Costs of Clothing Stores with Abrupt Changes in Apparel Industry Costs Can't Hurt

The business agency reported on February 29th that the Spring Festival of the Year of the Dragon is the coldest of the Spring Festival in recent years. However, in the heart of clothing manager Jian Guo Sheng, it is his heart that is colder than the ninth winter. Because Jane Guosheng could only watch his own small clothing store that had been in the Golden Eagle Women’s Street in Jiefangbei, Chongqing for 5 years, and stepped to the edge of closing down. As a self-made young man, he basically has no way to recover the situation.

The pain of an ordinary shop Five years ago, Jian Guosheng borrowed tens of thousands of dollars from his family and friends to prepare for the women's and accessories business at Golden Eagle Women's Street. After a friend's introduction, Jane Guosheng rented a 7-square-meter small facade from Golden Eagle Ladies Street from the other owner's hands, and took over all of the clothing business in the store. Since then, Jian Guosheng has owned a small clothing store of his own, and he has entered the ranks of clothing dealers.

For local women in Chongqing, Golden Eagle Women's Street can be described as nobody knows. When the first two years just took over, Jane Guosheng did not quite understand the clothing business, but the popular popularity of Golden Eagle Women's Street made it easy to accept the newly-entered youth. In the words of Jian Guosheng himself: “In the beginning, I still haven’t fully figured out why so many people like to sell well. Every time I haven’t had time to think about it, the goods have already been sold out in two days. ."

In Jinying Women's Street, Jian Guosheng, like all people in the clothing and apparel business, took less than half a year to fully adapt to the market's bargaining market atmosphere. "The business in those two years is really good. Basically, you don't have to worry about not being able to sell the goods."

Around September 2009, Golden Eagle Women's Street experienced an overall relocation and it was necessary to merge with the nearby shopping district for overall planning. Some of the merchants' business conditions have been affected, but even so, women's street after merger and reorganization can still attract many young women to spend.

Since taking over the store, in addition to the monthly fixed store rental and purchase cost, Jian Guosheng’s business in Golden Eagle Women’s Street has been basically making money. However, from the second half of 2010, the business of Jane Guosheng gradually faded, until the Spring Festival on the eve of the Year of the Dragon, the store almost to the edge of closed down.

For his own experience, Jian Guosheng said that since last year, he has seen some sporadic reports on local media in Chongqing. Some of the bosses who talked about doing clothing business decided to transfer the facade because of a sharp drop in sales, and they planned to leave. "I didn't think that something happened to me in the newspapers. Sometimes I talked to others and I didn't think I could cure it myself."

The physical store couldn't afford the price war. When asked why the current situation appeared, Jane Guosheng sighed at the “Textile and Apparel Weekly” reporter. “I think I know it's a bit late.” In 2010, Jian Guosheng was in Chaotianmen clothing wholesale. A friend of the market told him about the opening of the Taobao shop. Jane Guosheng was very interested at the time, but because of the reason for looking at the shop, there was no extra thought to study the issue carefully.

In the past two years, there have been fewer and fewer customers in Jian Guosheng's store. Occasionally, interested guests are also leaving after the inquiry. Gao Yan and Jian Guosheng, bosses who run manuka apparel at Golden Eagle Women’s Street, have similar experiences. She said that the sale of 200,000 yuan worth of goods every month was completely fine, but it began to decline slowly last year. It is now only about 10 million yuan, and the overall decline is more than 40%.

Speaking of the reasons for the decline in business, many shopkeepers have stated that the goods on the Golden Eagle Women's Street are not much different from those on Taobao, and the styles of clothes that are similar to the clothes on the Internet are only equivalent to about 60% of the physical stores. In addition, the price of clothing is always on the rise, and the prices on the Internet are relatively lower. "Online shop does not use water and electricity, there is no high rent, as long as they fight with us to fight the price, the store must have lost." Gao Yan said.

Hu Shaofu, who is doing business at Chaotianmen Dazheng Clothing Wholesale Market, disclosed to reporters a detail: 5 years ago, the number of goods that Hu Shaofu sent to online stores was less than 1/10 of the physical stores, but in the past two years, the purchase volume of online stores With rapid increase, the purchase volume of online stores and physical stores was very close to last year. In Hu Shaofu’s 11 years of clothing wholesale career, he has never seen such a rapid change.

The battle between rent and price is difficult for the small clothing store business. In fact, the well-known brand's flagship store is not easy. Not long ago, the Nike store in Nanjing West Road in Shanghai has publicly stated that the store was forced to close because of the property side. According to a survey conducted by the reporter, the “property of the property” mentioned by Nike is actually directly related to the increase in the rental price of stores in Nanjing Road shopping district.

As the lease period approaches, the rent on the Nanjing Road shopping district is also rising. Nike acknowledged that since the rental price of the Nike Shanghai Nanjing Road shop was much higher than the rental property company’s expectations, the property side and Nike terminated the lease agreement in advance.

The reason behind the property company’s decision to withdraw from the business district ahead of schedule is that once the rental price of the business district has risen to a certain range, which exceeds the price that most merchants can afford, it will inevitably affect the commercial property rented and sold by the commercial district. This may result in the merchant being unable to tolerate the excessively high rent of the shop and closing the door. Because Nike recognizes this, it simply chooses to terminate the agreement early.

In a sense, Nike is willing to reach an agreement with the property owner to terminate the leasing of shops in advance. It is actually a long-term strategic consideration, because when the rent rises, the operating cost of the store is too high, the single store performance is bound to be affected and even touched. To the store's profitability bottom line. Therefore, rather than losing money for a long period of time, it is better to close the business for a short period of time.

In fact, whether it is in the low-end clothing business in Chongqing, Jian Guosheng and Gao Yan, or Nike’s flagship store on Shanghai’s Nanjing Road, in the context of high commercial costs, large and small clothing brands are trying to pass the same The means - to increase the sales price of single items, to ensure the profits of brand owners, maintain the normal operation of the store. As long as apparel brands want to use this simple, mechanical approach to profit growth, today's consumers will continue to complain about the expensive clothing.

On the other hand, when clothing prices are getting higher and higher, consumers do not necessarily buy it. This is like a battle. When the increase in profit of the brand loses to the increase in rent, there will be a situation in which the store closes and the store closes. According to the latest research report published by Knight Frank, rents for shops in Beijing and Shanghai will increase by about 15% this year. In the past, most local brands saw the losses in the first-tier cities' gold business districts as advertising costs, and they valued their publicity. Now, these brands may have been unable to withstand such huge commercial costs.