Catch "Big" And Release "Small", And Fashion Starts To "Slow Down".

If you wander around the Chunxi Road business district in Chengdu, you will find it here. ZARA , GAP , Uniqlo The store disappeared. In particular, the ZARA store in Lok Sen Department store, 31 Lok Fu Road, is the first brand new shop in ZARA in China. Once known as "the biggest flagship store in China", it once occupied 3 floors and 3000 square meters of shopping malls. The rental contract expired in February of this year. It is also understood that in Shanghai, similar to ZARA Huashi square shop, Nanjing West Road store more than 1000 square meters of "small shop" is also likely to face shop adjustment.

According to the world clothing and shoe net, about 10 years ago, fast fashion began to be popular in shopping malls. New shopping malls often regard fast fashion as "head card" and even recruit several fast fashion brands at the same time. But now, in the eyes of shopping malls looking for "freshness", the fast fashion brand has changed from the "brilliant" to the "dull money".

As a result, the fast fashion led by ZARA is busy with slowing down the opening of stores, or even turning off the stores or small shops that the lease is due to expire. On the other hand, it is also thinking about the "big store" plan: first, only a large flagship store is set up in the key cities, and there are more and more goods in the store. Two, we should slowly integrate the home and sub cards together to form a super flagship store, instead of the previous department store format, and become the next main store in the shopping mall.

Catch "big" and release "small", and fashion starts to "slow down".

H&M's earnings report in May showed that sales in April increased by 7% over the same period last year, but lower than expected. The annual growth target for H&M is 10%-15%. UNIQLO's sales grew by only 0.6% in the first half of fiscal year 2017. ZARA has not yet released its latest earnings report in 2017, but as of January 31st this year, its sales increased by 12%, but its gross profit margin was declining, narrowing to 57% from 57.8% in the previous year, the lowest in the past 8 years.

While the growth rate of earnings has declined, ZARA and other fast fashion growth rates also show signs of slowing down.

According to the data of Jones Lang LaSalle, as of the end of 2016, the fastest selling shop was UNIQLO, which had more than 500 stores in China; H&M followed closely to more than 400; ZARA was about 200; however, with its subordinate cards, there were altogether 600, while GAP was less than 200. But as shown in Figure 1, in the 6 years of 2011 -2016, the fast fashion shop was positive but slower.

Chart 1: fast fashion brands expand strongly, but signs of slowdown in early 2016.

"Up to now, this trend continues." James Hawkey, director of the retail Property Department of China, pointed out that this is because the fast fashion city has moved from a second tier city to a three tier city, from downtown to suburban areas, with fewer and fewer locations.

The fast fashion of "slow down" has also been heard. The Chunxi Road business district mentioned above is only a microcosm in Chengdu. In addition, Gap has announced that it should streamline its retail chain with the same name and plan to close more than 1/4 shops.

ZARA, who is too urgent to enter the shopping center, even postponed the shop after the total number of stores was more than 500. The next task will be to open flagship stores in key cities.

"The strategy for ZARA to open flagship stores is to choose the location of the main pedestrian street and shopping center, which is basically 3000 square meters." Durbin, general manager of RET ruitede leasing business line, said that ZARA, who likes to open "big shop", also likes to enter the shopping mall with several sub cards. The use area of each sub card is around 500 square meters. Besides the larger area, the demand for the housing type is even higher. Basically, we need square houses. Many shopping malls are denied because there are fire corridors or bump in the apartments. "Leasing two floors, ZARA and H&M also need to configure elevators."

In the same area, in order to set up a bigger flagship store, ZARA will turn off the "small shop" with an area of one thousand or two thousand square meters.

Liu Cuixiao, director of business research at the Han Bo Business Research Institute, believes that grasping the "big" and "small" are the changes in the business mode of fast fashion brands resulting from market environment changes. First, under the rapid development of the Internet, online sales channels have weakened the advantages of traditional offline fast fashion sales channels. Online shopping gives consumers more choice. Fast fashion's "fast fashion update, low price" advantage is weakened, especially small area shops, product category, quantity and speed limit, will inevitably affect sales performance.

