The global epidemic continues to spread. As of now, the cumulative number of confirmed cases of COVID-19 worldwide has exceeded 4.17 million, and the cumulative number of deaths has exceeded 283,000. Although many countries have considered “unblocking” matters, the global economic restart has not yet entered a normal pace due to the rising number of confirmed cases of the epidemic. Under this situation, are the giants in the fast fashion industry okay?
1 H&M
Recently, the Swedish fast fashion brand H&M released its first-quarter financial report showing that it had closed 3,778 stores in 54 markets by the end of the reporting period, resulting in a sharp decline in operating income in the first quarter. It is understood that since Italy announced a nationwide lockdown on March 10, H&M has temporarily closed all offline stores in 13 European countries or regions including Italy, Poland, Spain, Bulgaria, Belgium, France, Austria, and Luxembourg. Among them, 8 stores in Italy will be closed. The company stated that this move is to optimize the store portfolio. Due to the impact of the epidemic, sales have declined and growth has slowed down. Only stores with poor operating performance will be closed, which will be harmful to the group. It’s a solution.
Currently, about 60% (3050) of H&M’s 5061 stores Stores remain closed; 46 of 51 e-commerce marketplaces remain open.
Between March 1 and May 6, H&M’s total sales fell by 57% year-on-year in local currency terms, but online sales increased by 32% year-on-year. %.
By region, H&M’s sales in the Chinese market fell by 32% year-on-year. The largest decline was in Italy (80%), followed by Spain (76%), France (71%) and the United States (71%). In Sweden, which has not completely banned commercial activities, sales also fell by 31%.
H&M warned that it expected a loss in the second quarter due to a sharp drop in sales and price cuts to adjust inventory.
H&M stated that the group’s cash flow is in good condition and will focus on “ensuring financial flexibility and freedom to be in the best position to meet business opportunities in a challenging market.” H&M It also said it was working to secure additional credit facilities.
In order to highlight the new look of the brand in fighting the “epidemic”, H&M recently announced that it will introduce a new fabric technology COOLMAX?, which is a high-performance fabric that can absorb moisture. The air is taken away from the body surface, keeping the wearer’s body breathable and comfortable. H&M will use this fabric to make this summer’s main style of men’s clothing and a series of essential items for men’s wardrobe. The series will be available on the H&M online store and Tmall official flagship store from May 8, and will be launched on May 21 It will be available in H&M stores across the country from today. Ross Lydon, head of H&M’s men’s wear design department, said that the COOLMAX® series is H&M’s first series to use high-performance fabrics to optimize daily clothing. From now on, it will regard fabric innovation as a new way to promote the development of men’s wear.
2 ZARA
ZARA is known for its “extremely efficient” strong supply chain and has its own Factories and production lines. It only takes less than two weeks for a piece of clothing to be designed, produced, shipped, and placed in stores. However, under the influence of the epidemic, ZARA has also been caught in the “store closing wave” in the clothing industry.
In early March, the 2019 annual report released by Inditex Group, the parent company of fast fashion brand Zara, It shows that 50% of the group’s stores worldwide are temporarily closed, that is, 3,785 of the 7,469 stores worldwide have been temporarily closed, and sales fell by 24.1% year-on-year.
In addition to closing stores, Inditex Group is also considering temporarily laying off about 25,000 store employees in Spain. In order to help the Spanish government solve the shortage of medical supplies such as masks and medical protective clothing, Inditex Group also plans to convert some fabric production lines into professional medical fabric production lines.
In order to overcome the resistance caused by epidemic prevention, Zara found another way to solve the dilemma. “ZARA” models were unable to take photos when large crowds gathered, so they used selfies to present ZARA’s new products. The presentation method was very eye-catching, and unexpectedly made this ZARA’s new products popular.
In addition, ZARA is still undergoing active transformation. Inditex Group has announced that all its brand products will be made of 100% sustainable fabrics by 2025. The group also promised that by 2025, Zara will not send any waste to landfills. The company’s headquarters, logistics factories and stores will consume 80% of the energy is renewable energy.
