Two or three years ago, ZARA, Uniqlo, H&M, Topshop and other fast fashion brands ambitiously entered the Australian market, causing a sensation in the local market. Within weeks of opening, customers even lined up in long queues to buy clothes in the store. However, this grand occasion seems to be gone forever. Nowadays, Australian customers seem to be tired of the rapidly updated clothing styles. As one of the leaders of fast fashion, ZARA’s current sales have seen a significant plunge.
Recently, the Spanish fast fashion brand ZARA’s latest financial report showed that its sales have declined while operating costs have increased. ZARA entered the Australian market 3 years ago. When it opened its first stores in Melbourne and Sydney, it caused a stir among local consumers. However, ZARA’s double-digit growth rate last year declined in 2014. While revenue is declining, operating costs are increasing, which can be described as a double attack. As of January, ZARA’s sales costs have increased by 37.5% in the past year, while administrative costs have also increased by 146.7%.
In the past few years, a large number of foreign brands have poured into Australia, and Zara is one of the leaders. Subsequently, brands such as Uniqlo, H&M, and Topshop also poured into Australia. These brands have taken a fancy to Australia, a market that has not been fully developed by local brands. When Swedish clothing giant H&M opened its first store in Melbourne within a few weeks, there were long shopping queues in the store. Now, these teams can no longer be seen in stores. ZARA is now finding that Australian consumers are becoming increasingly indifferent to its rapidly updated clothing styles, which are often directly derived from fashion catwalks.
ZARA has always been very confident in its clothing design model. It designs new clothing within 48 hours based on customer feedback and daily sales analysis data from more than 1,900 stores around the world, and then sends the design plan to 1,500 partner factories. After the factory completes production, its vast network will send the clothes to stores around the world in less than 3 weeks.
