Zara Parent Company Sales Slow Down Fast, Fashion Boom Continued Downturn

In recent two years, the fast fashion industry has been in a depressed state due to the intensification of industry competition and the pfer of consumer preferences.

A few days ago, the Inditex group of Zara parent company announced its 2018 fiscal year performance report: in the 12 months ended January 31, 2019, group net sales rose 3% to 26 billion 140 million euros compared with the previous year, the profit before interest tax depreciation and amortization increased 3% to 5 billion 460 million euros, and net profit rose 2% to 3 billion 440 million euros compared with the same period last year.

This data shows that the declining trend of Inditex group's performance has not been improved, and is still in the stage of "low single digit growth".

Compared with past earnings data, Inditex group's annual profit in fiscal 2015 increased by 14.9%, net profit in fiscal year 2016 was 10%, net profit in fiscal year 2017 increased 6.7%, and the latest 2018 fiscal year was 2%, the lowest level in recent years.

In the report, lnditex group also disclosed the anticipation for the 2019 fiscal year - the Group expects sales growth to remain 4%-6%, which means that they already agree that at least in the next year, the "slow growth" situation is hard to reverse.

According to the "business daily", Inditex Group Chairman and CEO PabloIsla have said that before 2020, all brands of the group will be sold to all the markets in the world through the electricity supplier. After that, the online platform platform will be optimized, and online shopping products can be returned to online stores.

But during the reporting period, Inditex group's online channel sales increased by 27%, accounting for 12% of total revenue, or 3 billion 200 million euros, far behind the strong growth of 41% in fiscal 2017.

If we only calculate the electricity market, the contribution of electricity providers will be 14%, which is slightly weaker than that of H&M 14.5%, which is also lower than that of the US apparel industry as a whole by 27%.

It is worth noting that the main brand Zara has opened its business in 202 markets.

Inditex intends to open up inventory and e-commerce inventories in offline stores by 2020.

Brand, Zara and ZaraHome grew by 3.3%, creating 18 billion euros in sales.

The fastest growth was Pull&Bear - sales growth of about 6.6%; MassimoDutti sales increased by 2.1%; Stradivarius3.6%; Bershka sales growth almost stagnated.

The two smallest brand -- Oysho growth 2.6%, Uterq u E 4%.

In fact, the global fast fashion industry is now facing a cold wave. Morgan, a well-known investment bank, started its declining fashion industry from last year. In March 2018, it pointed out that the market value of Inditex group had dropped to the level of 2015.

In 2018, NewLook withdrew from the Chinese market, and Topshop announced that it had stopped working with China's franchise partners and recently heard that Forever 21 had completely withdrawn from the Taiwan market and might withdraw from the French market.

Therefore, including Zara, fast fashion brands such as H&M and fast fashion TOPSHOP, New Look and Gap are constantly looking for new outlets.

The Inditex group released the latest financial report and revealed some new trends in the reform, for example, it will gradually merge Zara Home into Zara, and the chairman and CEOPablo Isla of Inditex group said the long-term goal is to make Zara Home become the fourth major business of Zara.

In addition, the TRF series under the Zara brand will provide cowboy customized services.

And another fast fashion brand Gap group's reform direction is "separation and reorganization".

Earlier this month, the group announced that it would be split into two independent companies, one of which contained only OldNavy which has been developing well in recent years, and one that has not yet been named, but will include existing brands such as Gap, BananaRepublic and Athleta of the same brand. It also announced some other reform initiatives, including plans to close 230 stores with the same name brand Gap in the next two years, so as to further optimize its operation.

At present, although the pformation strategies adopted by the major fast fashion brands are different, they are constantly adjusting their business layout and adapting to market changes in the case of fast fashion.