Damaging stock clothing

Lang Xianping once said that on average, the apparel industry is depreciating by 0.7% every day. As long as the apparel industry sells 10 days in advance and the depreciation rate is 7%, and the gross margin increases by 13%, anyone who can reduce the lead time will be able to make a profit. Similarly, if a large backlog of clothing, it will cause a lot of inventory, high stocks for textile and garment companies, it is like a nightmare, will greatly invade the profits of textile and garment suppliers.

There is such a "chat": Even if all garment companies in China cease production now, the warehouse storage can be at least for domestic clothing sales companies for three years. The severity of the inventory backlog in the apparel industry is evident here.

"If a garment company makes money as inventory, it is equivalent to not earning. The most valuable thing for garments is inventory." Xia Guoxin, chairman of Shenzhen Songlishi Garment Industry Co., Ltd., pointed out that the inventory was harmful to garment companies.

Statistics show that in 2010 China’s clothing inventory has reached 20% of production, which is about 15 billion pieces, and the annual growth rate has remained at 10%. According to the normal growth forecast, 2011 will reach 17 billion garments.

Li Ning, Smith Barney suffer from inventory problems

In 2008, Adidas, the sponsor of the Beijing Olympics, was overly optimistic about the market and increased its production scale. After the Olympics, it was unfortunately hit by the global economic crisis and fell into a dilemma of high inventory levels. It took Adidas more than two years to clear up the stock of backlogs. Inventory problems caused Adidas' sales performance in China in the first half of last year to fall behind the domestic brand "one brother" Li Ning.

However, it is dramatic that today's Li Ning seems to have encountered a post-Olympic era inventory problem similar to Adidas. The throne that has long occupied the head of the local sporting goods has also been lost due to inventory problems. In terms of revenue and profits, Li Ning was overtaken by Anta.

Causes of Stock Clothing
1, China is a big country in the clothing industry. Many domestic clothing manufacturers have even rushed into production without even conducting a market survey. Such rush-produced garments may be unmarketable due to prices, styles, colors, seasons, regions, etc., resulting in inventory garments.
2, Some apparel manufacturers have misjudged the market demand, blindly work overtime and point production, resulting in unqualified garments being produced and the products cannot be sold out, forming a large inventory;
3, some clothing manufacturers want to sell more of their own goods, but also afraid of the type of their own products, the number of fewer customers can not pick what they want, they will produce more, so the types of goods on the shelf more and more; but Often do not know what kind of product customers really like, they desperately produce a variety of styles, the final result is usually the customer can not find the goods, clothing companies have produced a large number of stock clothing.

For foreign trade companies, the reasons for forming inventory clothing are as follows:
1, due to China's accession to the WTO, foreign orders increase year by year, because the foreign trade orders are very strict, if there is a small and tiny little, it may lead to refund orders, the formation of inventory!
2, foreign trade companies received orders from abroad, the other party paid a deposit, but then, due to various reasons for breach of contract, do not form inventory. This is the so-called "foreign trade bill."
3, Due to strict requirements of foreign clothing, in order to prevent the production of products that have some unqualified products, manufacturers intend to increase the number of products to be found when there is a problem, they can be used interchangeably. If the products are fully qualified, those added will become Inventory, which is now called "trade goods";

Stock clothing is like food, it will spoil quickly

The most important thing in fashion is to keep up with fashion, and the biggest feature of fashion is changeable. A movie, a series, and an album may change people's views on fashion. “So, to some extent, selling fashion is like selling vegetables and selling bread.” Isla, the chief executive of Inditex, the world’s third-largest clothing company’s fast-fashion brand, said, “In the fashion industry, inventory is like food. It quickly deteriorated and everything we did was to reduce the reaction time."

Do not want to trend inventory

According to authoritative statistics, the majority of China's garment manufacturers' inventory rate is controlled at about 20%, which is very good, and some are even higher. If there is a large backlog of products, it not only occupies the company’s operating funds, but also consumes manpower and material resources. The company’s management costs and profit-making costs have increased, which has lengthened the product turnover cycle, reduced the company’s overall profits, and affected the company’s development. In severe cases, sales and circulation companies have fallen into disrepair, and capital turnover has failed. This has finally led to a complete breakdown. .

For apparel companies, both manufacturers and retailers must work hard to keep their inventory within 20%. How can retailers effectively digest stocks?

One, moderate sale Any one clothing store wants to achieve zero inventory is unrealistic, so you can master the rhythm and do appropriate sales activities when appropriate; for example, group purchase, VIP sales, issue coupons, time Segment buying, holiday promotions, etc. are all good methods.

Second, promptly with the wholesaler to transfer goods Beijing Wang alliance opened shop more than two years, and her secret to prevent inventory is to contact the wholesaler in a timely manner replacement. At the time of purchase, she insisted on a small amount of money, and set rules for the guides in the store. As long as the new style was not inquired within 3 days, or was not sold within 5 days, she quickly returned to the wholesaler to exchange other colors or Style.
At present, the competition in the clothing wholesale market is very fierce. Wholesalers are generally allowed to exchange other colors or styles of the same section in order to sell as much as possible. For those wholesalers that are not allowed to exchange, Wang Meng is not going to get goods. In her words, this method of preventing the pressing of goods not only gave her the greatest cash flow, but also allowed the new ones to emerge in the store, attracting the attention of buyers. Of course, there is also a disadvantage in doing so, that is, to look at the faces of wholesalers from time to time, and not to transfer goods too frequently.

Third, off-season diversification of "35 yuan into the clothes, now 25 yuan have to be sold." August has not yet arrived, Chen Juan's clothing store began to change the season clearance, dumped goods, she said, would rather lose Money and non-pressing goods are a sales principle in the off season. The operating funds of the shop are mainly the money sold every month. If the goods are held down, they cannot support it for up to two months.