1300 stores were closed in 3 months, and the "most profitable clothing company" defeated China

Written by / Yang Qian

Edited by / Tian Yanlin

Once known as the "most profitable clothing company" in the Chinese market, Ayage Group, its men's wear brand SELECTED is also about to withdraw from the Chinese market.

It is understood that Slade is one of the world's largest fashion groups under the business casual men's wear brand, founded in Denmark in 1997, introduced to the Chinese market in 2008. As of now, Slide has more than 1,300 stores in the Chinese market, and the number of tmall official flagship stores has 4.06 million fans.

Image source/Visual China

Recently, some media reported that Ayage Fashion (China) Tianjin Co., Ltd. (hereinafter referred to as Ayage Fashion) issued a "Notification Letter of Termination of Retail Business of Slide" to internal suppliers, saying that the company will close all retail stores in China by July 31, 2022.

This means that within the next three months, all 1,300 Slade stores will be closed. In this regard, Slide confirmed the news to the "Finance world" weekly. The official customer service also said that the refund of the stored value of the member, the store staff arranged to wait for further notice from the group, and whether the domestic online sales channels were retained in the follow-up was to be determined.

In the "Notification Letter" disclosed by the media, Ayazhi Fashion said that due to the significant reduction in the traffic of offline shopping malls and department stores, which has brought challenges to its sales recovery, coupled with the high cost of stores, as well as the continued high incidence of the epidemic and the weakness of the offline consumer market, Slade's goal of responding to the transformation of the consumer market has become out of reach.

However, in the eyes of many netizens, Slide's design "can't keep up with the fashion changes", and there is a serious product homogenization phenomenon with the brother brand JACK & JONES.

The transformation of veteran Danish menswear failed

As one of the earliest foreign-funded enterprises to enter the mainland garment sales market, Ayazhi Fashion's parent company BESTSELLER Ayazhi Fashion Group is one of the largest fashion groups in Europe, which was founded in Denmark in 1975. At present, Ayage Fashion has more than ten brands such as Vero Moda, ONLY, VILA, Object, JACK & JONES.

Among them, in the Chinese market, Ayage Fashion mainly operates four brands: ONLY, Vero Moda, JACK & JONES and Slade. In addition to Slade's closure of offline stores, for the other three brands, Ayage Fashion said it would continue to increase operational investment.

In the past decade, Ayage Fashion has developed rapidly in China, once known as the "most profitable clothing company", with its large-scale stores in Chinese cities, as well as the earliest "global design, Chinese revision", plus positioning as a popular fashion brand for young people, seized the best development period and quickly swept the Chinese market.

In 2008, the company's four brands had more than 6,000 stores in China, with total sales of more than 30 billion yuan. At that time, Metersbonwe and Semir were still very small, and fast fashion brands such as Uniqlo and Zara had not yet entered the Chinese market, but JACK & JONES, Vero Moda's single products had been sold for 200 yuan to 300 yuan, which belonged to high-end fashion brands in that year.

Today, the above 4 clothing brands developed in China have long lost their former glory. Ayaka Clothing, which has a first-mover advantage in time, is losing out to China's young people's market.

Specifically, the company's main men's wear brand Slater, in the eyes of most young people, they have become the representative of "middle-aged and elderly consumption". At present, in the Slide Tmall flagship store, the highest monthly sales of T-shirts are only 1,000 pieces, priced at 99 yuan; while the monthly sales of business pants priced at 349 yuan are only about 500 pieces.

In the eyes of industry insiders, The development of Slide in recent years is related to its excessive dependence on offline channels and insufficient brand innovation, "and the initial brand positioning is not clear enough, compared with other men's wear brands, there is not much design and price advantage." ”

But in fact, in the past two years, Slater is also trying to transform, not only developing the "silver label" series of comfortable and durable functional clothing, but also jointly launching a joint model with world-famous designers to upgrade fabric suppliers, but offline traffic is still not improving.

