The Number Of Fast Fashion Brands In The World Is Growing Weak.

From 2016 to now, how fast is the world?

All growth is weak.

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H&M, GAP, Mango and other fast fashion brands reported that their profit growth has experienced varying degrees of decline.

The only thing that counts is Zara.

A few years ago, the fast growing global market of fashion brands including China, which was cost-effective and fast growing, is now struggling with the bottleneck of rapid expansion.

"At this stage, it is neither the best nor the worst."

An industry insider told times weekly reporter that today, the consumer sector is generally depressed. Fast fashion brands, if they want to expand in the trough, may increase their impact on current profits.

As Asia's largest apparel retailer, 2016 of the new fiscal year of UNIQLO's parent sales group was bad, and its net profit fell by 16.9%.

Among them, Japanese domestic performance and overseas market performance based on Greater China were not up to standard, and operating profit decreased by 12.4% and 14.2% respectively.

Affected by this, XXX group also lowered its annual profit and revenue forecast for the 2016 fiscal year.

As for the reasons for the sharp drop in profits, UNIQLO said that the year-end cold clothing accounted for a larger proportion of the product portfolio, resulting in the winter climate anomalies and warmer times could not respond in a timely manner. This made the sales performance in November and December relatively poor, and the January and February expansion of promotional activities, the gross margin fell by 3.5 percentage points.

"Store costs and labor costs are growing," Shen Meng, executive director of incense capital, told the media. "Competition is too fierce, and cost increases are the reasons for the decline of UNIQLO."

UNIQLO is not the only weak fast fashion brand.

Its competitor, the world's second largest clothing retailer H&M, has a net profit of only 2 billion 550 million Swedish kronor (about 2 billion 30 million yuan) in the first quarter, down 30% compared to the same period last year.

H&M also pointed out that the warm weather led to a large backlog of winter clothing in H&M. Excessive discount and inventory clearance led to a sharp fall of 320 basis points to 55% in the first quarter and a 29.6% decline in pre tax profits as a result of increased procurement costs.

In March 15, 2016, another fast fashion group GAP released 2015 fourth quarter earnings, net profit of $214 million, down 33% compared with the same period in 2014, worse than Wall Street analysts had expected to lower GAP earnings forecasts.

Among them, GAP group's biggest downfall was Banana Republic, sales fell 14%, Old Navy fell 8%, GAP brand also had a 3% decline.

At the same time, GAP also announced that it will close 75 old Navy and Banana Republic stores outside North America.

Spain's fast fashion brand Mango was even worse. Its parent company's Mango MNG Holding SL 2015 financial year recorded a net profit of 4 million euros, down 96% compared with the previous year.

The only better performance is the ZARA of Mango's fellow townsman, whose parent company Spanish apparel retailer InidtexSA group has sold 20 billion 900 million euros in fiscal 2015 (up to January 31, 2016), up 15.4% over the same period last year.

At the same time, the group net profit also has 15% growth, the growth rate is the highest in the past three years.

In the beginning of the 2016 fiscal year, from February 1st -3 7, excluding the exchange rate factor, sales increased by 15%.

Despite the good performance of ZARA, the industry still believes there is a risk.

"Its pricing is also affected. The price of one thousand or two thousand yuan in autumn and winter clothing is facing many challenges. Moreover, although ZARA has many shops in China, the sales in the Greater China region is not too big."

People from the clothing industry in China analyzed the media.

When it comes to the problem of weak growth, several fast fashion groups agree that the warmer winter in recent years is the main culprit, the other is the impact of exchange rate and the consequences of price reduction promotions.

In the fierce competition, several fast selling brands are fighting price wars. They have been discounted all year round. They have been branded as "discount anywhere and anywhere" in the minds of consumers. The influence of brands is rapidly declining.

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In the face of weakness, several fast fashion brands still do not give up expansion in China and other emerging markets in Asia.

"In the first half of 2016, the sales revenue and profits calculated by Renminbi in mainland China increased.

We expect that in the second half of this year, the overseas sales of UNIQLO, including the Chinese market, will see a double growth in revenue and profits.

Our expansion in the Chinese market will continue. "

The relevant person in charge of fast selling group of UNIQLO parent company said in an interview with the media.

Because of the saturation of the fast fashion stores in China's first tier cities, the Internet also has an impact on offline retailing. They are targeting two or three or even three or four line cities.

Although stores are closed in the North American market, GAP is expanding the Chinese market.

GAP said that there will be 40 new stores in China this year.

UNIQLO also said that it will maintain 80-100 stores a year in China.

H&M expects to open 60-80 new stores in China this year.

ZARA also said that at present, the strategy of "shrinking and prudence" has been temporarily maintained. The growth rate of stores will be between 6%-8% in the next few years.

These new shops are mainly concentrated in two or three line cities.

At the same time, H&M also announced that the group's main brand H&M H&M business platform landing in the Japanese market, Japan has become the thirty-first electricity supplier market of H&M. The brand also plans to launch online business in Greece, Canada and South Korea in the current fiscal year, adding a total of 11 online markets to 34 in the current fiscal year.

Another fast fashion targeting market is India.

A report from Euromonitor International predicts that the luxury industry in India will grow by 86% in 2013-2018 years, faster than China, Malaysia and Indonesia.

Like fast fashion in the western market and a popular era, India has also proved to be an attractive new market for fast fashion brands in recent years.

As the second largest market in the world after China, fashion retailing is booming in India.

There are 300 million Internet users in India. They have many potential customers in clothing e-commerce.

Although it has been less than 6 years to enter the India market, ZARA has 16 stores in India, and in July 2015, ZARA has become the first clothing brand in India with a sales breakthrough of 1 billion US dollars.

In April 2016, ZARA built the world's largest store in India.

Shop area of about 4645 square meters, ZARA will pay 300 million rupees (about 29 million 160 thousand yuan) to add rent, and at least 15 years.

In the autumn of 2015, H&M opened the first India store in New Delhi, covering an area of more than 25 thousand square feet (about 2322 square meters). In 2016, the group also planned to open 30 new branches in India.

"India is a huge market. There are 1 billion people here. In Sweden, we have only 9 million people but 150 stores. It depends on the time we enter, but the market potential is enormous. When we enter the India market, we will open some stores. If everything is as we wish, we will start to expand." H&M CEO said he hoped that H&M could meet India's growing middle class and the people who aspire to the Western way of life.

Prior to May 30, 2015, GAP group also opened its first store in India, New Delhi Citywalk shopping center, and announced that it would enter the India market in May 30, 2015.

So far, only one fast fashion group fast retailing group has not opened a store in the India market, but the group is also eyeing the India market.

In June 2015, India Prime Minister Modi and Japanese fashion giant fast Marketing Group Chairman Liu Jing met, issued a short statement, said Asia's largest clothing chain brand UNIQLO is considering buying clothing products from India, and the establishment of production lines in India can be seen as UNIQLO officially entered the development of India pedal.

Although the pace of expansion has never slowed down, it seems that in the industry, the fast fashion that does not make adjustments can only be regarded as a temporary solution.

Min Guangya, a retail expert, said that fast fashion brands are pushing consumers to imitate some of the big brands in a faster fashion. But from the speed point of view, fast fashion is not fast. The so-called "fast" is more like a false proposition. After all, the seasonal pattern of clothing sales is not going to change. With the downturn of global retailing, fast fashion has also lost its immunity.