Is ZARA Really Dying?

The last week of 2019

All the fast fashion brands are in the final wave of year-end promotions.

Spain's fast fashion brand ZARA stores in Wuhan

But all of a sudden close shop.

They were all posted on the seals of the public security fire bureau.

This triggered a heated debate among netizens.

The news of "Wuhan ZARA" was also sent to the hot search.

Under the line, traditional clothing retailers lose their armor and run away.

Now, not even the fast fashion originator?

　　 A fast fashion trip

Forever 21

In April 25, 2019, Forever21 issued a notice in Jingdong and Tmall flagship store, announcing that it will suspend operation from April 29th.

Subsequently, Forever21 China official website also issued a notice that the official website closed shop.

Forever 21 was founded by a Korean couple in California. The brand quickly opened up the US market because of its precise positioning, easy price, quick product updates and fast logistics.

However, due to the bias in China's operation mode, Forever21 has closed more than 200 stores in the past few years, withdrawing from Tianjin, Hangzhou, Chongqing and Taipei until the complete withdrawal from China in May last year.

New Look

In December 10, 2018, New Look official WeChat pushed a picture, saying it would close its shops in China and start clearing the store from now on. However, the information pushed by officials on the micro blog is just a sale of the "3 games". The brand's Micro shop has also been officially closed.

According to New Look, 730 employees are expected to be unemployed.

New Look group released the 2017-2018 annual report shows that the group's performance fell sharply, the annual operating income of 1 billion 348 million pounds, down 7.4% over the previous year, the lowest value in five years. In addition, the group's basic operating profit also suffered a loss of up to 74 million 300 thousand in 2018.

TOPSHOP withdrawal from the mainland

In November 1, 2018, Topshop, the first fast fashion brand in the UK, announced the closure of Tmall flagship store.

Topshop, founded in 60s in London, belongs to the Arcadia, the largest clothing retailer in the United Kingdom. It is known as "the business miracle of fast fashion brand", and is also the representative of high street brand.

In the early days of entering the Chinese market, it had created a pair of jeans every 10 seconds, producing 600 thousand orders a year, and selling 1 million items. Two years are too short for any brand to run. But if we look at feedback from social media, it is easy to find out why Topshop failed.

Topshop announced that it was too late to enter the Chinese market: in 2016, ZARA has entered China for more than ten years, and its stores are located in the core business circle of major cities.

The price is high, but the quality is general: the price of Topshop is about 20% higher than that of Zara.

Brand marketing is also very water: micro-blog accounts less than 50 thousand fans, the latest update is still in June 22nd.

GAP: closing 230 stores in the next two years

According to CNN 1 reported that Gap group announced in February 28th last year, in the next two years, will close 230 stores (130 of which will be closed this year, most of the stores are located in North America; in Australia, it has completely bye bye).

The clothing retailer announced plans to split its business into two listed companies, including Gap, Banana Republic, Intermix and its female and male sports leisure brands Athleta and Hill City, and the other only Old Navy.

Founded in 1969, the Gap brand was once one of the coolest clothing brands in the retail industry, but its performance has been poor in recent years. Like many fast fashion brands that are facing difficulties, Gap has also experienced a vicious cycle of "unmarketable merchandise - inventory backlog - discounted inventory, and further sales decline." Last year, sales fell by 5%, even as a burden on group performance.

American Apparel two bankruptcy

American Apparel, founded in 1986 in Losangeles, USA, mainly deals in casual wear, T-Shirts, underwear, accessories and bags. AA opened its first store in 03 years. With eyeball sex suggestive advertising, American Apparel quickly gained fame and became the fastest growing fashion brand in the United States. It was once the favorite place for American teenagers to shop. In the first 6 years after its start, it has opened 450 stores worldwide.

Cheng also marketing failure marketing is probably about AA, with the sexy marketing no longer works, too much physical store with heavy financial burden, for AA audit Deloitte burst out its financial fraud, founder of the scandal, which makes AA go bankrupt.

Even starting in the second half of 2014, AA withdrew from the scandal's founder and CEO, shutting down some stores, streamlining business, reducing costs, deciding to abandon sexy routes, attracting younger consumers, and failing to improve the company's situation: in the first half of 2015, the company still made over $90 million in losses and finally declared bankruptcy.

