Lack of speed to understand the crisis let the textile sector away from recovery

Sao Paulo-the lack of agility of fashion retailers to understand and adapt to the crisis formed a challenging scenario for the textile sector. With resumption planned only for 2018, companies of all sizes run to adjust inventory, reduce dependence on a single audience and cut costs to get through the recession without fail.
The research data of the IBGE''s monthly trade, give a good overview of the situation. In April this year the sector of textiles, clothing and footwear saw indentation of 8.8% on sales volume, over a year before. This scenario of retraction is not new and has already been at least since the beginning of last year (see chart).
In this context, the solution found by the major retailers in the industry seems to be unanimous. "The tone of them is very similar: If the recipe doesn''t help, we go by the costs," says an investment analyst from Quantitas, Vinicius Piccinini. According to him, the big companies have tried to respond to crisis in a similar fashion: firing, adapting stores to reality, and closing with low performance.
For the professor of the Center for retail studies of Escola Superior de Propaganda e Marketing (ESPM), Roberto Nascimento, one of the main difficulties of those companies is stock management. "With the crisis it is necessary to adjust inventories to this new demand. And many companies have failed at it, "he says.
The consultant Rizzo Franchising, Marcus Rizzo, agrees and adds that another problem is the lack of positioning of companies. "This generates huge leftovers, which put products on sale of predatory manner. This error in stock is fostered by an evil targeting some of them, wanting to serve all audiences ".
Hits
Although the diagnosis to be similar for all, results vary and some have fared considerably better than others. "The crisis hits for all, but for some it is more lenient. There is a retail less prepared and more prepared, "says Piccinini, Quantitas-citing the retailer Renner as an example of a healthy operation. For him, publicly traded companies in the industry, she has presented the best financial results.
With steady growth in net revenues from the beginning of 2014, the retailer recently announced that should lead the operation for Uruguay, with the opening of two units in the country. "Uruguay has a market very similar to the State of Rio Grande do Sul, where the network was born and already know how to operate. I think it was a correct move, "says Piccinini.
In the first quarter of this year the retailer saw 6.5% growth in net revenues. In every quarter last year and 2014 the network presented in this constant feed item, and always two digits.
Errors
Renner''s case, however, does not reflect the reality of the sector. Most companies are in difficult situation and an example are negotiations between the Group Restoque-Le Lis Blanc holder, Pink Tea and Dudalina-and Inbrands, which controls the brands Ellus, Richard and VR. After submit drop in revenue and a loss in the first quarter of this year, they announced the possibility of merge operations. The goal would be to gain synergy, and reduce costs.
Another retailer that has more the crisis is the Cia. Hering. According to Piccinini, during the last 13 quarters, the company presented drop in sales at the same stores concept ''-which considers only the units open more than 12 months. In the first quarter of this year, the company had 29.5% decline in net income and closed eight operations. Marisa had even worse results, showing a loss of 17.2 million R$ from January to March. The value more than tripled compared with the 5.3 million R$ of prejudice that she had in the first quarter of 2015. Sought, companies preferred not to comment.
What to do?
The Side Walk shops supervisor, Felipe Azambuja, makes sense on these skin problems and States that, with the crisis, there''s been a change in consumer behavior. "Customers have left to buy, but are consuming in less quantity," he says.
In addition to reducing costs and adjust inventories cited by consultants another alternative is the adaptation of products. Children''s fashion retailer Marisol, claims to have launched a new line with lower prices. "We did a review of the portfolio and launched a new line, with products with a more affordable price," says the company''s retail business Director, Luis Dauphin. He also cites the simplification of processes and reduction in number of rows.
The various actions taken by businesses, however, should not be sufficient for a resumption in the short term. According to birth of ESPM, the sector should only feel a strong recovery at the end of 2017. "And until then, some companies should not resist. Will be years of '' sieve '', will only be good, "he predicted.