Zara Britain'S Market Revenue And Profits Both Grow At A High Speed.

Stepping on the corpse of a British colleague

High street in England

When the industry continues to decline, "invaders"

But it's strong. Spain's fast fashion.

Britain's market revenue and earnings both grow at a high speed.

In the 2015 fiscal year ended January 31, 2016, the Zara UK market recorded a sales income of 535 million pounds, up 8% compared to the same period last year, while the pre tax profit rose 18.5%, from 49 million 200 thousand pounds in the 2014 fiscal year to 58 million 300 thousand pounds.

In the 2015 fiscal year, Zara UK paid 47 million dividends to the Spanish parent company, up 9.3% annually.

Due to the economic downturn and the competition of electricity providers, the high street industry in Britain was seriously depressed after 2015.

Behind the strong performance of Zara in the UK market is the decline of the whole market, which means stepping on the corpse of the British counterparts. After losing consumer, the department store brand BHS and the men's wear brand Austin Reed went bankrupt, and BHS had a huge pension shortfall.

In the British home market, Zara's rival Marks &Spencer Group PLC (MKS.L), Marsha general store, M&S, and the same name clothing brand has been languishing for the past four or five years and its market share has been eroded. The new CEO Steve Rowe of the department store is currently undergoing a reform of the garment business in a thunderous attempt. However, its latest redevelopment plan has been hit by the market in a season and has been punished instantly in the open market.

In addition, Next PLC (NXT.L), which is strong in recent years and has jumped to be the most profitable clothing brand in the UK, is also facing downside risks.

The company had twice lowered its annual forecast in 45 days. The latest data show that NextPLC now expects annual sales growth to range from -3.5% to 3.5%, which was expected to be -1% to 4%, initially estimated at 1% to 6%.

Next PLC said the expected downward adjustment is based on concerns that domestic consumption may further slow down and the market's overall demand for clothing will decline.

Recently, with the British close to the EU referendum approach, the industry is worried that the British retail market will encounter further shocks in the future, and the specific impact of the referendum results still need to be observed for further assessment.

At present, in the UK market, the Irish / British brand Primark, which is superior to Zara, may only win the price. (Penneys)

The decline of the high street market in the UK is mainly due to economic recession and deflation. On the other hand, the development of e-commerce and the intensification of competition from foreign brands can not be ignored.

In the hands of many competitors, Zara is undoubtedly the best performing. Its fast fashion mode has become a target of retail competition and business schools competing for research, but its industry status can not be surpassed, especially in the current difficult retail environment.

In contrast with the US Forever 21, Zara's US competitor Forever 21 is now Jamie Merriman, and is facing difficulties and financial problems.

Since the early April announcement of its withdrawal from the Scotland market, the US fast fashion brand Forever 21 has been losing ground in the three British Islands. British media said the brand had hired Harper Dennis Hobbs, a real estate agency, to try to reduce the area of its UK market.

Since opening the first British store in Bermingham Bullring shopping center in 2010, Forever 21 has expanded to 8 stores in the UK, but the British market continues to suffer losses, and the UK market is the most crowded market with fast fashion and high street brands.

Although the competition in the US market is equally competitive, the UK market is fast fashion, high street, fashionable segment, and the most competitive market in the world. Because the UK market also has strong brands such as Topshop, New Look, Next and so on. At the same time, H&M, Zara, Gap and so on also have a large number of stores in the UK. Besides, Uniqlo, UNIQLO, A&F, AEO, J.Crew and other Asian and American mass brands all hope to make a difference in the UK market.

After finding it difficult to compete in the UK market, Forever 21 then began closing its stores, reducing the number of Bermingham's first store area from the peak of 8 to 4 now, starting in fiscal year 2014.

Since the middle of last year, rumors of tension in the Forever 21 capital chain have been ongoing. Despite the company's denial, its response to supply chains and creditors has made the denial of the US company seem weak.

At the beginning of this month, Forever 21 Inc. chief financial officer C.Elizabeth Jain Jain announced her resignation.

From the initial ambitious development of the British market and trying to double the Oxford Street flagship store in 2012, and now constantly closing down the sales area, or even withdrawing, the negative impact of the rapid expansion of Forever 21 Inc. has been exposed in the downturn of the economy and the weakness of the consumer market.

Triumphant news

The strong performance of the UK market is another good news after Zara's strong performance in Australia.

It is reported that Group Zara Australia 2015 revenue in fiscal year recorded a 222 million Australian dollar, an increase of 24% over the same period, with a net profit of 15 million 260 thousand Australian dollars, an increase of 49.6% over the same period last year.

At present, Zara UK is responsible for the former Zara Australia general manager I Igo de Llano, who was pferred from Australia to Britain in 2015.

Zara parent Inditex SA (ITX.MC) Co., Ltd. recently released the first quarter results of the 2016 fiscal year from 2 to April. The group maintained a rapid growth pace in the first quarter, and sales and profits both exceeded market expectations.

In the first quarter, Inditex SA, India and India Group achieved a net sales of 4 billion 879 million euros, up 11.5% from 4 billion 374 million euros a year ago, and increased 17% after excluding the exchange rate.

And the group's biggest competitor,

H&M Hennes & Mauritz AB (HMb.ST), the second largest clothing retailer in the world, reported two quarter results in fiscal 2016 from 3 to May on the same day, showing that the total sales of Hennes & Mauritz AB in the two quarter totaled 46 billion 874 million krona, representing a 2.2% increase compared with the same period last year, and the sales of tax based products also recorded a 5% increase based on the local exchange rate.

Sanford C. Bernstein analyst Jamie Merriman said that Zara has the best business model, and the gap between its competitors and it will only widen.

She said that the Inditex SA India India Textile Group, from design to production to stores and final consumer terminals, has formed a virtuous cycle of focusing on full price sales, enabling the group to have the industry's leading profitability because of its superior customer loyalty and frequency of purchase.

Jamie Merriman also said that under the pressure of the development of the e-commerce industry, many retailers based on physical businesses are under pressure from profits, closing stores or reducing sales area.