The Value Of Zara Has Shrunk By More Than 16 Billion Dollars, And Zara Has Become The Biggest Loser In The Fashion Industry

Zara bid farewell to the golden age, and the clothing myth that the founder Amancio Ortega's wealth surpassed Bill Gates for the second time also disappeared.

According to the Fashion Business News, a total of 50 millionaires fell out of the Bloomberg Billionaire Index in 2018, and Amancio, the founder of Inditex Group, the parent company of Spanish fast fashion brand Zara Ortega's wealth decreased by $16.7 billion, ranking second in the list of billionaires' annual shrinking wealth, which means that he became the biggest loser in the fashion industry last year. Affected by the slowdown in performance, Inditex Group's share price fell by 22% in 2018, and its current market value is about 82 billion euros.

But Amancio Ortega currently ranks No. 5 in the Bloomberg Billionaires Index and No. 6 in the Forbes Billionaires List, with a value of 58.6 billion dollars, ranking second only to Bernard, the boss of LVMH, the world's largest luxury goods group, in the fashion industry Arnault， The latter is worth US $68.6 billion, the fourth highest billionaire in the world.

Stefan, the boss of Swedish fast fashion giant H&M, who has also been in the throes of transformation in the past year Persson's value also declined, dropping by $1.9 billion to $14.9 billion from the previous year, ranking 60th on the Bloomberg Billionaire Index and 70th on the Forbes Billionaire List.

In sharp contrast to Zara and H&M, Japan Fast Fashion Uniqlo, the boss of its parent company Fast Retailing Group, Liu Jing, is becoming the richest person in the fashion industry last year with the largest increase in wealth. His value has soared by $7 billion to $25.9 billion, with an average daily net income of 130 million yuan, ranking 28th in the Bloomberg Billionaires Index and 31st in the Forbes Billionaires List. Since December 2017, the stock price of Fast Retailing Group has risen by 30%, and its current market value is 5.98 trillion yen, about 373 billion yuan.

The fashion retail environment is changing faster and faster along with the consumer structure. For Inditex Group, which has 8 brands and nearly 8000 stores, it is not easy to turn around in time. In addition to Zara, Inditex Group's brands include Bershka Massimo Dutti、Pull&Bear、Stradivarius、Zara Home, Oysho and Uterique. As of the latest quarter, Inditex has 7445 stores in 96 countries around the world.

　　Amancio Ortega opened the first Zara store in La Coruna, Spain, in 1975. It took him 40 years to become the richest man in the world from the original owner of a small store, which was once regarded as the "success model" of the fashion clothing industry. However, after its value surpassed Bill Gates again in September 2017 and reached the peak of 85 billion dollars, it took him more than a year to fall down from the altar, reducing a total of 26.4 billion dollars.

When talking about the successful experience of Inditex Group's multi brand matrix, Amencio Ortega said in an interview in 2003 that "Inditex Group does not want to miss any market segments." Therefore, whether it is Pull founded in 1991& Bear， It is also the four brands, including Massimo Dutti, acquired in 1995. Inditex Group has widely laid physical stores in the shortest possible time to highlight its "fast" advantage.

Inditex Group's "fast" is also reflected in its vertically managed supply chain. About 2/3 of its products can be produced within a short delivery period, so Zara can flexibly design and produce according to market demand to avoid unnecessary inventory. Richard, an independent analyst in London Hyman pointed out earlier that Zara's production model has broken the traditional rules of the fashion industry, and achieved a truly seasonal fashion.

However, after the outbreak period, fast fashion brands seem to be a little caught off guard by the younger fashion consumers and the change of concept. The demand for quality of the post-80s generation, who are nearly 40 years old now, is gradually surpassing their once thirst for freshness. Although the post-90s generation also patronize fast fashion, they are obviously less enthusiastic.

Consumer analytics firm Insight As early as 2017, Rooms found that Zara's original target customer group, namely women over 33 years old, is gradually losing interest in Zara, while female consumers aged 23 to 27 years old are the most involved. In addition to fashion demands such as style and trend, this group values the product itself more and believes that values are more important than price, which is no different from bad news for the "notorious" fast fashion in environmental protection.

Some industry insiders believe that the reason why Inditex Group is in such a dilemma is that everything happens too fast. "Inditex Group wants to use Pull& Bear and Massimo Dutti and other multi brand matrices are right to grasp the idea of consumers of different ages, but three years is not enough to consolidate the brand. " UOC Professor of Economics and Business Neus Soler wrote in a report, "The most important thing is that Inditex Group has no patience and does not know how to manage the brand with heart."

