Fashion retailers 2012 with better business

Fashion retailers 2012 with better business

Consumers are somewhat unpredictable regarding their buying habits since last fall. This aspect is also to be witnessed by the result of important global fashion retailers and their brands

Two companies, Spanish Inditex (Zara) and H & M Hennes and Mauritz (2472 stores) have reported good results in 2011, whereas Gap (USA, 3263 stores) had a slight decline in turnover (-0.8 %) and more distinct in the operational result (-26.9 %) whereas Fast Retailing (Uniqlo, J, 2088 stores, leader in Asia) had a slightly higher turnover of 0.7 % – despite all of the negative effects of the catastrophes – but operating result was down 12.1 %. The brilliant performer is certainly Inditex (5527 stores worldwide) with a 10.1 % increase in sales (and operating result) to EUR 13.8 billion and the annual profit amounted (+ 10.1 %) to EUR 1.93 billion.

H&M reported for its first fiscal quarter (end of January) an increase in turnover of over 13 % and profit increased by five percent, however the overall margin fell by 2.0% to 55.8 %. The company was not able to pass on higher raw material costs to the full extent to the end customers. In the existing stores the turnover in February was 3 % higher and in the three and a half weeks in March total turnover in local currencies increased by 22 %. It is planned to open 275 new stores foremost in China, USA and Great Britain. Also Gap reports a 6.5 higher turnover in February.

Inditex plans to open 480 to 520 new stores, in 2011 it opened 483 new sales locations and Fast Retailing will increase its sales network by 145 to 2233 stores.Just two days ago Fast Retailing opened its first west coast location (29000 square feet) in San Francisco (USA) and in the vicinity of Gap’s store and is looking for another location in Los Angeles and for flagship stores (30000 to 70000 square feet) in Philadelphia, Boston, Chicago, Washington and other major cities, all in all for 10 to 20 stores until the end of 2012. In New York City there is one at Fifth Avenue (89000 square feet). By 2020 Fast Retailing hopes to achieve a turnover in the USA of USD10 billion or one fifth of its total sales. American retailers such as Gap and Aeropostale fear the foreign competition including H & M and Inditex. Store closures were announced by Gap (over 20 % up to 2013), Abercrombie & Fitch and Sears Holding. These three companies however plan to expand in foreign countries and they are joined by Limited Brands and J. Crew Group because they feel that for them the American Market is saturated.

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