Fast Fashion Market, Crisis, Prosperity No Longer

Fast fashion market is no longer a collective prosperity.

H&M, UNIQLO and Gap continue to make strategic adjustments, while other fast fashion brands are in the mire of performance.

The market is now in danger.

According to the world clothing shoes and hats net, the American fast fashion brand.

The first flagship store in Japan was closed in October 15th.

Located in Harajuku, Tokyo, which opened in April 2009, it attracted 1800 consumers queuing up to buy and quickly became a shopping paradise for Japanese fast fashion consumers.

Some analysts pointed out that lower and higher passenger flow and high rent were the main reasons for the closure of Forever 21 flagship store in Japan.

Forever 21 the first flagship store opened when people were crowded.

With Zara, H&M and other fast fashion giants entering the Japanese market one after another, the emergence of Japanese local brands Spinns and WEGO, and the rapid rise of fashion business providers, the core consumers of Forever 21 are losing.

Forever 21, founded in 1984, has grown into one of the largest fashion chains in the world in more than 30 years. Now there are more than 700 stores in the world, but most of them are in the US.

Earlier, there was a rumour that Forever 21's flagship store in Sydney will soon be closed because of its continued downturn in Australia, and its berth will be replaced by Woolworths.

Last year, there was also news that Forever 21 was losing ground. After announcing its withdrawal from the Scotland market in early April, it began to reduce its UK market area and even withdraw from the UK market.

In the Chinese market, Forever 21 has opened 4 stores in Shanghai, and analysts have pointed out that Forever 21 has begun to fall into the doldrums after rapid expansion.

Chinese consumers have reflected that the product design of Forever 21 is not suitable for Chinese consumers in the past year. The practicality of American short blouse and short skirts is greatly reduced. There are a lot of hoarding goods in shops, and the volume of passenger traffic is also significantly reduced.

The picture shows Forever 21 flagship store in Tongluowan, Hongkong.

Affected by the continuing downturn in the retail market in Hongkong, Forever 21 closed the flagship store of 6 floors in the Tongluowan JINGWAH center in Hongkong earlier this year, retaining only a small store in Mong Kok, and the original flagship store will be taken over by Victoria's Secret.

It is reported that the flagship store is rentable and expensive, and has reached HK $about 10000000 at the beginning of its business. The brand must ensure that several items of clothing and accessories are sold every minute to ensure profitability.

In addition to poor store performance, creative plagiarism in fast fashion has been challenged.

One of the most notorious is Forever 21, which has been accused of trademark infringement by Puma, Gucci and Adidas this year.

In April of this year, Puma filed a lawsuit against the US court, saying that Forever 21 copied and sold its best-selling Fenty by Puma was not only an insult to Puma and designers, but also a threat to Puma's entire business.

The dispute over trademark rights which lasted for half a year between Forever 21 and Gucci is attracting more and more attention from the industry.

Forever 21 said it received three warning letters from Gucci lawyers in February this year, asking them to stop selling certain striped patterns of clothing and accessories.

In June of this year, Forever 21 decided to request the court to cancel the trademark "Gucci" in the United States before Gucci formally launched the lawsuit.

In response, Gucci decided in August this year to formally prosecute Forever 21's plagiarism for its logo red and blue stripe design.

This year, the Forever 21 infringement dispute also involves the German sports brand Adidas and the American family planning alliance.

Clothing business is becoming more and more difficult. Forever 21 also launched the idea of beauty makeup business. Recently, it formally entered the beauty industry. It plans to take the lead in opening up 10 Beauty Collection stores Riley Rose in the United States before this Christmas holiday. If the market is positive, it will open another 10 by March 2018.

In fact, not only is Forever 21, but the days of fast fashion brands are not so good lately.

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It was also the first flagship store. The H&M store at the north entrance of Xidan's pleasure city in Beijing had the same experience not long ago, and the news of "being removed from the store" caused an uproar.

Some analysts believe that according to the practice of signing a contract for more than ten years when fast fashion entered China, the lease did not expire, which meant that Joy City risked paying the penalty for breach of contract, and H&M had to give up the pavement.

Compared with the bustling situation of H&M's first entry into China 10 years ago, the market position and bargaining power of this fast fashion brand are no longer comparable.

The Xidan Joy City store is one of the first two people to enter Beijing in 2009.

H&M is also becoming slower and slower.

According to its earnings for the first 9 months of fiscal year 2017 as of August 31st, group sales rose 7% to 173 billion kronor, or about 21 billion 200 million US dollars, and its growth rate slowed down, less than expected.

The picture shows Beijing H&M store.

