Inditex, The Zara Parent Company Of The Fast Fashion Brand, Was Not Optimistic Last Year

Farewell to the golden age, founder Amancio Ortega fortune two degrees surpass Bill Gates.

The myth of the world is also shattered.

According to the world clothing and shoe net, a total of 50 billionaires fell out of the Bloomberg billionaire index list in 2018.

The fortune of Amancio Ortega, founder of Inditex group, the parent of Zara brand, was reduced by $16 billion 700 million, ranking second in the list of billionaires' annual fortune list, which means he became the biggest loser of last year's fashion industry.

Affected by the slowdown in performance, Inditex group's stock price fell 22% in 2018, and its current market value is about 82 billion euros.

However, Amancio Ortega is currently ranked fifth on the Bloomberg billionaire index list, ranking sixth in the Forbes billionaires list, with a value of $58 billion 600 million. It is second only to the world's largest luxury group LVMH boss Bernard Arnault in the fashion industry. The latter is worth 68 billion 600 million dollars and is the fourth highest billionaire in the world.

Over the past year, the H&M Stefan Persson, the fast fashion giant of the same pformation, has also fallen in value, down from $1 billion 900 million to $14 billion 900 million in the previous year, ranking sixtieth on the Bloomberg billionaire index list and seventieth in the Forbes billionaires list.

In contrast to Zara and H&M, Japan's fast fashion UNIQLO, the parent of its fast selling group, Liu Chi, is the richest figure in last year's fashion industry. Its value rose by 7 billion to 25 billion 900 million dollars, earning an average of 130 million yuan a day, ranking twenty-eighth on the Bloomberg Yi Wanfu index list and thirty-first in the Forbes billionaires list.

Since December 2017, XXX group's stock price has risen by 30%, and its market value is currently 5 trillion and 980 billion yen, or 373 billion yuan.

The fashion retail environment is changing faster and faster along with the consumer structure. For the Inditex group with 8 brands and nearly 8000 stores, it is not easy to turn around in time.

In addition to Zara, Inditex group's brand also includes Bershka, Massimo Dutti, Pull&Bear, Stradivarius, Zara Home, Oysho and Uterque.

As of the latest quarter, Inditex has 7445 stores in 96 countries around the world.

Amancio Ortega opened its first Zara store in La Coruna, Spain in 1975. He spent 40 years from the initial owner of a small shop to the world's richest man. It was once regarded as the "successful example" of the fashion industry. However, its value in September 2017 once again exceeded Bill Gates's peak of 85 billion dollars, but it only took more than a year to drop the altar, which reduced the total amount by 26 billion 400 million dollars.

Speaking of the successful experience of Inditex group's multi brand matrix, Amencio Ortega said in an interview in 2003, "Inditex group does not want to miss any market segments."

Therefore, whether it is Pull & Bear, which was founded in 1991 or the four brands such as Massimo Dutti acquired in 1995, Inditex group is widely laying entity stores in the shortest possible time to highlight its "fast" advantage.

Inditex group's "fast" is also reflected in its vertically managed supply chain. About 2/3 products can be produced in short term delivery, so Zara can flexibly design and produce according to market demand and avoid unnecessary inventory.

Richard Hyman, an independent analyst in London, pointed out earlier that Zara's production mode broke the traditional rules of the fashion industry and achieved a truly seasonal fashion.

However, after the outbreak period, the younger generation of fashion consumers and the change of ideas seem to be a bit caught off guard by fast fashion brands.

Nowadays, nearly 40 years old "80 generation" demand for quality has gradually surpassed the desire for freshness, while the "post-90s" have also patronized fast fashion, but apparently they are not so enthusiastic.

As early as 2017, consumer analysis agency Insight Rooms discovered that Zara's original target audience, that is, women over the age of 33, is losing interest. The highest participation rate is the female consumers aged 23 to 27.

Besides the fashion demand of style and fashion, the group values the product itself and thinks that value is more important than price. This is nothing but a bad news for the "notorious" fast fashion in environmental protection.

Some people believe that the Inditex group's current dilemma is precisely because everything happens too fast.

"Inditex group wants to grasp the idea of consumers of different age groups through Pull / Bear and Massimo Dutti and other multi brand matrixes, but it is not enough to consolidate the brand in three years," Neus Soler, a professor of UOC economics and business studies, wrote in a report. "The most important thing is that the Inditex group is impatient and does not know how to manage brands."

