When Will Global Fast Fashion Go Out Of The Dark?

At the beginning of July, after visiting Shanghai Lujiazui shijihui shopping mall and the land plaza near Nanjing East Road, the reporter found that all the major "fast fashion" brands were pushing for discount and promotion activities, and the discount of some products even exceeded 50%. "Fast fashion is not fragrant!" In the context of brand discounts, this sentence also appears on social media with high frequency.

Around 2012, the fast fashion brands represented by H & M, Zara, UNIQLO, etc. were in the limelight. But in the past two years, looking at the global market, the days of these brands are no longer "comfortable.".

Just recently, the "recession" of fast fashion seems to be breaking out intensively. One of the signals that superecology & music has been losing its reputation in the market is that it has been optimistic about its brands in China. At the same time, the giant's performance is no longer beautiful. The company reported a loss of 9.8 billion yen at the end of May 2020.

For a while, fast fashion brands were labeled "frustrated". Consumers can't help but wonder: are there any "second" moments for these once affordable fashion brands around the world?

Impact of epidemic situation, no "left alone"

During the "618" period, Zhang Xiao (pseudonym), a white-collar of a fashion enterprise in Shanghai, bought a super dry T-shirt in tmall. This fashion brand is from the UK. It mainly focuses on casual wear such as hoodies and jogging pants. The main customers are teenagers under 30. The price of a single piece of clothing is usually less than $100.

In early July, when Zhang Xiao landed in superdry's tmall flagship store again, what he saw was the word "goodbye" on the front page. "All of a sudden, I'm a dry old customer. Most of the clothes in my closet are dry. I like the style, the price is acceptable, and the quality is guaranteed. It's a rare brand." Zhang Xiao said that she also specially consulted the purchasing agent of the e-commerce platform, and was told that all offline stores of the brand in the Chinese market might be closed in mid July, so it seems that "in the future, it can only be purchased overseas.".

In fact, superdry announced its official withdrawal from the Chinese market through its official wechat official account at the end of June. Superdry said it would leave the mainland market temporarily due to the impact of the new outbreak. From July 2020, superdry's proprietary stores and brand e-commerce flagship stores will be closed one after another.

Superdry group has also announced to its reporter that the cooperation between superdry group and its global financial market has been adjusted based on the impact of the global financial market.

A clothing industry practitioner told reporters that superdry's brand positioning is too high to meet the needs of the Chinese market, and the product research and development has not found out the needs of Chinese users, but the brand side has been too optimistic about the market return expectations. He also pointed out that although a partner has been found in China, the running in of the two sides is not in place. With the impact of the epidemic on business, the best choice for "stop loss" is to withdraw.

Of course, not superdry. Recently, Japanese women's wear Earth Music & ecology, once regarded as the representative of mori, announced its withdrawal from the Chinese market in the flagship store of e-commerce platform.

In 2020, we will try our best to reduce the impact of epidemic situation on our sales in 2020. But with the spread of the global economy, especially in the global economy, it has caused great impact. After careful discussion at the general meeting of shareholders of the parent company, it is decided to restructure the business and temporarily withdraw from the Chinese market. " In the announcement, Earth Music & Ecology says this.

At present, the flagship stores of samansa MoS2 and e hyphen word Gallery of women's wear brands of stripe International Group, parent company of Earth Music & ecology, have also been closed.

The epidemic seems to be the "last straw" to overwhelm these brands. Caroline rush, chief executive of the British Fashion Council, told European news television that people were facing an "inventory crisis," Wen Wei Po reported. "When you stay at home, you don't have to go to the company, you don't eat out, you don't go to events, there's almost no demand for clothes."

Under the influence of the epidemic, some large groups with fast fashion empire in the world are also affected.

According to the data released by Fast Retailing, its total comprehensive income in the first three quarters of fiscal year 2020 was 1544.9 billion yen (down 15.2% compared with the same period of last year), and the total profit from comprehensive operation was 132.3 billion yen (down 46.6% year-on-year). Fast sale said that behind this performance is mainly affected by the epidemic situation.

