Fast Fashion Clothing Brand Encountered Development Bottlenecks, How To Save Themselves?

According to the world clothing shoes and hats net, since the big

Since the brand has entered the domestic market, the trend of fast fashion is all the rage. The domestic market has become the fast fashion.

The largest consumer market.

But over the past two years, many fast fashion brands have encountered bottlenecks in development, difficulties in making profits, blocked stores and even frequent closes. How to save themselves is a problem before them.

Sales continued to slow in 2017.

ZARA shares have suffered avalanche recently.

Frequent opening of new stores "old road" has been impracticable, and the fashion giants are coincidentally using the electricity supplier as a life-saving straw.

In March, H&M and H&M Home Tmall flagship store opened to greet guests. ZARA also sold and increased the electricity supplier's investment.

Spanish fast fashion giant Zara parent Inditex SA, the core data of the fiscal year of 2016, has shown the trend of decreasing gross margin (the lowest point in eight years), and its growth rate has slowed down in the second half of 2017. Gross profit margin has dropped to 59.8% from the peak of 2013, and the share price has also fallen.

In February 23rd this year, Inditex SA's share price fell by 7.1%, the most significant intraday drop since June 2016.

In the past year, the market value of Spanish fast fashion giants has evaporated by 14%.

As of February 27, 2018, the stock price of Inditex SA closed at 25.44 euros per share, down 0.12% from the previous trading day, and the overall market value of the group has dropped to a low level 3 years ago.

Because more than half of the sales of Inditex group are generated in the form of non euro currency, the strong exchange rate of the euro has caused a certain blow to its profit.

Under the pressure of exchange rate fluctuations, physical retail store rents and product costs, there is no pressure on the Inditex group. According to latest news from Bloomberg, Inditex has signed a leaseback agreement with 16 buyers from Spain and Portugal, and the total volume of pactions is expected to reach US $472 million.

Founded in 1947, H&M is the originator of fast fashion brands. It is also a fast fashion brand that entered the Chinese market early. In April 2007, it opened the first store in mainland China in Shanghai.

By the end of November 2017, after 10 years of development, all the brands of H&M group reached 506 stores in China, the number more than 2 in the number of stores, after 536 in the United States.

In December 15, 2017, H&M group announced its worst quarterly sales performance.

During the financial period, group sales fell 4% to 584.5 billion Swedish kronor (about US $6 billion 890 million), far below analysts' expectations.

Affected by this, H&M group shares fell 15% in the afternoon, the biggest decline in 8 years.

In the summer of 2017, H&M closed the flagship store in the golden location of Xidan's Joy City street. At the end of the year, the H&M store in Shanghai dragon dream of Shanghai was also replaced by rival Zara.

According to a previously disclosed message, H&M will continue to restructure its store network in 2018 and plan to close 170 stores.

In addition to Zara and H&M, the performance of other fast fashion brands is not ideal.

Forever 21 turn off 1/3 shops.

NEW LOOK's performance has deteriorated rapidly, its business has been closed, its revenue has fallen and its value is zero. It faces the debt restructuring and has become the latest British brand to withdraw from the Chinese market.

After a long time in the mire, GAP finally showed some improvement although its performance is still declining, but the decline is narrowing.

For many fast fashion brands, China has become a very important market.

The fast changing Chinese consumers and fast-growing Chinese brands also make these brands have to consider how to respond quickly when they attach importance to the Chinese market.

Fast fashion clothing brands have obviously encountered development bottlenecks, so how should they save themselves?

Affected by the declining performance of physical stores, many fast fashion brands have accelerated the layout of e-commerce.

At the end of last year, the Inditex group came out with 400 million euros (about 4.71 billion US dollars) to sell its 16 shops in Spain. It was reported that Inditex was aiming to obtain more liquidity to expand online sales.

H&M also announced that H&M and its H&M Home brand will enter Tmall and look forward to developing new retail cooperation with Tmall in the future.

It is reported that the official flagship store of H&M and H&M Home opened in March 1st, and the sales volume of single products has exceeded 100 pieces in just two days.

And its sub card Monki has entered Tmall at the end of 2016 to test the water. Although the brand is not well known in the Chinese market and its shop is quite low-key, its performance is still good.

At present, the number of fans in Monki Tmall flagship store has reached 1 million 488 thousand, and the monthly sales volume of some single products reaches thousands.

Insiders believe that the strategy of fast fashion brands to build their own electricity providers is not difficult to understand. "Self operated electricity suppliers form a linkage with offline stores, and get the precipitation of big data, which is conducive to more direct control of consumer data. These data will provide clues on location strategy, regional demand, product mix and so on.

But if we cooperate with the platform, it means that these data will be shared with the platform, which has always been taboo for international brands.

And in the electricity business as the highest penetration, retail business channel accounted for 15% of the world's first China, consumers did not develop which brand like to log on to the brand website to spend habits, we prefer to go to the platform for comparison.

Last month, statistics released by the Statistics Bureau showed that retail sales of e-commerce outlets in 2017 rebounded after two years of decline, showing a growth of 32.2%, of which physical sales increased by 28%.

In the face of other fast fashion brands, Tmall has successively entered the market, and has achieved impressive results. In addition to improving performance and cleaning up inventory, it can also greatly enhance its popularity. H&M is helpless and compromising.

However, the industry also pointed out that the development of e-commerce is not a panacea. Although the business platform does not need to maintain a certain inventory and store maintenance like a physical shop, it can reduce the cost of management, but to a certain extent, to a certain extent, the fast fashion supply chain accelerates the challenge, the high return rate has also increased the logistics cost.

At the same time, the price of online sales will be even cheaper, or will lead to the fast fashion which is facing huge profit pressure, and its profits will be further compressed.

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