In the world dominated by different styles and trends, providers like H&M (STO: HM-B) and Primark have reliably brought new fashion items to their consumers at quick paces. Participating in fast fashion, an industry dominated by the quick manufacturing of fashion trends from Fashion Week to affordable retail stores for the common buyer. The system has proved to be useful, with stores like Zara (BME: ITX) being able to transform a coat from design to in stores in just 25 days. But given the quick growth of the retail group Boohoo.com Plc (LON: BOO), whose stock shares rose 260% in 2016, is online clothing retail the future of fashion?
Boohoo.com Plc, a retail group that is based in Manchester, United Kingdom, started in 2006. Led by the two Joint CEOs Mahmud Kamani and Carol Kane, Boohoo dedicated itself to creating it's own online retail market online. Boohoo.com currently owns its own sub-brands, such as boohoo, boohooMAN and PrettyLittleThing. Following the similar design of the retail brand Zara, and makes it faster. After Boohoo orders a variety of products in low quantity, they track the products that are successful, and later stop buying the ones that aren't successful. This allows their products to be quickly be geared towards their consumers, providing an ever diverse selection of clothing.
Earlier this week, it was reported that Boohoo rose to a impressive market value, more than companies with a value of over $500 million. At first glance, this this fact seems to hold moderate importance. However, Boohoo's growth becomes more important with the declining sales of retail stores worldwide. Stores like H&M have suffered a decline in profit, while other retail stores like American Apparel have recently applied for bankruptcy. Likewise, well known stores such as Ralph Lauren
Recently, retail stores have been pulling back on the production of more brick-and-mortar locations, or physical stores that offer clothing directly to consumers. This allows them to offer up a multitude of fashion trends, offering thousands of new styles on a weekly basis. This online focus on their market has proven to be valuable, because Boohoo recently reported a 145% revenue growth from $17 million to $43 million just in the United States. In addition to avoiding permanent physical stores, Boohoo builds its brand through social media, using Instagram to further their sales.
However, their dedication to online sales and interaction with their customers sometimes goes outside the world wide web. Recently, Boohoo has entered into the industry of pop-up shops near US college campuses, allowing them to have direct interaction with the millennial age customers. This temporary store approach allows Boohoo to save their efforts building their online brand, while maintaining contact with their targeted demographic.
It's safe to say that the American retail market is changing rapidly. With stores like Boohoo offering quick fashion style choices for less, the future of permanent physical stores for fashion retail seem to be shifting towards a online future.
- https://www.wsj.com/articles/fast-fashion-how-a-zara-coat-went-from-design-to-fifth-avenue-in-25-days-1481020203
- https://www.bloomberg.com/news/articles/2016-12-28/a-new-age-zara-boohoo-s-faster-fashion-fuels-260-percent-return
- https://qz.com/951055/a-new-generation-of-even-faster-fashion-is-leaving-hm-and-zara-in-the-dust/
- https://digiday.com/marketing/boohoo-beating-rocky-american-retail-market/