On December 2, the World Meteorological Organization released an interim report on the “State of the Global Climate in 2020” in Geneva, stating that 2020 will become one of the three warmest years on record. The distribution and change of temperature are very uneven in time and space! Under the influence of more small-scale and short-term weather systems, the weather in various places is different, and there are also different cold and warm anomalies, and some places will be obviously colder. But according to WMO calculations, these deviations have been accounted for in this global average warmer result.
The expectation for winter has changed from “cold winter” to “warm winter”. The impact of this forecast change on the textile market is actually very big. Especially the sales of down jackets will be greatly affected if there is a warm winter later. Looking back at the winter of 2019-2020, due to the warm winter effect, down jackets were unsaleable and clothing factories accumulated a large amount of inventory.
Take Uniqlo as an example. In 2015, due to its failure to grasp climate changes, same-store sales fell by 10% annually, and its annual performance fell into a loss. In the spring of 2016, low-price dumping, large product backlogs, and arrears with upstream and downstream payments caused many down jacket manufacturers to close their doors. It was also a warm winter in 2019. Uniqlo’s financial report for the first quarter of fiscal year 2020 showed that sales fell by 3.3% year-on-year, and operating profits fell by 12.4%. The company said the decline in sales and profits was mainly affected by the warm winter weather.
It can be seen that weather is an important factor that cannot be ignored in clothing management. Earlier analysts believed that the relationship between temperature and retail sales is often underestimated by the outside world, but the former is one of the three major external driving factors that affect performance.
Autumn and winter fabrics are selling well again, and clothing orders have increased by 20%-30%
However, this winter, sales of down jackets have been exceptionally good. According to a number of garment factories in Hangzhou, as it is expected that this year will be a cold winter, the demand for winter clothing is much greater than in previous years, with order volume increasing by 20%-30%. The same is true for the weaving market. Recently, autumn and winter fabrics have become popular again, such as T400, four-way stretch, high-elastic pongee, polyester, nylon and cotton composite yarn, viscose T8, imitation acetic acid, etc. The sales volume of several gray fabrics has increased. Even clearing out inventory.
Thereasonwhyautumnandwinterfabricshavebecomesopopularagainrecentlyhasbeenexplainedbytheeditorinpreviousarticles.Ontheonehand,thereisindeedafeelingofcoldwinterrecently,andthereisacertaindemandforwinterclothingsuchasdownjacketsandcotton-paddedjackets.Ontheotherhand,astheendoftheyearapproaches,andundertheinfluenceofvaccines,expectationsfornextyearhaveimproved,drivingawaveofstockingup.However,assoonasthenewsofa”warmwinter”comesout,itseemstobecontrarytothecurrentmarketsituation.
Ifthe”coldwinter”turnsintoa”warmwinter”thisyear,whatimpactwillithaveontheentiretextileindustry?Wecanpredictfromseveralaspects.
ThewarmwinterwillmakedownjacketsunsalableinthelaterperiodIftheweatherheatsupormaintainsthecurrenttemperatureinthelaterperiod,itwillbedifficulttodrivethesalesofdownjackets,sothebatchofclothingrecentlyorderedwillbecomeunsaleableinventory.Garmentfactoriesholdinventoryintheirhandsandhavedifficultyincapitalturnover,soitwillbedifficulttorecoverthebalanceofthesefabricorders.Therefore,somedownjacketswillflowbacktofabricmerchants,anddownjacketscanbeseensoldatlowpriceseverywhere.
However,downjacketsaleshaveappearedrecently.Insomemarkets,onepieceonlycosts150yuan,whilesomeold-styledownjacketscurrentlyinfrontofBuBoss’ssalesdepartmentonlysellthreepiecesfor100yuan.Recently,theeditorwasattractedbyavideo.DownjacketsinstockinYiwumarketwereonsaleforapricereducedfrom58yuanto38yuan!Thepriceofdownjacketsisgettinglowerandlower,whichalsomeansthatithastoomuchinventoryandiseagertoselloutitsfunds.
Thewarmwinterwilllimittheplacementofnewordersnextyear
AccordingtostatisticsfromtheChinaNationalGarmentAssociation,thesizeofmycountry’sdownjacketmarketin2018wasapproximately106.8billionyuan,whichwasItincreasedbymorethan10%year-on-yearlastyear.Withconsumptionupgrading,themarketsizeofChina’sdownjacketsisexpectedtoreach138.2billionyuanin2020.Someprofessionalsrevealedthatevenifthedownjacketsonthemarketstopbeingproduced,theywillstilllast20years!
Accordingtothisdata,ifdownjacketsremainunsaleablethiswinter,itwillinevitablyaffectthedemandforwinterclothingnextyear.Thebacklogofinventorywillcontinuetobedigestednextwinter.Infact,thelargeamountofinventoryleftoverfromlastyear’swarmwinterhasnotbeenfullydigested.Anothermildwinterthisyearwillinevitablyseriouslyaffectthespeedofinventorydigestion.Partofstockingupnowistopreparefornextyear’swinterclothing,whichwillmakeitevenworsefornextyear’sneworders.Inordertodigesttheremaininginventory,nextyear’sneworderswillbegreatlydiscounted.In2021,someclothingcompaniesmaygobankruptduetoproblemssuchasexcessiveinventoryandbrokencapitalchains.Mostcompanieswillencounterabottleneckperiod,andtheentireindustrywillbeaffected.
Avoidexcessiveinventoryofdownjacketsandstockupcarefully
Lookingbackattheimpactofwarmwintersinthepast,thesituationofwinterclothingfabricsintheweavingmarketisclearlyreflected.Takingnylon,acommonlyusedfabricfordownjackets,asanexample,theshipmentvolumeisverysmall,andmostmanufacturershaveaccumulatedhundredsofthousandsormillionsofmetersofinventory.Inthefirsthalfof2020,thepriceofgrayfabricseven”collapsed”.Thepriceof380Tnylonsilkfabricsdroppedfrommorethan4.5yuan/metertoabout3yuan/meter.
ForToavoidasimilarsituationfromhappeningagain,Mr.Buneedstobecalmwhilewelcomingthemarket’s“year-endcarnival”trendrecently.EspeciallytherecentriseinPTAhasledtoawaveofshipmentsofpolyesterrawmaterials,alargepartofwhichisduetothestockingupofdownstreamweavingfactories.Althoughithasalmostbecomeatraditionforclothbossestostockuponrawmaterialsbeforetheendoftheyear,therearealsomanyclothbosseswhomakemistakesinstockingup.Thesameistrueforfabrictraders.Donotstocktoomuchstockandblindlyfollowthetrendofproduction.Whenplanningfornextyear,westillneedtobecautious.Postscript:Warmwinterhasagreatimpactonthesalesofwinterclothingfabrics,andwehavealreadyexperienceditinthepast.Oncethepredictionofawarmwinterthisyearisconfirmed,itwillundoubtedlymakethingsworsefortherecoveringtextileindustry,andthemarketconditionsnextyearwillalsobeaffected.
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