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Apparel businesses will continue to close stores in China
15
Mar '14
Some clothing businesses will continue to close stores in China as they would not be able to bear the cost pressure that comes along with a sharp increase in the number of stores, coupled with rising rents, high inventory and other factors, aver market analysts.
 
Top apparel brands like Zara, H&M, Uniqlo and Esprit have felt the impact of rising rents and other factors.
 
Hong Kong-based apparel brand IT’s interim report for fiscal year 2013-14 shows the Group’s net profit fell to 76.8 percent year-on-year, and it had to close 43 stores across China.
 
Last year, Smith Barney costumes closed over 200 stores. 
 
Sportswear brands like Anta, Xtep, 361° and other brands cumulatively closed more than 6,000 stores over the last one year period. However, these brands have increased efforts to sell online.
 
Experts say the dilemma currently being faced by the Chinese apparel industry is not unique to China. In Germany, famous brands have closed stores mainly due to competitive pressure from small clothing store chains and online shopping portals, according to the German Textile Retailers Association.
 
The apparel industry trend is making its impact also on the wholesale clothing industry, which is now trying to introduce new wholesale network model. Over the next five years, more than 60 percent of the traditional wholesale clothiers will have to change to new trading patterns or face extinction, according to analysts.
 

Fibre2fashion News Desk - India

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