Since the widespread spread of the new coronavirus, the operating performance of most industries has been affected, including the textile and apparel industry, due to the extension of the Spring Festival holiday, production shutdowns, and disruptions in logistics and sales. Not only are frontline medical staff lacking masks and other necessary protective equipment, but managers of clothing companies are also struggling to prepare masks for employees who are returning to work. In addition, clothing companies also look forward to an orderly management system to welcome the resumption of work.
The Spring Festival should be the biggest peak season for offline consumption throughout the year, which is conducive to increasing the profit level of textile and apparel companies. However, due to the outbreak of the new coronavirus infection pneumonia, the epidemic has had a huge impact on textile and apparel companies, directly leading to a rapid decline in terminal consumption and serious inventory accumulation. The epidemic will have a certain impact on the industry structure, and companies with relatively weak technical and management capabilities face the risk of withdrawing from the market.
1 Sales are at a semi-stagnant state
The person in charge of the blond rabbi said, Due to the obstruction of logistics and rework, the epidemic has had a certain impact on the normal operation of the company’s offline stores across the country and the opening of some OEM factories. The epidemic is expected to reduce the company’s first-quarter physical store revenue and net profit in the short term.
Xu Qiaoyun, the person in charge of the clothing brand “Post-Concept” said that in the past, work started on the sixth day of the Lunar New Year, but now I am afraid that it may not be possible to resume work after the Lantern Festival. The basic elements for resuming work such as the procurement, outsourcing, logistics, and organization of production of raw materials and accessories are all unknown. At present, the fabric market is closed, most logistics companies have also stopped, and sales are at a semi-stagnant state. This time in previous years was when the whole company was preparing for the Spring and Summer Fashion Week and seizing the first wave of online traffic peaks in the New Year. This year, due to the impact of the epidemic, customers have applied for returns of products sold. Repeatedly, everyone knows the reason: they cannot be shipped! It is foreseeable that due to the impact of this epidemic, millions of dollars have been lost.
From a sales perspective, the Spring Festival is the peak sales season for branded clothing retail products. The sudden outbreak of the epidemic has led to insufficient foot traffic in major shopping malls and a decline in total consumption, seriously affecting the clothing industry. The company’s sales revenue. Among them, direct store companies have suffered more serious losses, mainly due to store rent and sales staff salary expenses. Companies that rely on dealers need to share their losses with them. Online retail sales of clothing products were affected by logistics, and holiday revenue declined. In terms of exports, the export business has been affected mainly by the strict inspection and quarantine imposed by some countries (regions) on my country’s export commodities.
In addition, from the production side, the resumption of work of enterprises in various links of the industrial chain has been delayed, the supply of products in intermediate links has fluctuated greatly, the prices of some raw materials have increased, and employees have been included in the delayed start of factories. Fixed expenses, including wages, need to be added to costs, causing apparel companies to suffer from both production and sales squeeze.
2 Major textile cluster markets have once again postponed their resumption of work
It is reported that in recent days, the three major cluster markets in China: Shengze Oriental Silk Market, Keqiao Market, and Foshan Zhangcha Market have issued notices to postpone the resumption of work. The notice shows that the China Oriental Silk Market plans to stop power supply at 3:00 pm on February 5th, and the opening time will be after 24:00 on February 20th. It also requires that the opening must be graded three days in advance and approved by the municipal management office. The market can be reopened. On the 4th, the Keqiao District, Shaoxing City Joint Prevention and Control Leading Group for the Novel Coronavirus Infection Pneumonia Epidemic made relevant notices on the prevention and control of people returning to work and school. The notice showed that businesses in Keqiao District have started operations, markets have opened, The school opening time will be after February 17, and the specific opening time, market opening, and school opening time will depend on the epidemic situation. Foshan Zhangcha Market recommends that the market and enterprises resume work no earlier than 24:00 on February 24. In summary, the current updates on the main construction starts in the market that we have learned about are as follows:
3 It is difficult for employees to return to work without masks and other protective equipment
It is understood that the industrial zones where many weaving companies are located have implemented entry and exit control measures, and basically no entry is allowed. In principle, you can resume work on the 10th, but you need to report 5 days in advance. Xu Qiaoyun said that we called the sub-district office, and the sub-district office responded that we needed to report to the party group of the industrial zone, but there was no contact information. The industrial park is currently closed, and I don’t know who to report to.
