Major listed companies in the FMCG industry: Semir Clothing (002563), Peacebird (603877), Youngor (600177), Shanshan Co., Ltd. (600884), Langzi Co., Ltd. (002612), Heilan Home (600398), Septwolves (002029) , Jiumuwang (601566), Hongdou Shares (600400), etc.
The core data of this article: clothing business operating income, store area proportion, gross profit margin, etc.
Fast Retailing VSInditex: FMCG business layout history
Both Fast Retailing and Inditex Group are among the first-tier fast-moving consumer clothing retail companies in the world. The development history of the fast-moving consumer clothing industry of Fast Retailing and Inditex Group is as follows:
Analysis of apparel business layout and operating status
Comparison of regional layout of clothing stores: Inditex focuses on Europe, while Fast Retailing mainly occupies the Asian region.
ZARA (Inditex) is a European and American brand, and most of its main stores are in European and American countries. Most of Uniqlo (Fast Retailing)’s main stores are concentrated in East Asia, especially Japan and China.
Judging from store distribution data, according to Nikkei reports, as of November 2020, Uniqlo accounted for 60% in Asia (excluding Japan); mainland China has 791 stores, second only to Japan’s 815 stores, ranking second . 70% of ZARA’s stores are located in Europe and the United States. These stores have been temporarily suspended due to large-scale urban blockades. ZARA has fewer stores in Asia, accounting for only about 20%.
Comparison of single clothing store area and number of stores: Fast Retailing’s average single store area is slightly better
Judging from the single store area and number of stores of the two companies, in 2020, the total number of stores of Fast Retailing was lower than that of Inditex, with the number of stores being 3,630 and 7,469 respectively; while the single store area showed the opposite result, Fast Retailing’s The single store area is higher than that of Inditex, with single store areas of 800 square meters and 780 square meters respectively.
Comparison of group efficiency per square meter: Fast Retailing Group has higher per square meter efficiency
In 2020, when the single store area of Fast Retailing and Inditex Group reached 780 and 800 square meters respectively, the square meter efficiency was still as high as 3,468 and 2,819 yuan/month. The square meter efficiency of Fast Retailing Group was higher than that of Inditex Group. Under the high square meter efficiency, the rent, decoration and labor expenses per square meter of Fast Retailing and Inditex Group stores have been effectively reduced. In the medium to long term, optimization of the company’s scale, operating efficiency, channels and product management will drive improvements in square footage, and there is room for improvement in net profit margins.
Note: Ping efficiency refers to the turnover that can be produced per square meter of area, that is, the sales volume created per square meter of the business area of a single store per day.
Comparison of group store efficiency: Fast Retailing Group’s store efficiency is higher
From 2017 to 2019, the store efficiency of Fast Retailing and Inditex Group showed an upward trend. In 2020, the store efficiency of Fast Retailing dropped to 2.645 million yuan/month, and the store efficiency of Inditex Group increased to 2.25 million yuan/month. Overall, the store efficiency of Fast Retailing is higher than that of Inditex Group.
Note: 1) Store efficiency: unified revenue calculation, excluding value-added tax; 2) Inditex and Fast Retailing store efficiency is approximately calculated based on offline revenue/(number of direct-operated stores + number of dealership stores * 0.55), and the number of dealership stores is very small , the error is not big
SKU comparison of the group’s largest brands: Fast Retailing Group has less inventory pressure
ZARA, the largest brand under the Inditex Group, has more than 8,000 SKUs, while Uniqlo, the largest brand under the Fast Retailing Group, maintains around 1,000 SKUs all year round. Compared with ZARA, its SKUs are relatively smaller, so there is less inventory pressure. , which helps the inventory turnover rate to maintain a relatively benign state; although there are not many SKUs, Uniqlo has conducted in-depth development of each style of clothing. Each SKU is not only divided into round collar and square collar, but also often has 4 or 5 types. color.
Clothing business performance comparison
Clothing revenue comparison: Inditex leads the way
From the perspective of clothing revenue, from 2018 to 2019, the clothing revenue of both companies was generally higher;���Affected by the epidemic in 2020, the clothing revenue of both companies declined; overall, Inditex’s revenue is higher than that of Fast Retailing Group. Inditex’s operating revenue in 2020 decreased by 28% year-on-year to 20.4 billion euros (approximately RMB 158.7 billion), a low level in six years; Fast Retailing Group’s revenue also dropped slightly to 130.4 billion yuan.
Clothing SG&A rate comparison: large fluctuations in 2020
From 2018 to 2019, Fast Retailing Group’s SG&A rate was lower than Inditex, remaining at around 37%, while Inditex’s SG&A rate remained at around 39%. However, in 2020, Fast Retailing Group’s SG&A rate increased to 40.1%, while Inditex’s SG&A rate dropped to 38.9%.
Note: SG&A expenses are mainly sales costs, comprehensive expenses and administrative expenses. The lower the better, and it is best to remain stable all year round.
Clothing gross profit margin comparison: Inditex is higher
Judging from the gross profit margin of the apparel business, from 2018 to 2020, the gross profit margin of both companies has declined slightly; generally speaking, Inditex’s gross profit margin is higher than that of Fast Retailing Group.
In addition, Uniqlo’s parent company Fast Retailing Group released its financial report for fiscal year 2021 (September 2020-August 2021). During the reporting period, the group’s total comprehensive income was 2.13 trillion yen, a year-on-year increase of 6.2%; comprehensive operating profit The total amount was 249 billion yen, a year-on-year increase of 66.7%; net profit attributable to parent companies surged 88% to 169.8 billion yen.
According to official disclosures, the group’s business currently consists of four parts, namely Japanese UNIQLO (Uniqlo), overseas UNIQLO (Uniqlo), GU (Excellent) and global brands.
Data show that Japan’s Uniqlo business division’s annual revenue was 842.6 billion yen, a year-on-year increase of 4.4%; total operating profit was 123.2 billion yen, a year-on-year increase of 17.7%; same-store net sales (including online stores) increased by 3.6% year-on-year. Online store sales were 126.9 billion yen, a year-on-year increase of 17.9%, accounting for 15.1% of revenue.
Overseas Uniqlo business segment revenue increased by 10.2% year-on-year to 930.1 billion yen; total operating profit was 111.2 billion yen, a year-on-year increase of 121.4%. Among them, the annual revenue in Greater China reached 532.2 billion yen, a year-on-year increase of 16.7%; the total operating profit reached 100.2 billion yen, a year-on-year increase of 52.7%, setting the best performance in history. In addition, affected by the epidemic, operating profits in South Korea, Southeast Asia, South Asia and Oceania have declined to varying degrees, while sales in Vietnam, North America and Europe have rebounded and turned losses into profits.
GU business segment revenue rose but profits fell. During the reporting period, GU achieved revenue of 249.4 billion yen, a year-on-year increase of 1.4%; operating profit was 20.1 billion yen, a year-on-year decrease of 7.6%. At the same time, due to vigorous inventory digestion at the end of the quarter, gross profit margin fell by 0.9% year-on-year.
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