2020, which originally had high hopes, was disrupted by a sudden epidemic that disrupted the pace of the industry. As the overseas epidemic continues to spread, the textile market is in a worsening dilemma: customers are trapped in the epidemic or even lost contact, finished products cannot be delivered to customers or even cannot be driven out, orders are reduced or even canceled, companies suspend work, layoffs, or even go bankrupt. A series of problems such as The textile industry has encountered a “big landslide”. Now the peak of the epidemic is slowly receding, but at the same time the sequelae of the epidemic are also slowly coming!
200 million acquisition by China Textile Top 100 The US home textile company went bankrupt and liquidated
Shanghai Shenda Co., Ltd. once ranked first in the “Top 100 Chinese Textile and Apparel Export Companies in 2017” released by the China Chamber of Commerce for Import and Export of Textiles. Co., Ltd. announced on the evening of June 10 that the company’s overseas holding subsidiary PFI Holdings, LLC (hereinafter referred to as “PFI Company”) has confirmed that due to Sino-US trade friction and the outbreak of the epidemic, its main business has been seriously affected and sustained losses. It is unsustainable. After deliberation at the eighth meeting of the tenth board of directors held today, the company passed the “Proposal on the Bankruptcy and Liquidation of its Holding Subsidiary PFI Holdings, LLC” and agreed that PFI Company should submit a bankruptcy liquidation application to the local court.
The announcement shows that in 2015, Shanghai Shenda Import and Export Co., Ltd., a wholly-owned subsidiary of Shenda Co., Ltd., indirectly acquired the United States through an increase in capital of its overseas subsidiary CROSSRIVER, LLC (hereinafter referred to as “CR Company”). 100% equity of PFI Company. The project was completed in November 2015. The purchase price was US$31.7108 million, equivalent to RMB 202.527 million yuan.
PFI Company’s main business location is located in North America Charlotte, Carolina; its business involves bedding and home textiles, heating products, and handmade yarns. Its main customers include major well-known department stores and e-commerce customers in the United States. Since the second half of 2017, under the influence of the “America First” policy Under the unfavorable conditions of the continued warm winter weather in the United States, PFI Company successively lost major customers, resulting in shrinking sales and declining profitability. In 2018 and 2019, the company accrued RMB 22.4677 million and RMB 109.9545 million respectively for the goodwill formed by the acquisition of PFI Company. As of December 31, 2019, the book value of the above goodwill was 0 yuan.
With the outbreak of the epidemic in 2020, the U.S. market demand has been significantly reduced, resulting in PFI follow-up orders interruption, losses gradually expanded, and working capital turnover was difficult. As of May 31, 2020, PFI’s total assets were 109.8338 million yuan, of which the ending balance of monetary funds was 3.4174 million yuan, total liabilities were 99.7504 million yuan, and undistributed profits were – 28.053 million yuan, and the owner’s equity is 10.0834 million yuan (unaudited).
In order to maintain its normal operations, CR Company, as its shareholder, has successively provided partial financial support; as of 2020 As of May 31, 2019, PFI’s asset-liability ratio reached 90%, and the balance of shareholder loans was 56.2468 million yuan. If it manages to maintain its continued operation, shareholders will still need to provide follow-up financial support, and the risks are unpredictable. Weighing the pros and cons, Shenda Shares It is planned to terminate the operation of PFI Company, submit a bankruptcy application to the court where it is located (the amount of realizable assets is expected to be less than the book amount, and it is actually insolvent), and liquidate PFI Company under the auspices of the court.
The number of bankrupt companies in Japan due to the epidemic has exceeded 200, and the textile market is still in a vicious cycle of weak demand and overcapacity
The epidemic has put the entire industrial chain of the textile industry in a vicious cycle of severely weak demand and prominent overcapacity. If the market wants to get better, it still depends on the demand of the garment industry. Because the textile and apparel industry has always been “all prosperous and all suffer losses”, the current poor performance of the downstream apparel industry has also inhibited the improvement of the textile industry.
Data released by Tokyo Shoko Research Corporation on June 3 showed that as of 12 noon that day, the total number of corporate bankruptcies related to the new coronavirus epidemic reached 204.
The cumulative number of bankruptcies related to the new crown was 2 at the end of February, increased to 100 in late April, and then increased The momentum continued unabated, and by June 3, the number exceeded 200. Many people believe that although the emergency declaration issued by the government has been fully lifted, it will take time for sales in all industries to return to the level before the spread of the new coronavirus epidemic, and bankruptcies will continue to occur in the future.
Export companies are facing a shortage of overseas orders. Recently, textile companies have stopped production and reduced production or increased
The current decline in overseas orders is a major challenge faced by many export-oriented companies. The latest customs data shows that in April this year, China’s exports rebounded more than expected, rising 3.5% year-on-year, a sharp rebound from -6.6% in March; China’s exports to the United States, Japan, and ASEAN increased, while exports to the EU fell 4.5% year-on-year. %. However, according to analysis, the increase in exports in April was mainly due to the peak execution of orders on hand after China resumed work and production. As the epidemic spread in Europe and the United States, a large number of orders were canceled, and the impact will gradually appear in the last two months of the second quarter and even the second half of the year. . In addition, export data in April exceeded expectations, mainly due to the export of epidemic prevention materials and electronic computer products. China resumed work and production earlier, and has substitution advantages compared with other countries in some industrial chains. But this kind of surge in demand may not last long. Once the epidemic continues to trigger business closures andAs businesses rise and residents’ balance sheets are damaged, the demand for such durable goods is likely to fall quickly.
The rebound in exports in April is not a common phenomenon. The exports of major commodities such as clothing, footwear, luggage, furniture, toys, and mobile phones have experienced negative growth. In April, China’s manufacturing PMI In the sub-data of the index, the new export orders index dropped sharply from 46.4 to 33.5. According to the PMI survey, the proportion of domestic companies currently reporting insufficient orders has reached 57.7%, which means that export growth in April was uneven, and the “bright” figures concealed the difficulties faced by most export-oriented industries.
According to feedback from people in the foreign trade industry, the actual number of overseas orders placed by domestic related industries is still very small. Not long after Europe and the United States have just begun to resume work, many orders are still in the early inquiry stage and are not yet verified. It will still take some time for factories and orders to be placed, and we have just seen hope. However, seasonal products such as clothing have already lost many spring and summer orders.
Due to insufficient orders and overstocked inventories, textile companies are increasingly suspending work and reducing production. Recently, the production and sales situation of small and medium-sized weaving factories and printing and dyeing factories in Jiangsu, Zhejiang, Guangdong and other places are still sluggish. The main reasons for the unstable startup situation of small and medium-sized textile and garment enterprises are as follows: First, there is a serious lack of direct or processing export orders in May and June; second, gauze and other inventories occupy a large amount of working capital, resulting in employee wages and other expenses. Difficulties; third, after small and medium-sized textile enterprises judged that the epidemic in Europe and the United States had reached an inflection point, some countries had ulterior motives to elevate the epidemic from a health issue to a political issue, causing the trade and export environment faced by my country’s export-oriented enterprises to be worse. </p