“The Good, the Bad and the Ugly” in the Teen Fashion (Wild) Market

The teen’s fashion scene is swept by howling whirlwinds.


Lonely riders, deadly duels, high noon’s: it all reminds too well of Sergio Leone’s “The Good, the Bad and the Ugly”, the last and, to my modest opinion, best installment of his so-called “Dollars” trilogy of “spaghetti westerns”.

Should we then rightfully tag the turbulent young fashion scene a “spaghetti fashion”?

In the original motion picture, Clint Eastwood (the Good) is a taciturn, enigmatic lone rider, searching for a cache of stolen gold against rivals Lee van Cleef (the Bad) and Eli Wallach (the Ugly).

"The real West was the world of violence, fear, and brutal instincts," claimed Leone. "In pursuit of profit there is no such thing as good and evil, generosity or deviousness; everything depends on chance, and not the best wins but the luckiest."

Really?

In the turbulent unfolding of the teen fashion market, we believe it is not the luckiest who wins, but the one with the soundest strategy. We believe failures come from poor strategic decisions, precisely from flaws in the strategies themselves, as the following facts and brand stories clearly demonstrate.

1. Abercrombie & Fitch’s turnaround

We’ve learned from last month’s rumbling news that A&F’s controversial CEO, Mike Jeffries, abruptly exited the stage.

The coup de scene followed 11 (!) straight quarters of same-store declines; 180 stores to be closed by end of 2015; one major brand, Gilly Hicks, shut down; same store sales down by 10% in 2013 and another profit warning issued for 2015, as the outlook for the current fiscal year dooms.

Much has been written on the many excruciating reasons why the teen retailer has been struggling to attract customers who have increasingly turned their backs to the brand: its weak inventory management, its premium prices through times of economic instability to mention a few of the most frequently mentioned causes.

More significantly we must introduce two crucial factors, which alienated their audience:

·      Lack of understanding and response to changing fashion and market trends: reducing logo presence or removing shutters from the storefronts is not the radical, strategic change required for a turnaround business situation.

·      Fierce competition from fast-fashion-forward brands: we’ll expand on this fundamental factor in the following.

2. The crumbling of a crowded group of troubled teem retailers: Wetseal, Delia’s, Deb Shops, and more (and maybe more to come?).

·      Just a few weeks ago, adding up to a too long list of casualties, fashion teen retailer Wetseal filed for Chapter 11 bankruptcy protection.

·      On the lower end of the chain, part of an unstoppable chain reaction shaking the teen’s market, Delia’s and Deb Shops shared the same dusty road to oblivion.

·      The downtown LA vibe is not rescuing American Apparel from a progressive, inescapable brand appeal and identity crisis.

The list might become longer in the near future, as we witness the static, ineffective reaction of most of these brands to the irrevocable changes taking place in the teen’s marketplace.

3. The winner of the gold cache: H&M (and a victorious cluster of fast fashion brands, the likes of Zara, Forever 21, and more).

The advent and overwhelming expansion of the so-called fast fashion or fashion forward retailers is unanimously deemed to be the devastating force shaping the teen fashion market (the other crucial factor being the increasing relevance in the teen’s purchasing set of indirect competing products, such as technology).

·      Cheap-and-chic is the new fashion credo, which has converted millions of young consumers to the stylish, fashion-forward, eclectic and, significantly enough, accessible product offers from these (mostly European) brands.

·      The business models on which these retailers operate are phenomenally modern, and successfully aligned to consumers’ lifestyles on the one hand, as well as to the fast paced digital world on the other: a marvelous case of cultural integration.

·      These brands create, develop and deliver fresh, up to date merchandise to the sales floor every three weeks, rotating their sales floors more than twelve times per year, hypnotically attracting and engaging customers with their fashionable collections.

·      Their product offerings cater to a wide array of consumers, with different body types and needs. And their pricing strategy is accessible. In a word, their approach to fashion is democratic: how striking the contrast with the Abercrombie’s of the world, exclusively and narrow-mindedly targeting the “beautiful people” (to use Jeffrie’s words) of the world.

In the original film, though dubbed "the Good, Eastwood’s character is not much better than his opponents -- he is just smarter and shoots faster.

The same applies here to the fast fashion retailers in our “spaghetti fashion”. Smarter and shooting faster: which is the difference between life and death, in the wild, wild, West (read fashion?).