Fast Fashion New Look Announces Withdrawal From The Chinese Market, 130 Shops Will Be Closed

According to the news,

It will close all 130 stores to focus on the restructuring and pformation of the brand itself.

In fact, New Look has long been in deep trouble. This year, rumors of loss, layoffs and "selling oneself" continue.

It is understood that New Look entered the Chinese market in 2014 to set up stores, it is considered to enter the Chinese market.

The "late arrivals".

Entering the year, it opened up the trend of rapid expansion, expanding by more than 30 new stores every year. In just three years, it has exceeded 100 stores in China in 2016.

New Look said in 2016 that it plans to open another 500 in the next three years.

In 2017, its new business reached its peak, reaching 53.

In 2014, New Look entered the Chinese market in the form of direct battalion. The following year, New Look was bought 90% stake by 780 million Brait in South Africa's private equity fund Brait SE, then the brand decided to accelerate expansion in China.

Under the guidance of the original CEO Anders Kristiansen, the brand once planned to open 500 stores in China in three years.

Just recovering from the low performance.

It was just the last bus that caught the fast fashion bonus.

Faced with the changing trend of global fashion retail industry and increasingly fierce market competition, New Look has been losing ground in the UK market.

Meanwhile, Christo Wiese, the South African boss who controls Brait SE, has also fallen sharply due to the financial fraud scandal of another listed company Steinhoff, which indirectly has a negative impact on New Look.

According to the news, at the beginning of this year, Alchemy Partners, an investment company that sold New Look shares in 2013, considered buying back to try to save the brand's sluggish performance.

The company specializes in private equity investments in troubled companies.

It is also reported that the value of New Look bonds has been plunging sharply, and some anonymous potential buyers have planned to buy their controlling shares at a low price.

In March of this year, New Look decided to sign CVA with the owner.

New Look announced that it planned to close 60 stores in the UK market. It is expected to lay off 980 people, and the other 6 branches or sub leased to third parties may also be closed, thereby reducing rental costs.

The aggressive expansion plan in the Chinese market has also proved to be a wrong decision.

In mid year, New Look announced the termination of its brand expansion in China and said it had been reviewing its development strategy in China or suspending plans to open 500 physical stores.

In November last year, Alistair McGeorge, the chairman of the brand, said that the top priority of the brand is to streamline the scale of business and close redundant stores so as to enhance the profitability of the brand as soon as possible.

According to data, in the 2018 fiscal year ended March this year, New Look's overseas business lost more than 37 million pounds, exacerbating the brand's current predicament, the company's total loss of 74 million 300 thousand pounds, and bear a debt of 1 billion 440 million pounds.

At present, most of the 60 shops that have been closed down in the New Look bankruptcy agreement have not yet been closed, which means that it still has nearly 600 stores in the UK.

Since this year, New Look has closed 20 stores in China, and will continue to withdraw from international markets such as France, Belgium and Poland in the future.

Due to the drag on the British market, the brand expected its difficult situation to continue until 2018.

There are senior people in the industry who believe that New Look has a very good business model. It is only a network of stores with too much debt and too large. If a buyer can succeed in buying New Look at a low price, whether the brand can recover or not is a good deal.

It is noteworthy that New Look is not the first strategic mistake in China.

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In August this year, the fast fashion Topshop announced that it would terminate its cooperation with China's franchise partners.

Since 2014, Shang pin has helped Topshop to test the Chinese market through the electricity supplier channel, and reached an agreement in December 2016 on the exclusive operation of Topshop in China. It plans to set up 80 brand stores in the mainland of China.

Zhao Shicheng, CEO, said earlier that in early 2018, it would help Topshop open its flagship store in Shanghai and Beijing, and opened nearly 100 entity stores in 5 years, but eventually no store opened.

Topshop speakers said that consumers could still buy branded products at the Shang pin and Tmall flagship stores before November 30th, while the official website of Topshop and Topman will continue to operate in the future.

The spokesman continued to point out that Topshop is looking for new partners and has not given up potential China market.

In the 12 months ended August 2017, Topshop parent Arcadia Group sales fell 5.3% to 1 billion 900 million pounds compared with the same period last year, operating profit dropped 48.5% to 71 million 600 thousand pounds from 139 million pounds in the previous fiscal year.

In May 2016, ASOS, the UK's fashionable e-commerce website, announced that it had stopped operating in China.

Since its establishment in 2013, the Chinese website has been operating poorly.

According to the financial report, China's ASOS business lost a total of 860 Euro million euros, while the closure of Chinese websites, distribution centers and Shanghai offices also resulted in a one-time closing cost of 10 million pounds and a 400 operating loss of 10 million pounds.

Apart from the slow renewal of goods and the unsuitable taste for Chinese consumers, ASOS and Topshop share the same problem in China. The high price in China and the lack of price advantage make the fast fashion brand in the UK impossible to stand in China.

The British retail industry has entered the cold winter, which has also led to the fall of these fashion brands.

A recent survey of high-end retail business owners in the UK showed that optimism about the industry's future was at its lowest level since 2012, with Britain's close to Europe.

Some analysts believe that the British retail industry situation is still not optimistic under the multiple attacks from the electricity supplier, the European Union and the unbalanced tax system.

In this case, the overseas expansion of fast fashion brands should be more cautious.

Nowadays, all brands want to rely on the Chinese market, but ultimately they can only rely on the brand themselves.

With the gradual pfer of consumers to the Internet and the change of concept, the fast fashion brand will usher in a new round of reshuffle in the face of the changing retail environment.