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Fast Fashion: Designers and Retailers Speed Up, Business and Industry Trends Analysis

Several major retailers are based on 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.  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.
Fast fashion wasn’t always part of New Look’s business strategy.  As the phenomenon began to heat up, New Look changed its business model to get a piece of the action.  Originally a discount retailer, New Look has 391 stores, and ships merchandise to over 53 nations worldwide.  New Look stocks new items every week in order to catch the attention of fashion-conscious shoppers.
Mango, which operated 2,600 stores in 115 markets around the world as of early 2023 (including 12 stores in the U.S., with a goal of 40 U.S. stores by late 2024), 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 in the world of fast fashion and its products can hit the stores in just four weeks.  Inditex, a massive apparel manufacturer and retailer headquartered in Spain, owns the Zara brand, which has more than 2,300 stores in 57 countries.  Zara achieves one of the quickest turnaround times in the industry, as little as two weeks.
H&M is the largest player in the fast fashion market, both in terms of sales and stores.  It operated about 4,375stores in 77 markets as of late 2023.  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.
H&M also faces competition from UK-based Primark Stores Limited, a brick and mortar only retailer with stores in the UK, Ireland and Europe.  With dresses selling for about $18, pants for less than $20 and boots for $25, Primark is sometimes even less expensive than H&M.
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.  Teen-targeted retailer Aeropostale, Inc. is known for its chasing technique.  The practice can be difficult for manufacturers, many of which were hard hit during the global recession, finding themselves with scaled-back orders or cancellations.  Leery of ramping up production too quickly, some manufacturers are refusing late orders, leaving retailers short on merchandise to sell.
Traditional retailers are taking notice and attempting to shorten wait times for new merchandise.  JC Penney Co., for example, has been 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.

Shein Grows Quickly to Become a World-Leading Online Fast Fashion Seller
Founded in Guangzhou, China, and now headquartered in Singapore, Shein grew to a dominant lead in fast fashion with amazing speed.  Shein was on-track to hit about $32 billion in sales for 2023.  This is a stunning revenues achievement for a firm that was established in 2008 by a Chinese American graduate of Washington University.  Shein offers major competition to long-established fast fashion brands with their own retail stores, such as Uniqlo, H&M and Zara.  A handful of vital factors have been key to its success:
1) Amazingly low prices (as little as $13 for a dress)
2) A tightly integrated supply chain of 3,000+ manufacturers in a build-on-demand model which lowers inventory risk and expense (manufacturers are mainly in China, but also in the U.S., Turkey and Singapore, with plans to expand buying in Europe and elsewhere)
3) Exceptional online marketing expertise (including a dynamic website that engages the consumer and drives sales at bargain prices)
4) Highly efficient management practices and merchandising
SPOTLIGHT: On-Demand Apparel Manufacturers
In an effort to reduce waste and costs (and reduce the burden of carrying inventory), some clothing manufacturers are shifting from traditional lines of merchandise—designed and manufactured each season—to garments made on-demand.  Typically, when retailers over-buy an item and it is stuck in inventory, they must slash prices to move unsold goods.  Many retailers end up selling clothing to discount outlets or recyclers in a last-ditch effort to get items out of warehouses.  The on-demand model, in contrast, enables shoppers to select as-yet unmade merchandise on web sites, triggering the process to cut, sew and ship the desired apparel.  This can be of immense benefit to the retailer, since no inventory costs are involved.  Resonance Cos. is one of these on-demand providers.  It digitally prints fabrics for on-demand orders at a factory in the Dominican Republic.  Pattern pieces are then cut by robot and sewn by human staff either in the Dominican Republic or at a plant in New York.  Completed garments are shipped directly to customers.  As of late 2021, 25 clothing designers, including Rebecca Minkoff, were utilizing the Resonance system.  Giant online fast fashion seller Shein is a leader in utilization of on-demand manufacturing, primarily sin China.

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