Who Is Trapped In High Storage?

What is the urgent problem for garment enterprises in 2012? Ten, nine people will tell you that they are high inventories!

Indeed, all along,

But why high inventory will become the most difficult problem of garment enterprises in 2012? The following cases may give you some inspiration.

Huge inventory has become the sword of Damour, who is hanging on the head of clothing enterprises. Whoever can clear up the stock will get the chance to survive.

In line with the normal operation of the industry, the scope of 10%~20% is regarded as safe stock, that is to say, producing 10 thousand garments, of which 1000~2000 belongs to stock is common practice, which is also within the controllable range of garment enterprises.

However, with the change of the economic environment, on the one hand, the export is blocked, and more and more foreign buyers are destroying the list. On the other hand, the domestic dealers are beginning to be cautious, and the purchasing intention of the ordering meeting has been weakened, which has led to a reduction in the volume of delivery.

Case 1

Lining: "lost" after "change"

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In the past Li Ning Co, "everything is possible", they not only net profit growth year after year, but also surpass.

According to semi annual report, in the first half of last year, Lining's inventory reached 992 million yuan, an increase of 186 million yuan compared with the beginning of the year.

It also announced that it would spend about 300 million yuan on the sale of "unsold products" to distributors. It is expected that the group will need to repurchase about 1 billion 448 million yuan of inventory in the next two years.

In June 30, 2010, Lining, a well-known local sporting goods brand in China, held a news conference to announce that the brand of Lining will be updated from brand logo to brand slogan.

According to relevant media reports in China, Lining changed his bid to seek international development.

Li Ningxin's brand slogan is "Make The Change", which means "let change happen" and put forward the concept of "post-90s Lining", expecting to have an impact on young consumers.

Lining brand hopes to seize the inherent characteristics of young consumers and get a sense of cultural identity.

However, a year passed and it did not seem to have been developed as expected.

This year is the third year that Lining has offered to reinventing the brand.

Active change is a good thing. However, just after the Spring Festival, there was news of layoffs. Although the specific number has not yet been announced, according to the latest Li Ning Co released report, Lining group's income in 2011 is expected to decline by 6%~7% compared with 2010, and the days are obviously not very good.

Just after the Spring Festival, there was news that Li Ning Co announced massive layoffs, adjusted the organizational structure and reduced the cost of personnel.

On February 8th, Li Ning Co spokesman Li Wei further explained the layoffs.

"We did not say it was a layoff, which may not be understood very well.

The organizational restructuring is part of the group's strategic pformation aimed at focusing on core business, optimizing the organizational structure, improving operational efficiency and improving net profit margin.

Nevertheless, there are still some views on the adjustment of Lining strategy.

"I don't like to be original. Don't always compare me to others. The way you arrange for me always makes me lose my way.

Change is strength, Lining after 90.

Lining, which was criticized after the 90's advertisement, was too deliberate. Obviously, it used the tone of "90's after 70". Their products also had the same problem. They only considered the appearance not dazzling, but ignored the requirement of the brand after 90. Nike, Adidas and other foreign brands were still loved by the 90s, and the price of Lining became more and more expensive. Therefore, Lining's pformation not only failed to be recognized by the post-90s, but lost a lot of post 70 and Post-80 consumer groups.

In addition, Lining launched a sales channel reform last year, allowing big dealers to buy small distributors with low monthly income.

This led to the lack of confidence of dealers, greatly reducing the number of orders, and some even changed their names to sell other brands.

Integrating sales channels and raising product prices are all Lining's performance in giving up the low-end market, but this is a very bad step.

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They said

Enterprises: let changes take place and become Lining after 90.

First of all, you need to know the psychological characteristics of the 90s. Otherwise, success is just empty talk.

The consumption psychology of the post-90s generation is undergoing new changes. Human beings have desires and conditions (environmental and cultural changes) to seek emotional and spiritual products.

For the post-90s generation, gender, age, education level or income level are no longer the dominant factors that consumers need to change. Instead, consumers change their ego (psychological self) for the satisfaction of individuality and spiritual needs.

Whether you admit it or not, this subversive change has indeed taken place and is changing the future direction of this society and brand marketing.

Besides, there are some strategies for channel strategy.

Even ADI said he wanted to open the store to China's six line.

70 post 80s consumers: they always support local brands, but Lining's new slogan has been turned away from our "hard core fans" from age. They dare not step into Lining's store, lest others think we are tender.