A similar situation is found in INDITEX group, Zara's parent company. As of the first quarter of 2020, the sales of INDITEX group decreased by 44% compared with the same period in the first quarter of 2020. However, during the quarter, INDITEX's online channel sales increased by 50% year-on-year.

In early June, INDITEX was accused of planning to close 1200 stores this year and next, accounting for 16% of its total stores. For a moment, Zara can not stand the voice of the four.

However, INDITEX China's public relations department recently said in an interview that INDITEX will indeed absorb 1000 to 1200 small stores, but the sales of these stores account for 5% to 6% of the total sales, and due to the unsatisfactory location, they are unable to provide customers with a new shopping experience. It is said that most of these small shops are relatively old, mainly other brand stores other than Zara of the group.

Low tide has been a long time, many brands have failed

On June 11, BCG pointed out in a research report released by BCG that the impact on fashion and luxury industry during the epidemic was very similar. But unlike the relatively rapid recovery of luxury goods, the recovery of fashion sector is relatively slow.

Some people believe that the decline of fast fashion has already appeared, and the epidemic situation is only the fuse. If we lengthen the time line, for the fast fashion industry, "shop closing" and even "exit" have become the most talked about vocabulary in recent years. A person who once served as a middle-level manager in a large-scale domestic garment enterprise told reporters that in his opinion, after nearly a decade of rapid development, the fast fashion industry has long been no longer bright, and the industry has been in the stage of prosperity and decline.

For a long time, the Chinese market is the "strategic place" for the global fast fashion brands. In 2002, UNIQLO opened its first store in Shanghai, which has opened the curtain of China's fast fashion market. A few years later, many foreign fast fashion brands such as H & M, km, Zara, Forever 21 and other foreign fast fashion brands have successively entered China, and started the "horse race enclosure" era for nearly 10 years. According to a fast fashion brand development report of Yingshi group research center, as of the first half of 2015, the total number of stores of UNIQLO, H & M, Zara, gap and other top ten fast fashion giants in China has exceeded 1200, with the total number of stores increasing by 25.9% compared with the same period in 2014.

It is worth mentioning that, after reaching the peak of expansion in 2017, the situation in 2018 has gone down sharply. In 2017, the growth rate of new stores in mainland stores decreased from 415% in 2017 to 14% in 2016.

Investors in the field of commercial real estate once pointed out to reporters that the rapid expansion of fast fashion is closely related to the outbreak of commercial real estate. Before this, after the department stores and shopping centers were completed, the settled brands became the key to attract popularity and even compete with each other. For this reason, many commercial real estate even do not hesitate to avoid the way of shop rent to attract some high flow brands to settle in, fast fashion once became a "favorite". However, since then, due to the excessive expansion of commercial real estate and the impact of e-commerce, life has not been easy. With the "synchronous expansion" of commercial real estate, fast fashion people are facing multiple pressures, such as high store cost, inventory cost, saturated market and fierce competition, so stop loss immediately becomes the first choice.

In November 2018, the British fast fashion brand Topshop tmall flagship store was cleared. According to the original plan, the brand planned to open its first flagship store in mainland China this year, which will also be one of the largest stores in the world. At the end of the same month, new look, another British high street clothing retailer, officially announced its withdrawal from the Chinese market and closed its remaining 120 stores in China. Similarly, at the end of April 2019, the American fast fashion brand forever On the grounds of adjustment of international business operation strategy, it also confirmed to withdraw from the Chinese market, and then filed for bankruptcy. Seven months later, Old Navy, a sub brand known as the growth engine of gap performance, also indicated that it would leave China

According to he Xiaoqing, senior partner of corney management consulting company, fast fashion brands are facing several fierce rivals in China. On the one hand, with the development of international and domestic integration and consumption upgrading, there are a large number of inexpensive but more fashionable fashion brands on the market, catering to the needs of young consumers who pursue personalized. In addition, there are thousands of online celebrities on the e-commerce platform. At the same time, in addition to the rise of the local fashion brand, some clothing enterprises with capital strength and operation experience are also actively layout to compete with fast fashion brands for the market.

He Xiaoqing said that Chinese consumers have gone through the era of blind pursuit of western fashion and are becoming more rational. Their requirements for quality are gradually improving, and the market influence brought by consumption upgrading is being released.

