How Should Department Stores Break Through For Fast Fashion?

As a major force in the traditional retail market, with the promotion of China's urbanization and the new strategic structural adjustment, the department store industry is facing more business opportunities as well as other challenges such as shopping centers, supermarkets, franchised stores, and so on. "P >" department store "is an important force in the traditional retail market.

The malpractice of the joint mode commonly used in the industry is gradually emerging. Because of competing for brands, squeezing their profit margins seriously affects the profitability of department stores.

Faced with this dilemma, what should businesses do? < /p >

< p > < strong > the malpractice of the joint venture mode is highlighted < /strong > < /p >.

< p > recently, the Baisheng flower shop, located in the big cross of Guiyang, closed down.

Since the end of last year, Parkson Phoenix Phoenix store has been closed, and this is the second store that Parkson has closed in Guiyang.

Although a senior executive of Guizhou magic Baisheng Commercial Development Co., Ltd., responded to Guiyang's local media, "the removal of two stores is a strategic adjustment made by enterprises in Guiyang."

But in the first quarter of 2013, when the profits of Baisheng group dropped substantially, the reason is not necessarily so simple.

< /p >

< p > earnings show that Parkson's operating profit in the first quarter was 298 million yuan, down 27% compared with 406 million yuan in the same period in 2012.

The operating profit margin also dropped from 8.3% in the same period last year to 6%, and the profit attributable to shareholders decreased by 27.4% to 227 million yuan compared with the same period last year.

< /p >

< p > profit decline is not a case. Nanjing Xin Bai group also announced 2013 first quarter operating revenue, down 0.81% compared with the same period last year, net profit fell 60.31%, 2013 in the first quarter, the company achieved 762 million yuan of business income, down 0.81% compared to the same period, and the net profit attributable to parent company was 47 million 760 thousand and 600 yuan, down 60.31% over the same period.

< /p >

The sales performance of "P" department stores is not optimistic.

Since the 90s of last century, more and more department stores in China have shifted from the traditional proprietary mode to the "brand joint mode", which is controlled by brand operators. The brands enter the mall without paying rent, but by extracting the button from the sales volume of the brand as the gross profit of the Department store.

< /p >

< p >, however, with the increasing number of domestic department stores, the industry analysis, this mode is gradually affecting the profitability of shopping malls.

Although these ultra low price promotion methods have increased the passenger flow, promoted sales and accelerated the withdrawal of funds in the short term, but because the cost has not correspondingly reduced, the gross margin space of businesses has been seriously squeezed.

< /p >

< p > < strong > how should a department store break through? < /strong > < /p >

< p > < strong > break for fast fashion > /strong > /p >

< p > as we all know, the most popular features of fast fashion brands are moderate prices, ordinary fabrics, fashionable designs, diverse styles and fast updates. They are welcomed by consumers, and also the reason why fast fashion products can quickly get a higher market share.

In recent years, European and American H&M, C&A, ZARA, MANGO, Japan's UNIQLO, IMAGE and other fast fashion brands have significantly accelerated the "domestic market" of the domestic market.

< /p >

< p > but for various reasons, the international fast fashion brand represented by ZARA and UNIQLO seems to have been blind to department stores.

< /p >

< p > however, recently, a reporter interviewed found that the shop on the first floor of Xinhua Department Store in Beijing was originally replaced by UNIQLO, which provided several brands selling "a target=" _blank "href=" http://www.91se91.com/ "shoes" /a ".

Different from other brands in the department store, UNIQLO still takes a direct battalion mode with separate cash registers.

Its storefront area also far exceeds other a target= "_blank" href= "http://www.91se91.com/" > clothing < /a > brand.

< /p >

What is the significance of a fast fashion shop with a direct camp mode in the traditional department store dominated by affiliation? P analysis shows that the biggest drawback of China's department stores is the reverse growth of passenger flow, and the department store industry has become a relatively bad industry.

As a result, attracting consumers has become an urgent problem for department stores.

But many fast fashion brands have accelerated development, although there is no lack of "close to hand to hand" fierce, but more importantly, they stirred the traditional retail market this pool of spring water, but also brought new shopping experience to consumers.

According to the reporter's observation, many customers are attracted by it. UNIQLO's entry rate is much higher than the rest of the department store's clothing brands.

< /p >

< p > industry analysis: "in addition to price factors, there are various kinds of product photos on the Internet, but in physical shops, consumers often need to find and try them to get results.

"Fast fashion", while grasping the fashion trend, has also explored the construction of shopping environment and absorbed the advantages of online shops. This is also an important reason why they can attract consumers to go in.

< /p >

< p > < strong > diversification for upgrading < /strong > < /p >

Wang Xianqing, director of the Institute of circulation economics, Guangdong University of Business, said that the domestic department store format has entered a long-term recession, and it is difficult to recover in the short term, not to mention high growth in P.

After nearly ten years of rapid development, the traditional department stores have entered the bottleneck stage, and face enormous challenges in terms of operating costs, business models and pformation to high-end consumption.

< /p >

The most urgent thing for a p department store is to upgrade or turn to a dead end.

But for fast fashion brands, the "direct camp mode" is obvious. The department store is obviously under great pressure. The direct mode will bring great challenges to the comprehensive ability of cash flow, buyer team, market risk control and management in department stores.

< /p >

< p > "China's department stores do business property management rather than shopping malls management.

The alienation of roles gradually led to its departure from its main business, and it blurred the boundaries between department stores and shopping centers. The Department Store gradually adopted a business model similar to that of shopping centers. However, in the competition of hardware environment, the department store industry could only be defeated because of its slow development in the past.

People in the industry are not optimistic about this model.

< /p >

Less than P, however, there are also optimistic insiders. "Joint mode", the shopping mall actually pushed the business risk to suppliers, but after the direct operation of department stores, the market will face the market pressure directly.

In fact, it is also an opportunity to improve the internal quality of enterprises and boost the upgrading of business quality.

< /p >