**: Times Finance APP (ID: TF-APP) Author: Zhou Jiabao Editor: Li Qian.
After the ebb of the H&M, the European and American fashion brands are back
European and American fast fashion represented by H&M and ZAR is ebbing in China, and the former top fashion brand champion is also facing performance problems, but the entrants are continuous.
Recently, according to a number of ** reports, Supreme will open its first independent store in the Chinese market in Shanghai, which is expected to open next year. According to social platforms**, the shop has been covered by a large white fence, but no brand logo has been revealed.
While this news has not yet been confirmed by Supreme parent company VF Corporation, when the brand opened its own store in South Korea in August, the regional head revealed that the first store in China was in the pipeline.
At the end of last year, Supreme began to make moves in the Chinese market. In November 2022, Supreme opened a shop-in-shop at Dover Street Market, a well-known luxury boutique in Beijing, which is the brand's only official sales channel in China.
At present, Supreme only covers the United States, the United Kingdom, France, Italy, Germany, Japan and South Korea, including 6 in the Japanese market. If Supreme opens in Shanghai, it will be the brand's 17th store in the world.
Supreme, which is a smash hit, can it still make waves in China's trendy market?
The co-branding is all grabbed by increasing the price, and the thousand-yuan down jacket is fried to tens of thousands
Supreme was founded in 1994 by James Jebbia in New York, USA. Rooted in the streets of New York, this skateboard shop has been sought after by a group of skateboarders and street youth by promoting an attitude that does not cater to mainstream culture.
With New York street culture out of the United States. In 1998, Supreme entered the Japanese market and became an instant hit, opening three stores in a row. Bringing goods for Supreme is not only the famous Japanese ** person Hiroshi Fujiwara, but also the king-level actor Takuya Kimura. Supreme management even revealed in an interview that the Japanese market has made Supreme truly brand itself from a skateboarding clothing store.
The pop culture that came from across the ocean continues to infiltrate the growth of China's "post-90s" generation. Even though there are no official sales channels in China, Supreme has also received a share of this pie, and Supreme has ushered in a phenomenal explosion in China.
In 2017, luxury brands LV and Supreme launched their first collaboration, which quickly surpassed $100 million in sales, making Supreme famous. In the same year, China's first local hip-hop reality show, "China's New Rap", was broadcast, boosting a wave of street consumption.
Tong Cheng (pseudonym) is a follower of the Supreme trend, "People are not abroad, they can only buy at a higher price." Box logos and character T-shirts, artist's co-branded products, are all sold out immediately. "Under the strict starvation sales strategy, overseas hipsters queue up for the launch of new Supreme products, while in the Chinese market, young people are even willing to pay a premium several times higher than the launch price.
According to the trend** Hypebeast, Supreme sold for $158 for the Box Logo T-shirt at the time, but resold for at least $500.
More and more people are finding that Supreme seems to be more financially charged than Nike's sneakers. Tong Cheng recalled to Times Finance, "At that time, a large number of ** were fattened. Because of the limited edition and the lack of official sales channels in China, the market price of Supreme skyrocketed. As long as you buy it back from the store, you can sell it several times over. ”
He once bought two Supreme down jackets in the hands of **. One of them is a co-branded with the outdoor brand The North Face (North Face), and the offer price is equivalent to about 4,500 yuan, but he increased the price by thousands of yuan, and the price of the purchase from ** exceeded 10,000 yuan, which is comparable to Moncler, Canada Goose and other brands**.
Supreme's popularity in the Chinese market can be described as crazy, and even copycat brands are making a lot of money. Times Finance has reported that with the fame of Supreme, many copycat companies have carried out joint cooperation in China under the banner of Supreme, and even opened stores in downtown Shanghai and Shenzhen.
A salesperson revealed to Times Finance that from 2018 to 2019, a copycat Supreme luggage manufacturer could attract customers from Japan and the Middle East with only a 300-square-meter exhibition hall, with monthly sales of 4 million yuan to 5 million yuan. Another management company that holds the Shanzhai Supreme brand has a joint service fee of more than 1 million yuan a year.
After being acquired, Supreme began to bow to the market
Supreme's low-key approach is one of the factors that has led to the rampant copycats. For a long time, Supreme has maintained a mysterious and arrogant posture.
Its business strategy is very different from that of other clothing brands: new products are only available at a fixed time every Thursday (Saturday in Japan).There are no distributors, and all products can only be purchased through the official website or in physical storesMost of the products are limited and only one item per item is allowed to be purchasedConsumers don't know in advance what styles will be released next week.
The store opening strategy is even more demanding, and in the nearly 30 years of brand career, Supreme has only a dozen offline stores. According to a ** report, in the most profitable years in the Chinese market, Supreme did not have any entry actions, and the brand once said that "it will only open stores in the cities with the most street culture".
It wasn't until 2020 that Supreme was acquired by VF VF Inc. for $2.1 billion**, a deal that caused a stir at the time. VF Group's brands include Vance, Timberland, The North Face, and more.
Although the parties to the deal said that the acquisition would not affect Supreme's independence, the expansion of Supreme after VF Group's entry is seen as a certainty by the outside world. VF has also set a revenue target of $600 million for Supreme by fiscal 2022, and the company expects Supreme to reach $1 billion in annual revenue over time.
But contrary to expectations, the epidemic has hit the trend market harder than expected.
VF Group's core brands such as VF have been sluggish, and Supreme's revenue has consistently fallen short of expectations. In June of this year, VF VF Inc. disclosed Supreme's results for the first time, and for the fiscal year ending March this year, Supreme revenue was 5$2.3 billion, compared to about $5$6.2 billion, never meeting VF's target of $600 million.
Earlier this year, according to Bloomberg, VF Group was considering its backpack brand Jansport, which is valued at around $500 million. In October, VF Inc. announced a significant dividend cut and withdrew its full-year guidance. There are even activist investors asking for non-core brand assets other than the company's Vance, The North Face.
Tang Xiaotang, a fashion industry analyst at No Agency, pointed out to Times Finance, "At first, Supreme did have expansion plans when it was acquired. At that time, VF also proposed investment incentives for the Supreme acquisition, but the details were not disclosed. ”
Tang Xiaotang believes that "the previous acquisition of Supreme was too leveraged, VF was tired of repaying debts, and the main brand VAN was losing money, VF faced more pressure in all aspects of cash flow. There was no way to devote more resources to the development of Supreme, which affected Supreme's expansion plans. ”
Not only that, but core consumers are starting to stop paying. As early as 2017, Supreme gave a small stake to the investment institutionIn the same year, Supreme relinquished design rights in a collaboration with LV, which sparked dissatisfaction among some of the brand's core followers, who believed that Supreme was beginning to deviate from the spirit of "anti-commercial".
The weakening of end-use demand is also reflected in the change in the resale market. According to stock X, a Supreme and LV collaboration sold for as much as $7,450 in May 2019 and $3,196 in October this year.
It is worth mentioning that Supreme's business operations have also begun to change. In August 2022, consumers will no longer be able to purchase one piece of the same clothing on Supreme, with different restrictions depending on the style.
In the eyes of many consumers, Supreme is starting to bow to the market.
With the rise of outdoor trends, will anyone still pay?
The news that Supreme may land in Shanghai does not seem to have set off more waves.
Hunger marketing has caused the resale market to obtain a high premium on goods, which has affected consumers' enthusiasm for purchasing, and the rampant copycat has already damaged the brand image of Supreme. Wang Wei (pseudonym) told Times Finance, "Supreme's previous selling point was that the version was good, simple enough, and the color was good-looking, but it was too expensive." The reason why a trendy brand is a trendy brand, popularity is very important, once it is out of fashion, it is just a cost-effective clothes. ”
From the wind on the west coast to the rise of national trends, from street culture to outdoor sports, the trend direction of China's fashion has changed dramatically.
The skateboarding, hip-hop neighborhood culture behind Supreme is very different from today's "gorpcore" outdoor trend. Stone Island, ARC'Teryx, a more professional outdoor brand, has begun to become a favorite in the fashion circle.
This is also reflected in VF Group's financial report. The North Face has maintained a strong growth rate in the past two years, according to the financial report, in the second quarter of fiscal 2024, Vance revenue increased by **19% year-on-year, Timberland and Dickies revenue also decreased year-on-year, and The North Face became VF's only positive growth brand, with a growth rate of 19%.
On the other hand, the consumption of young people who used to buy has returned to rationality. Wang Wei told Times Finance, "Supreme has passed the best time, everyone's spending power is declining, and they will not be willing to pay too high a premium." ”
Despite this, VF Group is still increasing its exposure to the Chinese market. In 2021, VF embarked on a business transformation in the Asia-Pacific region by moving its Asia-Pacific brand operations center from Hong Kong to Shanghai. In the second quarter of fiscal 2024, VF Inc. revenue in Asia Pacific increased by 6%, with revenue in Greater China increasing by 14%. The North Face's single-brand grew by nearly 50% in Greater China this quarter.
However, there are also many opinions in the market that Supreme is too late to enter China.
Tang Xiaotang said, "In 2023, the global consumer market will recover slowly, and in the second half of the year, signs of accelerated recovery will appear, and many consumer goods companies may accelerate their layout, expecting a relatively good recovery next year." From the perspective of the brand's own development and the overall environment, it is necessary to give it a try, and the Chinese market is a priority market. ”
He is not worried about the operation of Supreme independent stores in Shanghai, "Supreme brand recognition in China is very high. Opening a store in Shanghai can still be supported. ”
On social platforms, Supreme still has a lot of support. If you don't consider the resale market and limited edition, Supreme T-shirt costs about 500 yuan, and sweatshirt products cost about 2,000 yuan. In June of this year, VF Group management revealed positive feedback from the Beijing point of sale, which opened at the end of 2022.
Supreme still has opportunities in the Chinese market, but it seems that it is difficult to return to the top. Tang Xiaotang pointed out, "It remains to be seen how VF's debt recovery will follow, the brand's own development, and whether the general consumer environment can support its continued expansion in the Chinese market." ”
The once-proud Supreme has long since shaken hands with the popular trend, and perhaps more people will be willing to embrace it.
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