Second, offline competitive position and pattern gradually change, and the speed of iteration is quickening, resulting in fast fashion brands must continue to adjust. There are about 500 new shopping malls pushing into the market every year, and the business competition is becoming increasingly fierce. Some old and slow business districts and projects have been phased out. The fast fashion brand stores in the region have been implicated in the weakening of regional competitive advantage, especially in small shops. With the emergence of new business centers, as a city vane, it will have a very big advantage in opening up big stores with fast fashion.

Third, emerging brands emerge one after another, and consumers' loyalty to a brand decreases. With the personalized and niche demand of consumers, new brands in the field of subdivision emerge one after another, and consumers' loyalty to a brand is greatly reduced. Fast fashion brands are no exception. "Fast fashion catch" big "to" small "is to increase siphon effect through large stores, through intelligent, multi format combination, experience and other scene design to lead the market, continue to attract consumers, increase stay time and generate more associated purchase frequency.

How to open a "super flagship"

In the fashionable and fashionable Shanghai market, this year, the newly opened Taigu Hui and other shopping malls did not appear in the grand market of several fast fashion brand groups, and even the shadow of fast fashion brands had not been seen.

"Now, a newly opened shopping mall in a second tier city rarely sees fast fashion." Zheng Ruisheng, general manager of Ying Shi Group Research Center and CDDA CEO, joint business intelligence big data center, said. In the past, in a second tier city, the shopping mall used fast fashion as a popular combination to attract young fashion crowd. But later it was discovered that fast fashion is not enough to attract more consumers in a second tier city.

After all, only the fast fashion of 10 years of history is not the authentic fashion leader, but also the follower of the luxury goods and the role of learners. Besides, the material and durability of fast fashion products are general. Compared with the traditional retail brands that have gone through 30 years or so, such as ONLY, today's fast fashion does not have many outstanding advantages. In some shopping malls, opportunities between them are equal. "In the past two years, the newly established shopping mall has emphasized individuality and no uniformity. For example, in Tianjin, it is not too willing to use traditional fast fashion brands to take a young and fashionable route for peace and joy. Zheng Ruisheng continued.

Therefore, for a shopping mall located in a second tier city, the choice of fast fashion is no longer the standard answer. Of course, those shopping malls which are more difficult to attract investment are also willing to throw olive branches to fast fashion brands.

It is worth noting that the fast fashion brands in the shopping mall such as Chia Tai Plaza, Joy City and Wanda Plaza will face the problem of the expiration of the lease in two years. In general, fast fashion brands do not pay rent to shopping malls, but sell 5%-8% according to their sales performance. It is not easy to renew the vogue with these stores when the turnover is no longer as brave as before.

However, James Hawkey believes that although the developers are looking for "fresh and fresh" brand, but in the next 10 years or even 20-30 years, the large international fast fashion brand will still be active in the shopping mall. "There may be fast fashion brands going through ups and downs, and new fast fashion brands coming in, but the fixed factor in shopping malls -- fast fashion is not going to be too bad." Because fast fashion advocates fast change, paying attention to luxury and consumption trends is creating fashion companies in itself.

"When the old store contract expires and the new location changes, it will focus on the way to grab a good flagship store, or a fast fashion day." Zheng Ruisheng judged.

Durbin also agrees, for example, the fastest rented area of the largest ZARA, which can store more commodity categories in the store. Consumers often like to shop in large stores because there are many kinds of goods to choose from. So the flagship store will be more efficient.

Liu Cuixiao thinks, "open a big shop" can be divided into two kinds of situations, one is that the content of brand management is basically unchanged, but the increase of store area and product category richness increase, for example, a large shop may occupy a whole layer of a certain category of products, and the other is that the main card will add multiple formats or merge the secondary brand format to form an integrated shop. The above two situations are all made up of shops in the same location, enjoying the advantage of the common rent negotiation, and the increased composite format can also be helped by the influence of the main card.

If the main cards and sub cards are located in the same shopping mall, they are not distributed in the same store, but they can be interpreted as "big shops" from the negotiation strategy, but they are not "big shops" from the consumer point of view, because the Deputy cards basically do not have the influence of the main card, and consumers do not know the relationship between the secondary cards and the main cards.

"Fast fashion shops will be more and more rich in commodity categories, and slowly integrate home and sub card formats to form a super flagship store instead of the previous department store format and become the main store in the mall." In Durbin's view, this is a trend.

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