Chengdu: Nearly 10% increase in fall profits

At the time of the listing of new cotton, the price of cotton is still “crazy” and it is setting a record high almost every day.

China's cotton price index (CCIndex328) reached 23,195 yuan per ton, a rise of 295 yuan per ton. The impact of the soaring cotton price has been transmitted to the apparel industry. Chengdu clothing wholesale market rose nearly 10% in autumn, and some textile companies and garment companies are in a difficult position.

Large price increases shouted uncomfortable

In Jiulong Square, Taihua Garment Wholesale Market and other major wholesale markets in the city, an ordinary cotton long-sleeved shirt, last year's price was 60 yuan, this year rose to 88 yuan. In general, the wholesale price of autumn clothes is rising this year, with a general increase of 5% to 10%. Many businesses have indicated that such a large price increase was difficult for them to accept at first.

“We have started booking winter clothes in June and July, and we will definitely increase prices this winter.” Several apparel dealers have stated that most of their clothes are imported from Guangdong and Shanghai, and some small and medium clothing brands Sichuan agent Jin Kefu said that overall, its branded products such as Eagle, Kashun, etc., rose by 50 yuan to 100 yuan each. “The price increase will definitely affect the sales of garments. We have a smaller profit margin.” And a certain French Cai Zhongyun, a well-known clothing distributor in Southwest China, also said that its branded jackets and cotton clothing have generally risen about 5% this year.

Cost pressures large corporate profits shrink

“Despite the fact that the upstream cotton price has risen sharply, we have stayed for three months and started to officially adjust the price yesterday.” Li Shizhong, general manager of Chengdu Qiaodi Mengsi, said that starting from the beginning, raw materials for clothing, including cotton and hemp, have been rising step by step. Since the beginning of the year, pure cotton has risen by about 30%. However, the company took advantage of measures such as purchasing fabrics in advance and production reserves to absorb the pressure of rising costs.

“But this month, the profit margin has indeed shrunk too obviously. It seems that we have to make a loss before we have to choose a price increase.” Li Shizhong reluctantly stated that currently the apparel industry has started to make general price adjustments, and the products specific to his company have generally been raised by nearly 10%. %, of which cotton apparel was the highest, rising 12% to 15%. “Despite the increase in prices, the profits of garment factories have still shrunk by 3% to 4%. We cannot transfer all the cost pressures to consumers and the market can't accept them.” Li Shizhong said that the apparel industry is a value-priced product and the added value is not Big garment companies are undoubtedly the most affected.

Cotton yarn prices rose by 2,000 yuan in ten days

What about the upstream segment of the garment industry - the situation of cotton textile companies? “Since October, the price of cotton yarn has risen by 2,000 yuan per ton within 10 days. Our increase in cotton yarn prices has been forced by the soaring price of cotton.” said a Minister of Supply and Marketing of a large textile company in Sichuan, Minister He said that the company placed risk control The important position of the current job, in order to control the risk, the company will purchase cotton when the cotton is at different price levels, but the purchase volume is not large. Another is to produce as many veils as possible in order to reduce the amount of cotton used. “Now is the time when Xinmian went public. It should be the lowest cotton price in a year. But cotton prices have risen faster and more violently. This is really incredible.” Minister He stated that although cotton yarns are also rising sharply, cotton yarn prices The speed and magnitude of the increase are far less than the speed and extent of the increase in cotton prices. The company's production of cotton is still the company's inventory at a time when the price of cotton is low. Once these low-priced cotton is used up, the situation of cotton textile companies will be "somewhat worse."

Industry Association: "Breakthrough" Relies on Innovation

“The recent surge in cotton prices has been transmitted to apparel companies. Nowadays, many clothing companies in Chengdu are in a very difficult situation. It is very embarrassing.” Zheng Wanxun, president of the Chengdu Garments (Clothing) Industry Association, used two “very” to describe some clothing companies in Chengdu. The problems faced in the context of the soaring cotton price. Zheng Wanxun said that from the current point of view, some large-scale well-known clothing companies only have reduced profits, there is still room for profit, but some small clothing companies have faced a crisis of survival, and some small clothing companies are considering changing jobs. In the case of a large increase in the cost, the vast majority of clothing companies have taken to raise prices to deal with the crisis, but the current clothing companies are afraid to sharply increase their prices of their products. "I don't want to go up, but I'm afraid of consumers, I'm afraid that the market can't accept it." Zheng Wanxun said that consumers have a process of accepting the rise in clothing prices. If the increase is too large, consumers will not accept it in the short term.

From the current point of view, the increase in clothing can not offset the pressure on raw materials from rising companies. “There is a clothing company that signed a supply contract with customers six months ago, but did not expect such a large increase in raw materials, and now can only supply customers at a loss.” Zheng Wanxun said.

There are more than 6,000 garment enterprises in Chengdu with annual sales exceeding 100 billion yuan. How will these apparel companies “surprise” in the context of rising raw materials? Zheng Wanxun suggested that garment companies should not only revolve around the original products, but also actively use new technologies to develop new products, new models, increase the added value of products, expand the popularity of products, and create their own brands.

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