The marketing pressure of the sub-brand also quickly spread to Ayaka clothing. In 2019, Ayage Clothing also had sales of more than 1 billion yuan during the "Double Eleven" period, and in the "Double Eleven" in 2020, the turnover exceeded 800 million yuan in the first 11 hours, but in 2021, "Double Eleven", the total sales of Ayazhi Fashion's full platform finally reached 1.226 billion yuan after a long 11 days, far less than the sales of CLOTHING brands such as ANTA, PEACEBIRD, Bosideng, belle and so on.

In addition, in recent years, Ayage Fashion's products have been frequently punished for quality problems. In January 2022, Ayage Fashion was fined 449 yuan by the Beijing Dongcheng District Market Supervision and Administration Bureau for allegedly adulterating, adulterating and shoddy goods in the sale of goods. In April of the same year, the company's Shenzhen Galaxy Soho Shopping Park sales department was fined 15,500 yuan by the Shenzhen Municipal Market Supervision and Administration Bureau for product quality violations.

According to the Guosen Securities Research Report, in 2014, Ayage Fashion Group had more than 9,000 stores around the world, of which 6,000 were in China. In 2013, Ayage Fashion's market share in China was close to 2%, but by 2020, the company's market share in China was only 1.4%. According to industry insiders close to Ayazhi Clothing, the company's information system is quite backward, not refined management, it seems to be just "selling goods, selling goods and selling goods".

Is the men's wear market not working?

Although Slater constantly adjusts its products and tries to live stream goods, Taobao live broadcast from 8 am to 3 pm. But in the nearly seven hours of live broadcasting, there were only more than 7,000 viewers, and the product was no different from other ordinary T-shirts.

Cheng Weixiong, a brand management expert in the footwear industry and general manager of Shanghai Liangqi Brand Management Co., Ltd., told the "Finance and Economics World" weekly that now that the trademarks of some men's clothing in China are removed, it is estimated that consumers cannot tell whose products it is. "There is no differentiation in the tone of the brand, which leads to some local men's wear brands having no story and no DNA." Brands are just names that differentiate between products. ”

Slade, which has been in the Chinese market for 14 years, has closed all offline stores in China this time, which undoubtedly sounded the alarm for the apparel industry.

In recent years, with the rise of national fashion brands and fast fashion brands, the market position of leading companies like Ayazhi Fashion has been shaken. Especially when brands such as ANTA and Li Ning attack the fashion circle with sports elements, Slater has been complained about by many male consumers as "too old and too earthy".

But this is not only the problem of the Slater family, the traditional men's wear brands Seven Wolves, Youngor, etc. are also facing the problems of brand aging, high inventory, and insufficient product innovation ability. However, the market has little time left for them to change and break through. Because the environment of the entire apparel industry is changing.

With the increasingly fierce competition in the domestic clothing market, coupled with the impact of the epidemic, many clothing brands are currently ushering in a "wave of store closures".

The most eye-catching of these is the domestic local brand La Chapelle, which has lost money for two consecutive years from 2020 to 2021, with a quota of 1.84 billion yuan and 821 million yuan, respectively, and is now facing the embarrassing situation of delisting. It is reported that the company's delisting period has ended and will be delisted on May 24.

Overseas apparel companies are not having a good time in the Chinese market. For example, the American volkswagen brand Forever21 has completely withdrawn from the Chinese market, and the fashion brand ZARA has also begun to close stores.

In January 2020, ZARA's brands Pull & Bear, Bershka and Stradivarius closed all stores in the Chinese market. In March 2020, GAP announced the official withdrawal of its brand Old Navy from the Chinese market, saying at the time that it planned to focus on its North American business. Recently, GAP has reported the closure of stores in Guangzhou, Shenzhen, Suzhou, Shanghai and other places. The latest news, in February 2022, HM Group also plans to close 224 stores this year.