ZARA create "fast fashion" mode, and is the Chinese clothing company in the past few years the most are fond of study direction. But several clothing enterprise recently discovered that they are for "quick" tired, for "quick" slow down.

Since recently, leisure clothing brand beauty TeSiBangWei (002269 SZ) suffered inventory brought trouble, according to 6 salomon Smith barney 2011 three quarterly reports, the company always current assets 6.018 billion yuan, including inventory has amounted to 2.982 billion yuan, accounting for more than 49.55%, accounting for nearly half of the current asset inventory, has become a sustainable business operation of the influence the main reason.

Small and medium plate on the listing of the clothing enterprise of the house of lanshi sea for high inventory been questioned, according to its prospectus in advance of the disclosure, by the end of 2011 the company inventory of 3.863 billion yuan, total current assets as high as 56.82%; In 2009 and 2010, the inventory turnover was only 0.79, and 0.88 (the good enterprise operation inventory turnover in usually between 2 ~ 3).

The business class clothing enterprise also fall victim to it, founded in 2007, every guest sincere products, 4 years nearly RMB 4 billion yuan of sales value. And because the continuously introduce the new products, marketing does not reach the designated position, leading to increased inventory. According to the samsung institute statistics, by September 30, 2011, every guest's total inventory as high as 1.445 billion yuan, and the end of 2011 and the end of 2010, the figure for 850 million yuan and 198 million yuan respectively.

Fast fashion line, in the Chinese clothing of enterprise, have suffered a series of "water and soil disaffected" phenomenon.

Orange born huaibei

Long-term studies of Chinese garment industry is slightly jun strategy management consulting senior consultant ZhangDaZhi still to "the first financial daily reporter recommend ZARA formula for success. ZARA fashion brand is not only, also be specializes in brand clothing chain of retail ZARA brand, in 1975 and in Spain, is ranking third, Spain FuZhuangShang ranked number one in the world more than 56 countries set up more than 2000 home clothing chain stores. In the past five or six years average growth of 25%, even in Europe in 2008 a recession, it growth in the third quarter is still 18%.

"Many domestic enterprises to ZARA study only stay in one hand, such as its buy a hand model, but for the rest of the management mode is a little learning is a dangerous thing." ZhangDaZhi told reporters.

TeSiBangWei beauty, once described as the most close to ZARA company in China. With most in the factory with different clothing brands, founder ZhouChengJian rely on production outsourcing founded the "virtual management" mode, in order to get rid of the shackles of own factory. In order to understand the mode of operation of ZARA, ZhouChengJian technically still put some order to the foundry to ZARA in China, and to understand the operation of the factory detailed process.

Another study of public ZARA is electricity business enterprise every guest sincere product, a close to the business to our correspondent said, every guest has been learning ZARA and fast fashion brands buy a hand mode, the so-called buy a hand mode, is to collect information on retail market and popular in the understanding of consumer demand, with the fastest response follows fashion. Every guest will the market popular clothing and element collected, and the small changes add stylist, then quickly will design model to a factory to processing.

Any a ZARA imitators will be told that, in the fast supply chain inventory is quick to maintain low fashion model the basis of earnings. But since most of the Chinese enterprise is still in the rapid expansion stage, for them, the more production means that expansion.

"Buy a hand mode of the perpetrators to ZARA wide range of learning, but related supply chain time management and inventory management but few learning." ZhangDaZhi said. In the clothing industry, these clothes in the warehouse stranded a day means that every dollar. The net assets of the beauty TeSiBangWei about for 3.2 billion yuan, and the warehouse of the clothes that an outlet has the net assets of nearly half.

solution

In fact inventory is always the most Chinese clothing enterprise with analysis of the li ning (02331 HK) in 2007 to 2010 years of the annual report, and it is easy to see the trend of inventory gradually to increase in 2010, more than 2007 inventory growth of more than 62%. Also, according to the Hong Kong stocks relevant data, as of June 2011, li ning inventory unabated, already close to 1 billion.

Meanwhile, Sam horse (002563 SZ), seven Wolf (002029 SZ), nine animal husbandry king (601566. SH) enterprise by 2011 in the third quarter of the year the company inventory balance growth of 37.36%, 78.43% and 52.69% respectively.

In ZhangDaZhi view, which is China's clothing brand high inventory of the three main reasons.

First is the management mode of distributors the malpractices, product sales can't provide feedback to the brand. In China's garment industry, each selling 1 goods, manufacturers, at least to 2.5 goods inventory turnover and sometimes beyond the proportion, thus forming a large number of inventory. For example, terminal customer actual need 100 pieces, retailers think need 150 pieces, distributors expand for 200 pieces, reflected in the producers will become 250 pieces when. Although terminal customer demand always and don't have a lot of volatility, but after retailers and wholesalers of amplification, quantity is level 1 level 1 increase, and the supply chain upstream to the order, the bigger the deviation.

Second, the order exhibition mode and not rely on distributors consumers provide market information. Various kinds of clothing brand every year chun xia, qiu dong has two order exhibition, the enterprise through the model shows, in-residence &equipment interpretation guide customers order, and then based on the quantity, make arrangement production, sales plan.

This mode, the real demand into products need to be a relatively long time. Most manufacturers domestic order to finished products from an average of 90 days to listed, some can reach more than 120 days. This led to a lot of store sales is a season of the popular style.

In addition, ignore design itself, ignoring the consumer demand is also a problem, many manufacturers think "the international popular style in a China city sell not move, can be stored in a second line after line, three city to sell", so can only lead to product the backlog of unsold existing homes, because they ignore the power of the Internet and role.

ZhangDaZhi think, the solution of the problem in several ways, such as strengthening management and feedback system, more press close to the customer. Such as foreign some fast fashion brand through the sales and bar code to direct feedback sales and production. There is far away from the urban core zone set up the factory store, will overstocked products rapid processing off.

"Small batch, quick turnover and tight vogue" is the key. And ChinaVenture hit group analysts all case think, clothing enterprise inventory into raw materials, inventory goods (not yet on the market the new product, not pin an outlet inventory) and turnover materials (packaging, etc) three categories, only the earnings on simple inventory Numbers, difficult to fully explain enterprises by an outlet inventory stock backlog is caused. If the enterprise inventory to not yet on the market new products is given priority to, but that enterprise management in good condition. Because each enterprise and franchisees to different ways of cooperation, leading to present great differences between the earnings statistics. Part of the enterprise will be devoted to napa stores inventory all plan into reports, some enterprises plan only devoted in stock, so only by inventory digital enough say business enterprise into a crisis.

Source "the Chinese textile nets"

Edit: Emma