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    The Myth Of "Sales Myth" Of UNIQLO Is Facing The End, And The Future Of Suppliers Is Confused.

    2016/4/25 13:49:00 66

    UNIQLOFast Marketing GroupFast Fashion Brand

    It is understood that in the first half of fiscal year 2016, the market revenue of UNIQLO overseas increased by 12.7% compared with the same period last year, but operating profit dropped by 31.4% compared with the same period last year, while the losses in the US market increased.

    On the evening of April 7th, the first half of the fiscal year 2016 released by Asia's first fashion group and UNIQLO's parent sales group showed that, in the first 6 months of February 29, 2016, the net profit of fast selling group fell 55.1%, which was the first half year net profit decline of the group in the past 5 years.




    In this regard,

    Uniqlo

    In April 23rd, the headquarter replied to reporters: "the first half of the fiscal year 2016 (the end of February 2016) increased its consolidated income, but the decrease in operating profit was mainly due to the abnormal warm winter in the northern hemisphere at the end of last year, which affected the sales of UNIQLO winter clothing and the exchange rate losses caused by the appreciation of the yen.

    As of February 29th, UNIQLO has 436 stores in China, and will continue to open 80-100 stores a year.

    Other specific data can not be disclosed.

    From this, people in the industry have predicted that the declining performance will make the vision of XXX group and its "world's largest apparel manufacturer and retailer" fade away. After several years of rapid development, the critical point of fast fashion has arrived.

    The "myth of sale" is facing the end.

    In April 21st, the reporter went into UNIQLO Wuhan Maoming shop and Han Street store.

    In the nearly half an hour of selling at Mau shop, there are not many customers choosing clothes and trying to buy them.

    Compared with sales of Maoming stores, Han street stores are bustling with excitement. Customers who choose clothes and try them on shop are in an endless stream.

    However, in contrast to the huge volume of single stores in popular business circles, it is the gloomy earnings report recently released by the fast retailing group of UNIQLO parent company.

    The financial report shows that in the first half of fiscal year 2016, the market revenue of UNIQLO overseas increased by 12.7% compared with the same period last year, but operating profit dropped by 31.4% over the same period.

    The profits in the Greater China region and South Korea have been reduced, while losses in the US market have increased. The business in these areas has been adversely affected by the warmer winter climate. Sales in Hongkong, Taiwan and South Korea have been hit by weak local economic conditions.

    UNIQLO said that due to the failure to fully convey the characteristics and freshness of the products to customers, coupled with the larger proportion of cold clothing in the product mix, resulting in the face of the winter climate anomalies and warmer time can not be timely response, making the sales performance in November and December are not good, the same store sales compared to the same period last year decreased by 1.9%.

    In January and February, the gross profit margin declined by 3.5 percentage points in the first half of this year.

    However,

    Fast Marketing Group

    In the earnings report, it reaffirmed the medium-term vision of 2020, which means that it will achieve 5 trillion yen (298 billion yuan) revenue in 2020, which is more than ZARA parent company Inditex SA (ITX.MC) and H&M parent Hennes &Mauritz AB (HMb.ST), becoming the world's largest apparel manufacturer and retailer.

    "With the rise of the new middle class in China, more consumers will choose to go out shopping or buy clothes with higher quality and higher design level.

    Next, UNIQLO will encounter difficulties such as the loss of customers and the weakening of core competitiveness.

    Xiong Xiaokun, a light industry researcher at CIC, said.

    Supplier's future is uncertain.

    In April 12th, the Hong Kong Stock Exchange welcomed a wave of new IPO listing. Unlike the Sibo system and Lian Wang Group, which had surged more than 10 times, the South spin holding company, which is mainly engaged in knitwear manufacturing, has not received much attention.

    The long and solid cooperative relationship with UNIQLO is an important "trump card" in the hands of Nan spin holdings.

    As early as 1995, UNIQLO began its cooperation with Nan Ping holdings. As of the three year of 2013, 2014 and March 31, 2015, UNIQLO provided 54.8%, 50% and 52.3% of the total annual revenue respectively, which undoubtedly became its largest customer.

    At the same time, reporters log on to the south wing holding official website found that, in addition to UNIQLO, the company is Tommy Hilfiger, Lands End and other international well-known brand suppliers.

    Over the past three years, the cooperation between Nan Ping holdings and 5 major customers has accounted for 95.3%, 93.1% and 92.3% of the company's annual revenue respectively.

