French philosopher Roland barthes described the value and significance of clothing in his popular system -- semiotics and dress codes:

An industrial society that is good at computing must breed consumers that are not. If clothing producers and consumers have the same consciousness, clothing will only be bought and produced with very low wear and tear. Popular fashion, like all popular things, depends on the gap between these two kinds of consciousness, strangers to each other. In order to blunt the computational consciousness of the buyer, a veil must be put on things -- a veil of imagery, rationality, meaning, creating a virtual image that becomes a consumer image.

In this consumption environment, clothing is essentially a product of constant upgrading. In the process of upgrading, clothing inventory is inevitable.

Instead, these inventories will bite apparel retail enterprises, bringing heavy cost burden to enterprises. This cultural and business paradox is almost inescapable, especially when consumption is low.

China merchants securities released on June 17 this year on a set of data mentioned. The growth rate of total retail sales of consumer goods continued to slow down in May 2019. Consumers in the current environment, the consumption floor is not enough.

This situation further affects the situation.

In the contradiction between the production logic of upgrading and the expected decline of coinage consumption, apparel retailers in 2019 are in a dilemma.

a

Apparel retail crisis

Everbright securities gave such a set of data in its "investment strategy for the textile and apparel industry in the second half of 2019" released in June this year.

Since the second quarter of 2018, affected by the sluggish terminal demand, the overall growth of the industry has slowed down, and the indicators of profitability (net interest rate), operating capacity (inventory, receivables turnover) and provision and provision have weakened successively.

Industry revenue growth slowed, declining net profit. According to statistics, the apparel retail industry is divided into 38 companies in 10 sub-industries. In 2018, the total revenue of the industry was 128.695 billion yuan, with a year-on-year increase of 10.76%; in the first quarter of 2019, the total revenue was 331.66 billion yuan, with a year-on-year increase of 5.55%.

Compared with the historical growth rate, the growth rate of the industry accelerated significantly in 2017 compared with 2016. The growth rate of revenue increased from single digits to 14%, the growth rate of 2018 revenue slowed to 11% compared with 2017, and the growth rate further slowed to 6% in the first quarter of 2019.

A large part of the reason for this is clothing inventory.

In terms of operating capacity, since 2018, inventory turnover first accelerated and then slowed down, and accounts receivable turnover continued to slow down.

After the inventory digestion during the adjustment period from 2012 to 2016, the inventory turnover of the industry improved in 2017, and the trend continued to 2018, indicating that the efficiency of the industry in operation and product control has been improved.

With the increasing impact of continued weak external demand since the second quarter of 2018, inventory turnover slowed down in the first quarter of 2019, and the weak terminal demand made it more difficult to digest goods in the industry and brought disturbance, thus the turnover days continued to slow down.

This data suggests several things.

1. Under the general trend of cold consumption, those that seem to be relatively little affected are also affected. The domestic clothing consumption demand is insufficient and the market is weak, so few people are willing to buy clothes.

2. Clothing enterprises are facing inventory turnover problems due to insufficient demand. The days of inventory turnover are lengthened, and the enterprises need to pay for storage costs, thus causing pressure on cash flow.

It can be said that the apparel retail industry is in a major crisis. The crisis can even be seen as structural.

In 2018, a famous apparel retailer defaulted on its debt. High debt, high inventory, if continued, will be enough to gradually drag enterprises into bankruptcy restructuring difficulties.

If you look at it from the perspective of the cycle stage, the domestic situation is very similar to Japan in the 1990s.

At that time, Japan's economy was in recession, and traditional clothing leaders such as envard and sanyang chamber of commerce were facing a decline in income.

At that time, these enterprises were mainly engaged in supermarket & department store channel and wholesale mode, with high markup rate. They paid more attention to rapid expansion and occupied the market, and paid less attention to refined operation, with low retail efficiency and inflated product prices.

This is basically the same as the current situation of most domestic apparel enterprises, but later uniqlo and other brands improved the efficiency of the supply chain, shortened the retail link, and provided cost-effective products with lower prices, which better fit the needs of consumers, gradually opening up the situation.

While high inventories and high profits can be maintained today, as the industry becomes more transparent, how long this unhealthy state can last is a question.

The second

Inventory problems

It would be more straightforward to look at a set of tables for Oriental securities.

The inventory days of most apparel enterprises are more than 150 days, few enterprises can control the inventory days within 100 days.

The problem with this is that inventories are a big drag on profits and production.

Interestingly, on June 13, semir released an announcement on the record of investor relations activities.

In response to investors' questions about controlling inventory risks, semar said in the announcement that the main problems facing semar brand are that it needs to take into account high-speed development, accurately forecast market demand, balance the relationship between production plan and actual sales needs, and keep inventory under control.

