Fast fashion, very fast. Maybe too fast for many, as times between success and failure are shorter and shorter, and consumers’ fluctuations ever wider. Just like a roller-coaster.
In the last weeks, two cases well represented the temporariness of the situations and the fickleness of consumptions. We speak about Uniqlo and Forever 21.
OLD AND NEW LEADERS
About Uniqlo, on the occasion of the opening of the Milan superstore, Fast Retailing (Japanese parent company of the brand) numbers ended up in the spotlight. Ten years ago, it didn’t appear among the world’s leaders of fast fashion.
It is for sure a solid national reality, but still absent from the first positions of the sector world ranking. In 2009, the ranking was headed by the American Gap that was, moreover, going towards a tormented period. Even more illustrative of the fact that, for Uniqlo, the amount of international sales has exceeded the local one just two years ago.
Looking at the revenues, today Gap is in fourth place, while Inditex (Zara, Pull&Bear, Bershka, Stradivarius) remains firmly in the first. Uniqlo, which has exceeded 21 billion dollars, earned (until now, fiscal years closing dates are different) the second position over H&M. Another illustrative case, the latter, of the fast but alternate fortunes of fast fashion.
After years of apparently unstoppable growth, H&M has experienced the first difficulties in 2016. After only one year, it lost seven positions in the rating of the major Swedish societies quoted on the stock exchange.
ANOTHER “CHAPTER 11”
Forever 21, in the last days, requests assisted bankrupt (Chapter 11): 3.3 billion dollars in the last year, in 2016 were 4.4. From 43.000 employees in that year to the less than 33.000 of today.
We are talking about the American retailer which wrote a piece of history of the global fashion: 5 dollars tops, and packed shops. The number of shops and the less attention to the evolution of formats and omni-channel, maybe, are at the basis of the flip side.
Linda Chang, CEO of Forever 21, said: “We passed from 7 to 47 countries in less than six years, this increased the complexities”. In the biographical data, we can find another feedback on the government difficulties of a very tumultuous business. She, millennial, seems not to be able to seize the behavior developments of the “centennials” (or generation Z, born after 1998) just next to her.
THE SHOPS ISSUE
It is important to say that for Forever 21, as for other brands, the crisis of malls was a big concern. Many fast fashion shops, in fact, count a massive part of their distribution network in malls.
It is also true, though, that turnovers do not necessarily have to decrease proportionally to the number of shops, and that profitability would be inevitably penalized.
Uniqlo is somehow the demonstration of that. Fast Retailing, in fact, aims to a network of 3.700 shops within august 2020. Just a hundred less than Gap, but a lot less than the 5.000 of H&M and the 7.000 if Inditex.
According to McKinsey, since 2000 the number of dresses purchased in one year from a single person increased averagely by 60%. But the imbalance between APAC and west is ever stronger, against us.
The whole sector of fashion, the distribution models are decisive and aim to the post-channel. If it is true that in 2019 the FF would have covered the 66% of the whole sector entire traffic, it is not even needed to spend many words on the hybridization success, if they could be called like that.
The Zalando case, e-retailer by definition, is there to teach: 70.000 partners on the territory within the next five years, to raise sales and reduce stock problems. And who, less than a month ago, joined the Milan-based event of Retex, would have noticed how much technology could be decisive in drawing new store formats.
ONE GAME, MANY PLAYING FIELDS
Second-hand clothing will grow quicker than other retail areas, in the next ten years. In 2022, almost 50 billion dollars forwarded at a global level, and yet in the supermarkets. This goes well also with the theme of sustainability, which regularly brings the sector big brands on the witness stand and adjusts the consumers’ preferences.
ASDA AND H&M
Asda, the second English retailer in dimensions, launched the collection “Re-Loved”, composed of recycled clothes. The initiative, in official statements, answers to the will to reduce the environmental impact of its offer. The goal is to “do the right thing!”, to “make products more sustainable, ensuring their durability and that in the surplus stocks there is a good portion of recyclable clothes”.
The same commitment to the already mentioned H&M. Last 10 October H&M made a new investment in the capital of the platform Sellpy, already investee from 2015, becoming the majority shareholder of the website selling second-hand clothes. This in support of the “strategic efforts of H&M to create a circular economy”.
At this point, it’s just discussing if the word “fast” is just applicable to fashion or, in a more holistic sense, to times and ways of change of the whole industry. Always on the roller-coaster, though.