However, with many stores closed for at least a few weeks, the inventory is not selling at the same pace and it is unlikely that e-commerce sales can make up the loss in revenue. Once the inventory has passed the prime time to sell, the goods are typically marked down. Two of the largest retailers in fast fashion, H&M and Inditex (Zara parent company), both have a majority of their stores closed due to the coronavirus pandemic. H&M, serving 74 global markets, has closed 3,441 stores out of 5,062 while keeping about 50 online digital markets open according to the latest press release. Zara reported 51percent of its 7489 stores temporarily closed and 156 online markets which continue to operate. Although online sales for Inditex grew 23 percent in 2019, the total online sales represent only 14 percent of total sales. H&M’s online sales increased by 24 percent for 2019 but represent a small portion of the total revenue.
Wednesday, April 22, 2020
Fast Fashion Leaders H&M And Zara; Weathering The Pandemic
Fast fashion, which is the mass production of fashion trend-right products at inexpensive prices, may have to deal with something it is not used to; excess inventory. Typically, the business model calls for many styles shipped frequently to stores, allowing for the trend-right merchandise to have a high sell-through, minimizing markdowns and improving profit margins. The industry inventory turnover for fast fashion is over 4.0 which is considered healthy for apparel stores.
However, with many stores closed for at least a few weeks, the inventory is not selling at the same pace and it is unlikely that e-commerce sales can make up the loss in revenue. Once the inventory has passed the prime time to sell, the goods are typically marked down. Two of the largest retailers in fast fashion, H&M and Inditex (Zara parent company), both have a majority of their stores closed due to the coronavirus pandemic. H&M, serving 74 global markets, has closed 3,441 stores out of 5,062 while keeping about 50 online digital markets open according to the latest press release. Zara reported 51percent of its 7489 stores temporarily closed and 156 online markets which continue to operate. Although online sales for Inditex grew 23 percent in 2019, the total online sales represent only 14 percent of total sales. H&M’s online sales increased by 24 percent for 2019 but represent a small portion of the total revenue.
However, with many stores closed for at least a few weeks, the inventory is not selling at the same pace and it is unlikely that e-commerce sales can make up the loss in revenue. Once the inventory has passed the prime time to sell, the goods are typically marked down. Two of the largest retailers in fast fashion, H&M and Inditex (Zara parent company), both have a majority of their stores closed due to the coronavirus pandemic. H&M, serving 74 global markets, has closed 3,441 stores out of 5,062 while keeping about 50 online digital markets open according to the latest press release. Zara reported 51percent of its 7489 stores temporarily closed and 156 online markets which continue to operate. Although online sales for Inditex grew 23 percent in 2019, the total online sales represent only 14 percent of total sales. H&M’s online sales increased by 24 percent for 2019 but represent a small portion of the total revenue.
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