about 1 zara

about 1 zara

  • Submitted By: mnddyz
  • Date Submitted: 09/22/2016 5:00 AM
  • Category: English
  • Words: 906
  • Page: 4

Uniqlo vs Zara vs H&M vs the world of fashion retailing
Rather than subcontracting manufacturing to China, India or Bangladesh, Zara built 14 automated factories in its home country Spain, where robots work 24/7 cutting and dyeing fabrics and creating semi-finished products, which are then finished to suits, shirts, dresses and the like by about 350 finishing shops in Northwestern Spain and Portugal. 

Globally, most fashion retailers have followed a similar business model for several decades.  Designers and buyers keep searching for new fashion trends round the year and around the world. They make decisions 6-9 months in advance based on what they believe (or guess) consumers will buy. More often than not, bad bets result in heavy discounted sales (markdowns) to clear out unsold inventory.
Uniqlo, Zara, and H&M follow three uniquely different models that are each proving to be hugely successful. All three understand that success in the fashion business does not come from guessing on the next hot style.  Any retailer may have a few great buyers who are able to identify some winners, but being dependent on the keen eye or gut feeling of a handful of people is a highly risky strategy.  

Therefore, all three companies have institutionalized this process, thereby greatly reducing their markdowns.  How do they do this?  By gaining a deep understanding of their customers wants and needs. Sounds fairly simple, doesn't it? 
Japanese retailer Uniqlo wants to be the number one apparel brand in the world by 2020.  In 2013, parent company Fast Retailings global revenue was 1143 billion Japanese Yen ($11.2 billion).  Swedish apparel retailer H&M had revenues of 150 billion Swedish Kroner ($22.9 billion) in the same year, during which the estimated revenues of Spanish retailer Inditex Group (the parent and owner of Zara) was 16.6 billion Euros ($22.4 billion).  In comparison, American fashion group Gap Inc. had revenues of about $16.5 billion. 

Uniqlos topline...

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