According to the earnings data released by Inditex group, cash cow and star products of the group are all core brands Zara. Its sales account for nearly 70% of the group's total sales, while the remaining 7 brands account for only 30% of the total sales. The so-called multi brand does not form a favorable matrix.

2018 in the first half of fiscal year, Zara sales increased by 2.2% to 7 billion 910 million euros, much lower than 11% in the same period last year.

In the 9 months ended October 31st, Inditex Group recorded only low single digit growth, rising 3% to 18 billion 400 million euros, a 10% increase in the same period last year, and net profit increased by only 4% to 2 billion 400 million euros, compared with 6% in the same period last year.

In addition, Zara has been flattering the rapid imitation of "T products" strategy has also been a major blow this year.

Diesel's parent company OTB sued Inditex group for copying its Diesel jeans and Marni sandals design case in July.

The court of Milan held that Zara's actions constituted plagiarism and infringement, and demanded that Inditex group immediately recall the infringing goods and stop selling, and pay 235 dollars for each product.

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Some analysts pointed out that the verdict confirmed the possibility of infringement compensation for registered and unregistered designs in the EU, which is the first case in Europe, which will bring a blow to Zara's controversial "business model".

With the new generation becoming the main consumer group after 90 and 00, they are no longer satisfied with buying clothes that are produced at a low price, but rather hope to get a unique experience and innovative products continuously. This will undoubtedly be a great challenge for the fast fashion of Zara.

According to Forbes's list of the top 2000 companies in the world, Inditex group ranked 289th for the second apparel group, down from 276th in 2017.

In contrast, UNIQLO seems to be more wise to constantly upgrade technology and new retail businesses on the basis of quality assurance.

In early 2018, XXX launched the production and retail pformation based on AI AI, that is, through AI analysis of weather and fashion trends and other large quantities of data, to predict the quantity of goods needed, avoid unnecessary production, and deliver goods that consumers need as soon as possible.

The demand forecasting mechanism will involve a wide range of objects, including functional underwear AIRism sold in UNIQLO.

In September last year, Google announced its cooperation with the Xun marketing group at the Cloud Next 2018 event in Tokyo to help speed up its growth.

Some people in the industry say that the cooperation with Google has milestone significance for Xun marketing group, which proves that the group has pformed from a traditional fashion retailer to a technology company.

As the world's most consumer familiar clothing brand, UNIQLO is speeding up the overtaking, not only to compete with Zara in terms of electricity and high-tech, but also to further enhance its market position through global expansion and become a fast fashion "destroyer". Ryui Masami's steady rise in price is naturally logical.

In the 2018 fiscal year ended August 31st, sales of XXX group rose 14.4% to 2 trillion and 130 billion yen, or 131 billion 400 million yuan, and net profit rose 29.8% to 154 billion 811 million yen, or 9 billion 500 million yuan.

It is noteworthy that Amancio Ortega has been relegated to the second tier, and Inditex group is currently mainly managed by chief executive Pablo Isla.

In addition to the Inditex group, Amancio Ortega has joint office and other non residential real estate investments in the central locations of Spain, the United Kingdom, France, the United States and Asia.

According to the relevant agencies, the total value of real estate portfolio of Amancio Ortega in 2017 was about 8 billion 759 million euros.

According to Spanish media, Amancio Ortega bought The Investment Building from Washington for $337 million last month through its investment company Pontegadea.

This is also the second big acquisition of Amancio Ortega in less than a month. In November last year, he said he would buy shares of Troy Block, including two of the 40 real estate in Amazon. The real estate agency will pay 7.4 to 750 million dollars. After the completion of the paction, Amancio Ortega will become the main landlord of Amazon.

What is most meaningful is that at the top of the world's billionaires is Amazon founder Bezos, whose wealth grew by nearly $25 billion 900 million to $125 billion between December 29, 2017 and December 17, 2018, equivalent to earning about 500 million yuan a day.

He was even higher in the early September when his fortune reached a peak of $167 billion.

Fashion apparel is the main development target of Amazon since 2012, and has made remarkable achievements since its development.

Morgan Stanley has released a report forecast that Amazon will occupy 7% of the clothing sales market share to 19% before 2020. Now it has become the second largest apparel retail group in the United States after WAL-MART.

With the traditional retail market being overturned, more and more people believe that Amazon represents the future of the retail industry.

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