After 0 consumers: compared with the traditional media, I prefer the marketing mode of combining network with entertainment. We have inherent immunity to traditional advertising forms.

It is not easy to impress us through traditional advertising forms, because we are not interested in traditional media. We have basically stopped watching TV and newspapers. Instead, interesting, experiential and interactive network marketing activities can move us more and stimulate our desire to buy.

Network marketing is probably the most suitable one for us. The main way to get goods information is Internet and mobile phone.

Although there are some Lining brand communication on the Internet, but it is far from enough. Brand building should learn to use various network tools, games, micro-blog and so on to strengthen communication with us or create hot topics.

How much do brand managers know about it? {page_break}

Case two

XTEP: the risk of impairment between large inventory and advance payment

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According to semi annual reports, XTEP stock amounted to 887 million yuan, an increase of about 92% over the same period. PEAK is also a worrying increase of 41%. Anta's stock has increased 20.3% compared to the same period last year.

High inventory not only affects the turnover rate of XTEP international, but also has an internal conflict with its own business mode, which hurts the company's product innovation and inventory control, thereby affecting its core competitiveness.

Moreover, the risk of impairment between large inventory and advance payment is likely to become a sharp sword hanging on the growth of company performance.

Recently, He Ruibo, chief financial officer of XTEP, said that by lowering the order target and slowing down shop opening, the inventory problem could be controlled. There would be no need to repurchase the stock in the future, nor would it substantially shut down the store.

He Ruibo said that the "retail sales ratio" of the retail side is about 5 times, which is 4 times higher than that of the previous year, but the situation is controllable, "inventory pressure is smaller than other brands".

To cope with this situation, the company has lowered its sales growth target from 15% to single digit sales in 2012, and from 800 to 1000 per year, to 400.

As for the retail sales, the same store sales grew by only one digit in the fourth quarter of last year due to the weather. Retail discount was 30 percent off.

He Ruibo believes that after inventory digestion, business in the second half of this year can be restored, "we do not do" one brother "will not stop!

They said

Dongxing securities apparel industry analyst Tan Ke:

In 2007, the number of newly established local sports brand enterprises increased to nearly 2 stores in ~2009, and the number of terminals increased by nearly 2 times at the end of 2009 compared with the end of 2006.

However, behind the crazy expansion, there are many problems, such as scale growth decline, high market concentration, high inventory and so on. This explains why a number of listed companies have lowered their sales expectations in 2012, and even reduced costs through layoffs.

It is expected that the price of domestic sports brands will continue to rise in the future. On the one hand, it is inevitable cost factors. On the other hand, enterprises will gradually be replaced by "open shop + raise price" by the simple extension way of enterprises originally relying on expansion channels, and the profit driven mode will also be changed from the original "volume and price increase" to "price increase".

Li Guangdou: in 2011, the competitive situation of local sports brands changed, and Anta surpassed Lining in its operating income.

"At present, the predicament faced by local brands is that" before they have strong enemies, there are soldiers behind them. "In the case of severe homogenization of products, local brands did not grow well after the Beijing Olympic Games.

Sports brands have spiritual and cultural connotations. If local brands want to break through, they need to combine with fashion, art and other elements to create cultural symbols that conform to the consumers of the times.

Li Kailuo: the decline of single store profits is becoming the biggest risk after the brand expansion.

"Wan shop era" reflects not only the expansion of market capacity and the enhancement of brand strength, but also the acceleration of market integration and the amplification of operational risks.

This has also caused problems such as inventory and channel integration today.

Because the expansion of the brand retail terminal is mostly carried out in the form of agency stores, the agent is not fully agreed with the brand's "expansion impulse".

The competition is too intense, and the frantic opening of the brand makes the agent fall into the "no profit" embarrassment.

Senior commentator: after the crazy expansion, the local sports brand is facing a new cycle.

2012 is a very difficult year for domestic sports brands. Since 2008, the "bomb" planted in the market of sports brand crazy expansion will explode one by one.

The two giants, Nike and Adidas, which are high premium brands, firmly control the high-end market of domestic sports brands. How to deal with the tendency of "brand foreign consumption" by local brands and break through in the white hot competition pattern is a proposition for enterprises to think about.

Besides, sports brand enterprises are facing not only the homogenization competition pressure of the same industry, but also the market squeeze of the leisure industry.

On the one hand, a large number of low-cost local brands, which have the ability to quickly make up and pfer goods, blossom everywhere. On the other hand, ZARA, UNIQLO and other foreign brands bring forth new ideas, all of which create pressure on the local sporting goods industry.

