The Clothing Industry Suffers From Online Impact, And Zara Begins To Close Shop.

According to the world clothing and shoe net reporter, Zara has been regarded as a textbook just like traditional clothes retailing and running away online.

However, Zara, who has been singing a lot of songs, has begun to close shop, and is also a flagship store.

However, Zara has also been closed in China, and Zara will be officially closed at Zara flagship store in Chengdu's downtown area.

This store, which opened in late 2011, is the first store opened by Zara in China and is the largest flagship store in China.

The store occupies three floors, with a total area of more than 3000 square meters, and the last tenant in this gold position is LOUIS VUITTON and DIOR.

Before entering Zara, losen shopping center has been positioned high end, mainly stationed in a number of luxury brands.

Why do you choose to close?

Titanium media has previously reported Martha's department store, which completely withdrew from the mainland market, and American Apparel closed the remaining two stores in mainland China (focusing on titanium media and returning to "American Apparel" for details).

In contrast, the Zara view is not a failure of performance.

The Inditex group, the parent company, has been better off in the past year.

According to the first three quarter results issued by the Inditex group at the end of 2016, the net profit of INDITEX group was 2 billion 210 million euros in the first nine months, up 9% from a year earlier, with sales of 16 billion 400 million euro, up 14.5% from the same period, and according to media reports, the sales growth of Inditex group reached 16% from November to mid December.

In the Inditex group's many brands, Zara is also the main selling force, while the offline stores account for about 1/3 of the total stores, but sales account for more than 2/3 of the group's total sales.

So who dragged the Zara down?

Depressed shopping centres, dragging down Zara?

With the big name "neighbors", Zara has always been a favorite store opening strategy.

This strategy is called the "oil pollution model" by Ortega, founder of Zara. Every time a new market is landed, the shop will first open shop in the most prosperous area of the big city center, then extend its tentacles to other places, and let the brand influence radiate without advertising.

"It's like a drop of oil spreading slowly on the fabric surface."

Ortega described this way.

As we all know, Zara's investment in advertising has always been very stingy.

Compared to spending money in advertising, Zara prefers to be "expensive" next to big names, and the economy is affordable.

As a result, Zara can be seen everywhere in the world.

Zara executives also believe that the store is the best display advertisement of Zara, and it is very valuable to spend money on the top location.

In this way, losen shopping center is not very suitable for Zara's site selection, but in fact, LOH Sen was once known by locals as "commercial Bermuda". The owners of this place were mainly the luxury goods department of the West Wu department store, but they had to close down because of the poor overall consumption and the combination of brand structure.

At the beginning, losen's positioning was still high-end, luxury oriented, and later after LOUIS VUITTON and DIOR were closed, losen shopping center began to seek pformation, and Zara was also settled.

However, it didn't last long. With the Chengdu financial International Center (IFS) and Chengdu oceanic taiguri two new shopping centers, the new shopping mall was completed in Chunxi Road.

Zara has also gone to Chengdu Ocean Pacific to build a flagship store, which is known as the new concept store with the largest scale, the latest decoration and the best Zara in the Asia Pacific region.

Since Zara opened its first store in Shanghai in 2006, it has been expanding rapidly.

The radical way of opening a store is closely related to the outbreak of commercial real estate.

The continuous completion of department stores and shopping centers has led to increasingly fierce competition among each other, and the brand has become a relatively strong side. Many commercial real estate even attract some high flow brands to settle in the way of avoiding shops rent.

Zara is famous for its "fast, small and varied". These three points also mean high cost.

With the supply chain, the supply chain of Zara is in Asia, Europe, South America, Africa and so on.

Zara divides its products into two parts, basic and popular. Zara produces basic funds in areas outside Europe, and some popular ones that need quick updates are basically produced at Zara's European factories, because these factories are close to headquarters and can quickly implement production decisions according to prevailing trends.

This means that the goods of a shop may come from all over the world. This unique mode makes Zara different from other fast fashion brands, which is very sensitive to the sales of single stores, because the backlog of inventory will directly lead to higher costs.

If a store's turnover is not up to standard, Zara may choose to shut it down.

Therefore, ZARA and shopping center have become the fate community. Over the past two years, commercial real estate has been getting worse and worse because of overexpansion and the impact of electric business. This has also dragged Zara down.

Zara actively slows store expansion

To say that the momentum of expansion of foreign brands in Chinese market stores can be quickly referenced to UNIQLO, which has created a record of 100 new stores in Greater China within 2013-2014 years, while the number of other brands in China in the past two years has been few.

Unlike the expansion of UNIQLO in the past two years, Zara revealed early last year that it would slow down store expansion and focus more attention on online channels.

The Wall Street Journal reported in 2016 that the growth rate of offline retail sales of Inditex was slower than that of 6%-8% 8%-10%.

In addition, the wave of consumption upgrading is sweeping across the country. With the increase of purchasing power of domestic consumer groups, our eyes are also aiming at more foreign design brands. The quality of instability and the Zara like to copy other brands are no longer the consumers' first choice.

According to the media survey, "the two largest European brands of H&M and Zara are popular in the first tier cities, only about half of Uniqlo UNIQLO."

According to fashion headline statistics, since 2016, the price of clothes sold by Zara in the Chinese market has decreased by 10% to 15% on average, and to some extent, Zara has also felt the competitive pressure in the domestic clothing market.

Inditex chief executive Pablo Isla said earlier that slowing the expansion of the stores does not mean that the company will not pay attention to physical retail business, but that the company will give priority to those flagship stores that cover a large area and are in prime locations and in major cities.

As Zara expands more and more in stores, it is also reasonable to shut down shops with poor performance.

Of course, increase.

Channels and shrinking channels are also the same choice for fast fashion brands.

Inditex chief financial officer Ignacio Fern ndez has told the media that now consumers are buying things on different channels, and the group is more inclined to cooperate with all channels.

He said:

For example, for Inditex, more than 1/3 of the people will pick up the goods after ordering online, and 2/3 will return the goods on the spot.

If consumers can not find the right size on the Internet, they will also stroll around the store. "

Shrewd Spanish brands may also want to save costs and keep their parent companies in a long-term way by reducing their retail space.

As Simon Bowler, a bank analyst in Paris, France, said in a report, "future sales growth should come from low capital density."

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