Fast Fashion Giant Zara Shop More Than 500 Stores To Postpone Opening This Is Why?

Beginning in 2013,

It has been planned to sink to the three or four tier cities. However, according to the current layout of Zara in China, the number of shops with a ratio of up to 85% yuan is distributed in the second tier cities, and the rest are in Ningbo.

In Southeast developed cities, the proportion of shops in the three or four line cities is very small.

In recent months, news of fast fashion giant Zara has continued.

First, the parent company Inditex market value soared more than 100 billion dollars, and half year report also came out positive: from February 1st to July 31, this banner owns Zara, Zara Home, Massimo Dutti, Bershka, Stardivarius and other brands.

The company's total profit in the first half rose 17%, about 10 billion 600 million US dollars.

Net profit rose 26%, about 1 billion 160 million dollars.

However, amid the good news, a Spanish media has disclosed a puzzling decision of Inditex: the group will suspend shop after the total number of stores in Greater China exceeds 500.

In its recent semi annual report, the company wrote that in the past six months, the Spanish Company has opened 94 new stores, of which 24 of Zara stores are located in Brussels, Amsterdam and Vladivostok.

At present, the brand has 6777 stores in the world, most of which are concentrated in Europe.

This year, Zara has opened an electronic shopping channel in Hongkong and Taiwan. At present, the brand offers 28 countries and regions online shopping platform.

Why is this fast fashion company still in steady expansion? Why is the brake decision made in the Chinese market that most brands attach great importance to?

A common misconception is that China's economy is not working.

Indeed, not long ago, the yuan had depreciated rapidly, and the Chinese stock market also experienced a sharp concussion. Many luxury goods and light luxury brands have made a decision to shrink.

However, the fashion industry also has the "lipstick effect" theory. The poor economy, the fashionable products that can improve the image will sell very well, such as lipstick.

By contrast, Zara's colleagues did not step on the brakes in China.

UNIQLO continues to open stores at the rate of 100 per cent per year, and has recently launched several sister cards under its fast selling group. H&M's shop opening plan has remained at about 80 a year. After its annual earnings report, the company has made clear that it will develop all kinds of brands, followed by high-end vice card COS, and another sub &Other Stories will also enter the Chinese market.

It can be seen that Zara and even the entire INDITEX group slow down shop in China may have its own reasons.

In the Spanish media interview, Inditex gave the reason: the early garrison in shopping centres is too urgent, and the next task will be to open flagship stores in key cities.

Zara is the first brand to enter the Chinese market in the group. In February 2006, it opened its first flagship store in Nanjing West Road, Shanghai. The total number of stores in China now reaches 166, and stores have entered more than 60 cities.

As for the whole INDITEX group, the number of stores opened in China in the past few years is very fast. Before 2011, there were only 119 stores in the country, but in 2011, it opened 156 new homes in one year, 121 in the following year, and only 61 in 2013. Only 8 stores opened in the first quarter of this year.

The rapid growth from 2011 to 2012 is not a case of Zara, but H&M, UNIQLO and other brands are also promoting the growth of sales by increasing stores.

The reason for rapid expansion is not related to the blowout of domestic commercial real estate that started in 2011. In that year, 400 new department stores were added, and 250 new homes were added in 2013.

Commercial real estate has led to the rapid development of the fast fashion brand. Because of the strong brand, the cost of entering commercial real estate is quite low, which is reflected in free shop rents and even decoration subsidies.