Affected by the epidemic, the law of “there is always one less piece of clothing in the wardrobe” seems to be no longer popular among consumers. In addition to the endless news about large-scale layoffs and store closures, the performance forecast of apparel brands for the first half of the year has been released recently, showing the weakness of China’s apparel market.
Women’s clothing and casual wear brands encounter cold winter
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Judging from the performance warnings for the first half of the year announced by listed companies in the brand apparel industry, the apparel industry seems to have delivered the worst report card. “Everyone knows that the performance will not be good, but such a drop is still unexpected. The original expectation was about 50%.” An industry insider told the editor. In the first half of the year, the performance of local mid-to-high-end women’s clothing groups and casual clothing companies suffered a collective failure.
Among them, Elise (603808.SH) expects a net profit of 47 million yuan in the first half of 2022, a year-on-year decrease of approximately 74.79%; Anzheng Fashion (603839.SH) expects a net profit of 15 million yuan to 21 million yuan in the first half of the year, a year-on-year decrease of 81.31% % -73.83%; Ribo Fashion (603196.SH) expects net profit in the first half of the year to be 3.58 million yuan, a year-on-year decrease of 87.14%; Jinhong Group (603518.SH) expects net profit in the first half of the year to be 33.73 million yuan – 41.23 million yuan, A year-on-year decrease of 75%-69%.
In addition to women’s clothing, casual clothing companies are also having a hard time. Semir Apparel (002563.SZ) is expected to make a profit of 90 million yuan to 130 million yuan in the first half of the year, a year-on-year decrease of more than 80.46%; in the past two years, Peacebird (603877.SH), which has relied on the national trend, is expected to make a profit of 133 million yuan in the first half of the year, a year-on-year decrease of more than 80.46%. Last year it was down 68%. The worst thing is Meibang Apparel (002269.SZ), which is expected to have a net loss of 620 million yuan to 680 million yuan in the first half of the year, a decrease of 1646.86% to 1492.73% year-on-year.
On the stock exchange platform, many investors said they were mentally prepared, but many others believed that the performance of these companies could be described as “explosive.” Some investors said: “I thought it would be miserable, but I never thought it would be this miserable.” In fact, in the face of increasingly fierce market competition and adverse factors such as the epidemic, we may still face difficulties in the second half of the year.
An internal employee of a listed women’s clothing company told reporters that in the first half of this year, in order to stimulate consumption and reduce inventory, the company’s discounts were significantly increased compared with previous years. Through offline visits, we found that in addition to increased discounts, terminal stores of some brands also experienced multiple problems such as delayed arrival of summer clothing, discounts immediately after launch, and delays in the release of new autumn and winter clothing.
“Generally, companies in the popular and four-season apparel business need to design and place orders for production one year in advance. Unexpected situations such as epidemics, demand declines, and changes in fashion trends in one season will have an impact on operations in subsequent quarters. “Industry analysts believe that the current mismatch between industry products and market demand has a tendency to spread to the next few quarters.
Therefore, he is not optimistic about the industry’s situation in the second half of the year. “For clothing brands with strong fashion attributes, the products have a strict ‘shelf life’. It is not like functional sports shoes. There may still be people buying at a 20% discount, but the depreciation of fashion brand products is very severe.” He predicts that in the second half of the year, various brands may further increase discounts to clear inventory and ensure funds.
China’s apparel industry profits turned negative from January to May
Output growth slows down and efficiency is seriously under pressure
At the same time, data recently released by the China National Garment Association shows that under the complex situation of intertwined operating pressures such as the impact of the epidemic, weakening demand, rising costs, high inventory, etc., the recovery of profits of my country’s garment enterprises is seriously under pressure. In addition, due to the decline in the same period last year, Affected by the high base, total profits turned to negative growth. According to data from the National Bureau of Statistics, from January to May, there were 13,053 enterprises above designated size (annual main business income of 20 million yuan and above) in my country’s garment industry, achieving operating income of 561.11 billion yuan, a year-on-year increase of 6.13%, and a growth rate of 1-4 The monthly slowdown was 1.97 percentage points; the total profit was 23.293 billion yuan, a year-on-year decrease of 4.57%, and the growth rate was 6.44 percentage points lower than that from January to April. The operating efficiency of enterprises continues to slow down, and profitability declines at an accelerated pace.
From January to May, the turnover rate of finished products of enterprises above designated size in the clothing industry was 11.89 times/year, a year-on-year decrease of 4.87%; operating costs increased by 6.92% year-on-year, 0.79 percentage points higher than the operating income growth rate, and the cost per 100 yuan of operating income included 85.73 yuan, an increase of 0.63 yuan compared with the same period in 2021; the operating income profit margin of clothing enterprises above designated size was 4.15%, a decrease of 0.47 percentage points compared with the same period in 2021, and the decline was 0.17 percentage points larger than that from January to April.
However, from a macro perspective, retail consumption seems to have bottomed out and rebounded. According to the National Bureau of Statistics, the total retail sales of consumer goods such as clothing, shoes, hats, and knitted textiles from January to June this year reached 628.2 billion yuan, a decrease of 6.5% year-on-year. However, in June, the absolute total consumption was 119.8 billion yuan, an increase of 1.2% year-on-year.
It is predicted that in the future, diversified companies will gradually return to their main business, and companies pursuing expansion will further shrink their scale. “There is still huge space in the apparel market, but we must survive first.”
And in each brand furtherWhile clearing inventory with heavy discounts, fabric purchases will inevitably be reduced to ensure funds. It will definitely be a big blow to the textile fabric market in the next six months.
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