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High rentals affect apparel brands in China's Sichuan
Jul '13
Chinese clothing enterprises intending to expand in Sichuan province, located in the southwest of the country, are being negatively affected by high rentals for store, coupled with poor stability of staff.
In Chengdu, the capital of Sichuan, despite the presence of a large number of commercial complexes, the store rents are very high, which act as a major constraint for the expansion of apparel brands.
In several major shopping areas of Chengdu, the monthly store rentals have risen to around 2,000 yuan/sq m, which means for opening a store of 150 sq m, the rent would go as high as 300,000 yuan per month, plus there would be operating and other costs, which makes earning profit very difficult, according to a local report.
As a result, some brands are even abandoning their Chengdu expansion plans.
Besides shop rents, another distressing factor for garment enterprises is the difficulty in recruitment. Several young people, without any industry experience, have unrealistic salary expectations and they frequently change jobs. So, it becomes difficult to find stable staff, according to local garment store managers.

Fibre2fashion News Desk - India

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