The fast fashion industry has been in turmoil recently.
Well-known fast fashion and affordable luxury jewelry brand Pandora released its first quarter performance report on May 4 this year. It showed that the number of its stores in China has been reduced to 209, which is 31 stores less than its peak period in 2019. In other words, in three years, Pandora has closed more than 30 offline stores in China.
Since Pandora also "pushed", various brands have begun to "retreat" from the Chinese market one after another.
Recently, the e-commerce flagship store of Bershka, Pull&Bear and Stradivarius, the three brands of , owned by Inditex, the parent company of Zara, issued a store closure announcement. From July 31, 2022, the online store will stop selling brand series products. At the beginning of 2021, these three brands announced that they would close their physical stores in China and only retain e-commerce channels.
Not only China, but also netizens said that Bershka in Shibuya, Japan has also closed its store. It seems that they are preparing to withdraw from the Asian market? Could it be that the fast fashion industry is failing?
According to the author's understanding, in addition to Zara, Inditex Group also has six brands: Zara Home, Bershka, Pull&Bear, Massimo Dutti, Oysho and Stradivarius. The highest among
in terms of sales is Zara, which achieved revenue of 19.7 billion euros in 2021, a CAGR of 13.52% from 1998 to 2021, and a market value of 68.34 million euros, which is 4.94 times higher than when it was listed.
and Pull&Bear In the 2021 annual report released by Inditex in March this year, sales increased by 32%, reaching 1.876 billion euros.
However, Inditex also stated that in the first quarter of fiscal year 2022, store traffic showed a sharp rebound, and store sales were also growing, but online sales fell by 6% at fixed exchange rates, while online sales in the first quarter of 2021 Sales increased significantly by 67%.
Since the sales of offline stores are considerable, why do these three brands still close all their Chinese stores?
In the third quarter financial report of fiscal year 2022 released by the Estee Lauder Group this year, the group's net sales reached US$4.25 billion in this quarter, but at the same time, Estee Lauder also lowered its full-year profit expectations.
In addition, H&M also launched its first product in the Chinese mainland market after the “ Store - The H&M store located at No. 651 Huaihai Middle Road, a traditional commercial street in Shanghai, has quietly withdrawn. It is reported that the store has been open for 15 years.
The repeated outbreaks and spread of the epidemic in many domestic provinces have greatly restricted the group's retail customer flow, travel retail and distribution capabilities. Raw material fluctuation risks and systemic risks also bring a lot of instability to the market.
Men's clothing brand SELECTED (SELECTED) A directly operated store staff in Beijing said that sales have been sluggish this year and have not even reached half of what they were before the epidemic. Store sales in May were only 5 digits.
For this brand, this is already considered a "terrible" result. Some stores have reached a point where there is no customer flow and rents have not been adjusted, so they can only stop paying employees' social security.
In such an environment, going online may be their way out.
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