Fast fashion is speeding up
Powerful companies like Inditex – the world’s largest apparel retailer – have redefined fashion over the last decade. Where once, the turnaround from catwalk to shop was a half-year prospect, with little wiggle room for evolving consumer tastes, these companies have squeezed the timeline and upped the interactivity that fashion brands have with their customers. Zara, the largest and most popular brand in Inditex’s considerable stable, is the poster child for this new trend: fast fashion. It can turn around new styles in about five weeks, and respond to consumer demands almost immediately. But now, fast fashion is getting even faster.
Inditex’s share price has risen by 12% so far this year
SOURCE: Yahoo Finance
According to a research report by Fund Global Retail & Technology released last month, a cluster of online retailers are outpacing the speeds at which Inditex and its peers can produce new clothes. These companies have copied some of Inditex’s key innovations: they’ve tightened logistics and streamlined supply chains, moved production closer to key markets, and are using social media to keep up to date with trends.
As a result, companies like ASOS are able to get new styles to market in between two and eight weeks. Boohoo can do it in two. And Misguided can do it in as little as one.
The report states that “fast fashion is becoming ultrafast fashion”. The big question is how Inditex and its peers will respond to this land grab. While the answer to that question remains to be seen, it is unquestionably true that Inditex maintains an incredible capability to innovate itself and its products – and based on its last quarterly earnings report, it seems like the competition has its work cut out for it.
Dominion holds Inditex in its Global Trends Luxury Fund.
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