Fashion big name ZARA wants to become the largest clothing retailer

In fiscal 2008 (February 2008-January 2009), GAP had sales of 14.5 billion U.S. dollars, the second ZARA-owned Inditex Group had sales of 10.47 billion euros, and the third H&M sales were SEK 88.53 billion. .

As of the end of January 2009, although GAP sales were still higher than Inditex, sales of existing GAP stores had a negative growth for 15 consecutive months. Sales in February decreased by 12% compared to the same period last year, while Inditex’s sales increased by 9%. %. Currently, GAP is making layoffs to shops with poor sales, and the number of store closures has exceeded the number of new stores.

All indications are that in fiscal 2009 (February 2009-January 2010), ZARA's parent company, Spanish Inditex, may exceed GAP's sales to become the world's largest clothing retailer.

Founded in 1969, GAP was once considered a label for American culture along with Coca-Cola and McDonald's. However, the company's business started to decline from 2004, and the continued deterioration of its business has forced GAP to face the immediate problem.

In fact, the advantage of the opponent is the disadvantage of GAP. In ZARA, a design team of 200 people in the northwestern part of Spain sent people to Paris and Milan to draw design inspiration from the fashion show. With a variety of fabrics, the sample can be produced in one day and sent to the factory. It only takes ten days from design to completion. To study how to reduce the lead time in the end, we need to quickly imitate and master changes in customer taste, and specifically send people to record the wearing of young and fashionable leaders. Take GAP as an example. The design gestation period is 2 to 3 months. They do a set of clothes. ZARA can do six clothes.

As of the end of January 2009, Inditex had 4,264 stores in 73 countries and 573 new stores in fiscal 2008. Due to the simultaneous downturn of the global economy, new stores were controlled within 370-450 stores in FY09, which is also much higher than the industry average. In comparison, GAP Group had 3,149 stores as of the end of January 2009. The Swedish H&M company, which ranks third in the world in terms of sales, has 1,748 stores around the world as of the end of February, and plans to add 225 stores in fiscal year 2009.

In the eyes of people in the industry, the main reason for the decline in sales of GAP is that it has been separated from the market and it has not been concerned about the market. The design of the product and the development of the brand can no longer satisfy the needs of the main customers. However, if the needs of the main customers cannot be met, the purchase direction will be invested in other brands, such as ZARA and HM, such as Uniqlo. This is even younger. Fashion and low price brands.

The shrinking pockets of the financial crisis have allowed more and more consumers to return to cost-conscious consumption patterns. Cheaper goods have been hotly promoted, and companies that insist on playing cheap cards have benefited, while others have had to downgrade their lives. Get the favor of consumers.

Since September 2008, GAP’s same-store sales have fallen for six consecutive months in the North American market, while Uniqlo’s same-store sales have increased by 12.9% during the same period. Although the vast majority of nearly 800 stores in UNIQLO are located in Japan, and the coverage area is different from that of North American-based GAPs, Uniqlo’s market performance is clearly superior to that of the same economic downturn. This can be seen from the fact that UNIQLO’s parent company Fast Retailing (UNIQLO's revenue accounted for 88% of the group's operating profit and 99% of its operating profit) and GAP's share price movements are also evident. In the past year or so, Fast Retailing's stock price has risen by 18%, and GAP's stock price has fallen by nearly 44% over the same period.

Faced with the continuous decline in market share, GAP is in urgent need of transformation. The company tries to attract potential customers to its needs and desires by rejuvenation. It is changing its operating methods and models and reducing costs. It is trying its best to attract consumers' desire to buy, in order to restore the market's competitiveness.