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After the worst season, which of the four big fast fashion companies is the best?

There is no doubt that the epidemic has caused collective trauma to fashion brands. It can be expected that fast fashion brands with high attention to physical retail and many stores will be hit more seriously. So, what's the current situation of UNIQLO, H & M, gap and Zara, four fast fashion brands familiar to Chinese consumers?

H & M group previously announced that its overall brand sales fell 57% year-on-year from March 1 to May 6, and it is expected to remain in a loss state in the second quarter. INDITEX group, the parent company of Zara, revealed in a report released in late March that 50% of its stores around the world were temporarily closed, with sales down about 24% in the first half of March.

UNIQLO's parent company, fast retailing group, is also not optimistic. In the half year report to the end of February 2020, the group said that its sales and profits fell 4.7% and 20.9% respectively year on year, which was mainly due to the impact of the epidemic in South Korea and greater China. It is assumed in the report that the performance in April and may of this year will continue to decline significantly due to the impact of the epidemic, and that the epidemic will be gradually controlled in June, and the market can resume normal business activities, so it is expected that the net profit of the whole year will also fall 38.5% by the end of August. Sure enough, with the spread of the epidemic, the same store sales in Japan's local market in April fell 56.5% year-on-year, and the total sales including online channels fell 57.7%.

Gap Inc., the US fashion group, has warned that there may not be enough cash flow to maintain operations in the next year and that it needs to cut costs and issue bonds to raise funds. Its fy2020 shareholders' meeting will be held online on May 19.

With the continuous spread of the epidemic, the real economy of various countries has almost stopped, and offline shops have become a decoration. However, fast fashion brands are facing the foreseeable crisis of cash flow crisis due to the long-term interruption of physical retail business. According to their financial situation, the major brands made flexible adjustment and preventive measures. H & M borrowed RMB 980 million to enhance liquidity, and then, like Zara, gap and other brands, took measures to stop employees' pay and leave or officially cut staff to reduce operating costs as much as possible.

Gap was particularly active in the outbreak, and it decided to suspend production lines at the beginning of the outbreak in Europe and the United States. Last month, the brand had to suspend paying more than $100 million a month in North American store rents, but the decision also got itself into trouble. This month, gap was sued by 48th Americas LLC, one of its landlords, for more than $530000 in April and may rents at its flagship store on Fifth Avenue in New York, and for at least $20000 in legal fees.

Although it's sad that the decision of layoff and rent suspension is not fulfilled, it's really a helpless move for fast fashion brands to seek self-protection. With the opening of the fast fashion brands in order to recover the economy, the fast fashion brands have shown an unprecedented desire to survive, and they have been among the first ones to resume business. H & M closed two-thirds of its local stores at the peak of the outbreak, resulting in a 90% loss in sales, and its store network was almost fully back in business in the first week of April. UNIQLO has become the first brand to reopen in Europe; gap is also preparing to reopen 800 stores in North America by the end of this month.

The losses caused are hard to make up in any case. While dealing with the heavy bombs and hidden dangers thrown at them by the epidemic, fast fashion brands also need to take time to withdraw their vision and shift their focus to the overall situation of future operations. There will be a day when the epidemic is over, and the brand will come out of the current collective crisis and face various challenges on the future business road.

H & M group

Although H & M's sales fell during the outbreak, its online sales increased by 32%, and H & M group's frequent actions can also form a transparent and clear thinking.

First, with the cooperation with Netflix, H & M extracted inspiration from the series of "to all the boys I've loved before" and launched a series of products for the consumers of the house, which reflected the attention of online publicity channels such as the streaming media.

Uniqlo

According to the previous report, UNIQLO's sales in South Korea and Hong Kong were poor, and its overseas sales fell the most in 10 years. Although UNIQLO has expanded in Europe and Asia, Greater China and Southeast Asia are still the main growth areas of the brand. In the middle of February, during the peak of China's epidemic, wechat opened the smart retail entrance, UNIQLO access for the first time, and made a good deployment for China Unicom online and offline. In March, China's epidemic situation improved, and UNIQLO's major physical retail stores quickly resumed business to solicit customers.

In addition, its parent, fast retailing, announced in March that it would open three UNIQLO large new concept stores in Tokyo from April to May this year. The three stores will respectively take family and community, online and offline, lifewear clothing life as the theme, with local consumers and visitors to Japan as the object, aiming to further strengthen brand influence. However, according to the current situation, the effectiveness of these three special stores may not be verified for the time being.