High inventories, declining performance, foreign fast fashion clothing brands are strongly invading font sizes
The cold winter for domestic casual clothing brands continues.
Recently, Dongguan casual clothing brand Baixian Doge declared bankruptcy due to poor management. Coincidentally, the former casual clothing giant Baleno has also been involved in store closures. Baleno and its sub-brands have closed 388 stores in mainland China. Accounting for one-tenth of the total number of stores at the beginning of the year.
This exactly reflects the survival dilemma of China’s local clothing brands. Second- and third-tier small clothing brands are struggling on the line of survival. The sales of casual clothing of listed clothing companies such as Giordano and Semir Clothing (002563, Stock Bar) have also been declining year after year. High inventories and frequent store closings have become common conditions in the industry.
There are too many people, and the plight of local brands may be due to the sudden rise of foreign fast fashion brands. In recent years, fast fashion brands represented by UNIQLO, ZARA and other brands have been racing to gain traction in the Chinese market. UNIQLO has even set an exaggerated speed of opening 11 stores a day.
“The main reason is that the brand design is lagging behind, the business philosophy cannot keep up, and the positioning is unclear, and the market has gradually been lost.” Secretary-General Pan of the Dongguan Textile and Garment Association believes that the backwardness of products and operations has made local brands Being left far behind by Uniqlo. Amid internal and external troubles, the survival of local casual clothing brands is in crisis, and this brand life-and-death battle may have begun.
Performance has dropped significantly year after year
Baxian Doge, a casual clothing brand with a history of 18 years, has closed down.
This company, which was founded in 1998 and had 3,000 employees at its peak, posted an announcement on May 4: Due to the company’s operating difficulties, certain processes in the production workshop have been semi-stopped since December 2013. As of April 1, 2014, all processes in the production workshop have been suspended. The company has decided that starting from May 4, 2014, all operations in the production workshop will be officially closed. In other words, Baixian Doge will no longer exist in the future.
This is just a microcosm of the current situation of China’s local clothing brands. According to media reports, in 2013, the main business income of the textile, clothing and apparel industry above designated size in Shaxi Town, Zhongshan City, where Boxian Dog is located, increased by 0.6% year-on-year, but the total profit fell by 41.2% year-on-year.
And those local casual clothing giants who were once at the top are also experiencing the pain of industry development and changes. On June 16, Baleno’s parent company Deyongjia Group Co., Ltd. released a financial report stating that as of the end of March 2014, the number of Baleno and other sub-brands’ stores in mainland China had reached 388, accounting for one-tenth of the total number of stores at the beginning of the year. .
Giordano, another clothing company listed in Hong Kong, cannot escape the fate of closing its stores.
According to Giordano’s 2014 quarterly financial report, as of March 31, 2014, the company’s sales decreased by 7%, and gross profit decreased by 13% during the same period. Currently, 75 Giordano stores are closed, of which 54 are in mainland China.
At the same time, the situation of Meibang Apparel (002269, Stock Bar) and Semir Apparel, as the leading domestic apparel companies, is also not optimistic. In 2013, Meibang Apparel achieved operating income of 7.890 billion yuan and operating profit of 518 million yuan, both of which decreased to a certain extent compared with the previous year.
“It is mainly affected by the general environment, the entire industry is in recession, and the impact of e-commerce. But under this situation, our own e-commerce website is now also a focus.” Meibang A representative of Apparel Securities told the Times Weekly reporter that although the development of ME&CITY under Meibang Apparel is currently slowing down, it will still adhere to the brand’s positioning to open up new markets.
In addition, many industry insiders also told Times Weekly reporters that Meibang Apparel has always been a leader in the field of domestic casual wear. Its e-commerce operation and concept store model are both leading the industry. In recent years, its business style has also changed from radical to more stable. ” Although last year’s performance declined sharply and the performance in the first half of this year is expected to continue to be mediocre, based on the low base effect and the catalysis of equity incentives, the full-year performance is expected to show restorative growth and greater profit elasticity. The future focus is mainly on the promotion of new concept store models, And the integration of online and offline channels.”
The performance of Semir Clothing is barely qualified, driven by its children’s clothing brand Balabala. In 2013, Semir Clothing achieved operating income of 7.294 billion yuan, of which main business income was 7.219 billion yuan. Although it increased 3.20% from the same period last year, it was mainly due to the rapid growth of children’s clothing, and its casual clothing achieved main business income of 4.683 billion yuan. , a year-on-year decrease of 4.04%.
