What is the current environmnet of the garment industry?

Under the background of continued recovery of consumption, clothing and home textiles plate recently received the attention of the secondary market funds.

Data show that as of the close of trading on May 10, nearly 10 trading days, clothing and home textiles index increased by more than 5%, while the Shanghai Composite Index rose by 0.54% in the same period, it can be said to outperform the market. 

It is worth mentioning that the recent clothing and home textile plate listed companies reported a quarter to close, the overall also showed the industry ushered in a warm recovery.

On the other hand, recent relevant consumption data show that the growth momentum of clothing and home textiles consumption is obvious. In this context, the consumption demand of clothing and home textiles in the second quarter is expected to be further released and become a consensus of many parties.

How is the sales performence of  Clothing and home textiles in the over past few months?

Since the beginning of this year, with the promotion of consumption policies across the country and the gradual recovery of consumer demand, clothing and home textiles consumer market ushered in a sustained recovery.

The reporter learned from Vipshop, an e-commerce retailer, that in the past three months, the sales of clothing and wear on the platform increased significantly, especially the growth of women’s clothing. The sales of women’s jeans increased by 58%, the sales of women’s knitwear increased by 79%, and the sales of women’s shirts and dresses increased by about 40%. Men’s wear also performed well, with sales of men’s shirts up 45% year on year, men’s jackets up 67% year on year, and sales of men’s POLO shirts and men’s T-shirts up more than 20% year on year.

In addition, the recovery momentum of the consumption of home textiles is also very obvious. Data show that in the past three months, the overall sales volume of home textile category increased by more than 25% year-on-year, bed kits, quilt cores, pillows and other products become the most favored by consumers.

On the other hand, April and May Day clothing consumption data also continued high growth. According to the Ministry of Commerce on May 4, the 2023 May Day holiday will see residents’ strong willingness to travel and enthusiasm for consumption, and the consumer market will maintain rapid growth. According to the Commerce Big Data monitoring by the Ministry of Commerce, the sales volume of key retail and catering enterprises increased by 18.9% year-on-year, while the sales volume of gold, silver and jewelry and clothing increased by 22.8% and 18.4% respectively.

 What are the prospects of the garment industry and its downstream enterprises?

In this context, many brokerages are optimistic about the future of clothing home textile industry further recovery prospects. Boc Securities believes that clothing consumption fundamentals are expected to improve in the long term. Looking ahead to the whole year, the clothing consumption market continues to recover.

Guangfa securities research report shows that 2023Q2 textile manufacturing plate performance is expected to improve, clothing home textile plate performance is expected to further accelerate. “First of all, for the textile manufacturing sector, with the gradual inventory reduction of overseas brand customers, the inventory structure continues to improve, the downstream demand is expected to gradually recover, and the prices of cotton and other raw materials gradually stabilize, or even recover slightly. Secondly, for the garment and home textiles sector, on the one hand, the year-on-year base is low, on the other hand, domestic consumer demand is picking up, the economy continues to improve, boosted confidence, and the competitiveness of listed companies within the sector continues to strengthen.”

Clotning downstream enterprises also ushered in new development opportunities with the recovery of the Clotning industry. For example, manufacturers of garment tags, woven labels, main labels, washing care labels, accessories and packaging  opp bags,zip bags  have also achieved good performance  in the past few months.