H&M Rental Store Will Open In Late Autumn. Is Fast Fashion Brand Testing Water Clothes Leased?

According to Swedish media recently reported, well-known fast fashion enterprises H&M A rental shop will be opened at the flagship store in Seeger square in Stockholm, capital. It is planned to open in late autumn 2019. A sewing workshop will also be set up to provide rental, sewing or customizing services for H&M members.

From the United States Fast fashion enterprise GAP brand Banana Republic (Banana Republic) It has also announced that it will start testing water in September. "Style Passport" Online ordering business, which includes women's rental services. It is understood that consumers can rent 3 pieces of Banana Republic clothing for about 600 yuan, and enjoy free delivery, replacement and laundry service. This business also supports consumers buying clothes after trying on them. Banana Republic is GAP's high-end clothing brand, and the retail price is about $100.

With the increasingly fierce market competition, how will the fast fashion brand get involved in the clothing leasing business?

Reversing declining performance

It is reported that In recent years, the performance of Banana Republic has been declining. According to the second quarter earnings report released by GAP group, Banana Republic sales fell 3% to 616 million US dollars. The brand even announced the closure of all offline stores in the UK area, leaving only the official website of the brand.

Banana Republic chief executive and chief executive said in a statement that he hoped that the clothing leasing business could stimulate growth and help brands establish better emotional ties with young consumers.

Coincidentally, another American Fast fashion enterprise Urban Outfitters Also launched in August was named "Nuuly" Women's wear monthly rental business, registered members pay a monthly fee of $88 membership fees, from its flag. Free People, Anthropologies As well as more than 100 third party brands, 6 pieces of clothing with a total value of not more than 800 dollars are leased at one time. The project leader predicts that the Nuuly business will attract 50000 consumers and generate more than 50 million dollars in annual revenue.

Same as Banana Republic. Urban Outfitters also suffered the pressure of declining performance. The retail sales in the second quarter of this fiscal year decreased by 2.6% to $878 million 700 thousand. As of July 31st, the group's inventory reached US $440 million, a 17.2% increase over the same period last year.

Urban Outfitters responsible person said. The flow of inventory does not give rise to great pressure on enterprises. Trial water garment leasing is a strategic move for enterprises to develop in a timely manner.

Not long ago, H&M released its semi annual report and detailed performance data for the second quarter of fiscal year 2019. According to the financial report, the H&M pre tax profit decreased by 1.3% from the end of May to 1.3%, to 640 million US dollars, a decrease for two consecutive years. Among them, the inventory problem is still serious. H&M's inventory continued to increase in the second quarter, resulting in excess inventory and reduced profits. As of the end of May, inventories grew by 11% over the same period last year.

Similarly, H&M launched this clothing leasing business is also intended to distribute part of the stock, reversing the decline of performance decline.

There are indications that with the market saturation and competition among brands, fast fashion has gradually entered the bottleneck of development in recent years. In order to change the performance that has been slowing down year by year, brand names are beginning to try new changes. For example, the choice of clothing leasing business as the main force in the future, so as to change the performance of slow down year by year.

In fact, renting clothing is equally lucrative for fast fashion brands like H&M. Some professionals say that because the rental market has fully satisfied consumers' preferences for clothing category and price, it is expected that the market will be of great benefit to enterprises to digest inventory.

Meeting the needs of sustainable development

H&M responsible person also said. Carrying out garment leasing and sewing is an important step in implementing environmental sustainability plan.

In recent years, the word "sustainability" has been very active. The major brands are emphasizing the importance of sustainability to their business strategy, and consumers are also being educated to start paying attention to the sustainability of their products. A recent study shows that 72% of 95 consumers are willing to spend more money on sustainable services or products, and have strong emotional preferences for brands that adopt sustainable development initiatives. They believe that buying and wearing old clothes themselves is a sustainable behavior. Governments also pay more attention to the environmental impact of products. Recently, the UK environmental audit committee has appealed to leading fast fashion companies to give relevant evidence to show what measures they are taking to reduce carbon emissions, waste of resources and water, and express concern about whether their products are compatible with humanitarianism.