“Currently young people pursue fashion and have high requirements for clothing index. Semir’s future positioning will still be a popular route for young people, but it will innovate in styles and clothing brands and continue to adapt to the current market development.” For Regarding future development, a person from the Semir Clothing Board Secretary’s Office said that in the future, Semir Clothing will strive to promote the diversified development of e-commerce.
Foreign fast fashion brand shock wave
While local leisure brands are in dire straits, foreign fast fashion clothing brands such as Uniqlo and ZARA are experiencing carnival-style development in the Chinese market.
Contrary to the trend of local brands closing stores, “UNIQLO”��Speed up the horse racing in the country. As of now, UNIQLO has more than 260 stores in China, covering more than 50 cities, accounting for more than half of the brand’s overseas stores. In the past year, Uniqlo’s growth has bucked the market trend and reached the peak of its operations over the years. On August 31, 2013 alone, 11 new UNIQLO stores opened simultaneously across the country; during the 2013 Taobao Double Eleven Shopping Festival, UNIQLO’s sales exceeded 121 million yuan, making it the sixth single brand on Tmall.
H&M, which opened its first store on Huaihai Road in Shanghai in April 2007, already has 200 stores in China within 7 years of its development. Statistics show that as of June 2013, the four major international fast fashion brands Uniqlo, ZARA, H&M and C&A had a total of 523 stores in China, of which nearly 40% were new stores opened after 2012, which means that These brands open a new store every three days on average.
In 2012, major clothing brands in China’s clothing industry experienced inventory problems. According to the financial report data of that year, the inventory of sports and leisure brands such as Li Ning and Anta increased year-on-year. The inventory of Xtep reached 887 million yuan, a year-on-year increase of 92%; the inventory of youth leisure brands such as Smith Barney and Semir also reached one to two billion yuan. Uniqlo, however, completed the inventory processing half a year ago.
Fast new arrivals and low inventory are the winning secrets of these fast fashion brands. Uniqlo told Time Weekly reporters that 83.72 days is the average inventory turnover days of Uniqlo, which is at least half faster than that of domestic clothing companies. Uniqlo’s SKU (stock keeping unit) remains at around 1,000 styles all year round, while local casual clothing companies are basically in 2000- 5000 models, 2-5 times higher.
“The decline in sales and store closures of local casual brands is indeed related to the strong development of foreign fast fashion brands. Foreign fast fashion brands are close to the mainstream of consumption in terms of design and style, and their management and marketing are more modern, so they can obtain more The recognition of many consumers is what domestic leisure brands are relatively lacking.” Xiong Xiaokun, a light industry researcher at China Investment Consulting, believes that it is reasonable for these fast fashion brands to become popular in China.
What’s the solution to the dilemma?
“The main reason is that the brand design is backward, the business philosophy cannot keep up, and the positioning is unclear, and the market has gradually been lost.” Secretary-General Pan of the Dongguan Textile and Garment Association said bluntly. Taking ZARA as an example, a new product can be launched on the market within two weeks, and it follows the trend of international fashion weeks. Fast fashion clothing is produced in small quantities, with diversified styles and a wide price range. Looking at local brands, a reporter from Times Weekly learned that they usually launch new products in four quarters, and the same styles are launched in various styles, so the selection is relatively simple. For a long time, outdated designs and infrequently updated products have been slowly abandoned by mainstream consumers in first- and second-tier cities, and can only be channeled to third- and fourth-tier cities. This cycle repeats, and product positioning has gradually become low-end and lost. consumers with spending power.
“These companies still stick to more traditional marketing techniques and rely on celebrity publicity, but in fact the price/performance ratio is not very high, and the overall brand marketing is very poor. And fast fashion brands like Uniqlo attach great importance to e-commerce. You see how good Uniqlo’s sales are at its Tmall store, but Baleno is a bit worse. It’s not that they don’t pay attention to it. They are also doing e-commerce, but they haven’t hit on the idea, so it has no effect.” Chief Consultant of Tianxiang Consulting Agency Tianshu told a reporter from Time Weekly.
A Times Weekly reporter found that most of these local clothing brands were developed from clothing factories in Guangdong, Jiangsu and Zhejiang. Take Semir Clothing as an example. It only gradually developed from a small clothing factory in Wenzhou. These businesses have strong family characteristics, and many family members serve as senior executives within the company. Although many management talents have been introduced, there is still a certain gap between them and modern enterprise management systems.
“Domestic companies need to work hard to improve their internal skills. Enhancing the attractiveness of their products to consumers is the key, and at the same time strengthening research and development, marketing and management.” Xiong Xiaokun said.
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