According to the financial report data released by Inditex Group, the group's cash cow and star products are all core brand Zara so far, whose sales account for nearly 70% of the group's total sales, and the sales of the other seven brands account for only 30%. The so-called multi brand has not formed a favorable matrix. In the first half of 2018, Zara's sales increased by 2.2% year-on-year to 7.91 billion euros, far less than 11% in the same period last year.

In the nine months ended October 31, Inditex Group's revenue only recorded a low single digit growth, rising by 3% to 18.4 billion euros. It recorded a 10% growth in the same period last year, and its net profit only increased by 4% to 2.4 billion euros, compared with 6% in the same period last year.

In addition, Zara's strategy of quickly imitating "T platform products", which Zara has always flattered, has also suffered a major blow this year. OTB, the parent company of Diesel, successfully sued Inditex Group for plagiarizing its Diesel jeans and Marni sandals in July. The Milan court held that Zara's act constituted plagiarism and infringement, and requested Inditex Group to immediately recall the infringing goods and stop selling them, and pay a compensation of $235 for each product.

Some analysts pointed out that the judgment confirmed the possibility of damages for infringement of registered and unregistered designs within the EU, which is the first case in Europe, and will hit Zara's controversial "business model".

As the new generation of post-90s and post-00s become the main consumer group, they are no longer satisfied with buying clothes produced in batches at low prices, but hope to continuously obtain unique experience and innovative products, which will undoubtedly be a challenge for fast fashion like Zara. According to Forbes' ranking of the top 2000 global companies, Inditex Group is the second clothing group, ranking 289 in the overall list, down from 276 in 2017.

In contrast, Uniqlo seems to be more sensible in constantly adding technology and new retail on the basis of ensuring product quality.

At the beginning of 2018, Fast Retailing Group started the production and retail reform based on AI, that is, through AI analysis of weather, fashion trends and other large amounts of data, to predict the number of goods needed, to avoid producing redundant products, and to deliver goods needed by consumers as soon as possible. The demand forecasting mechanism will cover a wide range of objects, including functional underwear AIRism sold in Uniqlo.

Last September, Google held Cloud Next in Tokyo At the 2018 event, it was announced that it had officially reached cooperation with Fast Retailing Group to help it accelerate its growth. Some industry insiders said that the cooperation with Google is a milestone for Fast Retailing Group, which proves that the group has transformed from a traditional clothing retailer into a technology company.

As the most well-known Japanese clothing brand in the world, Uniqlo is accelerating to overtake, not only competing with Zara in e-commerce and high-tech, but also further improving its market position through global expansion to become a "destroyer" of fast fashion. Naturally, the steady rise of Yanai's price is also natural.

As of August 31, 2018, the sales of Fast Retailing Group increased by 14.4% year on year to 2.13 trillion yen, about 131.4 billion yuan, and the net profit increased by 29.8% year on year to 154.811 billion yen, about 9.5 billion yuan, Approaching the 10 billion mark.

It is worth noting that Amancio Ortega has retired to the second tier. At present, Inditex Group is mainly composed of CEO Pablo Isla management. Except Inditex Group, Amancio Ortega has joint offices and other non residential real estate investments in the center of major cities in Spain, the United Kingdom, France, the United States and Asia.

According to the estimation of relevant institutions, the total value of Amancio Ortega's real estate portfolio in 2017 was about 8.759 billion euros. According to Spanish media, Amancio Ortega purchased The Investment Building in Washington, D.C., the United States, with $337 million through its investment company Pontegadea last month.

This is also Amancio Ortega's second big purchase in less than a month. Last November, he said he would buy Troy Block's equity, including two of Amazon's 40 real estate buildings, the real estate intermediary will pay $740 million to $750 million. After the transaction is completed, Amancio Ortega will become Amazon's main landlord.

It is significant that Amazon founder Bezos currently ranks first among the world's billionaires. During the period from December 29, 2017 to December 17, 2018, his wealth increased by nearly $25.9 billion to $125 billion, which is equivalent to earning about 500 million yuan per day. At the beginning of September, his value was even higher, when his wealth reached a peak of $167 billion.

Fashion clothing is the main development object of Amazon since 2012, and has made remarkable achievements so far. Morgan Stanley previously released a report predicting that Amazon's market share of 7% of clothing sales will rise to 19% by 2020, and it has become the second largest clothing retail group in the United States after Wal Mart. With the subversion of the traditional retail market, more and more people believe that Amazon represents the future of the retail industry.