Competitive and macro forces impact category
Consumers expect style, value and experience
Apparel category brand value flattened in the 2015 BrandZ™ Top 100 Global ranking, following a 29 percent rise a year ago when apparel led all categories in value increase.
Competition got tougher and consumers
got smarter. Well-informed by store visits
and online research, consumers shopped
across brand repertoires, mixing and
matching wardrobe elements looking for
the best value, which they often found at the
fast-fashion leaders: Zara, H&M and Uniqlo.
These brands refined the store experience
to entertain and impress shoppers with
product range and display, and to lengthen
the duration of shopping trips. The fast-fashion
leaders also expanded their online
presence, as new exclusively e-commerce
brands entered the apparel category.
Fast-fashion brands operated in the sweet
spot for post-recession consumers – at
the convergence of affordable style and
convenience. Their ongoing assortment
updates invited more frequent shopping
compared with brands that renewed styles
However, the fast-fashion brands also felt
the impact of global economic pressures
and currency fluctuations. H&M, for
example, sourced primarily in Asia where
the dollar was strong, but priced much of its
merchandise in the weakening Euro.
Meanwhile, low-priced apparel basics
appeared in non-apparel outlets, even
supermarkets. The consumer's ability to find
value for money at both the premium and
budget ends of the market squeezed brands
in the middle.
The fastest risers in the BrandZ™ Apparel
Top 10 were not the fast-fashion brands, but
Tommy Hilfiger, an affordable luxury lifestyle
brand, and Nike, the leader in sportswear.
Store and online expansion
Zara continued to focus on the in-store
experience, from the sales floor to the
changing areas. The brand implemented an
information loop in which store employees
reported to management what they
heard from customers, providing insights
that enabled the organization to better
understand, location by location, what
articles sell, or don't sell, and why.
Zara added to its existing 2,000 stores
worldwide and expanded its online business
by introducing Internet sales to Mexico
and South Korea and putting a Zara site
on China's Tmall. As part of its strategy
to increase its presence in the shopping
districts of major European and US cities,
Zara purchased a building in New York's
Soho, an important shopping district.
H&M added 325 stores in 2014 and ended
the year with 3,261 brand stores in 55
markets. It planned to add several hundred
more stores this year. New markets planned
for 2015 include Peru, Macau, South Africa
The brand also increased its online presence
in 2014. Adding France, Italy, Spain and
China gave it a presence in a total of 13
countries, and it planned to add nine
more European countries this year. In a
brand extension, H&M planned to launch a
personal care line called H&M Beauty in 900
stores in 40 markets and online.
Shifting control to stores
Uniqlo planned to continue its aggressive
expansion in the US and Europe, where it
opened a Berlin store in 2014, its first in
Germany. The brand also opened its first
store in Australia.
Uniqlo experienced especially strong results
in Mainland China, Hong Kong and Taiwan,
where it operated around 374 stores and
planned to open 100 annually. Sales for
Greater China increased 66.5 percent for
the fiscal year 2014.
At the end of its fiscal year, Uniqlo operated
633 international stores and planned to
add about 200 in the next 12 months. It
operated 852 stores in Japan. The company
also announced plans to shift more
management control to the stores, to better
match the product mix to local tastes and
drive sales per store.
Uniqlo continued to differentiate with a
focus on functional fashion, emphasizing
fabrics with innovative technology that
provide comfortable warmth or coolness.
While the fast-fashion brands succeeded
around style, value and rapid inventory
rotation, Tommy Hilfiger, an affordable
luxury brand built around an aspirational
preppy lifestyle, rose 29 percent in Brand
Value, the fastest riser in the BrandZ™
Apparel Top 10.
The strength of the US dollar weakened
Ralph Lauren's international business and its
share price declined. The brand's US sales
took a surprising dip in early 2015 because
of aggressive discounting by competitors.
Ralph Lauren implemented a restructuring
plan to create a global brand management
model as the company continued
international growth, and it opened a flagship
Polo store on Fifth Avenue.
Several factors negatively affected the sales
and the share price of Hugo Boss, including
weakness in the luxury sector in some
important European and Asian markets and a
slowdown in Russian tourism.
The FIFA World Cup in Brazil presented an
important opportunity for athletic apparel
and footwear brands. Nike did not officially
sponsor the World Cup, but instead provided
kits to 10 of the teams. It also introduced
new products at the Sochi Olympics and the
The brand also focused on its digital
presence, expanding the Nike ecosystem,
which includes its digital fitness-monitoring
devices. Nike's women's business grew at a
faster rate than the men's business. A new
advertising campaign called "Better for It"
motivated women to exercise and improve
fitness and health. Online business grew 42
Adidas officially sponsored the World Cup.
Its profit declined sharply in 2014, however,
because of difficulties in the Russian market
and its US golf division. The brand planned to
accelerate growth by concentrating on key
world capitals, including New York, London,
Paris and Shanghai. Over the next few years,
Adidas planned to add 55 more US stores.
Despite increased competition, the
overall strength of the athletic leisurewear
category helped Lululemon slowly recover
from negative publicity around the recall
of a line of yoga stretch pants that were