Uniqlo is now the leading brand of fast fashion

Last Monday, the Spanish newspaper El Economista revealed that Inditex is no longer the leading group in the fast fashion sector. The company that controls Zara, Bershka, Massimo Dutti, Pull&Bear and Stradivarius, was in fact surpassed by Fast Retailing, the owner of Uniqlo, which closed the trading session on January 25 with a capitalization of 9.97 billion yen (little above 79 billion euros), beating Inditex's 78.8 billion euros for the first time. 

There are several factors that led to this overtaking, first of all, the markets where the two groups operate. In fact, the Spanish newspaper reports that only in the last year Inditex has dropped significantly, especially in the domestic market, also losing 18% of its value on the stock market, compared to the revaluation of Fast Retailing to 40%. At the retail level, therefore, Uniqlo and its owning group are the most powerful and solid reality, followed by Inditex, the American company TJX, the Ross Stores chain and in fifth place the H&M group. 

Since the beginning of the new year, there have also been various rumours about the possible closure of about 100 stores of Bershka, Pull&Bear and Stradivarius in China, a series of brands that Inditex aims at boosting online in the territory. The admiral brand Zara, but also Massimo Dutti, Oysho and Zara Home will instead keep their physical locations. A reorganization of the retail network will also affect the group's stores in Europe, for which the closure of approximately 79 stores is expected, affecting 818 employees, mostly employed at Massimo Dutti. The predominance of Fast Retailing on the Asian market, and in particular the Chinese one, therefore makes the difference for the group led by Tadashi Yanai. In fact, the group concentrates 41% of total sales in China, with Uniqlo International in the lead, a territorial success that is driving global growth for the group, which this year aims to increase profitability.

"Although the Galician giant continues to largely outperform its Japanese competitor in terms of turnover, the evolution of the business of both companies has been very different in the last year. While Fast Retailing has benefited from its presence of China (the first market in recovery), Inditex has suffered from its exposure to European markets", explained the Spanish newspaper Modaes. Although it can't be said that neither of the two leading groups in the fast fashion sector is in crisis, given the solidity of the sector and the constant interest of consumers, the persistent health emergency in Europe weighs significantly and penalizes players who have invested the most in this area. The Chinese market, on the other hand, is already living a strong recovery, leaving the pandemic behind.