What Are The Secrets Behind "High Inventory" In Footwear Industry?

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< p > 2013 in cold weather, under heavy inventory pressure, < a href= "//www.sjfzxm.com/" target= "_blank" > shoes < /a > clothing enterprises in this winter is also difficult to feel a trace of warmth.

Especially after the end of 2012, the argument of "inventory selling for three years" made the whole industry questioned.

China's < a href= "//www.sjfzxm.com/" target= "_blank > > clothing /a < a href=" //www.sjfzxm.com/ "target=" _blank "> shoes and hats > < > > the industry is generally overcapacity. In the first half of 2012, the total inventory of Lining, Anta, XTEP, PEAK and the 6 domestic sports brands reached 3 billion 721 million yuan.

By the end of the third quarter, YOUNGOR's stock had reached an astonishing nearly 24 billion yuan, and the stock of red bean also had a stock of 3 billion 978 million yuan.

Jihua Group was 3 billion 481 million yuan, and a href= "//www.sjfzxm.com/" target= "_blank" > clothing "/a" and Semir clothing also reached 2 billion 199 million yuan and 1 billion 439 million yuan respectively.

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< p > although the inventory of most enterprises is caused by the diversification project, the footwear industry is still threatened by high inventory, resulting in more cash flow. The traditional mode of expansion through franchised stores needs to be adjusted.

Even if "stock is enough for Chinese people to wear for 3 years" is not objective, the development of shoes and clothing enterprises is already at stake.

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< p > < strong > diversification threatens the existence of high storage threats < /strong > /p >

< p > to eliminate the inventory of diversified business projects, shoes and clothing enterprises are still facing serious problems of stature inventory, and have made the enterprises face great challenges.

The turnover days increased from 171 days in the beginning of the year to 185 days at the end of 9, while the accounts receivable turnover days increased from 28 days in the beginning to 36 days at the end of 9.

This will increase the operating cost of the company, and the company will have to supplement its working capital through borrowing and so on, which will lead to higher cost and passive operation.

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< p > in addition, although the proportion of the total cash flow of the footwear industry as a whole increased from the end of 2011, the corresponding receivables turnover rate declined sharply, indicating that the company issued the "a href=" //www.sjfzxm.com/news/index_s.asp "inventory < /a" to the lower level dealers, but it did not materialise to become a real cash flow.

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< p > once the company has difficulties in cash flow, franchisee's profit space will be further compressed, so it is possible to take a large discount to promote sales growth and forced inventory.

As a result, consumers will not be able to buy clothes without discount, which will destroy the value of clothing brands.

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< p > < strong > supply and demand imbalance cost increase < /strong > < /p >

The main reason for today's high inventory crisis is the imbalance between supply and demand (P).

From the demand side, since the second half of 2011, economic slowdown, weak consumption and high prices have made residents' clothing consumption more cautious. Besides, online shopping channels have also diverted consumer groups.

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The bigger problem of P is that the supply side's operation mode has laid mines for high storage.

The expansion of brand shoes and clothing companies, especially in the initial stage of development, mostly choose franchisee mode for rapid channel expansion.

This rapid and franchise expansion can achieve great results in the early stage of enterprise development, but with the lack of brand store management.

For the franchisee to set up shop location, decoration, ordering and marketing guidance is not enough, leading to poor store operation quality, the price control ability is not strong, the franchisee blind discount, thereby affecting the brand image and so on.

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While P is expanding rapidly, all kinds of costs are also increasing.

The rent of the core business circle of the first tier cities continued to rise. In September 2012, the first floor rental of Shanghai's high quality retail property was as high as 60.8 yuan / square meter / day. The 100 square meter shop calculated that the rent cost of only one year was as high as 2 million 220 thousand yuan.

On the manual side, since the economic crisis in 2009, the cost of labor has increased by more than 15%. In 2011, the number of listed companies increased by more than 20%.

As a result, franchisee profit space is compressed, to further divide up gross profit.

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< p > < strong > industry mode is bad, brewing inventory crisis < /strong > /p >

< p > worse effect is that the shoe and garment enterprises are difficult to understand the situation of the terminal market under the affiliation mode. The market expectation is not enough, the price and the market deviate. Once the order quantity exceeds the market demand, it will easily lead to a backlog of inventory levels at all levels of distributors.

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Since P 2012, the price of shoes and clothing has been narrowed and the consumption demand has continued to be weak. Most Brand Company digest large quantities of stock with the form of vigorous promotion.

But at the same time, it also affects the normal operation and sustainable development of the company. After the labor pains, the adjustment of the industry development mode is imperative.

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< p > supply and demand contradiction has led to increased inventory of garment companies. Discount sales have become the main way to digest inventory. This phenomenon is concentrated in 2012, and it also raises the market's doubts about the operation mode of < a href= "//www.sjfzxm.com/news/index_c.asp" > shoes and clothing enterprises < /a > and concerns about the future development of the industry.

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