ZARA And Other Fast Fashion Brands 2014 Net Profit Income Is Not Good.

< p > fast fashion brand, which is what we often say, "quick paction, take away" has occupied young people's wardrobe.

ZARA is one of the rapid rise. In the central business circle of the first tier cities in China, it has spent a lot of money to decorate their huge windows. A long queue outside the fitting room seems to be announcing its earning power. However, in 2013, the fast fashion brand praised by the industry turned up an embarrassing report card.

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< p > Inditex group was founded in Spain in 1975 and is currently one of the four largest fashion chains in the world.

It has many a target= "_blank" href= "http://www.91se91.com/" > clothing "/a" brand, ZARA is the most successful, and the proportion of revenue to parent company is more than 60%.

It is considered one of the most valuable brands in Europe.

However, in March 20th, InditexSA, the fashion brand ZARA's parent company and the world's largest apparel retailer, reported that the net profit growth of the year was less than 1%, while in the past three years, Inditex has maintained double-digit net profit growth.

The fast growing trend of fast fashion is difficult to sustain? < /p >

< p > < strong > an embarrassing pcript < /strong > /p >

< p > the ZARA parent company, which has always been praised by the industry as a learning benchmark, has handed out a report card that surprised the industry this time.

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< p > according to Inditex's performance, the net profit for the year ended January 31, 2014 is only less than 1% to 2 billion 380 million euros in the 2012 fiscal year, which is the lowest growth rate for ZARA's parent company in five years.

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< p > "if the annual growth is less than 1%, it seems to be standing in step, but compared with the annual growth of CPI, the whole enterprise is going backward."

Chen Yi, a senior retail management expert, bluntly said.

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< p > March 27th, for the reasons for the slowdown in performance growth, ZARA responsible person told this newspaper that it was mainly due to the impact of exchange rate.

Meanwhile, in 2013, Inditex group increased its investment to refurbish stores, and this shop refurbishment plan is very necessary for the long-term development of Inditex.

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< p > financial results show that 440-480 stores were originally planned, but the reason why the shop speed was not up to standard was that it changed the strategy to close the smaller stores in the middle term, set up large new stores, and renovate some 100 important flagship stores.

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< p > < strong > the sequelae of blind expansion < /strong > < /p >.

< p > ZARA "fast fashion" mode is one of the most successful marketing modes in recent years, but this performance is a big surprise for the industry.

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< p > Senior retail expert, Ding Haozhou, President of China business management group, told this newspaper that the reason for ZARA's performance is mainly due to the rapid expansion and price increase of ZARA in the past two years, resulting in an increase in inventory and a decline in gross margin.

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< p > results show that as of January 31, 2014, all the brands of InditexSA have 6340 stores in 87 markets worldwide.

In the 2013 fiscal year alone, the group added 331 new stores, with an increase of 9% in retail space.

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< p > at the same time of large scale shops, product price increase also let consumers slowly away from ZARA.

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P, a senior industry veteran who declined to be named, told us that the price of ZARA was basically the same as that of its old rival H&M, but in the past two years, ZARA's a target= "_blank" href= "http://www.91se91.com/" > clothing "/a" price is more expensive than H&M.

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< p > in the process of rapid expansion and price increase, the increase in stock and the decline in gross profit rate become an indisputable fact.

According to the financial report, in 2013, the gross profit margin of Inditex group dropped by 50 basis points to 59.3%.

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< p > "fast fashion brands believe in the rule of" fast and unbroken "business rule, although creating the myth of supply chain with" 15 days and one cycle ", but from the index of gross profit margin decline, it is likely that the company is discounting the stock.

Ding Haozhou bluntly said that due to the rapid opening of ZARA, the consumption discrepancy among different regions, coupled with the rapid subsidence and rapid price increase, eventually led to an increase in the backlog of goods.

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< p > according to the previous performance report of Inditex group, its 2013 year growth was weak, and even in June last year, there was a rare large-scale inventory clearing action.

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< p > another industry insider who doesn't want to be named is right to say that although ZARA has opened many stores in the two or three line cities, the stores with good performance are basically in the first tier cities, while the two or three line city stores are basically on the margins of losses, basically relying on the first tier cities to patch up, resulting in a vicious circle of marketing mode.

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< p > "the decline of ZARA performance is very much related to the very easy replication of ZARA mode."

Zhang Qing, founder of Beijing's key road sports consulting, said that ZARA has entered China for many years. Although it has great advantages in operation and mode, with the rapid development of China in recent years, domestic enterprises already have the ability to copy ZARA mode.

"Under such circumstances, the ZARA's mode advantage is being diluted without innovation."

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< p > < strong > the status of a brother is threatened. < /strong > < /p >

< p > "from now on, < a href=" http://www.91se91.com/news/index_c.asp "> ZARA < /a" is still the first big tycoon of "fast fashion". If there is no merger and acquisition, the position of its leading industry is difficult to surpass in two or three years. If ZARA mode is not cultivated on the basis of original, the possibility of being replaced in the future will be great.

Ding Haozhou said yes.

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"P", and in terms of market competition, UNIQLO is undoubtedly ZARA's biggest rival.

UNIQLO has been expanding rapidly in the past two years. In order to lay the Chinese market, UNIQLO parent company sells fast to sell roundabout tactics, issuing HDR to help the Greater China and Southeast Asia, and improving the popularity of fast selling group, UNIQLO and its brands.

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< p > in addition to the market level, it also faces the competitive pressure of rival H&M in design.

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< p > Chen Yi said to analysts that ZARA is basically following the mode of micro innovation in the design aspect. H&M basically cooperated with some big brands in the past two years, and its products are experiencing multiple innovative elements, that is to say, it is changing to the direction of customization. Therefore, technological innovation and star effect marketing are the main reasons for H&M to surpass ZARA in terms of sales volume.

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< p > it is worth mentioning that H&M's performance has maintained double-digit growth.

Statistics show that in the first quarter of fiscal 2014 from December 1, 2013 to February 28, 2014, the group achieved a total sales of 37 billion 524 million kronor, including VAT, an increase of 13% over the same period last year.

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< p > for the development of 2014, the responsible person of ZARA indicated that the performance has been good since the 2014 fiscal year.

In the six weeks from February 1st to March 15th, the group's total sales increased by 12%.

China is a market that a href= "http://www.91se91.com/news/index_c.asp" > Inditex < /a > attaches great importance to. It is expected that by the end of 2014, the number of shops will reach 500.

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