H&M releases sustainable clothing every year. Taking the 2019 spring environmental awareness action limited series, we introduced the jacquard jacket made from pineapple leaf fiber plant leather and the sand color and black desert wind print straight trousers made of recycled polyester fiber.

In addition, H&M released the report on sustainable development in 2018. H&M is the first enterprise to release sustainable reports in the clothing industry. This year, it is already seventeenth. According to the report, 57% of H&M's clothing materials in 2018 were made of recycled fibers or other sustainable fibers, of which 95% of cotton materials were recyclable. H&M group has announced that it will only use sustainable materials to make garments by 2030.

H&M has also made new progress in the recycling of old clothes. The project started in 2013, and the recovery of 2018 has reached 20649 tons. This year, H&M also launches new functions in Tmall flagship store. It only needs to visit Tmall's flagship store in Tmall, clicking on the entrance of old clothes recycling, and can complete a series of operations of recovering clothing online through idle fish. This is the first attempt by H&M to combine old clothes recycling projects with online recycling methods worldwide. More importantly, H&M, which has been working hard for many years, has begun pilot projects for second-hand clothing sales.

H&M director of sustainable development pointed out that The sale of second-hand clothing is also a part of the continuous development of the enterprise's sustainable plan. It is not only beneficial to consumers, but also can greatly reduce the environmental impact by extending the product life cycle. Even H&M, there are 43% of the clothes do not use sustainable raw materials, environmental pollution problem still can not be ignored, rental clothing every transaction is a contribution to the environment.

Derivative issues deserve attention

At present, The pressure of global economic downturn is increasing, and the driving force of consumption growth is insufficient. Clothing leasing can well meet the low consumption demand. Consumers are beginning to realize that many things don't have to be shared. Sharing is also a good way. By way of clothing leasing, consumers can try more styles instead of worrying about the high cost.

When it comes to building any consumer big data model, data acquisition is crucial. Leasing business can also provide effective feedback to fast fashion enterprises such as location, age and size preferences of customers, as well as product ratings and durability. Fast fashion companies can make quick judgments and facilitate research and development of fast moving products.

So, can this rental label business become a good business? It should be noted that there are many derivative issues.

For example, a garment can be calculated at the highest operational efficiency within a month and can only complete 4 rents. Usually the clothes are basically scrapped after about 30 times of circulation. If the design or style is complicated, the frequency of use is even lower. This is not very cost-effective for rental income from fast fashion companies.

On the consumer side, most users have various concerns about whether there is health and safety in cross clothing, and the "platform promises to wash and disinfect carefully, but there are concerns about clothes or stains or odors" and "cleanliness in place."

And at the capital side, the cost of proprietary warehousing and washing centers can not be ignored. Self run warehousing and washing centers are not a one-time investment, just like the operation and maintenance of shared bicycles. If clothes are not professionally treated, not only will the texture decrease, but also the service life of the clothes will be shortened. As a result, it will also increase the operating cost of enterprises and make the profit space smaller.

If enterprises cooperate with chain washing enterprises, it means that the service chain is more complex, and the loss and efficiency of products will also be worse. Therefore, to meet the needs of consumers and the quality of service experience, enterprises need to invest heavily in infrastructure construction.

It is important to note that the demand for renting is high priced products, which can not afford to buy. That is to say, the daily commuter clothes like fast fashion are not usually purchased by leased loan. One is unwilling to wear clothes worn by others everyday. Two, the general psychology of women's consumption is that they usually buy something they like. It can be seen that the rental behavior is on high-end clothing or special scenes of clothing, rather than ordinary parity, ordinary clothing. Most of the high-end users tend to buy and afford it, even if it is a luxury item that is occasionally worn on specific occasions.

In short, At present, the clothing rental market has not formed a climate. After all, most people do not need long term rental clothes, so the growth of rental income is limited. This shows that for fast fashion enterprises to develop leasing business, there is still a difficult way to go.