The emergence of Superdry Plc., a British international clothing company, may create competition among international fashion brands in Vietnam and hinder their plans to continue expanding in the country.

Superdry has a significant and growing presence around the world, operating through 515 Superdry branded locations in 46 countries. There are 139 owned stores across the UK and mainland Europe, 208 franchised and licensed stores, all but one outside the UK, and 168 concessions.

On April 21, Superdry will launch its first store in Trang Tien Plaza, one of the most crowed shopping centres in Hanoi, marking its first appearance in Vietnam in general and Hanoi in particular.

The store will showcase the latest menswear, women’s clothing, footwear, undergarment, and accessories product lines, as well as products for kids at competitive prices.

Along with casual clothing products, Superdry will introduce customers other products, including accessories, perfume, and sportswear.

On this occasion, Superdry will display its latest perfume collection called “Superdry SS18,” which inspired by the summer of the 1990s on the Italian seaside.

Superdry is an exciting contemporary brand which focuses on high-quality products that fuse vintage Americana and Japanese-inspired graphics with a British style.

They are characterised by quality fabrics, authentic vintage washes, unique detailing, world leading hand-drawn graphics, and tailored fits with diverse styling. Such distinctiveness has gained the brand exclusive appeal as well as an international celebrity following.

Heating up competition

Once it officially enters the Vietnamese market, Superdry may have to compete with Zara because both fashion brands focus on young people and adults with competive prices, with Zara's average price being $48 (edited.com) and Superdry's $200 at most (superdry.com).

Furthermore, these two fashion stores are located in the centre of Hanoi—with Zara in Vincom Ba Trieu in Hai Ba Trung district and Superdry in Trang Tien Plaza in Hoan Kiem district. This will lead to consumers picking between Zara and Superdry when deciding on their shopping destinations.

Zara came to Vietnam last September by opening its first, 2,400sq.m store at Vincom Dong Khoi, Ho Chi Minh City. The store reportedly achieved sales of VND5.5 billion ($246,000) on its first day. Following the success of the store in Ho Chi Minh City, on November 11, Zara launched its store in Vincom Ba Trieu, marking its second store in Vietnam.

H&M’s first store was opened on September 9, 2017 in Vincom Dong Khoi, District 1, Ho Chi Minh City, a two-storey 2,200sq.m flagship unit. According to the brand’s representative, the debut witnessed a record number of 4,000 customers queuing up for the opening and a total of 10,000 customers visiting on the opening day.

On November 12, the H&M fashion store in Hanoi welcomed more than 2,000 visitors and shoppers to celebrate its first official opening day.

Both Zara and H&M had impressive openings in Vietnam, however, there has been no official information about their business results in Vietnam alone, excluding bleak performance on global markets.

Notably, according to newswire Bloomberg, Zara’s turnover in 2017 dropped significantly, reporting the lowest profitability during the past ten years.

Specifically, Zara’s gross margin narrowed to 53.6 per cent in 12 months through January due to the USD exchange rate. Sales in the second half of 2017 increased to 5 per cent, the lowest rate over the past three years.

Similarly, H&M on March 27 also announced low global revenue, with high amounts of stockpiles worth $4 billion, equivalent to 17.6 per cent of its turnover in this year’s first quarter, while profit as at a 16-year low. As of this February, H&M’s net profit reduced to 44 per cent on-year, equivalent to $167.4 million.

During last year’s announcement of Zara’s turnover, chairman of Inditex (owner of Zara) Paolo Isla said that he plans to open 93 stores in five markets, including Vietnam and New Zealand, upgrading the total number of stores to 7,292.

In early 2018, H&M also opened its third store in Ho Chi Minh City, suggesting its two previous stores have been successful.

In addition, H&M announced its plan to open 430 more stores globally and mainly focus on five markets, including Vietnam, Kazakhstan, Colombia, Iceland, and Georgia.

VIR