In addition, according to document requirements, companies are required to provide masks, disinfection and other supplies themselves. Xu Qiaoyun said that the company cannot snap up supplies at all. Even so, we still inform all employees in the company who have returned to their hometowns for the New Year (even those who are not from Hubei) not to come back to work for the time being; because once they come back, they will need to take public transportation, and we do not want employees to take this risk. When the epidemic situation improves, even if employees come back in the future, we will require them to be quarantined at home for 14 days, regardless of whether they come from areas with severe epidemics. However, frankly speaking, the company does not have the ability to carry on for too long and can only pray that the epidemic will pass as soon as possible.
As the majority of small and medium-sized textile owners, what they hope most is of course a clear resumption of work.Arrangement, guidance, assistance and undifferentiated management and coordination. Enterprises can conduct self-supervision and management, and they also hope that local governments can provide bosses with procurement channels for protective materials, or distribute them directly to enterprises.
The relevant person in charge of Rabbi Jinfa said that according to the notice, the company will resume work on February 10, and prioritize some infant and child disinfection and sterilization products that are helpful for epidemic prevention and control ( Such as: baby hand-washing bubbles, hand-cleaning bubbles, etc.) R&D, procurement and production personnel arrive at work in advance. However, due to the current epidemic situation, the company urgently needs to provide protective equipment for employees and contact various resources to try to solve the problem of employee masks. However, it hopes to receive key support from the government to ensure epidemic prevention and control and employee health and safety after the start of work.
4 There is no way to reduce losses, but it will not be dealt with through layoffs
“We cannot find a way to reduce losses now because the entire industry chain is at a standstill. The basic elements for resuming work, such as the procurement of raw materials and accessories, outsourcing, logistics, and organization of production, etc. It’s unknown, but we can be sure that we will not respond to losses through layoffs.” Xu Qiaoyun is miserable about how to reduce losses, and hopes to get loose policies and corresponding standards to give companies and employees the choice to face the difficult times of the epidemic together. There must be no one-size-fits-all approach and let companies and workers coordinate on their own.
The golden rabbi said that no matter how the epidemic develops, the company will not lay off employees because of this, and employees will be paid wages in accordance with relevant national regulations during the epidemic. At the same time, it is recommended that the government appropriately refund unemployment insurance premiums and defer the payment of social insurance premiums to insured companies that do not lay off employees or reduce layoffs during the epidemic; in order to reduce the burden on enterprises, it is recommended that the government appropriately reduce or reduce corporate taxes and defer tax payments; it is recommended that the government increase Provide financial support to reduce corporate financing costs and provide guaranteed financial services; it is recommended that the association collect member needs and provide feedback to the government.
The textile and garment industry’s future response measures should strive for more cash flow, including some support from the government or more credit from bank channels. In addition, in the future production process, we will try to reduce manual links as much as possible and instead focus on machine production. In terms of the ratio of offline sales to online sales, it may be necessary to strengthen online marketing and sales capabilities in the future to withstand some emergencies. In addition, textile and apparel companies donate some of their inventory of clothing to those in need in epidemic areas, which can not only improve the company’s brand influence and reputation, but also contribute to the epidemic.
As for the future development of the textile and apparel industry, judging from the situation in countries around the world after the impact of the epidemic, consumer products including clothing will usher in a period of compensatory consumption. The consumer demand suppressed during the epidemic prevention and control period will be released intensively after the epidemic is basically over. If the epidemic ends as soon as possible, the spring clothing inventory of some manufacturers can still be digested. However, in the future, companies need to further enhance their value chain status, do a good job in cost management, quality improvement and brand building, and adapt to the needs of domestic consumption upgrades. At the same time, they must also actively explore international markets and share production costs and through diversified market strategies. Various sudden risk impacts.
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