Fast fashion brands look up to speed up expansion plans

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Fast fashion brands look up to speed up expansion plans

(China Daily) 08:58, October 10, 2013

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Shoppers outside an H&M store in Nanjing, Jiangsu province. Provided to China Daily

Foreign fast fashion brands are stepping up the pace of expansion in China, where the growing ranks of style-conscious customers and new shopping centers are boosting their sales.

Motivi, a fashion brand under the Miroglio Group SpA, an Italian textile and apparel maker, has seen double-digit growth in China this year, Aldo Spaanjaars, the group's managing director in China, said in an interview with China Daily.

After Italy and Russia, China is the group's third-largest market, he said.

Miroglio, which holds 50 percent of E&P, a local Chinese fashion brand, is looking at more local brands for merger and acquisition opportunities.

Spaanjaars said that Italian women favor a unique personal style, while Chinese women prefer to look like their peers.

Therefore, in Italy, the stores stock very limited quantities. "What is sold is sold and they bring something new next," he said.

But in China, success relies heavily on being the best seller, which keeps generating sales, he added.

As a fast fashion brand, inventory is the least of the company's problems. "We have new products every year. We slow down what we buy when inventory is up and we react fast," he said.

The brand has launched an online shop on Tmall to de-stock products that are not sellling well, he said.

Armed with their full brand portfolio, foreign fast fashion brands have crowded into the nation's swelling ranks of shopping centers.

Sweden-based H & M Hennes & Mauritz AB, for example, has new brands - COS, Monki, Weekday, Cheap Monday and H&M HOME - heading into the Chinese market. It also opened its first male clothes store in Shanghai this August, targeting men's fast fashion in China.

H&M Chief Executive Karl-Johan Persson said: "China is the country where our expansion is strongest. H&M has grown 10 to 15 percent in China and keeps penetrating second- and third-tier cities."

In 2013, the group is expected to open 350 new stores globally. The opening of its 3,000th store, which took place in Chengdu, shows the brand has strong faith in the Chinese market, said Magnus Olsson, general manager of H&M China.

Location is the most crucial element in opening stores. "We'd rather postpone the opening date of a new store to wait for the right location," said Olsson.

Olsson said H&M controls costs by such strategies as employing its own designers and maintaining a highly efficient logistics chain.

H&M's major competitor, Industria de Diseno Textil SA (known as Inditex), is the world's leading fashion retailer. It has grown to 415 stores in China, with eight brands of its portfolio present including Pull & Bear, Massimo Dutti and Bershka.

Hermann Ng, chief executive officer of Retail Nation, a consultancy in Shanghai, said the number of foreign leading fast fashion brands in the country is far from saturated, given demand from Chinese shoppers and shopping centers.

A local fast fashion brand, La Chapelle, has opened about 5,000 stores in China, Ng said.

But foreign brands might need more time to digest their quick development. Motivi is not growing too quickly as they want to understand more about people in the cities they've already entered, said Spaanjaars.