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Case three

US bond: slowing down under mode hedging

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According to the 2011 China Daily's announcement, the operating income of the company during the reporting period increased by 49% over the same period in 2010, and the gross profit margin increased by 4% to 47% compared with the same period last year. Net profit rose 833% to 376 million yuan over the same period.

But in the surge of perfect performance, the United States and the rise of clothing inventory.

As of June 30, 2011, the United States apparel inventory grew 220% to 2 billion 890 million yuan over the same period, while the stock in 2010 was only 903 million yuan in the same period, the net assets in the reporting period were only 3 billion 200 million yuan, and inventories accounted for 90% of the net assets of the same period.

In the same period, the proportion of the same type of clothing enterprises accounted for 20% of net assets.

In fact, the high growth of American barrack clothing inventory has appeared since 2010.

The company's inventory in 2010 was 2 billion 548 million yuan, an increase of 183% over the same period, accounting for 77% of net assets.

At the same time, net cash flow from operating activities was negative 1 billion 54 million yuan, down 223.03% from the same period last year.

In 2011, the quarterly report showed that the number of stock has increased from 706 million yuan at the end of the first quarter of 2010 to 3 billion 162 million yuan in the first quarter of this year.

In just a year, the stock has grown by 347.88%.

They said

American Apparel: the main reasons for high inventory are three aspects: first, the expansion of sales scale and the rich style design; two, the late winter in 2010 and the delayed sales period of winter clothing; three, the goods were put into storage in 2011 in response to the impact of labor shortage on the supply chain at the beginning of the year.

Tang Shuang, analyst of textile and garment industry of Huachang Securities: the reason of the weather has indeed had a very important impact on American Apparel. At the same time, it also shows that American Apparel is not sure about the demand of that year, and the fast response capability of the supply chain needs to be strengthened.

In order to eliminate inventory, the sale of Smith barrack clothing will result in a gross margin drop of 2~3 percentage points in 2012.

Although the Me&City brand of Smith Barney apparel lost its profits in 2011, but because of the more frequent strategic adjustment of the company, the fast fashion supply chain capability is still lacking. With the increasing competition in the public leisure apparel industry, the future of American Apparel is not optimistic.

Shenyang Wanguo company: Smith Barney increased sales promotion efforts in the fourth quarter of this year and the Spring Festival this year. The sales strategy of the new and old integration has shown signs of success. At the same time, the company has handled inventory in different channels such as discount stores and net sales, and the total inventory has started to inflection point, and the inventory structure has improved.

It is estimated that the total inventory size is about 2 billion 500 million yuan, of which the estimated spring and summer new year accounts for about 10% yuan in 2012, accounting for 250 million yuan. In autumn and winter in 2011, it accounts for 28% yuan, which is 700 million yuan. In 2011, the volume of products in spring and summer is larger, accounting for 30% or more 800 million ~9 billion yuan. In 2010, autumn and winter accounts for 20% yuan, 500 million ~6 billion, and the remaining few are products in 2010 spring summer or earlier.

The inventory clearance process will continue for a period of time. It is estimated that inventory will drop to a lower level by the middle of 2012 or the second half of the year.

Short term may have a certain impact on gross profit margin, but in the long run, it can make the company light up and get rid of the burden of inventory and facilitate future development.

Senior commentator: the core of the profit of a garment enterprise is the control of inventory. If the stock is reasonable, excess profits can be obtained.

While pursuing the expansion of scale effect, the United States has increased a large number of pre orders. Once the sales expectation is in question, the stock will increase substantially.

The brand ME&CITY of the city series, which started in the US state, is the mode that the United States hopes to make direct contact with the terminal. China has long relied on the mode of agents so that the fashion brand will never touch the popular trend in the market.

ME&CITY is the subversion of traditional franchisees and agents.

But the United States has ignored or is unable to control the ME&CITY brand new operation cycle difficulty and a large backlog of inventory problems.

This completely subverting the original operation mode of the original franchisee operation mode makes the two brands of ME&CITY and MTs bond in many ways hedging.

Consumers: when reading, they especially like the American market. Because the color is bright, the style is novel, and it is obviously different from the casual wear wide pattern. It is more close to the body, and the price is moderate, which is very suitable for the students' consumption ability.

The newly promoted brand ME&CITY is mainly aimed at urban white-collar workers aged 18~35, and is complementary to and extended to the brand of the mus bond.

The price is on the high side, but there will be discounts from time to time.