Why Did The Old Costume Brands Not "Big"?

According to the world clothing shoes and hats net, the department stores' traffic volume is down.

Competitors' products are cheap and the price of products is weakened.

Retailers are developing.

In the previous period, the owner of The Limited, the private fund Sun Capital Partners, announced that it would be closed.

There are 250 stores in the chain store, and thousands of jobs are lost.

Previously, the whole industry had gone through a difficult holiday shopping season. The rest of the brands, including Gap, J.Crew, Abercrombie & Fitch, offered a large number of discounts and promotional activities before the western "boxing day" (Boxing Day).

Such trouble is not the first time.

Gap group (owned Gap, Banana Republic, Old Navy, Athleta) has seen comparable sales decline in 9 quarters in the past 11 fiscal quarters, and the identification weakness of Gap brands has proved to be a big problem.

Group highlights Old Navy has been recovering in the first half of fiscal year 2016 since its CEO Stefan Larsson left office in November 2015.

The company's net sales growth has been minimal in the past 10 years: from $15 billion 900 million in 2004 to $16 billion 200 million in 2015.

Abercrombie & Fitch group (owned by Abercrombie & Fitch, Abercrombie Kids, Hollister) has declined in 14 quarters in the past 15 quarters.

Following the departure of chief executive Mike Jeffries at the end of 2014, the group made a comprehensive reform of the Abercrombie brand image to meet the needs of older consumers. However, the identity of the brand in 90s is really hard to shake.

J.Crew (owned J.Crew and Madewell) has declined in 10 quarters in the past 11 quarters.

The company also has a debt of about $2 billion, including a bond of about $500 million, which will expire in 2019.

It is also reported that J.Crew is trying to redeem bonds by pferring its brand equity to spin off subsidiaries and using these assets as collateral to market at a low price.

Various sources also suggest that J.Crew will sell or split Madewell brand.

The thriving sister brand left J.Crew headquarters in New York last April and opened an independent office in Long Island City, Long Island.

Although J.Crew, Gap, Abercrombie & Fitch have made many efforts, they have not been able to pick up the decline in the quarterly and quarterly sales slump. There are many reasons: the decline of shopping malls, the threat of Amazon (Amason), the lengthy supply chain and the more sensitive prices of consumers, but there is not much time left.

Lack of conspicuous brand identity

"Why is that? The key is that consumers want to show their personal style," says Richard Passikoff, founder of market research firm Brand Keys.

In the 2016 Brand Keys consumer interaction loyalty list, Gap fell by 20% compared with the previous year.

J.Crew fell 10%, but only higher in clothing retailers than Forever 21 and Gap.

"I don't think Gap represents a very clear image," Passikoff said.

Although the leadership of Rebekka Bay is remarkable (she is regarded as the leading factor behind the successful development of Cos for the H&M sister brand, she was the creative director of Gap from 2012 to early 2015). Her vision is not also reflected in Gap.

(she was hired as head of Everlane product and design department in 2015.

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"Gap is not a design led company, so I didn't have the right to speak at the end," Bay told Wall Street Journal in an interview with Bay.

Gap chief executive Art Peck also told the Wall Street journal that he thought the creative director was a "false savior".

But the product classification of Gap has never been very clear and not very noticeable, which has led to the brand and sister brand Old Navy, Banana Republic hand and foot disabled (the latter is also in deep trouble).

Why is that so? The key is that consumers want to show their personal style.

Retail analyst Gabriella Santaniello said: "these brands have not caught any style trends.

They divide everything into one category, which is useless. "

At the same time, J.Crew has not upgraded with its consumers who are proficient in social media.

Howard Davidowitz, chairman of Davidowitz & Associates, a retail consultancy, said: "at some point in the past, they actually guided the consumer style, but now I think they are in trouble."

To solve this problem, J.Crew hired Madewell designer Somsack Sikhounmuong in 2015 to take charge of women's clothing design business under the leadership of Jenna Lyons, President and creative director. The same year brand CEO Mickey Drexler announced that it would focus on classic products instead of alienating core customers, with a stylistic bias towards eclecticism high fashion products.