    In this way, it is unavoidable to worry that once the 5 major customers stop working with Nan Ping holdings, they will be fatal to the company.


    {page_break}


    No coincidence, just before the launch of the south wing holding company, its biggest customer, UNIQLO, came to the news.

    According to the prospectus of South spin holdings, the company entered into short-term purchase orders with customers instead of long-term sales contracts. Although the directors believe that they have established good relations with their main customers, if their customers decide not to purchase any products or replace suppliers in the future, and if the company fails to find alternative buyers in time, their business performance may be seriously adversely affected.

    In April 21st, the reporter sent the outline of the interview to the official mailbox of Nan Ping holdings. On the evening of the evening, the company replied, "thank you for your interest in our business. As we are about to announce the results, we regret that we are not very convenient to respond to your questions.

    UNIQLO is one of our long-term and close partners. We have confidence in each other's cooperation.

    Nan Fang holdings did not respond positively to the reporters' questions. However, as the "giant" of Chinese knitwear, how to find new customers and gradually get rid of the fate of others is still a question worth pondering.

    Fast fashion development enters a critical point

    From 2000 to 2007, China's clothing retailing industry was dominated by department stores and supermarkets.

    Before and after 2006, fast fashion entered the Chinese market. ZARA first entered the flagship store in China in 2006. The following year, H&M also entered the Chinese market "Nuggets", while GAP was relatively late, and was declared to enter the Chinese market in 2010.

    Fast fashion brands were once called "a strong booster for the weak clothing retail market" because of its strong purchasing power, and strongly impacted the traditional department stores in China.

    The fast fashion brand, represented by UNIQLO, usually does not go to department stores, but opens on the crowded shopping street and even the front door of department stores. It is the main selling point of low price and fashion.

    Over the past three years, it has been a concentrated stage of fast fashion.

    However, judging from its performance in recent years, as Asia's largest apparel retailer, fast selling group seems to be getting farther and farther away from its medium-term vision. Its total operating profit in the first half of fiscal 2016 amounted to 99 billion 300 million yen, down 33.8% from the same period last year, and the total pre tax earnings amounted to 82 billion yen, down 49.9% from the same period last year.

    The performance of fast retailing group UNIQLO brand also disappointed investors.

    At the same time, reporters noted that the world's second largest garment retailers H&M2016 first quarter performance also suffered a substantial decline.

    H&M reported that the company's net profit in the first quarter was 2 billion 550 million Swedish kronor, down 30% compared to the same period last year, while GAP group's 2015 financial report revealed that its net profit in the fourth quarter of last year was 214 million dollars, down 33% compared with the same period in 2014.

    Many people in the industry told reporters that the rapid fashion performance of the collective decline, and the overall macroeconomic depression related.

    At the same time, Xiong Xiaokun, a light industry researcher at CIC, believes that if UNIQLO fails to adjust its strategy in time to cope with the market predicament, its once fast selling myth will end. "The operation cost of UNIQLO is continuing to improve. As of the first half of 2015, UNIQLO's shops in China are about the sum of H&M and GAP stores in China, which has forced them to maintain their own profit margins by raising prices. However, due to frequent quality problems and relatively slow categories of new products, the brand influence is gradually weakening, and the price increase will have a greater impact on UNIQLO sales."

    In recent years, the fast fashion brand has sprung up and has been widely criticized. After several years of rapid development, has the fast fashion brand reached its critical point?

    In the face of the doubt that brand development has reached the critical point, UNIQLO responded to reporters: "the performance of the first half of the year is not satisfactory, but we have analyzed the problems and challenges, and have actively implemented countermeasures. We expect to see results in the second half of this year to the next year.

    UNIQLO does not lack quality products, but it should work harder on product mix to cope with the unusual changes in the climate.

    This question is skilfully avoided.

    Xiong Xiaokun said that the current speed of fast fashion brands is slowing down.

    Luxury goods price reduction

    With the rise of overseas shopping and the increase in the number of middle class, its attractiveness to consumers has weakened, and now the market saturation of fast fashion brands is high, and the critical point has arrived.

    In addition, fast fashion has exploded in low price, fast speed and diversified products in the economic downturn. However, the market environment and consumer demand are changing. It is difficult to recover the trend of development several years ago.

    With the rise of the new middle class in China, more consumers will choose to go out shopping or buy clothes with higher quality and higher design level.

    Next, UNIQLO will encounter difficulties such as the loss of customers and the weakening of core competitiveness.

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