The Big Problems with Fast Fashion
This week, everyone will be talking about online retailer Asos' latest results and fashion weeks in Shanghai, Seoul and Tokyo. Get your BoF Professional Cheat Sheet.
- Asos reports fourth quarter and full-year results on October 16
- The company has issued two profit warnings since December, tied to logistical problems outside its UK home market
- Asos shares are down about 50 percent in the last year
Forever 21’s bankruptcy sparked a lot of talk about how online fast fashion retailers are swallowing the low-end apparel market whole, but some of the biggest e-commerce players are struggling as well. Asos issued a profit warning in July and shook up its board earlier this month. It blames problems at a new warehouse meant to support an ambitious US expansion; instead, out-of-stock items and shipping delays hurt sales. One of the new board members is the CEO of Ocado Solutions, an e-commerce logistics platform, indicating Asos still sees work to do on the backend. The company can't afford any more missteps, with rival Boohoo surging and incumbents Zara and H&M investing heavily in e-commerce.
The Bottom Line: Online fast fashion is primed for disruption, too, from rapidly growing peer-to-peer secondhand marketplaces. Why buy fast fashion when slightly better, if slightly used items are available on Depop?