In the spring and summer conference in 2017, the show was a brand friend rather than a professional model, which was also well received by the industry.

But these changes have not changed the status quo of sales.

A number of new reports show that the brand CEO Drexler is working with the consulting firm McKinsey & Co. to develop new business plans. After launching J.Crew's first joint series with New Balance, it is considering moving the focus to the sportswear. Morgan Stanley (Morgan Stanley) predicts that the market will increase to $83 billion by 2020.

The brand also shut down the wedding product line.

Abercrombie & Fitch has tried its best to keep away from its original brand image of Logo in the late 1990s and over emphasis elements in the golden age.

In the spring of 2015, the brand announced plans to abandon the dim lights, strong fragrance and naked male models of stores, and to attract older customers.

The brand hired new designers, and recently promoted men's designer Aaron Levine to supervise women's clothing series and reshape women's clothing marketing.

Although sales rebounded in the fourth quarter of 2015, the change did not turn to sales.

"They try to keep away from the old image," Santaniello said. "This is not a decision overnight."

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What do consumers expect? Low prices and promotions

"Until we went wrong, our customers were very loyal," Drexler said at a conference call on shoppers in March 2015. "After that, they want to buy anything at a discount."

The highly promotional market environment has plagued all the three retailers mentioned above, and their customers have become accustomed to the uninterrupted discounts in the past few years.

"Prices are more important than ever before," Davidowitz said.

In general, shoppers spend less on clothing, especially young people who prefer to buy Electronic Technology and experience.

According to the 2015 data released by the US Department of Commerce, the share of clothing in total consumption expenditure has reached the lowest level in history.

"The price of J.Crew is not related to the current market," Santaniello said.

Madewell hit the pain spot: "this is high on target customers, but it can still be achieved," she said.

To better meet the demand for price sensitive shoppers, these retailers are expanding their discount businesses.

As of October last year, J.Crew added 28 sales outlets (discount stores outside shopping centres) in 2016.

The death of a real store

The three retailers are the cornerstones of shopping malls in the United States, which is not a coincidence because the "millennial generation does not want to go shopping" and leads to fewer people in the mall, Davidowitz explains.

In May this year, Jan Rogers Kniffen, a retail analyst, told NBC financial channel CNBC that he predicted that 400 closed shopping centers in the United States would close in the next few years, leaving only 250 remaining strong.

Santaniello said, "physical stores are valuable."

He also divided the shopping malls into local shopping malls (near death) and what Wall Street called "A+ level shopping malls" (shoppers can stay in the whole day to experience all kinds of activities).

In response to changes in consumer behavior, Gap has announced the closure of American stores in recent years: in 2011, the brand had 200 stores, 175 in 2015 and 75 in May 2016.

Online sales totaled $2 billion 530 million in 2015, up 62% from 2011, but only 1% in 2015.

In the latest earnings call conference, Peck said the company is concentrating on pforming the mobile terminal traffic and said that "now is the biggest business opportunity".

Abercrombie & Fitch closed 60 stores last year, shutting down 200 stores in the past two years.

In 2017, half of the brand's domestic stores will arrive, and it will also provide opportunities for closing more stores.

Sales to consumers directly increased by 2% in the third quarter of fiscal year 2016, reaching 23% of total sales.

The company also launched the online order to shop self selection, and in October on-line redesigned website, with new marketing strategy and holiday promotion.

Although J.Crew is reportedly considering closing the store in the future, it announced in August last year that it was working with Nordstrom (Nordstrom) to sell its specific stores and websites - and also reaping new customers.

He started selling Madewell since 2015 and has become the only place of sale outside J.Crew's own channel.

Insufficient flexibility and speed in supply chain

The foregoing retailers have a deeper problem that has not been fundamentally solved. Measures such as improving design, lowering prices and streamlining stores are nothing but pruning: there is no speed and flexibility in the marketing culture of these companies.

