Recently, news of layoffs by many companies at home and abroad has once again made people feel uneasy about the current situation of the textile and apparel market.
More than 2,800 stores closed in the first half of the year
Domestic and foreign clothing brands collectively face a wave of layoffs
After retail giants such as Wal-Mart have canceled orders and destocked their inventory, domestic and foreign clothing brands are facing a collective wave of layoffs. On the 5th, a notice covering Wenzhou Zhuangji Clothing Co., Ltd., Wenzhou Zhuangji Group Industrial Park Co., Ltd., Wenzhou Yingboli Clothing Co., Ltd., and Wenzhou Zhuangji Industrial Co., Ltd. said: Since the impact of the epidemic in the first half of 2022, The company’s orders decreased and its operations encountered difficulties. All administrative staff of Zhuangji Company have been suspended from work since August 5. At the same time, they will provide minimum living allowances in accordance with Wenzhou policies and assume the obligation to pay social security to ensure the basic livelihood of employees. The specific resumption time is unknown. According to the video provided by netizens, at the entrance of Zhuangji Clothing Company, many employees gathered together and pulled up banners, pointing the finger at their old employer. The banner read in bright fonts: “Zhuang Ji laid off employees in disguise, maliciously suspended work, and demanded reasonable compensation and justice to the employees.”
The epidemic has created an increasing number of people living in poverty and has directly impacted the global apparel industry.
On September 1, according to the US financial media Denver Business Journal, Steve Rendle, president and CEO of VF Corporation, the parent company of fashion sports brand Vans, outdoor sports brand The North Face (North Face) and other brands, sent a message to employees. announced the company’s upcoming layoffs in a letter.
According to reports, Steve Rendle said in the letter that the layoffs are intended to “align our employee numbers and capabilities with our highest strategic priorities.”
Subsequently, VF Group confirmed that this round of layoffs involves 600 positions in the group. However, VF did not disclose the specific departments, regions and related businesses involved in these positions.
According to public data, as of the end of fiscal year 2022, VF Group has about 35,000 employees worldwide. The layoffs account for about 2% of the company’s current employees.
VF Corporation was founded in Pennsylvania, USA in 1899 and has a history of more than 120 years. The group is the parent company of well-known sports, leisure and outdoor brands Vans, The North Face, Supreme, Timberland and popular backpack brands Jansport and Eastpak.
Also in the context of weak consumption, even big-name clothing merchants cannot escape the fate of closing stores.
In the first half of 2022, the trend of store closings will intensify. According to incomplete statistics from Lianshang.com, at least nearly 4,700 offline stores were closed in the first half of the year, including many leading brands with strong comprehensive strength such as Walmart, Innisfree, and Haidilao. The apparel industry was the industry with the largest number of store closures in the first half of the year. Statistics show that in the first half of 2022, more than 2,800 stores in the apparel industry were closed, covering 14 companies, including foreign fast fashion brands A&F, GAP, H&M, and MONKI, as well as domestic apparel brands Metersbonwe and Semir.
The business of clothing brands has a direct impact on the business in the second half of the year. Recently, the A-share mid-term financial reporting season is coming to an end. The performance of the clothing industry is generally sluggish. The industry leaders Semir Apparel and Peacebird both saw profits drop by more than 95% after deductions. Both companies are tens of billions. For scale-level companies, it is conceivable that in the unfavorable environment and the traditional clothing industry with low profitability, rigid costs will greatly erode profits.
Against the background of epidemic containment measures and weakening consumer confidence, low- and middle-income consumer groups have become more price-sensitive and have reduced related expenditures. This has made local brands even less competitive. Even the performance of groups such as Anta and Li Ning has shown that Consumers prefer professional products, and apparel products performed sluggishly. The difficulties in the apparel industry also show that profit performance lags far behind revenue performance, which is a reflection of the industry’s inefficiency. Therefore, most brands in the apparel industry are usually more difficult to revive after experiencing adversity. The recent news that a retail giant canceled a billion-dollar order has once again hit the bottom of the textile and apparel market’s confidence in the second half of the year!
Raw materials rebound sharply
Next textile and apparel demand: Is it still worth looking forward to?
However, the textile and apparel market is not optimistic. Recently, the production and sales of upstream raw materials have been good and prices have risen, showing a strong rebound. What is going on in this market? Is the real demand worth looking forward to?
In the editor’s opinion, since the second half of 2021, the repeated impact of incident factors such as the epidemic and the pattern of economic downturn have made the market generally have no good expectations for the demand side. Especially since the second quarter of 2022, the overall industrial chain terminal has been severely weak. The pessimism of the entire industry has wiped out all expectations for a boost in the peak season, and the downstream terminals of the industrial chain have generally maintained a low-intensity operation. Therefore, when another so-called “peak season” approaches, there are no particularly strong expectations in the market. While impacts such as the epidemic are still ongoing, it is difficult to be optimistic about the demand boost that can actually be achieved.
But when the market generally lowers its expectations, it will be discovered that the actual situation on the demand side is not as bad as imagined. In fact, what is really affected on the demand side is expectations, and actual rigid demand still exists. In other words, what is missing from the real demand side is the early stocking of downstream products, which is equivalent to an empty reservoir. But when the immediate demand really comes, the actual demand will beThe impact is still there, and the overall tempo has gotten faster. Therefore, it can be seen that the downstream production and sales of polyester yarn have become strong again recently, polyester yarn inventory has also been reduced, and the inventory pressure in the upper and middle reaches of the entire industry chain has been alleviated to a certain extent.
However, in the editor’s opinion, it seems that some industry insiders are still quite reluctant to use this to judge that the market will strengthen on a large scale. Without the boost from the low rebound in power supply rates due to early power cuts, the well-timed rise in raw materials, and the expected purchase and stockpiling of goods at the end of the month for the peak season, this wave of market prices would have passed by insipidly. The more traditional the peak season is, the more intense the market speculation is. These three factors give downstream weavers a certain amount of confidence to stockpile slightly more raw material inventories than before, while also giving raw material traders room for speculation. The current increase is entirely driven by raw materials and expectations. Most textile companies’ orders are always in the window period. The current market situation cannot verify the authenticity of the future.
For most textile bosses, the market trading surface is still under great pressure. The overall market volume is tight compared with the same period last year. It is difficult to boost the overall market trading volume. In addition, the imbalance between supply and demand and funds Under pressure, market competition has become more intense, and polarization will only become more obvious.
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