Fast Fashion ZARA To Deal With Crisis

In the past two years, the performance of Inditex group has been slowing down. According to the 2018 fiscal year data released by the group, the sales volume of the group increased by 3% to 26 billion 100 million euros, an increase of 4% compared to the sales volume, a further slowdown of the 9% increase in the 2017 fiscal year, a 56.7% gross profit margin, and a net profit of 12% to 3 billion 400 million euros, which is the worst profit growth in the last ten years. Even in the 2018 year of fiscal year, sales growth in the 27% fiscal year is only 27%, accounting for 12% of total revenue, or 3 billion 200 million euros, far behind the strong growth of 41% in fiscal year 41%.

Zara's performance is not very satisfactory. There is a store which occupies the main location of the first floor, 1200 flat, and a year's sales of only 34 million. One of the reasons why fast fashion is not suited to the Chinese market is that in any shopping mall, its location is very beautiful and its area is very large. The rental efficiency and profit flat effect of the shopping mall are relatively low. Shopping centres will not interact with too many resources, and they will lose more and more customers.

In the second half of last year, the shopping mall moved the fast fashion brands such as Zara and H&M from the most important position to a secondary location, and some of the less profitable brands even withdrew directly. For young people's preferences, introduce some personalized designer style clothes or tide cards.

For the fast fashion brand, the golden age of horse racing enclosure has long been over, and the glory of "opening a fire home" has also become a history. China's market environment is changing quietly, the tide of the country is rising, and the aesthetic of consumers is constantly being rebuilt and rebuilt. The quality and style of fast fashion are increasingly criticized.

In the first half of 2019, the number of new stores in mainland China increased rapidly compared with that of last year. There were only 12 new products, 11 GAP and ZARA, 7 new ones. In the first half of the year, the biggest "melon" in the fast fashion industry was that the US Forever21 withdrew from China. In April 29th, Forever 21 China official website, Jingdong and Tmall flagship store suspended operation and gradually closed shop.

At this stage, the Inditex group's replacement of CEO is intended to change the whole. Inditex trend in the past two years, after the replacement of high-level, Inditex will vigorously develop electricity providers and other businesses.

It is understood that by 2020, Inditex's plan is that all brands will adopt integrated inventory management systems in all entities with physical stores. The system will solve the problem of online customer orders and store inventory. So far, Zara has integrated inventory management in 25 markets, including Spain, France, Italy, China, the United States, the United Kingdom and Mexico. Inditex believes that since the radio frequency identification technology (RFID) has been fully deployed in Zara and Uterq u E, the overall layout of the integrated inventory management system can be realized.

Inditex continues to accelerate the layout of the Chinese market and focuses on digital development. In 2018, Zara's sister brand Uterq u E announced its entry to Tmall and maintained the world's first synchronization. After that, Inditex intends to further expand the number of online sales brands worldwide. PabloIsla said that before 2020, Inditex will sell all its brand products on the global online channel, including those without physical stores.