3 GAP
GAP is also “embattled on all sides” under the influence of the epidemic. It is reported that the amount on GAP Group’s account quickly evaporated by US$1 billion, leaving less than US$1 billion. Some time ago, GAP announced that due to the impact of the global new crown pneumonia epidemic, the company’s cash flow is urgent. If it cannot obtain new operating funds, the future will be unpredictable. Although the company has taken several measures to reduce losses, they have had little effect.
The brand launched on April 24.GAP said that due to the outbreak and in response to directives from government and public health authorities, GAP has temporarily closed its North American retail stores and many stores globally. Starting in April 2020, GAP will immediately suspend $115 million in monthly rent for store leases in North America. Over the next 12 months, its “existing cash and expected cash generated from operations may not be sufficient to fund our operations.” It has taken 11 measures, including suspending wages for more than 80,000 employees, It may become the first fast fashion brand to collapse.
Previously, GAP’s brand Old Navy had announced that it would officially withdraw from the Chinese market on March 1 and close all offline and online stores. It is understood that this is a brand under GAP Group and has been operating in China for six years. Officials stated that the withdrawal was to focus on the development of the North American market.
In order to curb the decline caused by the epidemic, and in view of the signs of improvement in epidemic prevention and control, Gap Group recently issued a statement announcing that it will gradually open up its brands in stores starting this month. Approximately 800 stores in North America. The group previously said that due to the forced closure of its stores during the epidemic, it has consumed US$1 billion since February, cash flow has been exhausted, and there is less than US$750 million left in its bank account. Currently, Gap Group is taking measures to maintain healthy cash flow, including furloughing approximately 80,000 store employees, cutting executive compensation, and deferring rent payments in April.
4 Uniqlo
The outbreak has changed not only the survival pattern of fast fashion brands in European and American countries , Uniqlo, one of Asia’s fast fashion giants, is not immune.
Last Thursday, Japanese fast fashion giant Uniqlo announced its plans for the Japanese domestic market. Monthly key financial data. The financial report shows that Uniqlo’s sales in Japan continued to decline sharply in April. Same-store comparable sales including online sales fell by 56.5% year-on-year, and total sales including online sales fell by 57.7% year-on-year.
Uniqlo’s performance is often greatly affected by weather, especially sales of its functional basic apparel. But this time it was mainly affected by the new coronavirus epidemic, which caused most of its stores to temporarily close or reduce operating hours. Store traffic has been greatly reduced, and consumers are cautious about going out for shopping. Uniqlo said that many consumers decided to “stay at home to fight the epidemic.”
In April, at least 299 Uniqlo stores were open as usual, but the business hours were shortened and 311 stores were temporarily closed. . Same-store traffic, including online sales, fell 60.6%.
In order to better break the situation, UNIQLO started data mining on people’s consumption attitudes and changes in consumption behavior before and after the epidemic. UNIQLO focuses on the brand concept of “LifeWear clothing for life”, starting from the four aspects of peace of mind, health, high quality, and sustainability, and gradually building a full link from establishing brand immunity and health in the early stage to opening up life and vitality today. . Currently, they are “evolving” in all aspects through product innovation, online and offline services and innovation, brand value building and social responsibility fulfillment.
At the same time, UNIQLO launched new 2020 spring and summer new products, including five major series: lifestyle sports, healthy sun protection, AIRism comfortable underwear, UT world cultural and creative pioneer, and high-quality classics. Under the pressure of the epidemic, people have new demands for clothing that is more comfortable and healthy, efficient in multiple scenes, and can also generate emotional resonance and serve as a cultural carrier.
Fast fashion giants have been recognized for their “extremely fast” logistics chain integration and their representation of fashion. Trendy and popular in the global clothing industry. But now, due to the raging epidemic, it has fallen into a “shuffle” crisis. Various brands are constantly making corporate adjustments and brand management in the new post-epidemic era, but they still cannot withstand the impact of the epidemic on revenue decline and consumer loss. Will they still usher in their own “fast” pace? ? </p
