In 2017, The H&M Group Plans To Open 430 New Stores, And Whether It Will Hit The Fortune List Quickly And Fiercely.

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The decline in performance can be partly explained by a notice issued by investment bank in the past year. The report said that although H&M still expands at the rate of more than 400 stores a year, its operating profit will shrink by 40% by 2020.

All this inference comes from the continuous discount sale of brand.

The other H&M almost entered a vicious circle, that is, constantly increasing the discount to stimulate consumers, consumers expect H&M more discount to consume. In order to alleviate the inventory will not be more serious loss of record, H&M can only continue to increase the discount, which has brought huge reputation loss to H&M.

Interestingly, the parent company Hayne Maurice group quoted all kinds of weather and environmental factors in the quarterly earnings report, which means that the group must increase sales promotion.

Hayne pointed out that Maurice and H&M are at the critical point of development, that is, profits will be on the edge of high-speed decline. Since 2007, the operating profit of H&M per square meter has dropped from 10900 kronor to 5200 kronor, or more than 50%.

Constant discounts directly reduce the growth of sales per unit area and prevent sales from falling by sacrificing gross margin. Therefore, we can understand that the decline in profits of Hayne Maurice is the victim of its sales growth.

If sales are not maintained, the group may have experienced a real decline in both sales and profits.

The relationship between fast fashion and commercial real estate is like the relationship between clothing brands and department stores in the past, such as Esprit and agogue. The former needs the latter channel, while the latter needs the former to get the flow of people, rents and sales returns.

If either of the two sides has problems, the other side is hard to be independent.

But now, China's commercial real estate has shown a regional bubble after radical development over the past few years.

Although it seems that fast fashion is the favorite object of all new shopping centers, luxury goods also want to live next to them.

But if the bubble of commercial real estate breaks down, for the fast fashion like H&M, the plan to go down to the three or four tier city following commercial real estate will also be disrupted.

According to the world clothing and shoe net, the report of the China commercial real estate research center of Rui Yide said that the supply of commercial real estate projects in China will peak from 2016 to 2017.

According to the no fashion Chinese Web report, Zara already perceived the problem of China's commercial real estate in 2015.

At the time, the world's top fast fashion announced that when the total number of stores in Greater China was more than 500, shops would be postponed and more efforts should be made to increase the return rate of single stores.

The return rate of single stores is precisely what H&M is now sacrificing when it expands in China.

The commercial real estate bubble is neither too early nor too late. The 345 line is also a consumer market which is quite different from the first tier cities. Local brands, including Metersbonwe, have created their own consumption groups by means of setting up franchised stores, lowering prices, naming variety shows, and asking celebrities to endorse, and these marketing methods usually do not conform to the style of international brands.

But in recent years, H&M has changed its spokesmen from European and American stars to domestic stars. It seems to be a test for the three or four tier cities.

H&M also began to regard the electricity supplier as another path.

Recently, the company has changed the original "10-15% store expansion target" to "sales growth of 10-15% per year" as the goal. The difference between the two is that the latter covers the share of the electricity supplier business.

But H&M China has no advantage over the electricity supplier.

In 2014, H&M launched the electricity business in the Chinese market, and chose to build its own electricity supplier, which means that it lost an important traffic entrance.

Zara also started its own business at the beginning, but it also settled in Tmall in October 2014. The main reason is that China's online business is not in line with Zara's expectations.

H&M's explanation for insisting on self built electric business is, "Tmall is like a marketplace for online shopping, a portal website.

This pattern is also common in the United States and Europe.

For us, it's important to focus on the way we provide ourselves, how we can keep in touch with our customers, and provide customers with what they want, or even exceed their expectations.

This strategy is understandable. Self operated e-commerce means more direct control over consumer data.

In addition, despite the downturn in department stores and major brands, H&M group plans to open 430 new stores in 2017.

In contrast, Zara has slowed down its opening rate since March last year, and the new store plan has been downgraded to 6-8% from the original 8%-10%, and has shifted its focus to the expansion of e-commerce business.

Although fast fashion is the main business, H&M's purchasing strategy is not as flexible as Zara, and its response to consumption trends is not fast enough.

In the expansion of stores, the brand value of H&M is also rising.

But expansion has also brought risks to it, and investors are not optimistic about it.

According to the information of Ou Rui consulting, from 2016 to 2020, the average annual growth rate of China's clothing retail market will be only 6.3%, which is far lower than that of the 15% clothing industry of the early industry and the growth of 8%-10%'s men's clothing. Two, the average annual growth rate of the clothing market in the United States between 2016 and 2020 has shrunk to 2.7%.

But no expansion is impossible for the H&M group, its largest market now.

There is a weak sales growth, and France, which ranks fourth in terms of market contribution, has seen a negative growth of 4%.

Under such circumstances, H&M group still claims that "to open stores in China and the United States" will be desperate.

As a fast fashion producer, one of the most important features of H&M is that it is very short from clothing design to merchandise in a monopoly store.

This enables consumers to get access to the cutting-edge fashion products more quickly.

It also helps with the cost of compression. H&M's products are cheaper than the brand Zara of Spain.

The sales idea of many styles and small quantities has applied the principle of long tail effect.

H&M has invested a lot in publicity. Apart from advertising, it also works with famous designers or celebrities, such as Madonna, to design clothing to attract people's desire to buy.

The most attractive thing about H&M is its dominant luxury brand in fashion industry and its fast fashion crossove.

H&M has been working in cross-border cooperation with luxury brands since 2004. Whenever there are cooperation, many people go crazy queuing for H&M cheap but a big designer designer clothing, which includes MARNI in 2012, VERSACE in 2011, LANVIN in 2010, and Sichuan Jiu Baoling, JIMMY CHOO, ROBERTO CAVALLI, etc.

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