Dollars & Details:
The hottest thing in the apparel business is a business model known as “fast fashion.” Key players in this business include Sweden’s H&M; two Spain-based firms, Zara and Mango; the UK chain New Look; and Japan-based Uniqlo. Total global sales in this field top $70 billion yearly. For these retailers, success comes from designing trendy, inexpensive clothes that mimic high-end fashion and are delivered to consumers at lightning speed—two to four weeks from design to manufacturing to arrival in stores. This turnaround time is a far cry from the four to nine months that U.S. mass retailers typically require.
Mango, which operates more than 2,731 stores in 109 countries, has developed a clever distribution system that keeps its products and its inventory current. Clothes are categorized according to basic style traits, such as dressy or casual, and then shipped to stores that are most successful at selling those specific categories of merchandise. This system has given it a competitive edge and its products can hit stores in just four weeks. Inditex, a massive apparel manufacturer and retailer headquartered in Spain, owns the Zara brand, which has more than 2,000 stores in 88 markets. Zara achieves one of the quickest turnaround times in the industry, as little as two weeks. Its efficiency is expected to improve even further through the installation of RFID tag systems in all its stores.
H&M is the largest player in the fast fashion market, both in terms of sales and stores. It operates over 4,000 stores in 62 countries, with 161,000 employees. From design table to store rack, its lead time is three weeks. In keeping with the fast fashion model, H&M sometimes does not restock items—once they’re gone, customers won’t see them again.
Trends and Theories:
Traditional apparel retailers are losing market share to fast fashion. Many are attempting to shorten lead times for new merchandise. JC Penney Co., for example, is now using some suppliers in Central America rather than Asia, cutting delivery time from 10 months to eight. Gap, Inc. is sourcing from the Caribbean and working to speed garment conception time. However, these efforts only shorten delivery times slightly and have yet to match Inditex’s typical time of 25 days from conception to delivery.
Ranks and Results:
A practice related to fast fashion is “chasing,” in which retailers order a small number of units for fast delivery to test the waters. Should the items sell, retailers place a quick re-order
All the information you need about the global wireless industry can be found at Plunkett Research, including our Apparel, Textiles and Fashion Research Center Online, and our just-published, completely-updated Plunkett’s Apparel & Textiles Industry Almanac, 2017 edition.