There is a very important message here: the ultimate challenge for semir is how to turn content advantage into brand momentum to "completely solve the inventory problem."

There are two reasons for semir to disclose this information:

1. Since 2018, the number of days of inventory has been increasing, which has affected the rapid development of enterprises to some extent;

2. It has reached the turning point of the industry. In the case of insufficient consumption, it can only reduce costs and improve profits by fine management of inventory;

From these two sources, semmaka is aware of the problems in the country. And I hope to find a breakthrough through self-reform.

Want to know, semir is among them still be inventory turns over a number of days to maintain a good enterprise, other enterprises are facing more serious problems.

In fact, compared with Japanese enterprises, the inventory capacity of Chinese apparel retailers is generally relatively low.

IRMAN, a Japanese professional investment relations website, published a data in September 2018. According to the number of days of inventory turnover, ryopin plans to change all the goods in the store on the 81st, that is, the 81st.

Remember, this also includes household goods, which have a relatively long inventory cycle.

That said, ryopin plans to have fewer than 81 days of inventory -- or even only about 70.

For this year's 2018-2019 annual report, which starts from 2015-2016, there are very few fluctuations in the plan, whether it is clothes, household goods or food. While we can see inventory levels rising, ryopin's stock levels barely increased at 2% yen inflation in 2018.

According to its medium-term business plan for 2017-2020, the company intends to reduce its inventory by another 50% by 2020. The refined management ability of Japanese enterprises is vividly reflected in liangpin plan.

By contrast, the inventory management ability of Chinese apparel enterprises needs to improve a lot. The cost of inventory days above 150 is staggering.

1. Warehousing costs and the accompanying labor and transportation costs will directly drag down profits, which is one of the reasons why the profit margins of domestic apparel retail are so high. High profit is actually to cover inventory risk.

2. Clothes will be gradually worn out and reduced in price. Every year that the inventory cycle is extended, the clothes will not be sold at the price, and the profit margin will eventually decline. Eventually, if the inventory cycle is too long, there is even a risk of incineration.

three

Qualitative changes in the supply chain

From the experience of Japan, domestic apparel retailers may need to seek qualitative changes in the supply chain next. No matter product positioning, single management and full link coordination should be reorganized.

1. Product positioning: once the positioning of the brand is accurate and the customer group is determined, the cost is not an issue. Appropriate raw materials and production process control can produce products corresponding to the positioning.

At present, apparel retail enterprises are often hit on the head in the process of apparel production, and design directly according to their own preferences. There is a lack of research on subgroups. Take women's wear as an example, domestic apparel retail is often divided into luxury, high-end, little lady clothing and other categories.

However, foreign apparel enterprises will even continue to subdivide under large categories, such as idyllic small flowers, lace, beige and pink lady design and other elements continue to join them, continue to divide the crowd, and provide different products for each group of people.

2. Single item management: we can see the company's inventory management -- the amount of each single item of inventory -- from muji's 2018 annual report released in February 2019.

In fact, this is only part of the story. Muji inventory tracking began five years ago. Companies will look for consulting firms to conduct a comprehensive analysis of the company's business performance over the past five years, including inventory turnover, and make plans for each year. According to the actual situation of each year, inventory correction.

In the face of inventory problems, this kind of refined treatment plan, muji more than most domestic enterprises.

3. Efficiency of connecting upstream and downstream: domestic apparel retail enterprises should pay more attention to the connection between upstream and downstream. Inventory management can also rely on social e-commerce and other supply chain management techniques.

For example, the S2b2C social e-commerce model adopted by love inventory pays more attention to find a high-speed and effective solution to destocking. The efficiency connecting upstream and downstream is becoming the lifeblood of clothing enterprises. Love inventory can improve the control ability and flexibility of the whole chain of the supply chain.

This is also the most unique advantage of Chinese enterprises compared with foreign enterprises. In China, WeChat and other social networks have become one of the important channels for apparel sales. Third-party e-commerce based on WeChat ecology can empower brand apparel enterprises and bring about the remodeling of supply chain. The real advantage of social e-commerce lies in its socialization, data and systematization. Enterprises can also achieve inventory management capabilities.

Clothing retail inventory problem, it is a cultural and production paradox.

On the one hand, apparel retail enterprises need to stimulate production and gain profits through upgrading; on the other hand, upgrading inevitably brings inventory problems, which may bite enterprises.

Van gogh packard's "the garbage man" argues that the way to change mass society, as opposed to cultural rebellion, has accelerated our cycle of fashion obsolescence, all in the name of personal expression.

But technology is likely to ease this cycle of fashion obsolescence, allowing companies to maintain a relatively healthy balance in the middle of the paradox.