Fast Fashion Brands Open Store Inventory In The First Quarter: China Market "Bleak" Opening

In 2019, the fast fashion mainland China market expansion "bleak" opening.

According to incomplete statistics, among the nine fast fashion brands including H&M, ZARA, UNIQLO, UNIQLO, MJstyle, MUJI Muji, UR, C&A, Forever 21, GAP, only five brands have expanded in the first quarter, adding 11 new stores (excluding upgrading and reopening stores). Compared with the previous years, the speed has slowed sharply.

In the past three years, the ten fast fashion brands including NEW LOOK added 36, 37 and 26 stores in the first quarter.

There are two main reasons for the sharp reduction of new stores this year.

NEW LOOK has officially withdrawn from the Chinese market, and stores closed in February this year. The brand added 4 stores in the first quarter of last three years.

Each brand generally slowed down the scale expansion, UNIQLO, ZARA, GAP, Forever 21 four brands did not open new stores, colleagues, GAP, Forever 21 closed one store.

Experienced a "mess" in 2018, fast fashion brands coincide cautiously.

While shrinking the pace of expansion, they embark on channel upgrading and expansion of other businesses.

But will 2019 really be better?

Channel optimization, fast fashion more and more like to open flagship store

In the first quarter, the local fast fashion brands MJstyle and UR opened 3 new stores in the forefront.

From the same period of four years, the expansion trend of the two brands is similar, and 2017 is the peak of expansion.

But in the number of new stores, MJstyle has decreased more, and the trend of slowdown has become more obvious.

During the same period, there were 3 new stores and H&M, and Muji and C&A each opened 1.

From the perspective of regional distribution, East China is still most popular.

Of the 11 fast fashion new stores, 5 are located in East China, 2 in the northeast, and 1 in North China, Southern China, central China and Northwest China.

In the first quarter of the southwest region, there were not only fast fashion stores, but also GAP and Forever 21 closed 1 stores in Chengdu and Chongqing respectively.

From the perspective of urban distribution, the trend is downward.

The 7 new stores are located in the second tier cities of Hangzhou, Wuhan and Shenyang. The remaining 4 are located in three cities and below three lines, and there is no fast fashion shop in the first tier cities.

After the end of the horse race enclosure, the function of the shop is no longer a commodity display.

Fast fashion has realized that sometimes huge physical stores can even become burdens. For example, ZARA last year shops rent to 2 billion 392 million euros, accounting for 10% of total revenue.

Today's fast fashion industry is testing the ability of brands to upgrade their channels and operate meticulous.

Store expansion slowed down, switch on and off, behind the channel optimization strategy.

The flagship store with better quality and better experience has become a trend in the fast fashion industry, with UNIQLO, ZARA, GAP, and H&M.

In January 18th, H&M and Muji flagship store also settled in Hangzhou Federation of trade unions CC.

Among them, more than 2200 square meters of H&M for the first time in the store to add special home H&MHome products, and set up a new retail interactive magic mirror, support online browsing and order.

MUJI Hangzhou union CC shop has an area of 3500. It is the fourth flagship store in the country. It integrates MUJI to GO, Caf &Meal MUJI, Open MUJI, MUJI BOOKS, and MUJI and so on. It also introduces the bicycle rental service, Hangzhou tea taste, children's sorting table and other special services for the first time.

In addition, ZARA, GAP and so on in the world a large number of closed entity stores, Forever 21 completely withdraw from the Taiwan market......

It is also the embodiment of optimizing the store combination and upgrading the channel network.

In terms of electricity and logistics, convenience and efficiency are the common pursuit of fast fashion brands, such as UNIQLO's "quick delivery service".

After the customer orders the mobile phone, UNIQLO will deliver the door with Shun Feng City. The business currently supports UNIQLO APP and UNIQLO applet purchase.

Not afraid of competition, boldly bet on "new" business

Besides the upgrading of channels, fast fashion brands are becoming more and more bold this year. Especially the fast fashion of the international brand, they are busy betting on their superior products and developing new businesses.

As early as the end of 2018, C&A announced that it would enter the wedding market this year and face high-end customers.

At the beginning of the new year, ZARA, who has always been very cold and cautious, announced the replacement of brand LOGO, followed by bringing the brand new parity makeup series to the exclusive sale in China.

GAP overweight children's clothing business, the acquisition of children's clothing retailers treasure baby's high-end children's clothing brand Janie and Jack, and plans to split its dominant brand Old Navy in 2020......

Wedding dress, make-up, children's clothing and other businesses in the fast fashion industry is no longer rare. For these "latecomers", it is a bold decision.

In addition to facing fierce competition, no one can guarantee future development.

Taking make-up as an example, in the current era of "lipstick effect", luxury brands and big color make-up are the choices of most middle class.

Moreover, these businesses are only a supplement to the brand format, and there is no large-scale development.

At the same time, there are many examples, for example, GAP's wedding brand Weddington Way was shut down in June 2018.

This boldness also includes betting on celebrity endorsements and opening up electricity providers in more markets around the world, more or less accompanied by risks.

Traffic stars can bring goods, but carelessly will also affect brand image and bring higher cost pressure.

But fast fashion brands have to suffer from pressure, especially in the industry.

The results show that:

ZARA parent Inditex group's sales in fiscal 2018 increased by 3% to 26 billion 100 million euros, a further slowdown from 9% in the previous year. Net profit rose 12% to 3 billion 400 million euros, the worst growth rate in the past 5 years.

H&M's net sales rose 10% to 51 billion kronor in the first 2019 fiscal year, and its net sales increased by only 5% last year.

UNIQLO's parent company, which has always maintained a good momentum, has cut its annual profit forecast for the first time in three years, and is expected to reduce its operating profit by 10 billion yen in the 2019 fiscal year.

Will fast fashion be better this year?

It's hard to say.