Clothing sales in the first half of 2012 are not optimistic

Judging from the current economic environment, the outlook for the next six months is not optimistic, the overall liquidity is tight, and the economic growth rate has also become the market's unanimous expectations.

Although the end consumer market is more booming, increasing the financial support for distributors can fully mobilize the enthusiasm of dealers and increase the efficiency of channel expansion. However, if the end consumer market turns cold, the dealer’s accounts receivable The money will bring great risks to brand owners.

Generally speaking, the decline in real estate transaction volume, followed by the fall in housing prices, and then the decline in the operating rate to affect investment, and finally the overall economic downturn led to a decline in consumer enthusiasm. When the volume of real estate declines, the sales of home textiles will be directly affected. The negative impact on the home textile industry in the future may precede clothing companies.

Judging from the current economic environment, the outlook for the next six months is not optimistic, the overall liquidity is tight, and the economic growth rate has also become the market's unanimous expectations. In October of this year, the sales growth of apparels of retailers above designated size was 30.5% year-on-year, a deceleration of 12.6 percentage points from the growth rate in September and an acceleration of 7.2 percentage points from the growth rate in the same period last year. The sales growth of key commercial retail enterprises reached 14.7% in October, down 8.6 percentage points from September and down 11.8% from October last year. This may be the beginning of the end of textile and apparel consumption slowed down by the impact of the economic environment, the domestic market for garments in the next six months is not optimistic.

Judging from historical experience, the decline in economic growth has a direct impact on terminal consumption. Affected by the financial crisis in 2009, China's economic growth rate dropped sharply. From the perspective of the income of listed companies, the fluctuations are far greater than the fluctuations of the economy during the same period. It is expected that the growth rate of China's end-use textile and apparel consumption will drop by a certain margin in the first half of next year, and the terminal sales of listed companies also have lower-than-expected risks. During the financial crisis of 2009, the performance growth rate of listed companies with branded apparel was generally falling on the 2009 report, and the author found that the three home textile listed companies had reflected the negative impact on the 2008 report. The inherent logic of this time difference may be related to the close relationship between the home textile industry and the real estate market. From the perspective of the declining economic growth in China, generally speaking, the transaction volume of real estate first declined, then house prices fell, and then the operating rate dropped to affect investment. Finally, the overall economic downturn drove the decline in consumer enthusiasm. When the volume of real estate declines, the sales of home textiles will be directly affected. The negative impact on the home textile industry in the future may precede clothing companies.

From the perspective of this year's data, the average inventory turnover rate of A-share listed companies has generally declined, which means that they generally have more optimistic expectations for terminal sales, and will welcome the rapid expansion in the future by increasing the proportion of stocking. In this situation, once the terminal sales are lower than expected, higher inventory will increase the volatility of the listed company's performance.

As this year’s monetary policy has tightened, brand dealers, as relatively weak micro-private enterprises or private owners, have become more difficult to obtain bank’s financial support this year, and the overall channel’s funding is tight. This was also confirmed in the survey of some brand dealers.

Most of the listed brand companies have a more optimistic estimate of the future industry and their own brand prospects. Therefore, listed brand companies generally increase their capital and credit support for dealers. The main forms of support include reducing the proportion of prepayments for orders; allowing dealers to postpone payment of a certain percentage of goods during delivery; advance shop decoration fees, etc. The author believes that although the end consumer market is more booming, increasing the financial support for dealers can fully mobilize the enthusiasm of dealers and improve the efficiency of channel expansion, but if the end consumer market turns cold, the dealer should Payments will bring great risks to brand owners.

The main risks for the next year will be the decline in end-user consumption due to the economic downturn and the higher operational risk at the corporate and dealer level.