Luckily, American Apparel, which was acquired by Gildan Activewear Inc. in 2018, announced that it would re open its first entity store in Losangeles. I just don't know if AA can be lucky.

...

ZARA has seen a decline in a fast fashion brand. After closing, it still takes root in the Chinese market and is regarded as a textbook. Is ZARA dying now?

　　 ZARA, what's wrong with you?

ZARA official customer service said that all 4 ZARA stores in Wuhan were upgrading and upgrading, but the specific opening hours were uncertain. But at the beginning of December, ZARA, a flagship store in central department store in Wuhan, also issued a discount publicity. It originally planned to launch the biggest sales promotion window every year from December 28th. Overnight, suddenly closing, is it really a simple upgrade?

　 　 What's wrong with ZARA?!

Closing is only the first step.

This is not the first time ZARA has closed:

In February 2017, the closure of the largest flagship ZARA flagship store in Chengdu caused a sigh of regret.

In September 2018, the closure of ZARA's first store in New York shocked the whole fast fashion circle.

A year later, the Raffles Center store in Dongzhimen, Beijing and the new Dongan store in Wangfujing were also closed.

Some people took stock of the number of ZARA stores, net sales and EBIT (pre tax profit) in 2014-2018 years. After 2015, the profit growth rate of ZARA began to slow down, and the growth rate of shops decreased correspondingly, even in 18 years.

In the past two years, ZARA has had a great impact on the Chinese market.

ZARA's clothing price fell by 10% to 15% on average. Dragged down by this, the performance of Inditex group of ZARA parent company began to slow down from the second half of 2016. In 2016, it gained 23 billion 300 million euro income, the growth rate was 12%, but the growth rate slowed down obviously, while gross profit rate decreased 0.8%, which was the lowest in 8 years.

The slow growth of performance has sounded the alarm for fast fashion. Inditex group is actively seeking transformation, and closing shop is only the first step in its series of actions.

The expansion of fast fashion is usually based on the opening of spacious stores in the downtown area of the first tier cities. With the high consumption trend of China's electricity supplier, the high rent of offline stores is becoming a huge burden. ZARA is trying to reduce operating costs through the contraction line, increase the channel of e-commerce, and achieve profit growth.

Strengthening Digitalization

To stimulate faster growth, Inditex chose digitalization and new retail as a breakthrough point to revive young consumers' interest in brands.

ZARA opens the spokesperson route in the Chinese market. The new generation strength actor Dongyu Zhou and millennial popular actor Wu Lei became the ZARA Greater China brand ambassador, trying to accelerate the growth of performance with star traffic strategy.

In September 27, 2018, ZARA China's first new retail concept store located in Shanghai Times Square:

Moreover, the layout of electricity providers, the introduction of home Zara Home sub line, TRF series to provide cowboy customized services, and strive to emphasize sustainable development are ZARA trying to find new ways of breaking through.

In terms of the layout of the electricity supplier, although the entry time is relatively short, in just two years, it has achieved 47 online platforms to 156 online platform breakthroughs. From 16 years without any online revenue, to 18 years, online sales increased by 27%, accounting for 12% of total revenue, and the online market accounted for 14% of the total number of stores.

At the same time, in order to better realize the digital transformation, Inditex was replaced by the end of May last year. It was replaced by chief operating officer Carlos Crespo, CEO, responsible for technology, IT security, logistics Yuyuan, construction and engineering, forensic, procurement and sustainable development, and vigorously lay up on line network, and online store to use the technology of radio frequency identification (RFID) to enhance the numeral experience.

2014-2018 years Inditex online offline store situation

In terms of sustainability, Inditex group announced in July that by 2025, 100% of the products of all brands including ZARA, Pull & Bear and Massimo Dutti will be made of sustainable fabrics, trying to break the negative evaluation of previous products such as environmental protection.

After so many attempts, ZARA's sales in the first half of 2019 increased by 7% compared with the same period last year.

　 The future will be the battleground of new retail.

At the 2016 cloud habitat conference, Ma said: "in the next 30 years," e-commerce "will soon be eliminated, and" new retail "will take the place of it. "The future will be the new retail battleground for online offline and modern logistics integration". How can new retail get rid of Marketing Analytics?

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Marketing Analytics outlet

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