In fact, fast fashion brands are not only "cold" in the Chinese market. According to the financial data of previous years, the performance of H & M, a Swedish fast fashion group, has been weak since 2017. It was not until last year that its performance recovered. But the new outbreak has hit the company hard. In the third quarter of 2020, the net sales volume was 2.8 billion kronor and 6.6 billion in the third quarter of 2020 compared with that of last year.

Gap is no exception. According to the financial report, the sales volume of gap group decreased by 1% to 16.4 billion US dollars, and the net profit decreased by 65% to 351 million US dollars.

Why is fashion fast fading?

Wang Guoping, a member of the senior advisory group of lianshang.com, told reporters that the threshold of fast fashion products is not high. In comparison, regional fast fashion brands will be more grounded and easier to meet the needs of consumers. "Take the Chinese market as an example, there are at least 1000 fast fashion brands. These international fashion brands can be said to be defeated by domestic ones."

Difficult transformation, future online?

The word "fast fashion" originated from Europe in the 20th century. It flourished with the rise of "improvised consumption" at the beginning of the 21st century because of its low price and rapid update of fashion styles. Driven by the "fast fashion" trend, people's clothing purchases began to increase rapidly from 2006 to 2016.

Gu Xinyi, chairman of Haiyan guishidi Industrial Co., Ltd., which has long-term cooperation with Primark, the largest fashion retailer in the UK market, told the international financial news that compared with traditional clothing brands, fast fashion brands can quickly copy, produce and put on the shelves the latest fashions, and the prices are close to the people, but they blindly pursue speed and price, so the brand positioning is not clear and the products are homogeneous And unstable quality control, high inventory and other drawbacks are increasingly prominent.

"This industry has the element of" gambling ", which is bound to face the problems of product shortage and excess inventory, followed by price reduction and profit margin decline." A senior person who has been engaged in clothing trade for decades also told reporters that in the current ever-changing business environment and the heavy damage of epidemic situation, fast fashion brands must take measures as soon as possible.

Under various difficulties, expanding the Chinese market seems to be the first choice of fast fashion brands. H & M said in an interview with reporters that China's mainland market will become the third largest market of H & M group in the world in the second quarter of fiscal year 2020. As of May 31, 2020, H & M group has 516 stores in mainland China and opened four new H & M stores in the first half of 2020. At the end of May, UNIQLO, a Japanese fast fashion brand, announced that it would open eight new stores in eight cities across the country, including Hangzhou and Chengdu. In addition, INDITEX group, fast retailing group and UNIQLO also indicated that they would participate in the Expo 2020.

"INDITEX group will always be committed to the development of the Chinese market, we see the growing potential of the Chinese market, while continuously understanding and analyzing the needs of Chinese customers, so as to bring them high-quality fashion based on Sustainable standards and meet their preferences." For example, it will strengthen its investment in China's market and some of its young brands.

The next focus of the transformation of the digital fast code brand will also become. According to INDITEX China, it will invest 1 billion euro to support online platform business and 1.7 billion euro to upgrade integrated store platform. "We expect the share of online sales to rise from 14% in 2019 to 25% in 2022, and with the support of a fully integrated online and offline shop network, our business model will be more flexible, more sustainable and more intelligent."

A person who once served as a senior official of a domestic listed clothing enterprise told reporters that INDITEX group is undoubtedly right to increase the direction and layout of online e-commerce business. "In the future, international fast fashion brands will pay more attention to offline physical store layout, and increase investment in online business. Online and offline integration has become a major trend in the international market from the domestic trend."

There is a "tacit understanding" between fast fashion. H & m also said in an interview with the reporter that at present, H & M group is continuing to take actions, such as accelerating the group's digital transformation, optimizing the store mix and further integrating online and offline channels. In addition, the transformation work related to the supply chain and organization is also accelerating.

"We are launching a treadler service for businesses to provide H & M Group supply chain information to textile and apparel retailers, enabling other companies to accelerate sustainable social and environmental change through their own value chains. Through leading sustainable development work, we hope to continue to lead the fashion retail industry to a more sustainable future. " H & M said so.