garments and more textile materials. According to data from the General Administration of Customs of China, in the first seven months of this year, the cumulative exports of textiles and clothing were US$156.48 billion, an increase of 5.6% (the national export of goods trade decreased by 4.1%), of which textile exports were US$90.08 billion, an increase of 31.3%, and clothing exports were US$66.4 billion. USD, down 16.6%.

As a textile supplier to many apparel exporting countries in Asia, China is playing an increasingly important role. In value terms, more than half of the rest of Asia’s textile imports came from China last year, compared with 37.2% a decade ago.

In the first half of the year, the unit price of clothing imported by the United States from China dropped by 16%, which was much higher than the average decline of 3% for all clothing import prices. Since the beginning of this year, Chinese suppliers’ quotations have been about 30% lower than those of other Asian countries.

In the American Apparel Industry Association’s survey, about 70% of respondents expect to reduce purchases from China by 2022, but this is lower than last year’s 83%. One executive said: “It is difficult for our company to source goods from outside China. Even counting tariffs, we cannot obtain suitable products in other regions.”Colombia will impose a 36% import tax on the import of Turkish textiles and clothing products to replace the previous 27% import tax. This new measure aimed at supporting the domestic textile industry officially came into effect on July 27. The tax is part of the Finance Bill 2020 approved by the Moroccan government and parliament earlier this month.

Morocco’s decision to increase import taxes is aimed at promoting local production, especially during the COVID-19 pandemic. Protectionist measures also seek to limit textile imports that compete with domestic products. While Morocco’s new protectionist import taxes are expected to support the domestic textile industry, it remains to be seen how Turkey will respond.

Some Turkish companies that will be directly affected by the new tax rate include clothing brands LC Waikiki, Koton and In fact, as well as retail company Bim.

04 Global textile orders are expected to begin to recover in the fourth quarter of this year

The latest report from the International Textile Manufacturers Federation (ITMF) said , global textile orders may recover by the fourth quarter of 2020. In order to understand the impact of the new crown epidemic on the global textile industry chain, ITMF recently conducted its fourth survey among 600 members around the world.

Survey shows

From the beginning of the pandemic on March 1, 2020 to June 8, 2020, people around the world Textile orders plummeted by more than 40%. Going forward, textile companies expect orders to fall by 32%. Among them, 22% of companies in Southeast Asia expect orders to decline, while 36% of companies in Asia expect a decline.

Despite this, there is still a glimmer of hope and optimism for all parties in the industry chain. About 23% of respondents said they expected orders to resume in the first quarter of 2021, and 21% expected them to resume in the second quarter of 2021. 14% of respondents expect a recovery in the third quarter of 2021, while 20% expect a recovery in the fourth quarter of 2020.

Afterwords

Textile Industry Overall Report for the Second Quarter of 2020 Losses and compensation payments increased significantly. Affected by the epidemic, well-known European and American buyers reported large losses, and the performance of major countries and customers was unsatisfactory. In the second half of the year, the recovery trend of global demand is not yet obvious, and the international political and economic situation remains complex. It is recommended that export enterprises focus on buyer groups with persistent losses, high debt ratios, tight liquidity, and opaque finances, carefully accept orders, prudently sign contracts, and reasonably arrange shipments. </p

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Author: clsrich

 
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