Industry Observation: The Net Profit Of Listed Companies In Clothing Industry Generally Declined

What is the impact of the epidemic situation in the first half of the year on the textile and garment industry? According to the data of Dongfang fortune choice financial terminal, among the 42 textile and garment companies in a share market, 16 companies' net cash flow from operating activities decreased year on year, 17 companies' accounts receivable increased year on year, and 30 companies' net profit decreased year on year, accounting for 71%.

On the one hand, the cash flow of enterprises is deteriorating; on the other hand, the overstocked inventory cannot recover funds. Facing the trend of online shopping of consumers, garment enterprises must complete the transformation and upgrading as soon as possible to meet the market trend. Because even Nike and Zara have successively closed offline physical stores, international fashion brands can not keep pace with the changes in China's consumption trend, and they are also facing market elimination.

Inventory and operation pressure force international tide

Transformation is the mainstream topic of textile and garment enterprises in recent years, especially under the influence of the epidemic situation, some enterprises which have offline stores or mainly supply goods to offline market are facing great pressure of operation and cash flow, because the sharp decrease of offline consumption leads to the generation of a large number of inventory.

Cheng Weixiong, an expert in textile and garment brand management and general manager of Shanghai Liangqi Brand Management Co., Ltd., told reporters that this year's epidemic situation mainly affected the sales of winter clothing and spring clothing, and the change of seasons in winter and spring is an important sales time point for garment enterprises, so the overstock of inventory has affected the operation of enterprises to a certain extent. After the performance of textile and garment enterprises in the first half of the year is under pressure, whether the funds can be returned through clearing the inventory in the second half of the year is the key. The trend cycle of clothing industry is very fast. If the sales scale of the old model exceeds the new one, it will have a great impact on the brand.

The epidemic not only brings pressure, but also brings thinking, such as increasing the proportion of online marketing, and connecting online and offline channels. Although the net profit of Hailan home in the first half of the year decreased year on year, the net cash flow from operating activities increased by 76.79% over the same period last year, and the inventory also decreased. One of the reasons was that the new retail channels and traditional e-commerce retail sales increased significantly in the second quarter, and online sales increased by 40% compared with the same period last year.

Fu Yifu, a senior researcher at Suning Financial Research Institute, said in an interview with reporters that in the first half of the year, clothing enterprises generally had a high inventory phenomenon, especially those focusing on offline physical stores. Under the pressure of inventory and operation, many international fashion brands, such as Nike and Zara, have closed offline stores for a short time or a long time. As clothing is not a just needed product like food and beverage, facing the choice of consumers and the market, it also forces garment enterprises to increase the transformation efforts, so that the online and offline rapid integration.

Dongfang Securities Research Report also pointed out that the share price and market attention of Baima stocks in many industries have been significantly improved in the short term with the disclosure of the China Daily. On the one hand, from the performance performance point of view, in the first quarter, due to the impact of the epidemic situation, the medium-term bottom of the industry was formed. In the second quarter, under the rapid growth of e-commerce and the comprehensive promotion of new retail, the operation of some leading companies improved significantly compared with the month on month basis, showing a strong overall On the other hand, the overall valuation of the sector is low and institutional positions are at a historical low. Therefore, the undervalued Baima in the industry will attract more market attention.

Catering to the trend of consumption, Guochao brand begins to rise

    Because of the lack of understanding of online channels, some brands of clothing have taken a lot of detours in the online transformation. Cheng Weixiong said that for a long time, online has become the display window of brand clothing or the export of cleaning up inventory. Therefore, although some enterprises transform to online, it can be found in financial reports that the main sales still come from offline, It is the difference between the online and offline views of consumers, which affects the development of the brand.

"There are two main points to see whether the transformation of clothing enterprises is successful. The first point is to see whether the products, prices and styles of their Omni channel stores are unified, whether the discount activities are consistent with the online and offline promotion; the second is whether the proportion of online channel marketing is high enough. For many traditional clothing brands, we can't deny the offline completely just by looking at the online traffic dividend, because the transformation is not necessarily smooth, consumers also have the demand for offline consumption, and online and offline linkage is the future trend. " Cheng Weixiong said.

Although the sales volume of some flagship stores dropped during the one month sales promotion, the sales volume of some flagship stores was on the decline, but although the sales volume of some flagship stores was on the decline for about a month, the sales volume of some flagship stores was on the rise. Obviously, the online traffic is not inexhaustible. As more and more clothing brands begin to pay attention to the online market, a large number of small and medium-sized brands' living space is occupied, and the competition for traffic is also turning white hot in the cry of "the lowest in the whole network".

Wang Quan, a financial strategy expert and senior economist of a head asset management organization, told reporters that offline channels and online channels go hand in hand. In the first tier cities, many young people are busy with their work, and online shopping has become a way to save time. However, in small and medium-sized cities, residents who have leisure time are still willing to shop offline. Clothing brands need to choose the combination of online and offline or a biased way to further promote channel construction. Investors can also pay attention to the store transformation and market layout of clothing enterprises and look at the enterprises Whether there is a clear understanding of the transformation and consumption trend.

"The current consumption trend is the rise of the national tide. The anti epidemic has enhanced the national cohesion and national pride. The old clothing enterprises like Li Ning and Huili have had good sales in the first half of the year, and have also made appropriate marketing strategies." Fu Yifu believes that local garment enterprises will have a good opportunity for transformation and upgrading. It is not only a good opportunity to open up online and offline channels, but also to fully tap the market demand of different consumer layers by using big data, but also a good opportunity to fill the market vacancy of international fashion brands and enhance their brand influence.