Physical Stores Will Become The Burden Of Fast Fashion.

The online market has become

For future battlefields,

The first store in New York

Too many stores will become the burden of fast fashion.

According to the world clothing and shoe net, Spanish fast fashion Zara's first store in New York will close in 9 this year.

In addition, the Zara action is alleged to have violated the lease extension agreement with the owner International Plaza Associates (hereinafter referred to as IPA), claiming a claim of $15 million.

In December last year, IPA filed a lawsuit with a local court in New York, saying that Zara sent an e-mail to him in November, saying that it would not renew the contract in September this year. It violated the agreement that the two sides would postpone the lease term for 5 years in 2016.

30 years ago, Zara opened the first New York store in IPA, New York, 750 Lexington Avenue.

IPA is a subsidiary of Cohen Brothers Realty, owned by billionaire real estate developer Charles Cohen.

IPA said that part of its claim of $15 million was the rent for future losses.

However, Zara said earlier this week that it had to reject the case completely, insisting that he had not broken the contract and that the two sides had never had a formal agreement to extend the 5 year lease, adding that there were other reasons for the decision to close the store in Lexington Avenue, New York.

Zara pointed out that in October last year, it had negotiated with IPA, and the two sides failed to reach an agreement on any major terms such as renewal or extension. It is reported that after the closure of the Zara store in Lexington Avenue, New York, the remaining 8 shops in New York will be concentrated in the Manhattan area.

Affected by exchange rate fluctuations and the rising rents of physical retail stores, the profitability of Inditex group, the parent company of Zara, is being hit.

In the nine months ending last October,

Group net profit rose 6% to 2 billion 340 million euros compared with the same period last year, but it has slowed sharply compared with 9% in the same period last year. Sales rose by nearly 10% to 17 billion 960 million euros compared with the same period last year. In the past few years, the Inditex group's annual revenue growth is usually over 20%.

It is noteworthy that Zara recently opened the world's largest flagship store in Madrid.

But from another point of view, this is a success for Inditex group of more than 7000 stores, but it may be a drag.

Some analysts point out that the decisive factor that really threatens the traditional fast fashion is the form of operation.

Now, Inditex group, which is aware of the huge network of stores, sees the electricity market as a new turning point.

According to earlier news, Inditex has signed a leaseback agreement with 16 buyers from Spain and Portugal, and the total volume of pactions is expected to reach US $472 million. This news has aroused widespread concern in the industry, and speculated that whether fast fashion is starting to face the serious challenge of physical shop saturation.

Close to the Inditex group sources, the sale of 14 stores in Spain, 2 in Portugal, the main purpose of the group is to invest more funds to expand the Zara online business in Spain.

Peel Hunt retail analyst Jonathan Stevenson said in the Financial Times report, "to imagine that Boohoo and other emerging e-commerce providers do this, you can't have a physical store."

The electricity supplier is "invisible" against "tangible". To become faster and lighter, we need to get rid of the efficiency loss caused by the large volume of the physical shop, because the electricity supplier does not need to guarantee the stock reserves of each store.

Obviously, the online market has become a fast fashion future battleground.

According to the analysis of the insiders, the fashion industry is facing pformation under the changing rhythm of e-commerce and the Internet.

The fast fashion of once rapid expansion has to face the severe challenge of full store.

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