Although Zara said that it would open again later, it aroused peoples attention to the closing tide of physical stores. According to statistics, in 2019, more than 9300 stores were closed in the United States, a record high. But in China, the trend of closing stores, such as La charbel and Daphne, makes people deeply experience the difficulty of physical stores.
Wuhan Zara city closed shop
According to a number of micro blog big Vs, all stores of Zara in Wuhan have been closed recently.
From the photos taken, the doors are all pasted with seals, and the official website can not find the information of Wuhan stores. Some netizens speculated that the notice posted outside the store might be related to the fire inspection.
Zara has 4 stores in Wuhan, including Wanda Plaza store in Hanjie, central department store, Huiju Center store and Wanda Plaza store in Lingjiao lake. On the public comment, it has been shown that the business is suspended.
What happened when the whole city closed its shop at the same time?
Reply from Zara: all are under renovation and upgrading
But many stores have been closed around the world
Zara replied that all four Zara stores in Wuhan are in the process of transformation and upgrading, but the specific opening time has not been determined, only it will be reopened later.
In this regard, netizens said, why do the four renovations at one time
Wuhan fire rescue team responded that Zaras store in Wuhan had major fire safety hazards and was temporarily closed down.
Although Zara Wuhan stores are all closed or accidental, the brand offline tightening has become an obvious trend.
According to Beijing business daily, as early as February 3, 2017, the largest Zara flagship store in China in Chengdu was closed; in September 2018, the first Zara store in New York was closed; in September 2019, two core business district stores, Raffles store in East Zhimen of Zara in Beijing and new Dongan store in Wangfujing, were closed.
Previously, Pablo Isla, chief executive of INDITEX, Zaras parent company, had publicly stated that the closure of underperforming stores would be an obvious trend of Zara brand.
To this, many netizens said: its too difficult to do business
Zara in China: 13 stores are closed every day
Looking back at the Chinese version of Zara - La ShaBel, the situation is even worse.
In the clothing industry, founded in 1998, laxabel is known as the Chinese version of Zara, which is mainly engaged in mass womens leisure clothing and once became the representative of civilian fashion.
In 2017, laxabel opened 9448 stores, almost all the major shopping malls in the country. At that time, its goal was to break through 10000 offline stores by 2020.
In 2017, laxabels revenue was nearly 10.4 billion yuan, making it the highest revenue listed womens clothing enterprise in China. In the same year, laxabel landed in the A-share market and became the first clothing enterprise listed in both a + H markets in China. At its peak, its market value reached 12 billion yuan.
But not long after, due to the rapid expansion, corporate strategy and other reasons, low efficiency, high inventory and other problems began to appear, coupled with the impact of the constant popularity of e-commerce platform, a series of problems followed.
According to the data previously released by laxabel, by the end of March 2019, the number of outlets was 7653, while according to the pre loss announcement, by the end of June 2019, the number of domestic offline outlets of the company had been reduced by more than 2400 compared with the end of 2018, equivalent to a quarter of the net number of outlets, with an average of 13 outlets closed every day.
It is disclosed that as of December 31, 2018, laxabel has 9269 offline retail outlets. By the end of June, there were less than 7000 stores, according to the net decrease of stores in half a year disclosed in the announcement.
At the same time, rashabel fell into a vicious circle of continuous selling.
In May 2019, laxabel sold 54.05% of the equity of its holding subsidiary Hangzhou Amway e-commerce Co., Ltd. at a price of 200 million yuan, and its online clothing brands such as qigege, othermix and othercrazy were also divested. In October, La charbel also announced that Jack walker, the mens clothing brand to be acquired in 2015, would apply for bankruptcy liquidation. Recently, rasabel announced another one yuan sale of Sun company.
And the stock price cant be recovered. Its 10 billion yuan from the market value at the high light moment.
Forever 21, mysteries
2019 is a record year for retail outlets to close
Of course, Zara is not the only alternative store to close due to the rising cost of labor, rent and other costs as well as the decline of profits.
US retailers announced plans to close more than 9300 stores in 2019, according to coresight, a retail and technology research firm. This is more than 50% higher than the total number of closures announced in 2018 (5844), according to coresight. Previously, the record was the closure of 8069 stores announced in 2017.
Here is a list of 20 retailers that have announced that they will close stores in 2019.
In April 2019, Forever21 announced its exit from the Chinese market; in October, Forever21 filed for bankruptcy and successively closed stores in China, Japan and other markets.
Forever21 filed for Chapter 11 bankruptcy in September 2019. At that time, it had more than 800 stores around the world. In bankruptcy proceedings, the company said it planned to withdraw most of its operations in Asia and Europe. The company finally went bankrupt because of its rapid development and large scale.
Victorias Secret said in February it planned to close 53 stores this year because of sales growth problems for its fashion underwear brand.