There are more fast fashion brands similar to Forever 21, which are going through tough times.

Britain's fast fashion brand New Look fell 60.3% in the first quarter.

According to its 2017 fiscal year first quarter earnings report, sales fell 4.4% to 338 million 700 thousand pounds compared with the same period, operating profit fell 60% to 12 million 100 thousand pounds.

Some analysts pointed out that because of the British consumer's vigilance against the British retail industry, the New Look, which is now expanding radically in China and falling into local recession, is facing the challenges posed by high risk.

New Look, a fast fashion brand in China, which is crazy to expand and swallow bad results.

Another fast fashion group, Next group, fell 2.2% in the first half of the year.

In the first half of July 31st, Next Group sales decreased by 2.2% to 1 billion 914 million pounds, while profits fell 9.3% to 307 million pounds over the same period last year.

Among them, the core brand Next sales fell 8.3% to 993 million pounds over the same period. The decline in performance was mainly affected by the dismal sales of physical stores and will continue to close 13 stores.

Affected by the same factors, at the end of January 2015, the British fast fashion brand Topshop announced the closure of all 5 stores in Japan and officially withdrew from the Japanese market.

In the financial year ended August 2016, the group's sales fell sharply by 2.5% to 2 billion pounds compared to the end of the year, and the net profit dropped by 16% to 211 million pounds.

At the same time, Topshop in Australia's franchise dealer Austradia's life is also not good.

Data showed that Austradia's net loss amounted to 3 million Australian dollars in the 6 months ended January 28th, and began to enter bankruptcy proceedings.

But the latest news is that Topshop has decided to continue to operate its four existing direct stores in Australia.

Topshop opened its first store in Australia in 2011, and its competitors Zara and Gap entered Australia in the same year.

By contrast, the expansion of Topshop is too slow.

Bettina Kurnick, an international analyst at Europe, said that compared with fast fashion brands such as Zara and H&M, Topshop has no advantage in pricing, product mix or product update cycle.

And as Amazon and other large retailers are starting to pay attention to the Australian market, Topshop will face a more difficult challenge in the future.

Therefore, the high operation cost is one of the important reasons for the fast fashion to fall into the crisis.

With the increasing impact of the electricity supplier on the industry, the physical shops become a drag on fast fashion.

Fung Global Retail &Technologh, a retail research firm, released a report entitled "Fast Fashion Speeding towards Ultra-Fashion" this year. The European fashion business platform is challenging the traditional fast growing brand, which is known for its immediate response to consumer demand and constantly bringing fresh ideas.

They are shorter from design to shelf, and more products are being updated in fixed time. They are competing for consumers who are more and more difficult to meet with "Ultra-Fashion".

The report provides the internal data of three British Retail retailers who are considered to be faster than traditional fast fashion, namely, Boohoo, ASOS and Missguided.

Data show that Boohoo.com, ASOS and Missguided are now able to produce goods in 2-4 weeks, Zara and H&M for 5 weeks, while traditional retailers need 6-9 months.

Misguided can launch 1000 new products every month and update the inventory once a day.

ASOS can also complete the product process within 2-8 weeks, with an average listing time of about 6 weeks.

These ultra fast fashion retailers avoid the inherent problems of traditional retailing, namely product shortages and overstock, and the consequent reduction in prices and profit margins.

The supply chain of ultra fast clothing retailers is always agile, able to quickly match inventory supply and changing demand, and strictly control inventory, and achieve a balance between insufficient supply and price reduction.

The preliminary design of the product is to conduct small batch production, test consumer feedback, and replenish goods quickly if successful.

Take Boohoo as an example, when the first time is new, the inventory of each single product will be around 300, and it will be added in time.

ZARA produces 120 new products per day, while Boohoo currently has 200 new products, and its website has about 29000 products.

In addition, the design and production process of Boohoo is 4-6 weeks and the fastest is 2 weeks.

Performance data also support the positive trend of fashion business.

With the popularity of young consumers, the annual sales volume of British fashion ASOS has increased by 33%.

According to its annual performance data in fiscal year 2017, its sales rose 33% to 1 billion 923 million pounds, gross profit was close to 1 billion pounds, pre tax profits surged 145% to 80 million pounds year-on-year, sales of full price products increased significantly, and private brand sales accounted for 41%.

In addition to clothing products, ASOS is also expanding its product categories, and will expand to sports and ski products such as skiing and surfing.

CEO Nick Beighton says ASOS is gaining popularity among more and more young consumers. The number of active users of ASOS has increased by 24% during the reporting period.

