Ryui Jungyo Changed His Position In Zara. How Big Is The Impact Of Fast Fashion Company?

Its owns Zara, Massimo Dutti.

Announced recently that he would resign as chief executive.

It will replace the vacant posts.

The resolution will take effect after approval by the board of directors and shareholders in July this year.

It is noteworthy that UNIQLO will also replace its chief executive this year.

Earlier, he said he would retire to the second line at the age of 70, but no successor has been announced so far.

It is reported that the new chief executive of UNIQLO will not recruit from outside, but from the executive directors and other internal staff.

Well,

Blind expansion leads to Zara replacement

It is understood that Pablo Isla has been the CEO of Inditex group since 2005 and replaced the 83 year old in 2011.

As chairman of the board.

Under the leadership of Pablo Isla, the Inditex group, led by the core brand Zara, has opened up a high-speed expansion process in the world, especially in the Asia Pacific region.

However, in recent years, the profitability of the group is being hit by the fluctuation of exchange rate and the rising rents of physical retail stores.

From the 2016 fiscal year, the profitability of the parent company Inditex group has been shrinking, and gross margin has fallen for 4 consecutive years.

Over the past two years, Zara's clothing prices in the Chinese market have declined on average.

Dragged down by this, Inditex group's net profit in 2018 only increased.

Until

Yuan.

During this period, the electricity supplier channel has become the main driving force for group performance and sales growth has reached

Of the total income.

About

Yuan, but far less than the strong growth of 41% in fiscal 2017.

Some analysts believe that excessive cost spending is a major drag on the Zara industry.

According to the idea of enterprise expansion developed by Pablo Isla, Inditex group has global ownership.

Stores have been added only in the past year.

Right.

The shop has been renovated or expanded.

Countries and regions launched the official website and e-commerce services, and the group's expenditure on rents increased by 2 billion 358 million over the 2017 fiscal year.

To 2 billion 392 million euros.

In particular, the rapid expansion of the Asia Pacific region is most obvious. At present, there are more than 600 stores under the group's brand in China, and will further increase along with the sinking strategy of the three or four tier cities.

In terms of the number of outlets, fast fashion brands contracted in 2019.

According to incomplete statistics, among many fast fashion brands including H&M, UNIQLO, Muji, C&A, Forever 21 and GAP, only 5 brands have expanded in the first quarter, adding 11 new stores (excluding upgrading and reopening stores), which has slowed down considerably compared with the previous years.

Zara suddenly changed this year, whether we can have a turning point, let's wait and see.

Consumption upgrades forced UNIQLO adjustment strategy

Because

In order to maintain the existing market share and not be excluded from the market by other competitors, the strategy of store expansion advocated by Zara former manager Pablo Isla has become the most direct measure for fast fashion enterprises to choose.

At the same time,

As a strong competitor of traditional clothing stores, fast fashion's use of stores to seize market share is also a way to deal with the impact of e-commerce.

However, as the rent and manpower cost become more and more expensive, the operating cost of the store is higher and higher, and the profit is narrowed.

It is reported that consistently maintained a good momentum of development of UNIQLO parent company, for the first time in 3 years, cut the annual profit forecast, and in the 2019 fiscal year, it is estimated that the operating profit will be reduced by 10 billion yen.

At the moment of the new era of consumption upgrading, market demand is changing, consumers are increasingly diversified demands, and pay more attention to product quality and service experience.

To this end, in recent years, one of the pformation measures proposed by Liu Chi, a chief executive of UNIQLO, is to launch clothing customization services, trying to change stereotypes in the minds of consumers, so that consumers can buy clothes that are most suitable for their bodies.

For example, for complaints that the sleeves are too long or too small, customers can choose their sleeves, clothing length and neckline from 169 sizes combinations, and can deliver them within a few days after placing the order online.

This year, Liu Jing is already 70 years old. He once said that after he left the CEO at the age of 70, he would choose a person who could understand the consumer psychology deeply and be good at meeting the needs of the market as the future manager of UNIQLO.

Digital technology enables H&M to find business opportunities

In fact, not only Zara is facing a decline in performance, but its old rival H&M's sales growth is slowing in recent years.

H&M has maintained the speed of opening a new store in 4 days, but from 2016 to 2016, the operating profit margin of the company has increased from 2012 to

。

In order to ensure profitability, H&M abandoned the annual increase.

The goal of the new store is not improving.

In the 2018 fiscal year, H&M Group sales increased by 5% compared to the same period last year. After the growth rate stagnation, the bigger trouble was massive inventory: data showed that the stock size increased only in the first half of last year.

It reached 36 billion 333 million Swedish kronor (about 25 billion 600 million yuan).

Karl Johan Persson is the third generation of the H&M family, and is also the global CEO of the group.

Although he has no intention of leaving office, he has publicly stated that he is not willing to label H&M as fast fashion. Whenever he needs to use this word, he does not want to put fast fashion and H&M in a sentence.

In any case, fast, is the most important feature of fast fashion brand represented by H&M, and H&M, which has experienced rapid growth, has also come to a gateway.

Whether the third generation of leaders of the family is willing to admit it, the good time for fast fashion brands such as H&M may have passed, and whether or not to go back to be a deep concern for CEO people.

Therefore,

H&M recently invested in different areas of digital technology, such as a technology to test whether clothes fit well.

In addition, H&M has invested a lot of money in 3D technology and AI.

In the future, we can predict the general trend based on these data and better distribute products.

Karl JohanPersson believes that H&M is at a low price segment in many similar companies, and H&M wants to provide more consumers with better quality and lower price products.