Let’s first look at a set of data:
Statistically, nearly 90% of A-share textile and apparel companies Performance declined in the first half of the year, with nearly half of net profits falling by more than 50%. Many clothing giants handed over dismal mid-term results.
Seima Clothing announced that the company is expected to achieve a profit of 0-72.2106 million yuan in the first half of this year, a year-on-year decrease of 90%-100%;
Annair expects a loss of 13 million yuan in the first half of this year to 18 million yuan, compared with a profit of 56.2979 million yuan in the same period last year, a year-on-year decrease of 123.09% to 131.97%;
Septwolves achieved a net profit of 20 million to 30 million in the first half of this year, a year-on-year decrease of 75.70-83.80%;
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Langzi shares are expected to lose 19 million to 28 million in the first half of the year, compared with a profit of 89.1253 million in the same period last year;
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It can be seen that the clothing industry is not having an easy time. A clothing business owner said that last month’s performance was still only about 40-50% of previous years.
The editor also found in shopping malls that major clothing brands have recently launched the word “discount” in order to monetize their inventory. This desolation has also been transmitted to the upstream. For the fabric industry, life for enterprises seems to be not easy. Even though there was a signal of “recovery” in the market last week, the tone of the off-season market has not changed!
“We currently have two-thirds of the looms open!” A business owner Mr. Zhang, the textile boss of imitation memory fabrics, said, “Recently, imitation memory orders have been relatively poor, and our factory’s inventory pressure is relatively high. Maybe we will consider a holiday next!”
According to this person Mr. Zhang, whose factory is located in the northern Jiangsu area, said that his operating rate is relatively good among nearby companies. The operating rate of many manufacturers has dropped to less than 50%, and a few even started their holidays at the end of July.
Mr. Shen, the textile boss who also opened a factory in northern Jiangsu, specializing in the production of polyester taffeta and pongee, said that the factory is missing orders and the gray fabrics produced can only be used as inventory. At present, The inventory of gray cloth is also increasing, and it has been more than 2 months. “The factory is running at 40% capacity, and the holiday will soon be unbearable. The market situation in August is not promising!” he said.
It is understood that because the scale of looms transferred to northern Jiangsu, Anhui, Jiangxi and other places in the early stage is generally larger than that of Jiangsu and Zhejiang, the inventory accumulation speed is also faster and is affected by market fluctuations. Bigger too. In May, after the strength of chemical fiber protective fabrics such as polyester taffeta and pongee, the start-up rate in places such as Siyang in northern Jiangsu once rose to about 90%, and many manufacturers were operating at full capacity to seize market order share.
The market situation comes and goes quickly. Entering June, as the conventional fabric market gradually weakens, many manufacturers accumulate inventory at an accelerated rate, and production reductions and holiday operations are also slowing down. Gradually opening up, the current start-up of manufacturers is generally not high, with a high of 60-70%, and a low of which is already in the holiday stage.
As manufacturers’ inventories get higher and higher, fabric prices become lower and lower. Under the double impact of the epidemic and the traditional off-season, the production-to-sales ratio of both the upstream and downstream of the industrial chain has declined, and the financial pressure on enterprises has become even greater, especially the weaving bosses. On the one hand, they need cash to purchase raw materials, and on the other hand, the loan withdrawal cycle has been extended, which is even more serious. The difficulty of capital turnover.
“In previous years, my customer payment cycle was usually three months, but this year it is generally within three months. Half a year later, there are even customers whose final payment for orders placed in November last year has not yet been settled,” said a trader in imitation silk fabrics.
Affected by the epidemic this year, the imbalance between market supply and demand has weakened the bargaining power of weaving manufacturers. In an environment where there are too many people and too little food, fabric manufacturers can only ask customers to “get the money they owe” goods” to retain customers. Although this kind of operation is not new in the textile industry, this year due to poor terminal consumption and poor overseas economic environment, the capital withdrawal cycle has been extended from bottom to top, further expanding the proportion of enterprises’ own advance capital.
In addition, inventory backlog has also become another major problem for cloth bosses. For this reason, there are more and more voices in the market about selling goods and cutting prices. “Last year, our price of 75D weft-twist imitation memory was around 2.70 yuan/meter. Now the general order price is 1.80 yuan/meter. It can no longer drop!” said Mr. Zhang.
It is reported that many textile bosses have recently sent out information about selling goods in the circle of friends. Compared with previous years, the price can be said to be really “fractured”! “There is too much inventory. If we don’t throw it away now, the inventory produced will not be enough, and the factory also needs cash flow.” said Mr. Wang, the person in charge of another imitation silk manufacturer. He is currently preparing to sell the 75D chiffon at a discount of 0.30 yuan/meter.
In fact, many bosses currently have the above two experiences. In order to reduce costs during the off-season, textile bosses The wind in��Various “self-rescue” operations have been gradually launched.
For the next September, most textile bosses said that market demand will recover to a certain extent, but the “recurrence of epidemics” has become the needle that stings the hearts of textile bosses. With the recurrence of overseas epidemics, the foreign trade market may still experience a shutdown, which means that demand may remain stagnant or even regress. Therefore, there is still great uncertainty as to whether the “Golden Nine and Silver Ten” can arrive as scheduled!
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