Leading fast fashion retailers have been making headlines a lot
recently but not for good reasons. The industry leaders in the inexpensive and
disposable world of fast fashion, have had their fair share of controversies of
late from offensive advertising to concerns about unethical manufacturing
practices, but there are some more troubling signs for these retailers that a
rocky road may be ahead.
It’s been reported that H&M is sitting on a massive
glut of excess inventory. Just how extensive is it? Its estimated to be about
$4 billion dollars’ worth of excess inventory. Even with H&M’s 4500
locations globally, this is no small task to move a mountain of goods like
this. So why the slowdown in demand from consumers for fast fashion? It’s a
diverse mix of reasons but let’s start with the big one, money. The global
recession of 2008 drove a lot of consumers to drastically rearrange their
spending priorities and fast fashion certainly benefited from this trend.
Consumers traded in their name brand apparel for these cheaper alternatives out
of necessity but as the global economy began to improve so did the desire for
better quality goods. Domestically the United States has enjoyed in the last
several years a steadily declining unemployment rate combined with a slow but
steady increase in wages allowing consumers to once again afford that quality
name brand apparel that was put aside during the economic downturn.
Since the 2008 global recession consumers have also
drastically shifted the way they make their purchases for apparel and fast
fashion retailers are struggling to adapt. Online retail has essentially thrown
a monkey wrench into their business models, these retailer’s formula of low
cost items and rapid turnover simply does not translate as effectively to
online retail. It’s one thing to load up a store with thousands of units of
merchandise selling for less than $10 a unit in many cases. Quite a different
story if they are expected to ship a $10 item thousands of times and offer free
shipping. The already thin margin turns into a nonexistent margin very rapidly
in a scenario like this.
Last as consumers become increasingly brand conscious again they
are also becoming more aware of what the brands they wear represent. Fast
fashion has been associated with some of the worst manufacturing disasters of
recent history and consumers are aware and taking steps to avoid manufactures
and retailers who are jeopardizing lives for the sake of inexpensive clothing.
Higher end brands with big margins can afford to take corrective measures to
ensure that their goods are produced safely and in an ethical manner where many
fast fashion brands tend to turn a blind eye to keep their costs to a minimum.
Now you may be wondering, how this slowdown in fast fashion
helps you the independent retailer and I will explain. Consumers are
once again demanding recognizable name brand apparel and the quality associated
with it. The big difference these days is that the consumer post-recession is a
lot savvier and thriftier. These consumers are not rushing into malls to hand
over their hard-earned cash at premium retailers, instead they are hunting
online shopping for the retailer with the best price and service or shopping at
independent retailers who offer the same goods at discounted prices. In essence
market forces have aligned to create a perfect niche between the premium
retailer and the fast fashion retailer where an independent retailer like you,
can sell quality name brand merchandise at a discount and reap the rewards of a
reinvigorated economy. At Foxliquidation.com, we offer wholesale,
quality branded merchandise at a fraction of a wholesale price. Our clients are thriving and so should you!