In order to minimize the loss caused by the sale of unsold products and the sale of fashionable styles, apparel retailers need to make bold attempts through a fast and flexible supply chain.

John Thorbeck, chairman of Chainge Capital LLC, said: "everyone is going to make sure that the products will be listed quickly, but this is not a specific operation."

His collaborative research with Professor Warren H. Hausman of Stanford University has proved the link between fast and flexible supply chain and market capitalization: "I want to emphasize as much as possible that you need to find another business model and another set of indicators."

The analysis of "Zara gap" (Zara Gap) by Thorbeck and Hausman shows that if retailers can shorten the delivery time and reduce the new gap to respond to the changing consumer demand rapidly, the profits can be raised to 28% and the market capitalization will reach 43%.

But Thorbeck said that the brands that were in trouble had not adopted this strategy.

You can buy new products in less than a month in Zara, but in other American professional retailers, you usually have to wait for 10 months.

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Those who think they want to do things are faster selling goods, actually running another way.

Peck said at Gap's earnings conference call last November that the company is building a "fast response supply chain".

Although it is not clear how fast the production and supply can grow, Gap group has said that it will come down in the first quarter.

The company has moved a small quantity of manufacturing to the Caribbean region to shorten the pportation time and buy a large amount of fabric before the end of the design.

The person in charge of the design will no longer have full approval, and some businesses will introduce more businesses to supervise.

(J.Crew, Abercrombie & Fitch Representatives failed to comment on the matter.

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These companies need to adjust more than just the supply chain, Thorbeck said. "Retailers regard this as a functional problem in the supply chain. I think if you think so, you can't compete with fast fashion leaders," he added. The term "fast fashion" is actually inaccurate: it's not a "fast displeasure" problem, but a risk diversification.

Fast fashion refers to the ability to deliver fashion products at a smaller risk and more frequently.

Those who think they want to do faster marketing are actually competing in another way.

This is the difference between today and 10 or 20 years ago.

In the long run, if these retailers fail to solve these corporate culture problems, they will not be able to compete with international clothing retailers such as Zara and H&M.

At the same time, Gap group and Abercrombie & Fitch group are still shutting down or reducing international business, but domestic business is also laborious.

Anyone who has walked through Fifth Avenue in New York knows that the dominant retailer here is the international retailer.

New York is the same as London, Paris or Madrid.

To defeat this dominant position, what you need is not only to enhance response, "Thorbeck said." American retailers' investment in pformation is not enough. "

Threats from Amazon

It is no secret that Amazon wants to take the lead in the fashion retailing industry.

Financial Services Company Cowen and Company expects Amazon to surpass Messi's (Macy) s this year to become the largest clothing retailer in the United States.

Previously, Messi's Department announced that it would close 63 stores and lay off 10000 people in the face of declining sales.

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"If you are a Category killer, your bottom line is very fragile," Carol Spieckerman, a retail expert, said. "Concentrating on a single category and highly concentrated retailer is not flexible in business mode." Amazon is essentially willing to pay for these businesses to win share, so it's hard for you to compete with such retailers. "Killer

Unlike specialized retailers, Amazon can satisfy different prices.

"Amazon can sell cheap T-shirts and sell high-end luxury goods, but no one will think it is against the brands," Spieckerman said. "Professional retailers must be good at brands because brands are everything to them."

She added that it would be expensive to compete with Amazon Prime members who have become new service benchmarks.

Looking ahead, professional apparel retailers with large free cash flow will have the greatest probability of inventory if they can invest in full channel retail and customer services, and not only in the whole enterprise, but also in the supply chain, taking speed and flexibility as priorities.

But if nothing is done, the consequences will be terrible.

"I think there will be a knockout game, and some brands will disappear," Spieckerman said.

But licensing is still a bottleneck.

"If you want to pfer brand equity to another business model, you have a much better choice than ever before," she said.

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