March 29, 2024

Sound rises again in the apparel industry and continues to raise prices

“Now the raw materials are rising so much, domestic and foreign raw materials are rising, and the cost of clothing is also rising. This problem is very tricky.” A few days ago, Chen Lingmei, chairman of the Shenzhen winner apparel, told reporters that the company is a mid-to-high-end Chinese women's clothing. "Leader of a group". To Chen Lingmei's thorny problems, there are rising labor costs in addition to raw material costs.

The reporter learned yesterday that in order to ease the cost pressures, this year, many domestic brands have raised the sword of “price increase”. Currently, the retail price of branded clothing has generally risen by 10%-15%. There are apparel companies that will continue to raise prices in the second half, there are industry insiders expect that this fall and winter apparel product wholesale prices will also increase 10% -15%.

Clothing brand collective "price increase"

Price increases have become the mainstream of the apparel industry this year. Yesterday, the reporter consulted several listed companies' latest financial reports, quarterly reports and other information and found that a number of clothing brands made price increases this year.

In the field of sportswear, Xtep (01368.HK) announced its semi-annual report yesterday. The average selling price of footwear products increased by 6.6%, and the average selling price of apparel products increased by 13.9%. After the price increase, the average selling price of Xtep footwear products was 85.7 yuan. The average selling price of apparel products was 52.5 yuan. The other two brands Li Ning [26.25-1.50%] and Anta (02020.HK) also raised the prices of their products in the first half of the year: Anta Financial reported that the average selling price of Anta footwear products (wholesale price) rose in the first half of this year. From 2.0% to 96.9 yuan, the price of apparel products increased by 7.1% to ***49.6 yuan***. Li Ning also announced in June this year that in the fourth quarter of this year, the average retail price of footwear products increased by 7.8%, and the retail price of apparel products increased by 17.9%.

In the field of casual wear, research data of Haitong Securities [9.89-0.50%] also showed that Youngor [12.83-1.00%] launched new products from January to May this year and the average price increased by 15-16%, resulting in a 4-year increase in sales within its apparel business. At 5%, the sales amount has increased by about 20%, and the gross profit has exceeded 50%.

"Rising prices" provided guarantees for major apparel companies to maintain their performance. Xtep said that due to the combined effect of increased sales volume and higher selling prices, overall revenue in the first half of the year increased by 22% year-on-year to 2 billion yuan***, gross margin rose 2.1 percentage points to 40.7%, and operating margin increased by 2.4 percentage points to 22.2%. . Anta's semi-annual report also showed that the company’s revenue in the first half of the year increased by 22.6% to 3.453 billion yuan, net profit increased by 25% year-on-year to *** 760 million, and gross profit margin increased by 2.2% to 43.7%. Anta explained that one of the main reasons for the increase in turnover is the increase in average selling price and sales volume.

Soaring costs urge pressure on prices

Behind the collective price increase in the apparel industry this year is the substantial increase in raw materials and labor costs. Recently, Chen Lingmei, chairman of Shenzhen Winners Apparel Co., Ltd., pointed out in an interview with this reporter that the company’s labor costs and fabric costs have increased significantly this year, and the pressure has suddenly increased.

"There has just been another increase in wages. On average, each worker has added 200 yuan per month. Now, the monthly salary of workers is basically more than 2,000 yuan, and they need to eat, eat and stay." Chen Lingmei said that if this level is not reached, it will be difficult to retain skilled workers in Shenzhen. On the other hand, the price of raw materials has also risen sharply. "This year, the price increase of imported fabrics has exceeded 30%."

Other apparel companies are also troubled

According to the special semi-annual report, the staff cost increased from RMB 81.318 million in the same period of last year to RMB 95.345 million, which represented a year-on-year increase of 17.2%; the cost of raw material sales was RMB 537 million, which represented a year-on-year increase of 18.7%. Anta’s raw material expenditure for the first half of this year was 287.2 million yuan, an increase of 51.6% over the same period of last year, and direct wage expenses were 144.9 million yuan***, a year-on-year increase of 20.6%.

Insiders pointed out that in addition to the above-mentioned increase in basic cost pressures, some fashion and trend brand advertising marketing, promotional costs are also growing.

In addition to price increase measures, some companies have expressed that they are taking pressure from high-end brands. Chen Lingmei, chairman of Shenzhen Winners Apparel Co., Ltd., said that the company’s branded clothing, a set of clothing is sold for around 5,000 yuan, and some of the dresses are even sold for over 10,000 yuan. “There is more room for profit to absorb the steep rise in production costs. ".

It is reported that the sales target set by the company this year is an increase of 42%. The first half of the year has been completed as originally planned. Insiders suggested that the best way to reduce the pressure of garment companies is to adjust the product structure.

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