H&M Dropped Out Of The First Camp Of Fast Fashion Due To Quality Problems.

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Suffering from slowing growth.

Reporters learned that in many large shopping centers in Beijing, the popularity of the H&M halo gradually lost, the growth rate has obviously lagged behind.

UNIQLO is equivalent to echelon teammates.

In the past year, H&M group has maintained its sales growth by opening up rapidly, but the gross profit margin and operating profit rate of two indicators are the lowest level in five years.

The performance is inferior to the opponent.

The fast fashion trend of shopping standards has gradually slowed down.

Reporters learned from a number of shopping center operators, in the fast fashion matrix, H&M has shown a sharp slowdown in the growth rate, the drop in performance fell two digits.

Reporters visited Yau Tang shopping center, found that here gathered a number of fast fashion brands, including H&M, ZARA UR, UNIQLO and many other fast fashion brands, while H&M occupies the one or two level of Yau Tang shopping center, when the weekend price reduction is very eye-catching, but there are few customers here, and many of the fitting rooms are idle.

In the blue harbour, Gap, H&M, ZARA, Bershka, pull&bear and Stradivarius are gathered. 80% of them are from the Inditex group. Bershka of Inditex group is a low price brand with street fashion style, pull&bear is a leisure brand, and Stradivarius focuses on women's wear and accessories.

In order to expand its business, Inditex group also introduced ZARA home and women's underwear brand oysho.

H&M's top competitor, INDITEX group, has introduced many of its brand names and has been fighting in various shopping malls in Beijing. UNIQLO is also introducing its brand of different positioning into the mainland.

In contrast, H&M has been fighting single brand operations in recent years, although it has added product lines such as home products.

Financial data also reflect the slow development of H&M.

In the past year, the gross profit margin of H&M has decreased from 59.5% in 2012 to 55.2%, and the operating profit rate has decreased from 18.01% to 12.4%, and two indicators have reached the lowest level in the past five years.

In the first quarter of this year, H&M sales increased by 7% to US $6 billion 20 million, but group net profit fell 3% year-on-year.

H&M group's two quarter earnings report showed that gross margin was further down to 57.1% from 57.6% in the same period last year.

Open shop to maintain growth

Although the H&M group did not disclose specific data in China, H&M CEO Karl-Johan Persson said it has grown well in the UK and Eastern Europe and many other markets, but several major markets such as the United States, China, Holland and Switzerland are more challenging.

Karl-Johan Persson admitted that the group's investment and earnings growth is not related.

For many years, the focus of H&M group is to continue to develop business at a fast pace.

H&M group will continue to expand new stores in the future.

According to the world clothing and shoe net, H&M will open about 500 new stores this year while closing 100 undesirable stores.

In the 2016 fiscal year, H&M group has about 91 new stores in China, and the average speed is to open a new store every 4 days.

In the two quarter of 2017, as of May 31, 2017, the total number of H&M group stores was about 4498, representing an increase of 421 compared with 4077 stores in the same period last year.

Although the rate of expansion is not decreasing, the sales growth of online H&M is higher than that of a large investment line.

Karl-Johan Persson revealed that online sales of H&M group in the first half of this year accounted for 30% of total sales, and in some mature markets, online sales accounted for 25%-30% of total sales.

In the future, H&M group will continue to invest in this field and continue to increase the share of online sales. It is estimated that the online sales of H&M group will advance at a rate of at least 25% per year.

In the 3 months to April 30th, sales of Inditex group increased by 14% to 5 billion 600 million euros, net profit increased 18% to 654 million euros, net profit more than H&M two times, gross margin reached 58.2%.

Quality problems

Quality problems make fast fashion brands go on the quality blacklist again and again.

In July 7th, AQSIQ issued the "unqualified information on imported industrial products" in May 2017, showing that H&M, ZARA, TOPSHOP and so on counted 1000 pieces of imported fast fashion clothes.

It is understood that the nominal importer is Haines Morris (Shanghai) Commercial Co., Ltd., the brand of H&M 6258 pants, a total of 258 kilograms of underwear and socks products of color fastness is not qualified.

According to statistics, from 2012 to date, H&M has more than 40 kinds of products, tens of thousands have been boarded the quality blacklist.

On the related issues, the reporter has contacted the relevant person in charge of the H&M group's public relations department, and has gone to interview the outline.

Cheng Weixiong, general manager of clothing expert and Shanghai Liang Qi Brand Management Co., Ltd., said that the arrival of the consumer escalation tide, the clothing market is developing further to the market segments, and the market demand is changing. Fast fashion clothing is also changing quietly. Cheap, homogeneous, poor quality and lack of individuality will become the reason for more and more consumers to abandon fast fashion brands.

Cheng Weixiong said that H&M's brand positioning and product positioning in China are misplaced.

H&M is a very cheap product and brand abroad, its cost performance is not high.

But after entering the Chinese market, H&M has positioned its brand as a fashion brand which is already higher than the product itself. In fact, the audience and price of H&M should be more suitable for the general public.

More interesting reports, please pay attention to the world clothing shoes and hats net.