Archive for li & fung

Hey Fast Fashion, Don’t Out-do Yourself!

Posted in Blogroll with tags , , , , , , on March 29, 2009 by nmb

Forbes recently called the European fast-fashion retailers that have hit our shores “America’s favorite foreign retailers,” http://is.gd/py8t  implying that H&M, Zara and the like are an exception to the current recessionary rules. The fact is that they too have struggled in the current retail climate (even as some U.S. specialty retailers such as Urban Outfitters have flourished) and, while their operating models have given everyone in the fashion business a run for the money, I’m not sure that these advantages will be sustainable.

Interesting that the Forbes article was published at about the same time that Liz Claiborne announced that it is going to begin outsourcing its manufacturing to Li & Fung, http://is.gd/py9E  particularly since Liz’ single fast fashion retail holding (and competitor to the European disruptors), Mexx, is said to be on the chopping block! Liz is going in the exact opposite direction of its fast-fashion competitors (though in lock step with the major retailers that are at once the brand’s competitors and its customers). It will be interesting to see if they somehow “win” with this contrarian strategy.

The fast fashion model of complete process and inventory ownership, from design inspiration through to retail sell-through, has been a killer advantage; one that has thrown a wrench in the traditional fashion calendar, compromised the relevance of the catwalk to retail floor journey and set an impossibly high performance bar for other apparel retailers. After all, these vertical retail machines can get designs interpreted (from the runway shows, of course), executed, produced and sold at an astounding speed. The mega cost savings realized from their highly efficient operations help offset the expense of airing new designs to stores; providing yet another speed-to-market advantage. Alliances with celebrities and well-known designers create excitement in the stores and keep the assortments from getting too generic.

I do wonder though if the demise of the very fashion system that these retailers have compromised will in the end cause them problems. If there is no system to buck and outperform (or if that system continues to conform to the new standard they have set), where will they be? “Fast” and “fashion” are fast becoming table stakes!

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