Home collapse

In 2014, for the home industry, it was clear that the word "unfavorable year" was fulfilled. From the so-called wave of turnover of executives to the mid-year home bankruptcy, all kinds of tides rise and fall. Previously, the royal family furniture, Jiefeng home and Other home companies have been exposed to a serious decline in performance, the days of home businesses seem to get worse.

In mid-June, according to media reports in the industry, Huayuanxuan, one of Shenzhen's household giants, is in the process of filing for bankruptcy. The so-called “no winds can rise” and the IPO from Huayuanxuan is blocked to rumors of bankruptcy. Shenzhen’s other home giant, Rich Island, has also suffered from collective staffing due to unpaid wages.

In the face of various home closures, it was recently reported that the “net exposure of Huayuan Xuan was on the verge of bankruptcy” and received a “impossible” response from the company.

But in fact, anyone may face bankruptcy!

In this regard, we must admit that for a high-speed, fast-moving market economy, the home-ownership enterprise is just a boat floating on the surface of the sea, and there is always the danger of overturning the ship, even if the ship is large enough to withstand storms at sea. The fiercest rampage may cause the big ship to sink as soon as structural problems, fuel problems, or other ship collisions strike. Because of this, Bill Gates often told the company’s employees when he was Microsoft’s CEO. “Microsoft is always 18 months away from closing down.”

The bigger the homelessness tide, the bigger the danger?

The tide of bankruptcy began in the store In recent years, the beginning of the so-called home bankruptcy boom was actually not our familiar home manufacturing industry, but began to spread from the terminal store. In mid-September 2012, the US chain giant, Home Depot, the world's largest building materials supermarket, closed all large-scale home building and building retail stores in China; coincidentally, since 2013, Beijing Xinglong Home Building Materials City, Jinkai Leader Home Marketplace, Oriental Home Lishuiqiao Stores, Bianjuju Bridge North Store, and House of Furnished Dadongfa Store have been in trouble, or closed, or moved to relocate. In 2013, the home-grown building supermarket, which was once the largest domestic brand in China, was plagued by collapses. All five Beijing stores were suspended and their headquarters also filed for bankruptcy.

These facts are nothing more than explanations. In recent years, due to real estate regulation, the home industry has been in a state of depression. Looking at the annual sales in the previous two years, in 2012, the sales volume of building materials homes above designated size decreased by 2.46% compared with the value of 1.278.92 billion yuan in 2011. The situation in 2013 was also not very optimistic.

The home industry as a traditional industry, the emergence of its so-called closure tide did cause some sensation in the market. As a typical representative of the traditional industry, home building materials for two years is not a good day, the tide of the collapse of traditional enterprises, no doubt gave this home building materials has been full of chill a more heartbreaking shock, a wave of more intense home industry reshuffle tide It is in full swing.

Some small and medium-sized stores with weaker capabilities have already begun to close stores, some of them are to reduce the scale of operations, while others simply leave the market. For the upper reaches of the manufacturing industry, the reason why it is in a difficult situation is partly because of the recession in the domestic real estate market, and at the same time the export is hindered and the amount of work is reduced; on the other hand, the overall excess capacity of the building materials industry has led to overall low profitability in the industry. , Reduced risk resistance.

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Is it a "crisis" or an "opportunity?"

Recalling one of the few bankruptcy booms in the home industry, the most obvious start is the bankruptcy that arose from the shrinking real estate market in 2005. At the time of the closure of the tidal wave, whoever fell first will become the target. If you change the angle, the question is nothing more than what causes the closure of the company.

In general, the collapse of a business is often the result of many factors working together. For example, the capital chain is broken, the raw material cost is too high, the product design is backward, the channel construction is weak, the management efficiency is not high, the market competition is too fierce, and so on. In terms of importance, funds are undoubtedly the most important factor in determining the survival of a company. As we all know, the vast majority of home-based businesses are small and medium-sized enterprises. The most important issue for these companies is capital. So the answer is obvious. Those companies with tight funds should be the first to fall. Facts have also proved that since 2005, the enterprises that have been closed down in the home industry are basically small and medium-sized enterprises with financial constraints.

Prior to 2005, household consumption had been maintained at a very high level, and any household product could be sold quickly. In this kind of benign consumption environment, the home company's capital turnover period is short, funds are quickly returned, and very little liquidity can maintain the operation of a company.

After 2005, this situation has changed and the overcapacity in the home industry has become increasingly severe. As a result, large-scale home companies have started to collapse large-scale small and medium-sized home-enterprise enterprises. According to unofficial statistics, in the two years of 2005 and 2006, thousands of home-based enterprises were closed down; within one year of 2007, there were thousands of home-based enterprises in the country closed down; in 2008, under the impact of the financial crisis, there were 7,000 in the country. Home-based companies have closed down; from 2009 to 2010, home-based companies have closed more than 1,000 homes per year on average. Until 2011, the Pearl River Delta and Jiangsu and Zhejiang again reported news of corporate closures. The recent closure of the tide, which is caused by changes in the macro environment in 2013.

However, no matter what era of bankruptcy, when we carefully summarized, we found that the company's disease-causing genes are always similar: rising corporate costs, overcapacity in the industry, macroeconomic downturn, corporate decision-making failure, operational management confusion ... ... The above factors also make In the past two years, the home industry will face the critical point of change. The overall decline in the home industry is precisely the opportunity for the industry to upgrade.

The bigger the plate, the more dangerous it is?

The home furnishing industry is a special industry. The special nature of the material, the processing technology and the irregularity of the appearance determine that it can only be a semi-mechanical and semi-manual production industry. At the same time, after 30 years of development, China's modern home furnishing industry has entered a state of overcapacity in the industry, overexpansion of stores, and modest corporate profits.

In this state of the home industry, the dependence on market consumption is very large. Once the consumption power of the market shrinks, it means that there will be a large number of products in the industry that cannot be sold, funds cannot be recovered, and eventually will inevitably lead to a portion of cash dependence. Flowing businesses and stores have problems in their operations and become victims of "shuffle".

As the article said at the beginning of the Huayuan Xuan bankruptcy rumors, the most external analysis of the reasons for the capital chain is also tight. In turn, we can also say that those companies that have completed the initial capital accumulation during the explosive growth of the home industry and have strong financial strength are also very likely to become the final winners.

As long as the decision-makers of large-scale enterprises keep their heads awake, these companies can "laugh" to the end under the support of abundant funds. The market economy has always been a "game of the strong," and every industry is like this. The big ones are big and the capital is king.

However, with the increasing number of home-based enterprises on the scale of assets in China, entrepreneurs will feel even more struggling. Market competition is always relentless. Once a company makes a major mistake, it is likely to collapse in a domino-like chain reaction, and the results of decades of operation have been turned out to be unsuccessful. Such examples are numerous. Therefore, the CEOs of home companies should always “be on the verge of an abyss, tread on thin ice” and always maintain sufficient awareness of the crisis.