Textile is an industry with very seasonal patterns. It has been a long-standing rule to stock summer clothing in March and April and produce winter clothing in September and October, but this rule does not seem to apply this year.
Has the market picked up?
9Yuebu boss’s business is indeed a little better than 8Yue, but the best-selling items are neither autumn clothes nor winter clothes, but outdoor camping The product.
In previous years, the National Day was a time for textile companies to rush for orders. However, this year, not only did textile companies not rush to work, many companies even had a full 7 days during the National Day. This is a situation that was unimaginable in previous years.
At this stage, the average operating rate of weaving factories is less than 7%, and the average operating rate of dyeing factories is around 6% It will be difficult to improve in the future.
For textile companies, although there are more orders, life is not much better than before. The orders they receive are simply not enough, and profits have been reduced and they dare not increase prices. Customers who dare to increase prices will run away. Companies that were doing well in the past are still doing well, while companies that are doing poorly are still not receiving many orders, and the polarization has become increasingly obvious.
This has led to a bottleneck in the availability of looms on the market, which has never been able to increase. It’s not that companies don’t want to run all the machines. In fact, under the current market conditions, once the fabric produced cannot be sold, the pressure on inventory will make the company with already tight cash flow even worse. Once the inventory is too high and the cash flow is cut off, the company may be unable to recover. Textile companies have to be cautious. Even the cloth produced by some enterprises is difficult to sell at all, and they are only forced to start production for reasons such as workers and loan credit.
To use the current popular expression, it is: “The market has picked up, but it has not completely picked up.”
The market is almost over?
The market is so bad, will the market in the second half of this year end soon? It’s not that pessimistic.
Except for those “oil guys”, life upstream and downstream has been difficult this year. The Federal Reserve has continued to raise interest rates, and a large amount of capital has returned to the United States. Institutions would rather buy capital-guaranteed US dollar bonds than invest, draining liquidity from the market. , economic vitality has dropped significantly.
As a result, clothing brands and retailers that face consumers have begun to tighten their budgets. Companies that originally stocked 1000 pieces may now only stock1000 pieces. Then, check the sales situation before performing quick reverse operation. The current quick-turn speed can already produce ready-made garments within 1-2 weeks. Although the price of quick-turn is a little higher than mass stocking, it can greatly reduce inventory risks. .
Therefore, as the weather gets colder, cotton-padded jackets, down jackets and other products begin to go out of stock, and clothing brands and retailers have reduced inventories. The number of reorders this year may increase significantly compared with previous years.
In addition, emerging Internet channels such as shopping festivals and live broadcasts have become rare new growth points in the textile market in the past two years. In this year’s sluggish market demand environment, a large number of textile companies have squeezed into this track. This track has also become more and more “volume” at a speed visible to the naked eye. With the advancement of technology, from customers The time from placing an order to when the company produces the finished product is also constantly shortening.
In previous years, during shopping festivals like “Double Eleven”, many merchants would prepare large quantities of goods in advance, which brought a lot of market orders. But this year, more companies may replenish goods through efficient processes after receiving orders. This wave of market conditions is also worth looking forward to.
In general, with both upstream and downstream companies becoming conservative this year, it is difficult for orders to come in a “swarm” like in the past, and more of a “slow flow”. Textile companies need to prepare for this change in advance. .
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