In fact, fast fashion rivals are not only specialized fashion providers, but also Amazon's popular business tycoons. The latter's ambitions for fashion are more and more obvious.

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Not long ago, Amazon launched its own fashion brand The Fix, and formally challenged Zara and other fast fashion brands.

It is reported that the first The Fix series includes 45 products, priced between us $49 and US $139, and is newly launched monthly for Prime members.

Amazon fashion director Kate Dimmock said that The Fix is a value-added service for Prime members. Amazon's fashion buyer will find the most popular items from the fashion industry and update the products in the fashion fashion.

And Amazon announced in June this year, the launch of the beta Prime Wardrobe "trial and buy" services also pose a threat to fast fashion apparel.

The further improvement of Amazon's shopping experience will undoubtedly make up for the short board that the electricity supplier can not try on, and at the same time, it breaks the restriction of the physical store's inventory type, and provides consumers with more variety and cheaper products.

It is reported that the Prime Wardrobe service will cover more than 1 million kinds of goods.

Some analysts believe that Amazon's technological innovation in the logistics experience and so on may have more potential in the future. Solid technological support and infrastructure construction will gradually widen the distance between Amazon's clothing business and fast fashion.

For example, the trend trend database that Zara is proud of is likely to be replaced by big data that Amazon collects from its large customer base.

Other analysts believe that Amazon's share price of up to $1000 is based on the market's prediction of its value after 20 years.

Under the impact of the electricity supplier, the once popular fast fashion brand has been in danger. Even the Zara of the industry leader can not relax vigilance.

In the first half of this year, the sales of Inditex group of Zara parent company kept up while the gross profit margin declined seriously, which was 56.4%. This means that the profitability of its fast fashion brand is being hit by the fluctuation of exchange rate.

Especially in the second quarter, its gross profit margin dropped to 54.8%, while net profit only increased by 1.5% to 712 million euros.

Societe General analyst Anne Critchlow said: "the low gross margin in the second quarter is worrying. The market will pay particular attention to how the index will develop in the coming year, and more importantly, the market has realized that the strength of the euro may continue to bring pressure on sales growth."

Agence France-Presse analyst Anne Critchlow has expressed concern about the decline in profitability of Inditex group, indicating that the fluctuation of the euro exchange rate will further weaken the price advantage of Zara and other fast fashion brands in the market. It is estimated that the gross profit margin of Inditex group will decline further in the second half of this year.

To stimulate growth in performance, since 2015, Muji has begun to cut 20% of more than 260 categories of goods in China, with the aim of further expanding consumption through price advantage.

In the Chinese mainland market, Muji has lowered the price of products since October 2014, and is expected to achieve the basic parity between China and Japan in the 2018 year of the year.

Spain's fast fashion Mango announced earlier that its range of leisure series was reduced by about 15%.

UNIQLO is also implementing the price reduction measures, and its parent sales group chairman and CEO Ryui Seiso said that consumers do not agree that new products are equivalent to high prices, and that the environment of fashion retailing is now very difficult. It is a mistake for companies to raise prices in this environment.

H&M has been improving the cost performance of its products by attracting cross-border cooperation.

In order to seek pformation, Topshop's first step is to adopt a price cutting strategy.

In September of this year, Topshop was released from the "Topshop Unique" of its high-end series, instead of being named "Topshop London Fashion Week".

Prior to the Topshop Unique series, the highest price could be up to 700 pounds, while the latest Topshop London Fashion Week series was priced between 39 and 650 pounds, and more than half of the new clothes were on the official website, all of which were not more than 200 pounds.

Some analysts pointed out that the move of Topshop confirms the pformation strategy proposed by Philip Green earlier, such as price reduction and brand positioning. With the increasing popularity of social apps such as Instagram among young consumers, young consumers' preferences and dependence on high street fast fashion brands such as Topshop are gradually decreasing.

Philip Green also admitted in an interview with reporters that in the face of the continuing downturn in British retail industry, Topshop's high street status is difficult to guarantee. In addition to reducing the price of Topshop products, it also accelerated the digital process to cope with the rise of fast fashion providers such as Boohoo.com and ASOS.

At the beginning of this year, Zara suddenly closed its biggest flagship store in China, which is located at lerson shopping center in Chengdu.

According to data monitoring, the price of clothes sold by the Zara in the Chinese market has decreased by 10% to 15% since last year. This may reflect the growth rate of the group in the Chinese market may not have met expectations, and began to feel the fierce competition of fast fashion competitors and the rise of domestic clothing brands.

This also means that the fast fashion brand entering the bottleneck stage is experiencing a collective chaos and price war is imminent.

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