H&M Beijing Again Closed Shop, Why Fast Fashion Frequent Withdrawal From The Core Business Circle?

The fast fashion main store, once placed in the shopping mall's Street location, has been unconsciously fading out of people's horizons. Recently, the Beijing Commercial Daily reporter interviewed found that the fast fashion brand shops without core business have been withdrawn and replaced by famous brands such as sports.

H&M Beijing Qianmen Street shop and two stores opened in Wangfujing for many years have been evacuated. The fast fashion recession is already unstoppable. Under the constant slowdown of brand performance, the shrinking front is the best choice. Industry experts believe that the fast fashion brand will seek transformation in the new form of net red economy.

H&M Wangfujing street shops closed quietly, replaced by Adidas.

　 Withdrawal of core business circle

When fast fashion is no longer the core fashion, demand for offline stores also begins to shrink. Beijing daily news reporter recently visited found that the original H&M Beijing APM store in the commercial district of Wangfujing has been closed.

According to the location information of the store, the Adidas store will be opened in August this year.

Not long ago, H&M Qianmen Street store just evacuated. This is the first store that the brand has entered the Beijing market. It has been in operation for 11 years. In April 2009, H&M Qianmen Street shop had not formally cut the ribbon, and the door had already queued up to the dhura junction. According to the official website of H&M, there are only 23 stores in Beijing market.

Previously, ONLY, ZARA and other fast fashion brands were also closed at Qianmen Street stores. At the end of December 2019, all 4 ZARA stores in Wuhan were also closed. The brand says it needs upgrading.

For the frequent closes of stores in the near future, an industry close to H&M said that the brand is communicating with different owners for future cooperation. "In the course of developing the business, the company will continuously evaluate the location and market development trend of the store.

According to the consumption habits of Chinese consumers, H&M is also speeding up the adjustment of the physical stores, closing some stores and optimizing other stores, with a focus on expanding better shop choices. The source said.

Accelerated transformation of ebb tide

The industry close to H&M revealed that the key to H&M is to continue to integrate offline stores and online sales channels to optimize H&M's brand store portfolio.

For fast fashion brands, the past two years are not easy. Since 2018, many brands including NewLook have even faded out of the Chinese market. In September 2019, Forever21, the fast fashion brand, announced bankruptcy protection.

Another fast fashion brand TOPSHOP has readjusted China's market strategy and closed Tmall flagship store on the eve of "double 11" in 2018.

From the current active fast fashion brand, offline stores are also tightening. In September 2019, ZARA Beijing Dongzhimen Raffles shop and Wangfujing new Dongan store two core business circle shops closed.

H&M also closed 160 stores in fiscal year 2019, 14 more than in the last fiscal year. In September 2018, ZARA closed its first store in New York. As early as February 2017, the country's largest ZARA flagship store in Chengdu was closed.

On this basis, the fast fashion industry is undergoing rapid transformation. The industry close to H&M said that the core and driving force of brand transformation is digitalization. It requires the brand to transform its business at a faster pace and reexamine its brand. The online transformation of some brands has been effective.

According to the H&M group's 2019 quarter fiscal year third quarter earnings report, the Swedish group's online sales of H&M group increased by 27%. Less than two years later, H&M Tmall flagship store has more than 11 million fans, and its performance level is in the middle.

Red Net Economy

"The main reason for the frequent closure of channels under fast fashion lines is due to the increase of costs". In the view of Zhang Peiying, honorary consultant and fashion industry expert of luxury China Alliance, in recent two years, with the popularity of e-commerce channels, more and more consumers are accustomed to online shopping, and the line has long been unable to become the main direction of drainage. Therefore, when considering the cost increase, the brand will adjust the storefront layout.

In contrast to the general decline, Zhang Peiying believes that the adjustment of the offline stores indicates that the attractiveness of fast fashion is rising. This is because consumers have formed a good understanding of fast fashion form and gradually transformed into mass consumption. Therefore, the location of fast fashion brand stores is not important.

Zhang Peiying also said that the fast fashion industry will move towards sustainable development in 2020, with the help of net red economic growth performance. First of all, fast fashion enterprises will make more investment from environmental protection. No matter from the perspective of marketing operation or promotion, there will be more investment, including the research and development of raw materials and supply chain management by enterprises themselves.

Secondly, fast fashion enterprises will make efforts to net red economy. At this stage, net red has become a major development trend of the economy. In 2020, fast fashion enterprises or more products for the net red economy or joint fund cooperation.

In this regard, Baum, the research fellow of the electronic commerce research center, and Bao Yuezhong, chairman of the enterprise management consulting Co., Ltd., also said that from the retail perspective, the net red economy has solved the trust problem of users. Retail platform usually encounter more problems that consumers trust in enterprises and brands.

From the product point of view, it can solve multiple dimensions and stereoscopic display problems. From the perspective of retail sales, the cost is low and the threshold is low. Establishing a live channel, comparing to a shop and opening a channel, the cost is much lower, so there will be much room for future development.

Some fast fashion brands in Beijing in 2019

ZARA: closing the Raffles shop in Dongzhimen and the new Dongan store in Wangfujing.

H&M: close the Qianmen Street store and Wangfujing APM store.

Forever21: close Yau Tang Shopping Plaza Shop and gather in Xihongmen Shopping Center store.