Why Is AA In A Good Market In China?

A month ago, we just pulled out of the Chinese market. Marks & Spencer (Marks&Spencer) sigh with regret. The 100 year old British retail department entered China in 2008. After committing almost all the mistakes it made, it decided to close the remaining ten stores in China and retain only the online shops of Tmall and Jingdong.

Today, the US fashion brand American Apparel began cleaning up the inventory of Beijing's green grass and two stores in Sanlitun this month. This is also the last two stores of American Apparel located in the mainland of China. According to the reporter's enquiry from the shop in her tri Tun shop, all merchandise in the store is now sold at 75% off -5 discount. brand It was almost never discounted), and the last closing date was set in December 18th.

Reporters at the American Apparel store in Sanlitun found that the brand is in the final stage of cleaning up inventory, and all products are sold at a discount of 75% off -5.

American Apparel Sanlitun store real estate, the two floor has been emptied.

"Only the United States will have it later. AA The online store will also be closed. American Apparel Beijing Sanlitun store clerk told reporters. That is to say, in addition to China, AA has recently closed nearly 80 stores in Australia, Germany and the United Kingdom, and completed its final liquidation by January next year.

American Apparel (hereinafter referred to as AA) has had a glorious time. It was founded in 1989 by Canadian DovCharney, and the main target for young people is "made in America" and "sexy marketing". You know, at that time 96% of the clothing needed to import in the United States, AmericanApparel will be factory located in expensive labor Losangeles is indeed an amazing move. Although this has led to a doubling of the price of clothing, it also means the guarantee of quality and comfort.

For young people willing to spend twice the price to buy a pair of AA jeans, it is also related to its bold and naked "soft pornography" advertisement. In the AA posters, the protagonists are often young men and women who are exposed and making provocative moves. This suggestive marketing method soon became famous in the younger generation of the United States. In 2005, sales of AA increased by 440% to 210 million yuan, which was one of the fastest growing companies in the year.

It didn't last long. The two big killer of AA was "made in America" and "sexy marketing". The problem was that most factories in Losangeles broke out in 2009 and used thousands of illegal workers in Mexico. After they were disbanded by the local immigration bureau, the supply of AA was severely damaged. Then, the advertisement of AA's bold position began to fall into disputes. AA had to rebuild its brand image in a more positive, inclusive and socially responsible way. The UK banned three advertisements in AA in four months.

In the posters of AA, the protagonists are often young men and women who are exposed and making provocative moves. This suggestive marketing method soon became famous in the younger generation of the United States.

The AA advertising poster, which was once criticized for being too out of place, began to converge after 2015. The above is the poster image after 2015.

In addition, the internal management of AA is also troublesome. The trade unions and management are in constant contradiction. The founder Dov Charney was accused of sexual assault by employees of the company, and a scandal of embezzlement of public funds was also launched. In a word, AA has not been profitable since 2010, and has more than 200 million dollars in debt. It has to apply for bankruptcy protection two times in October 2015 and November 2016 respectively.

According to the world clothing and shoe net, and Martha's sudden announcement in the earnings report that it is different from the mainland market, American Apparel's failure has long been traceable, but if we put the two companies together, the reason why they choose to rush ahead in a good market in China has many similarities.

1, management turbulence.

At the beginning of this year, Martha Department announced its retirement as a group of CEO Marc Bolland for six years, and was succeeded by Steve Row, executive director of the general commodity department. In fact, Marc Bolland also expressed the desire to remain in office in 2015, so his resignation was considered to be a "retirement" initiative because of persistent downturn in performance.

And the departure of AA founder Dov Charney was more dramatic - he was expelled by the company. The reason is that he was suspected of sex slavery, while tacitly allowed employees to publish nude photos of female sales and privately embezzled company assets online. Subsequently, AA found a female executive Paula Schneider as CEO, but for a time, she could not erase the founder's scandals against the company's image.

American Apparel, founder and former CEODov Charney, was run out of company after facing a number of accusations.

Despite being in office, Paula Schneider tried to help the company turn the corner by streamlining its businesses, closing its stores and reshaping its brand image. However, it still had little effect. The loss of AA continued to snowball. This female CEO also left AA in October.

2, expansion strategy error

If Marsha general stores only opened 10 stores in China in the past ten years, some of them are too conservative, so AA's overseas expansion plan is quite radical.

In the six years since 2003, AA has opened over 450 stores in the world, but most of them are in a state of loss. Taking the number of AA stores in New York as an example, there are more AA stores in the region than GAP, and there are four stores in the upper west side of Manhattan, but all of them are losing money. As a result, AA's finances began to run out of money. By 2010, the company was almost bankrupt.

In November 14, 2016, AA announced its second bankruptcy filing after its first bankruptcy filing last year. GIL, Canada, disclosed in its bankruptcy petition that it bought global intellectual property rights of US apparel brands for $66 million in cash.

　 3, products lack innovation.

Many AA fans rated the brand as "good quality", "simple" and "good match". However, even the most loyal fans admit that AA's product line and other fast fashion brands that are on the "new" speed are somewhat less innovative than others.

"From the University, they will buy their tennis skirt, canvas bag and tight T-shirt, but they are all classic. There are not many new models in the impression, and shop displays are very fixed." Yu Anqi, who works in Shanghai, told reporters. Similar to the old European style clothing sold by Marsha general store, AA did not keep up with the trend of young people in the development of apparel product lines.

Tyler Swift (Taylor Swift) wears AA's striped skirt.

Such basic clothing is a product of AA, but today's young consumers can no longer satisfy it. They need more diversified product lines and richer single product choices.

The classic style of the main match is not wrong, but the everlasting style always makes the consumers feel weak. Think of another Japanese brand, UNIQLO, who is also keen on the classic style. It can constantly introduce new products on the basis of conventional products such as bottoming shirts and striped shirts. It can cooperate with Christophe Lemaire, the former design director of Hermes, and launch hot money with Disney and man Wei to meet the consumption needs of different level groups.

Although AA and Marsha general lost China, it is a conclusion. But in the wave of consumption upgrading, the potential of domestic emerging consumer groups still has an infinite appeal for overseas brands. No one can conclude that they will not make a comeback. What is interesting is that when the last clearance sale was held at AA store in Sanlitun, but another 100 meters away, another fast fashion brand Abercrombie&Fitch, also from the United States, who also played the same fashion as young people and loved to play sexy marketing, opened its first store in Beijing. Can it finally laugh?

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