Swedish fast fashion brand H & m also plans to close 160 stores in 2019, 14 more than last fiscal year, and the number of new stores will be controlled at 335.
Gap group announced that old navy, a subsidiary of its performance growth engine, will withdraw from the Chinese market in 2020.
Gap also plans to close about 15 of its branded stores this fiscal year.
Charlie, the accessory chain, filed for Chapter 11 bankruptcy protection in July and plans to close all 261 stores by the end of August. This marks the second time in two years that the retailer has filed for bankruptcy. The company said it could not develop a plan to attract shoppers and ensure long-term profitability..
Walgreens said in August that it plans to close about 200 stores in the United States. Prior to that, rival CVS announced its closure. Walgreens said the plant closures are part of a cost cutting plan and will help it focus on more profitable areas.
Gamestop said in September that it had closed 180 to 200 underperforming stores worldwide at the end of the financial year. The retailer has more than 5700 locations around the world. As more and more consumers turn to the Internet to buy and download video games, Gamestop realizes that it does not need such a large physical store.
Paylesshoesource filed for bankruptcy protection for the second time in February and has since closed all its 2500 stores in North America. This is the biggest number of retailers closed due to bankruptcy this year. Payless is heavily indebted, and when it filed for bankruptcy, payless said it had about $470 million in outstanding debt and lost $63 million in 2018. In addition to debt, the company has too many stores, and the companys overhead is too high.
Art and crafts retailer acmoore said in November it would close all its stores in the United States. There are 145 stores in total. It has become very difficult for us to operate and compete, the company said in announcing the news
10. Charlotte Russe
Charlotte Russe, a youth clothing retailer, filed for Chapter 11 bankruptcy in February 2019. Forced to liquidate, more than 500 stores across the country were closed.
Barneys New York, a high-end department store chain, filed for Chapter 11 bankruptcy protection in August 2019, when it said it planned to close 15 of its 22 stores in an effort to keep at least some of its iconic stores in New York and California open.
When Gymboree, a childrens clothing company, filed for bankruptcy protection in January, it said it would close all of its 800 Gymboree and Crazy 8 stores.
Freds, a discount retailer and drugstore chain, filed for Chapter 11 bankruptcy in September 2019 and plans to liquidate and close all its stores. It has more than 500.
Zgallerie, a home retailer, filed for Chapter 11 bankruptcy protection in March 2019. At the time, the company said it planned to close 17 of its 76 stores.
Pier1 imports said in September that it plans to close about 70 stores in the fiscal year and possibly more. The company was still operating at about 950 locations. As shoppers head to Amazon and other online retailers to buy things like the cutlery, wall art and small furniture that Pier1 sells, the challenges are growing.
Chico said in November that it would close 75 stores in 2019 (excluding any opening).
Womens fashion brand agaci filed for Chapter 11 bankruptcy in August 2019. In court documents, agaci said it intended to close and close all physical stores. With 54 physical stores, agaci is one of many clothing brands forced to go bankrupt or forced to go bankrupt.
Cvshare said earlier this year it would close 46 underperforming stores in 2019, less than 1% of its countrys roughly 9600 stores. CVS has also announced plans to close another 22 sites by 2020.
Bedbath & beyond is a global market for baby buying stores and Christmas tree stores. The company expects to close 60 stores this fiscal year.
Shopko filed for bankruptcy in January 2019. Initially, discount retail chains wanted to recover some of their stores in order to close about 70% of their stores. But by March, shopko announced it would liquidate all its assets or more than 300 stores.
In addition, retail stores such as searsandkmart and dressbarn were closed. Earlier in 2018, Topshop closed tmall flagship stores; in December, newlook closed its stores in China and tmall flagship stores;
Physical stores are too difficult
Many businesses that go bankrupt or are forced to close their stores say that with more and more consumers turning to e-commerce, physical stores face great challenges.
Changes in consumer habits are driving changes in some retailers, meghnan Martindale, global head of retail research at CBRE, a commercial consumer services company, said in an interview with CNBC
Lifeway, a Christian Bookstore chain that plans to close all 172 stores by the end of 2019, said lifeway faces huge challenges as more and more consumers turn to the Internet to buy books or download them to electronic devices such as iPads. Even with some initiatives, such as increasing coffee bars in some places, in an attempt to increase traffic. But not enough to make lifeway profitable, which has been losing money for years.
As a result, Chicos has been trying to sell some clothes on Amazon while cutting some stores.
In China, e-commerce has penetrated into everyones life. On December 17, the real-time data of the State Post Office showed that the annual business volume of express delivery in China exceeded 60 billion. On the contrary, the shopping malls are getting colder and colder. There are advertisements for the transfer of shops and the rent-seeking of shops everywhere.
To this, people say, online shopping is too convenient.
In addition to the direct impact of e-commerce, there are also several reasons to force the closure of stores from the point of view of the tide of closure of major physical stores: