THE CHEAT SHEET
Fast Retailing's Digital Ambitions
- Uniqlo owner Fast Retailing reports quarterly results on July 11
- The company has embraced automation and data to overcome inventory and logistics challenges
- Fast Retailing lowered its full-year outlook in April, blaming inventory problems caused by warm winter weather at Uniqlo, which drives over 80 percent of sales
Uniqlo could make a plausible case that it’s a victim of climate change. The Japanese retail giant dialled back its full-year outlook in April after an unexpectedly warm winter saddled the company with ¥44.8 billion ($400 million) of unsold sweaters, Heattech garments, puffy coats and other apparel. We'll find out with fresh results this week whether this was a temporary stumble or a sign of larger problems. Fast Retailing is in the middle of an ambitious plan to fully integrate its digital and brick-and-mortar operations, which span thousands of stores in about 20 countries. The company is squeezing efficiencies out of its supply chain, automating more warehouse functions and redesigning stores to handle online orders and cater to local tastes. It’s also beefing up its customer data analytics so next time customers shed their winter coats early, Fast Retailing won't be caught by surprise.
The Bottom Line: Uniqlo's ability to quickly incorporate new technologies and retail trends has helped it avoid the inventory problems of H&M or declining sales of Gap.
Dapper Dan Tells His Story
- Harlem-based designer Daniel Day releases "Dapper Dan: Made in Harlem: A Memoir," on July 9
- Day helped define the codes of modern streetwear in the 1980s, including the use of bootleg luxury logos
- At the time, brands threatened legal action; now he's partnered with Gucci
In the 1980s, Dapper Dan popularised the idea that knockoff (or, as they became known, knock-up) Fendi and Louis Vuitton logos could be stylish too, setting in motion trends that have come to define both streetwear and luxury fashion. His tailor shop on 125th Street in Harlem closed in 1992, and it took another 25 years before the luxury industry embraced him, when Gucci helped reopen his atelier and collaborate on a collection (though even these gestures came only in the wake of accusations the brand ripped off Day's work). In the interim, luxury embraced streetwear, especially the logos. And the industry has faced increasing pressure to acknowledge its cultural debts, rather than simply appropriating underground art for financial gain. Day's memoir will cover seven decades, from his experience growing up in Harlem in the 1940s and 1950s to his work with hip-hop legends and athletes in the 1980s to his partnership with Gucci.
The Bottom Line: Day's memoir is no mere history lesson. As one of the most influential black voices at Gucci — and therefore the fashion industry as a whole — he has played a pivotal role in guiding the brand's approach toward other cultures and taking it to task when it fails.
Is Fenty Beauty Preparing to Enter Mainland China?
- Fenty Beauty registered a Weibo account last month, sparking speculation Rihanna's brand is preparing to enter mainland China
- China is the only major market where Fenty isn't fully available; Chinese consumers must travel to Hong Kong or beyond to acquire its complete range of products
- China requires animal testing on cosmetics, which Fenty has said it will not do
Fenty Beauty managed to surpass €500 million in annual sales without entering the world's second-biggest cosmetics market. That may be about to change. The LVMH-backed, Rihanna-fronted beauty line recently opened an account on the social media app Weibo, a necessary step for any Western brand looking to sell directly to Chinese consumers. Though it has yet to post, the account follows Xiaohongshu, an e-commerce site. But though Fenty took the US and Europe by storm, success in China is by no means assured, BoF's Aijing Wang reports. For starters, Fenty has made a splash with its 40 shades of foundation; diversity doesn't sell as well in China, which is relatively homogenous compared with the US. Regulations mandating animal testing for cosmetics are another roadblock for cruelty-free Fenty, though China appears to be slowly loosening these requirements.
The Bottom Line: Fenty will have plenty of competition in China's red-hot beauty market, where Western brands like Estée Lauder, L'Oréal and Chanel (which added Tmall to its Chinese distribution channels earlier this month) are well-established.
COMMENT OF THE WEEK
"The moment you lose sight of what the customer wants you lose big time." @andrewjgrimes2021, commenting on "Inside H&M's $4 Billion Inventory Challenge."
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- Inside H&M's $4 billion inventory challenge.
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