Bosideng Inventories Rushing Sales Promotion for Five Years in a Row Is Just an Expedient

Bosideng stocks rise for five consecutive years

Down jackets are seasonal products with high sensitivity to air temperature. If companies are overly optimistic about the market and stocking more, they are likely to cause difficulties in sales and high inventory levels. Bosideng’s latest fiscal year results as of March 31 showed that the company’s ending inventory was still as high as 2 billion yuan. Bosideng attributed the rise in stocks to "insufficient digestion." However, people in the industry believe that reductions in production, discounts, and other means of palliative treatment will increase the speed of channel response, and sales will be the key.

At the end of September last year, Bosideng stocks reached 2.703 billion yuan in "high-voltage lines." After nearly six months of digestion, inventories remain high. As of March 31 this year, the stock amounted to 2.043 billion yuan. Its inventory has risen for five consecutive years since 2010. Huge inventories are serious use of funds, leading to poor performance of Bosideng's various financial data. In the year ended March 31, 2014, the company's revenue decreased by 11.7% year-on-year to approximately RMB 8.238 billion. The net profit of shareholders decreased by 35.6% year-on-year to approximately RMB 695 million.

Chong Xiaotiao, a light industry researcher with China Investment Advisors, said that due to the impact of electricity suppliers, there are a large number of merchants selling down apparel on the Taobao platform. The price is lower than that of Bosideng and will undoubtedly divert the latter's customers. On the other hand, affected by global warming, the down apparel market Reduced demand.

In this regard, Bosideng controlled the new stocks during the reporting period. Due to factors such as weather, market competition, and weak market consumption, Bosideng automatically reduced production. In addition, Zhang Xiaoning also said that mainly because the digestion of old stocks is not large enough and not thorough. Therefore, the company plans to intensify its efforts this year to adjust its off-season product discounts and increase sales channels, such as group purchases.
Xiong Xiaokun believes that the double decline of Bosideng revenue and net profit is a dangerous signal to the company. Down jackets are seasonal products. If they have high inventory and the digestion cycle is long, if the backlog of inventory exceeds a certain period, it will be difficult to sell out, it will be difficult to realize, and it will become a loss; and a substantial discount promotion will also result in the company’s image. Negative impact.

Bosideng stated that the discounted conference has a certain impact on gross margins. Discounting is only an expedient measure, and people in the industry generally believe that increasing the speed of channel response is the key. Down apparel enterprises should strengthen the timely feedback of terminal store sales information, and formulate detailed production plans for styles, output, etc. according to the daily operating conditions. The “need to quantify” is more necessary.

Bosideng has also realized this, and Zhang Xiaoning said that the company has changed the frequency of replacement from once in the previous two weeks to once a week in the production of new products. The company expects that by March 31 next year, inventory can be down 10% -15%.

Some people think that they can sink old inventory through channels. “On the premise of guaranteeing quality, some products will be expanded to third- and fourth-tier cities to increase their access. In addition, although the e-commerce platform is also an option, companies need to guide consumers through the selection of formal partners and advocacy. Buy to prevent the impact of fakes on the brand.”

Another personage in the industry stated that for the purpose of “distribution by sales”, information feedback from the sales terminal to the company is a very important link, and this time should be as short as possible, and even the best real-time data collection can be achieved through big data analysis, etc. Means to plan for the shortest possible period of production. In addition, this feedback mechanism should not be limited to direct-operated stores, but third-party distributors should also join