Under the new coronavirus epidemic, the catering, tourism, and film and television industries, as industries recognized to be severely affected by the epidemic, have become the focus of attention from all walks of life. However, it cannot be ignored that there are still other industries in the market that have also suffered heavy setbacks and are even experiencing a “big retreat” that is rare in history, such as the clothing industry.
This year The clothing market will evaporate 400 billion
The situation of Shenzhen Chegongmiao Fengsheng Town
Several shops next to Nanyou Wholesale Market are closed for leasing
It is worth mentioning that the epidemic Under this situation, the global apparel industry is having a hard time. Public information shows that Nike has launched public layoffs and suffered a huge loss of 5.6 billion yuan in the fourth fiscal quarter of 2020. In addition, Levi’s net loss in the second fiscal quarter of 2020 was US$364 million, compared with a profit of US$28.507 million in the same period last year. The company announced About 15% of global corporate employees will be laid off. In addition, H&M will close 170 stores, and Zara is considering closing thousands of stores.
Listed companies were “annihilated” in the first half of the year
According to reporter statistics, as of July 21, a total of 19 A-share textile and apparel companies have disclosed performance forecasts or performance reports for the first half of the year. Among them, 17 have shown a year-on-year decline in performance, accounting for nearly 90% of the estimated net profit. There were 15 companies that fell by more than 50%.
Data from the National Bureau of Statistics show that the clothing and apparel industry and the home textile industry were affected by the shrinking end demand, and the industrial added value from January to May decreased by 12.8% year-on-year respectively. and 10.6%. From January to May this year, the retail sales of clothing, shoes, hats, and knitted textiles in units above designated size nationwide fell by 23.5% year-on-year.
Upstream raw material prices have hit bottom
Cotton Futures Index Trend chart
PTA Futures Index Trend Chart
The road to self-redemption of clothing people
What kind of clothing stores are doing well during the epidemic?
Because of my interest in the clothing industry, the author often thinks about what kind of clothing companies or stores can survive the economic cycle and remain prosperous.
Judging from my recent communications with some clothing people, it seems that companies or stores that can survive this year’s epidemic with such difficulty and still do well have at least the following characteristics.
There is a small shop in a street in Shangmeilin, Shenzhen that has been operating in Shangmeilin for 18 years. Under the current epidemic, this small shop did not officially open its doors until April, and the landlord did not help reduce the rent, but this small shop was not affected.
“We have also been affected by the epidemic, but it is relatively small, because 80% of our customers are old customers. During the epidemic, we mainly relied on old customers for support. They all know the quality and price of our store’s products, so many of them directly go through Waiting for order via WeChat,” the shop owner told reporters.
As for his business secrets, this shop owner…To be honest, “Our clothes are cost-effective, of good quality, and sold cheaply.” According to her, the retail price of the products in the stores she operates is generally 20%-30% higher than the purchase price, which also includes rent. Fees, labor costs and other expenses, and there are many clothing people in the market who increase the retail price of clothing by 100% or even several times compared with the wholesale price.
“There is no point in selling something too high, because after customers find out that it is too expensive or not worth it, they will never come back again.” The shop owner said that some of them are neighbors who look up but never look down. She believes that long-term business relies on old customers. Of course, she is not opposed to the high-priced business model in large commercial malls. “Their rent and labor costs are higher.”
In addition to this, one of the business secrets of this store owner is to skillfully grasp customer needs and appropriately expand product levels to meet more customer needs.
She introduced that she mainly purchases goods from a wholesale market in Shenzhen, which is concentrated in the mid-to-high-end market. She usually selects styles that customers may like from the market to sell, and she also adds appropriate supplements. Some supply from the mid- to low-end market to meet the needs of these customers. After all, the store she operates is located in a community with various levels of consumers.
What’s interesting is that maybe this shop owner has another specialty that she hasn’t discovered yet: sincerity. When I bought a piece of clothing that I liked very much in this store and it was accidentally worn for the first time and the hand feeling deteriorated, and I proposed to buy another exactly the same piece of clothing, the store owner sincerely advised me: “I don’t recommend you to wear the same style of clothing.” I bought two pieces. This dress just feels a little different, but it will gradually get better in the future, and we will have more beautiful styles in the autumn.”
Between his words and deeds, the shop owner was selling at the same time. , has treated customers as friends and thinks about customers rather than making short-term profits.
Small shops are like this, are there similarities in business operations? Of course, every clothing businessman may have his or her own set of skilled business methods, and it is not ruled out that those who have achieved high profits for a long time are not excluded. But behind the high profits, there must be their own unique personality. For example, the clothes are original design brand clothes. Another example is the unique fabrics of clothes and so on.
The gross profit margin of a domestic high-end women’s clothing listed company has remained above 65% for a long time. When talking about the company’s high gross profit margin and high product pricing, the company’s chairman once told the author, “The gross profit margin of our products is actually not high, because the subsequent competition in the clothing industry will focus on brand, design, fabrics, etc. As a company that has long-term focus on branding, design, etc., its products will become more and more competitive, and its clothing prices will be higher.”</p
