Foreign Fast Fashion Brands To Ensure Low Inventory Rates Follow A Small Number Of Product Strategies

Yesterday, the American fashion brand, which attracted much attention from young people. GAP The Raffles shop opened in Chengdu. It is understood that the store is GAP's first store in Sichuan. GAP, which has entered the Chinese market for two years, has obviously improved the pace of opening stores in recent years, but at the same time, many famous clothing enterprises in China are facing "cold winter" while foreign clothing brands are rapidly attacking the city.

　 A: two brands of Chinese and foreign brands

It is reported that at present, GAP, which has more than 4200 chain stores in the world, entered China in 2010. Beijing And two of the most prosperous streets in Shanghai have two flagship stores with an area exceeding 1 thousand square meters. However, the opening rate of GAP has been slow until the end of 2011, the total number of shops in mainland China was only 12, and most of them were concentrated in the first tier cities. In 2012, GAP began to accelerate its development in China. So far, GAP has opened 15 new stores this year.

Yang Deming, President of GAP Greater China, told the media: "by January 2013, GAP will have 46 stores in China." That is to say, in the three months from now, GAP will open nearly 20 stores. In addition, GAP has opened 12 stores in Toronto, which has only 3 million of the population. Therefore, Yang Deming also said that GAP chain stores in Shanghai certainly will not be less than 12, and look at the national market should be able to open to 1000 stores.

Reporters at GAP Raffles shop in Chengdu, because of the relationship between working days, the opening day GAP did not appear bustling bustling scene. A staff member told reporters: "we are not looking forward to the opening of the long queue, but rather to slowly manage the market. From now on, GAP sells well in other stores in China."

In fact, though GAP is the world's top ranked company. Clothing brand But it will be several years later than competitors to enter the Chinese market later. H&M, which has entered the Chinese market earlier than GAP, has opened hundreds of stores in more than 40 cities in China, and the pace of its opening has been maintained at a high speed. INDITEX, the parent company of ZARA, now has 275 stores in China, and the company's target is to cover 50 cities in China, with 150 new stores. Japanese clothing giant UNIQLO is also increasingly concerned about the development of the Chinese market. At present, its number of stores in China has reached 114. The company plans to sell more than 10 of the Japanese market in the next 10 years, and at the same time, it plans to increase the number of UNIQLO stores in China to 1000 by 2020.

However, with the rapid expansion of foreign brands, the domestic garment industry is facing an unprecedented "cold winter". Including Lining, PEAK and other sports brands, Semir, United States, Daphne and other casual wear, this year has repeatedly reported negative news such as layoffs, closings, profits decline and so on.

Daphne group has announced 300 layoffs nationwide, while Semir's latest three quarterly report shows that 7 to September, the total operating revenue of the company was 2 billion 100 million yuan, down 5.53% from the same period last year, and realized net profit of 225 million yuan, down 36.24% from the same period last year. The state of the United States is also not optimistic, and its quarterly report has a negative growth. From 7 to September, the total business revenue of the company was 2 billion 594 million yuan, down 13.47% from the same period last year. Net profit was 320 million yuan, down 13.4% from the same period last year.

Flush statistics show that only from the first half of this year, the total inventory of more than 80 listed companies in the textile and garment sector amounts to 67 billion 166 million yuan. Especially the popular leisure clothing and sportswear are also unable to escape the torture of high inventory.

Sports clothing brand market has not been spared. This year, the number of PEAK's retail outlets has dropped sharply. The report released by PEAK in May showed that the company closed 1067 stores this year, while Lining announced that the company closed 952 stores in the first half of the year, and the total number of Anta stores decreased by 110 in the first half of this year.

　　 B: brand positioning and management concept is short board.

Why did the domestic garment enterprises encounter embarrassment in the case of the continued growth of macro sales? Most companies are targeting the difficult problem of high inventory. Li Ning Co said, "the pressure on channel inventory is increasing, retail terminal competition is becoming more intense and retail discount has been raised, resulting in a further decline in terminal retail profit margins". Semir also said bitteringly, "to speed up inventory processing, leading to a short-term decline in gross margins".

"High inventory" is a common problem faced by garment enterprises this year. "This year's macroeconomic downturn, the decline of GDP and the coldness of the consumer market are the main reasons for the pressure on the apparel industry to face inventory pressure," Wang Bing, an analyst with the apparel industry, told reporters. In the past few years, the clothing industry has been expanding fiercely, and the stock crisis has been concealed by the good economic situation. Now the economy is falling, this crisis is also exposed.

However, foreign brands such as ZARA and H&M have maintained impressive growth in the face of the economic crisis. Data show that ZARA has grown by an average of 25% over the past five or six years. Even in 2008, when Europe was in recession, its growth in the third quarter was still 18%.

"Brand attractiveness is the most obvious gap between Chinese and foreign clothing brands at present." An industry analyst pointed out, "no matter from the initial stage to the late stage propaganda, there are still many areas for domestic brands to be perfected." Take the United States as an example, the company has several brands such as Smith Barney, AMPM, ME&CITY and so on. Among them, the price of ME&CITY brand is basically the same as that of ZARA, but it is far apart in terms of sales and brand influence.

On the other hand, the operation mode of domestic enterprises still has problems. At present, the market space is limited, and the high speed extension growth is difficult to continue. But the business mode of enterprises still stays in the inertia of scale expansion, resulting in the backlog of product inventory.

Zhang Dazhi, a senior consultant in strategic management consulting, believes that many domestic businesses are only learning about foreign brands such as ZARA, but they have little knowledge of other management modes.

According to the data provided by one industry, in China's apparel industry, manufacturers sell at least 1 items of goods. At least 2 to 5 items are prepared for inventory turnover, sometimes exceeding this proportion, resulting in large inventories. For example, terminal customers actually need 100 items, retailers think they need 150, distributors will expand to 200, and it will become 250 when it comes to manufacturers. Although the demand for terminal customers has not fluctuated very much, after the enlargement of retailers and wholesalers, the order quantity has increased at the first level, and the larger the supply chain, the greater the order deviation. Most manufacturers in China need an average of 90 days from receiving orders to finished products, and some can reach more than 140 days.

In contrast, from initial design to final garment, ZARA takes 15 days and H&M is 21 days. At the same time, foreign fast fashion brands, in order to ensure low inventory rate, high turnover rate and fast fashion, follow a small number of product strategies.