Recently, Moments of Friends issued a "Spring Festival Holiday Notice" for a textile company. The notice clearly pointed out that due to the impact of the market environment, the company's customer orders dropped sharply and normal production could not be maintained. At the same time, as the Spring Festival approached, the notification unit negotiated with the customer , Decided to leave early.

　　 Coincidentally, a weaving factory urgently issued a notice: due to operating at a loss, production will cease on December 5!

The textile market is difficult this year! difficult! difficult!

Whether it is in other regions or the surrounding areas of Jiangsu and Zhejiang, the textile market is hard to describe. Since last year, the crazy capacity expansion, capacity transfer, and blind production have led to a large excess of capacity this year. It is difficult for weaving manufacturers to balance production and sales, and the textile market has suddenly gone downhill.

Coupled with the ups and downs of the foreign trade environment, there is no direct benefit. The textile market lacks upward momentum, and companies are more or less under financial pressure. In addition to the blind expansion of the company itself, the difficulty in receiving orders also puts companies under great pressure.

Conventional varieties are not sold well and the market is not sustainable

The textile market is not good, and the way clothing companies place orders has also been changed, mostly in small batches and multiple batches, resulting in textile companies with few large orders and mostly small orders. Especially in the off-season in July and August, the phenomenon of selling goods on the market is not uncommon, but the cruel thing is that if you throw it, no one may want it.

Conventional varieties have entered a dead end this year. Take nylon spinning as an example. As a necessity for autumn and winter fabrics, three or four million meters in previous years are normal. However, this year, some companies said that the orders for nylon spinning are close to "stopping". Only less than two million meters have been made so far. In the interviews and surveys, some companies even stated that the sales volume of nylon spinning this year was zero.

　　 After entering October, the market began to warm up, mainly in autumn and winter fabrics, which drove a wave of weaving manufacturers to sell goods, but this wave of market continued not long, less than a month, the market has entered the off-season. The decline in the market and the suspension of production continue. It is difficult to receive orders, and the most direct phenomenon is the high inventory of grey fabrics!

Is the weaving market cold?

According to other media in the industry, the owner of a weaving factory in Nantong is planning to have a holiday in December. The specific day has not yet been determined, depending on the market. But no matter what day, I can't help but sigh, the holiday is so early! Although there is no news about holidays in the market, many cloth owners plan to have a holiday in December. Earlier, some industry media conducted a small questionnaire survey, and the results showed that more companies had a holiday in early January, but not a few of them had a holiday in December. In addition, compared with last year, most manufacturers have a holiday around 15 days before the Spring Festival, but this year some companies have advanced their holiday plans to around 30 days.

Most people believe that the textile industry is downturn this year, the number of orders plummeted by half, the inventory of weaving manufacturers reached 43-44 days, the market was full of information about selling goods, and manufacturers’ profits were generally less than 10%... The news of early Spring Festival holiday in previous years has appeared, does this mean that the textile market is really so down?

In fact, the boss does not need to be anxious. Early holidays may not be a good thing, or a strategy for some companies to deal with this market.

Early vacation is a relief?

Early holidays are definitely a bad thing in previous years. After all, the textile market before the year is the production season for spring and summer orders after the year, especially many garments are basically on the market after the year. But because the factory has been shut down for a long time during the Spring Festival, every day before that period seemed extremely valuable. If the holiday is greatly advanced, it will be a disaster for textiles that are waiting for shipment. But this year’s market holiday is early, which may be a relief for many textile people.

First of all, the market was still quiet a year ago. It was supposed to be a lively spring and summer order production time. But in fact, the number of related orders received by various textile companies is far less than in previous years. Most of them are doing some orders for the autumn and winter next year. The recent spring and summer apparel orders in the textile market are absent. Because the clothing sales side still stocks a large amount of spring and summer clothing under the influence of the epidemic at the beginning of the year, the spring and summer market next year is basically a function of digesting inventory, so there is no need to place this order again and increase inventory.

The second is to reduce production costs. For most textile companies, even if there is no order, they will not easily suspend production and holiday, especially all kinds of textile factories. Because once a long holiday is easy to cause the loss of workers, it will be more difficult to reproduce. Work cannot be stopped without an order, and the labor, water, electricity, environmental protection and other expenditures will greatly increase the operating cost of the enterprise. However, early holidays will give textile companies a reasonable reason to stop work, which can not only reduce expenses and reduce inventory, but also avoid the loss of workers.

