It took less than two years for La Chapelle to go from being listed on the market to suffering huge losses. How to play the cards in hand well requires brands to continue to explore.
The headquarters office building of La Chapelle Group is located in Minhang District, Shanghai. It has just been put into use for more than a year, but recently a poster for leasing was posted on the outside of the building.
Coincidentally, you can also see the rental situation of multiple office buildings in La Chapelle on 58.com. As a once popular fast fashion brand, it is now posting information about office buildings for rent, which shows that its current situation is worrying.
The most incredible thing is that it only took less than two years for La Chapelle to go from being listed on the market to suffering huge losses.
La Chapelle is not an exception when it comes to development difficulties. A few days ago, the American fast fashion brand Forever 21 declared bankruptcy; after H&M closed 140 stores last year, it also plans to reduce the total number of global stores from 175 to 130 this year. ZARA closed 355 stores last year and this year also More store closures are expected.
Why did the once popular fast fashion enter the cold winter collectively? How will major brands respond?
Consumption upgrades, personality is favored
According to the latest report released by the fashion agency Thredup, 25 % of female consumers said they would no longer buy fast fashion clothing starting in 2019, and most of them are young consumers. The new consumption outlook of the post-90s and post-00s generations is constantly impacting the core business model of fast fashion. More and more young people are pursuing trendy personalities, but the “cheap fashion” positioning of fast fashion brands does not attract enough appeal to young people. On the other hand, trendy domestic brands are beginning to be sought after by young people.
According to the world’s first trendy brand big data research trend and user analysis report released by OFashion and Nielsen, the consumption growth rate of fashionable brands in 2017 was 3.7 times that of non-fashionable brands. The growth rate reached 62%, while the growth rate of non-trendy brand consumption was 17%. Stylish brands are becoming a hot favorite in the market, carving up the target audience of fast fashion brands. With the increasing demand for personalization and fashion, brands that can highlight the design concepts of the times are once again favored by consumers. The improvement of China’s local design capabilities is an indisputable fact. After product quality problems are solved, design sense will become more important. compete. Obviously, the fast fashion development model that focuses on “fast” cannot meet people’s requirements for original design, and some fast fashion brands have also been involved in plagiarism. In 2018, ZARA was accused of plagiarizing Diesel’s jeans and Marni’s sandal designs; Gucci sued Forever 21 for plagiarism because it used a design that was very similar to Gucci’s iconic striped color pattern; ROARINGWILD accused Heilan House’s fast fashion brand Black Whale HLA JEANS copied and changed their 2018 spring and summer series into the 2019 new series for sale.
Fast fashion brands that are constantly exposed to plagiarism scandals have caused quite a stir in the industry. Consumer favorability has declined, and brands are also facing pressure from consumption upgrades. Faced with development limitations, various brands are also making efforts. In recent years, UNIQLO has been actively getting rid of the fast fashion brand image. While selling basic items that are indispensable in everyone’s wardrobe, it has also actively developed high-tech fabrics and long-term co-branding with designers. It has gained a good reputation among the public and has become a brand. It has become a fast fashion brand store for many trendy young people to check in. Therefore, while consumption is constantly upgrading, brands need to adapt to their preferences, use personalized trend elements to win the favor of consumers, transform and upgrade, and find their own development route.
E-commerce impact, cost expenditure is still a problem
Initially, fast fashion brands were developing layout On the Internet, they all use crazy expansion of offline stores to occupy market share, and Zara and La Chapelle are no exception. In the first half of 2018, Zara had more than 7,000 offline stores around the world, while La Chapelle had more than 9,000. Among similar domestic competitors, La Chapelle became the brand with the largest number of stores at that time.
Having more stores means an increase in manpower, material resources, rent and other costs. In the first half of 2019, La Chapelle’s net loss expanded to 498 million yuan. Faced with loss loopholes, the brand needs more passenger flow to make up for the funding gap.
Things were not always smooth sailing. According to a data monitoring report released by Analysys Think Tank, from January to December 2015, the transaction scale of clothing and apparel categories in China’s B2C market reached 654.98 billion yuan, a year-on-year increase of 66.08%. According to data from the National Bureau of Statistics, the national retail sales of clothing, shoes, hats, needles, and textiles above designated size from January to December 2015 were 1,348.4 billion yuan, a year-on-year increase of 9.8%.
Obviously, clothing e-commerce has taken away half of the clothing retail industry. The development of e-commerce platforms has given rise to many unknown…Many original clothing brands do not have the cost of offline stores. Their price advantages are obvious and they capture more traffic.
At the same time as external worries, the clothing industry cannot avoid the internal trouble of inventory turnover.
La Chapelle positions itself as a fast fashion, multi-brand, fully direct fashion group. But its direct operation model is like a double-edged sword. On the one hand, it can reduce costs through unified management and operations, but on the other hand, it faces inventory turnover issues.
Uniqlo’s average inventory turnover days is 83.72 days. Although La Chapelle is called the Chinese version of Zara, its inventory turnover is more than 240 days, which is only 1.5 times a year. With high inventory, more funds are naturally needed for maintenance, which is why La Chapelle has been complained about the long new cycle.
Online has been impacted by e-commerce, offline stores have tight inventory, and the funding gap left by crazy expansion is getting bigger and bigger. The cycle continues again and again. It seems that it is not difficult to understand the current situation of La Chapelle.
Big data is an important part
In addition to seizing market share , the clothing industry also needs to always understand social trends and consumer preferences. At this time, using Internet big data and relying on data platforms to understand consumer preferences and clarify consumer portraits has become one of the important means for the industry to improve its competitiveness.
Take Uniqlo as an example. In order to find a breakthrough and distance itself from competitors such as Zara and H&M, Uniqlo founder Yanai Tadashi has gradually turned his attention to product technology since 2016. digitization of innovation and channels while accelerating global expansion. And it has been repeatedly emphasized that the group’s mid-term vision is to become the world’s number one apparel retail manufacturer with its “digital consumer retail enterprise”.
Borrowing digitalization, Uniqlo’s subsequent development is considerable. In the 2019 fiscal year as of the end of August, the overall sales of Fast Retailing Group, the parent company of Uniqlo, increased by 7.5% year-on-year to 2.29 trillion yen, approximately 151.5 billion yuan, and net profit increased by 5% to 162.578 billion yen, exceeding approximately 10 billion yuan. A total of 10.75 billion yuan, both hitting record highs.
In terms of e-commerce marketing, Uniqlo’s official e-commerce website and APP traffic are all directed to its Tmall flagship store. Uniqlo uses network backend data to analyze customer consumption amounts, consumption frequency, regional distribution, etc., and uses these data to accurately guide new store location selection and distribution.
In 2014, the cold winter in the clothing industry continued, but UNIQLO decided to speed up its operations and planned to open 80-100 new stores every year, a year-on-year increase of 30%. The backing of this still relies on data. support.
In short, the capital and other difficulties faced by La Chapelle also exist in most of the same industry, and it is not easy for fast fashion brands to get rid of them.
From the perspective of the development of brands such as Uniqlo, relying on big data is a good way, but there will still be certain differences when applied to different brands. How to play this card well? Brands need to continue to explore. </p
