Textile And Garment Industry Inventory Backlog Highlights

The inventory problem has plagued textile and garment enterprises for more than a year. This year's garment industry continues to maintain a grim market situation since last year. In the first three quarters, domestic sales and exports did not show a favorable turn.

The problem is gradually emerging in the market downturn.

However, analysts said that the garment industry is following the economic trend and gradually stabilized, and terminal consumption has also been higher than expected market changes. The fourth quarter garment enterprises are expected to get rid of the shackles of high inventory and enter the stage of "burden reduction".

Inventory backlog highlights

Insiders pointed out that high inventory mainly affects the capital turnover of enterprises. The higher the inventory is, the more funds will be deposited, and the capital turnover of enterprises will become more difficult.

This will not only affect the business activities of enterprises, but also lead to the decline of corporate profits.

Flush data show that clothing in the first half of this year

The total amount of inventory items of the 35 listed companies was as high as 46 billion 480 million yuan, an increase of 3 billion 680 million yuan compared with the same period last year.

The largest amount of stock in a listed company is YOUNGOR, which has already disclosed 23 billion 872 million yuan in the semi annual report, and 3 billion 844 million yuan and 3 billion 431 million yuan in Hong Kong Group and China group respectively.

In high inventories, the backlog value of stock products increased, and the total amount of the 35 companies increased by more than 14 billion 100 million yuan, representing an increase of 5 billion 720 million yuan over the previous year, an increase of 40% over the previous year.

Although the overall situation of the apparel industry in the three quarter was more optimistic, net profit increased significantly in the first half of the year, but the stock of enterprises continued to increase.

According to incomplete statistics from reporters, it is found that the inventory of clothing and textile enterprises in the three quarter of this year has increased generally, such as the stock amount of red beans and the group of China, respectively, amounting to 3 billion 978 million yuan and 3 billion 481 million yuan, which has increased again over the medium term scale. In addition, the turnover rate of enterprises has also declined.

The export market is grim and domestic sales are not optimistic.

Terminal sales sluggish, so that clothing enterprises inventory backlog continues to rise, companies are looking for a way out - discount sales promotion, increase the electricity supplier channels, and switch to the two or three tier cities.

For distribution business, clothing inventory accumulation is undoubtedly "pressure mountain", dealers feel that this year's repayment pressure is the largest in nearly ten years.

De stocking in progress

Export environment improvement, US economic recovery and EU

The situation is no longer deteriorating, and cotton prices stabilize and CPI is better than expected, which will provide good external conditions for the apparel industry to go out of the doldrums.

Wang Jian, an analyst with Zhejiang textile and apparel industry, believes that the clothing industry, which is increasing in inventory and has a significant decline in capital turnover over the past year, will enter the stage of "burden reduction" in the four quarter when the external environment is more stable.

Analysts pointed out that this autumn and winter products brand companies have less price increases, some brands even choose to cut prices strategy, and the volume of price cuts help boost consumer desire to buy, fundamentally improve the terminal demand.

The market is strengthening confidence in downstream consumption. In view of the fact that clothing consumption is in the post cyclical stage of manufacturing in the middle reaches, the de stocking of manufacturing industry is coming to an end.

Statistics released by the National Bureau of statistics on 18 may show that textile and garment export growth in September has improved significantly.

Professor Guo Yan of China Clothing Institute believes that the Mid Autumn Festival, the National Day golden week and the upcoming Christmas and new year promotion season will greatly stimulate consumer enthusiasm in the market, and it is expected to speed up the process of garment enterprises going to inventory.

Wang Jian, Zhejiang Merchants Securities, said that last year, casual clothes enterprises, which were the first to be affected by internal and external troubles, were also ahead of the other four industries, such as men's clothing, home textiles and other fine industries, because of the early change of their sales strategy and the overall stabilization of the fourth quarter industry.