The last thing is to ease the order dilemma. In fact, there are not a few textile companies in the market that receive orders, especially foreign trade orders, but receiving orders now is not necessarily a good thing for them. The first is the exchange rate issue. Most of the orders currently being made are quoted at an exchange rate of around 7 in the early quotation, but now the RMB has risen to 6.5. Secondly, because of the shortage of containers, the freight price has risen from a few hundred yuan to four to five thousand. According to the current market conditions, most corporate profits have shrunk significantly, or even at a loss. The force majeure through the industry’s mandatory early holiday, but the appropriate delay in delivery, leaves room for a fall in the exchange rate, and also gives containers a certain time to return to the country. If you wait until the end of the year to arrange production, many problems may be solved.

Workers’ wages are relatively large, and the bankrupt boss is unable to repay

For factory workers, the happiest thing in the year is to get the year-end award and go home happily for the New Year. In the past two years, due to the sluggish textile market, especially this year’s epidemic, it is very common for textile companies in many places to suspend production and close down. Not only some small-scale companies, but also some well-known companies have also fallen into a dilemma.

The biggest reason for the failure of enterprises is the break of the capital chain, which has led to many closed textile enterprises not having enough funds to pay workers' wages.

High inventories and longer payment periods have led to difficulties in corporate capital turnover

It's not just that the bosses who are on the verge of bankruptcy have the problem of tight capital chains. This year, it can be said that 70% to 80% of the bosses have encountered capital shortages to a greater or lesser extent, especially for companies with a relatively large foreign trade business.

An enterprise that produces peach skin and pongee said: "In the first half of this year, we basically stopped all foreign trade orders. Funds were difficult at that time. The wages of workers in the factory were paid once every three months. Hundreds of looms also stopped.

Many cloth bosses have said that after so many years, this year is the most difficult year. In addition to reduced profits, high inventories and longer payment periods are also the most important reasons for the difficulty of capital turnover in textile enterprises. According to reports, a boss who produces imitation memories in Jiangsu and Zhejiang said that this year, the stock of each type of conventional polyester taffeta in their factory exceeded 500,000 meters, that is, millions of funds were occupied, and the inventory remained unchanged. Even if there is no working capital, there is no way to buy raw materials, pay wages, etc.

How to relieve financial pressure?

Therefore, how to alleviate the financial pressure in the next step is to remove inventory, reduce start-ups, sell goods at low prices, etc., and secondly recover the payment in time. If the receivables cannot be collected, the pressure is still on the company.

Nowadays, the market is still relatively sluggish and transaction risks are high. Production decision-makers should calmly face this situation to ensure the stability of existing customers; strengthen autoimmunity, guard against arrogance and rashness, maintain product quality internally, and maintain market communication externally , Strengthen the concept of production and marketing; be honest and trustworthy, do not easily agree, and do it if you agree; keep a broad mind, actively communicate and learn from each other. Only in this way can the capital and manpower in our hands be truly transformed into productive forces that cause their own changes.

In the final analysis, the terminal demand is insufficient

This year, not only the textile market is "cold", even the clothing industry has encountered a "bottleneck period." According to data from the National Bureau of Statistics, since 2020, the sales of clothing and cloth have fallen to varying degrees year-on-year.

According to data from the National Bureau of Statistics, the retail sales of clothing products nationwide increased year by year from 2011 to 2017, but the growth rate has slowed year by year. In 2017, the national retail sales of clothing products reached 1036.54 billion yuan, a year-on-year increase of 1.4%; in 2018, the national retail sales of clothing products were 987.04 billion yuan, a year-on-year decrease of 4.8%, and the retail sales of clothing products showed a negative growth for the first time. As of the first half of 2019, the retail sales of apparel products reached 474.97 billion yuan.

In the first three quarters of 2020, my country's apparel market demand has improved significantly compared with the initial period of the epidemic, and the production situation is stable. However, the production economic indicators of the apparel industry are still in a large decline. The apparel output of apparel enterprises above designated size is 15.705 billion pieces, a year-on-year decrease of 10.53%.

Continuing to this year, the epidemic has led to a global economic downturn and weak consumer intentions. This has led to apparel companies starting a "flood of bankruptcy" this year. There are not a few large companies. Jeanswest closed down, and HM and ZARA closed some stores in China.

Adjust your mentality and make more money next year

All in all, the current negative effects of the entire textile industry have formed a downward-to-upward transmission of the industry chain. At present, the downstream weaving market lacks stamina, the trading atmosphere is not performing well, and the high inventory pressure has not alleviated, and manufacturers have a strong intention to destock. , Resulting in frequent low-price operations in the market and chaotic transactions. Many textile manufacturers with missing orders are already preparing to collect payment for the New Year ahead of schedule; most companies will feel the pressure of "hard to make money" even more!

The last wave of orders has begun a year ago. At this time, those who have orders should be intensively operating. Beware of queuing for production at the end of the year, causing delays in delivery; if there are no orders, many companies will choose to take a holiday in advance to adjust their own Status, fight again next year!