By LYDIA NATHAN / Pic By AFIF ABD HALIM
WHILE the wealthy crème de la crème are still sauntering gingerly into their favourite haute couture boutiques, those who could only afford the second-tier prêt-à-porter brands are sliding down the ladder in the more price-conscious brackets.
So, it isn’t really a surprise when brands choose to shut down, like when popular apparel brand Gap and Banana Republic announced in February 2018 that they will be closing down all their stores across the country in that same month.
Previous reports said Gap Inc has seen a drop of 1% in sales, while Banana Republic garnered a loss of 5%, prompting both parent companies to issue statements on the closure of their 200 stores worldwide, which they had deemed “underperforming”.
Sunway Shopping Malls and Theme Parks CEO HC Chan said a majority of the international fashion brands are Western-dominated.
“In 2017, Western retail brands had been under siege as they lost traction among consumers,” he told The Malaysian Reserve (TMR).
Chan said the depreciation of the ringgit to the US dollar in 2016 might have also created a domino effect as it drove up the cost of doing business, reducing consumption pattern and weakening consumer sentiments. “At its peak, the ringgit closed at a
19-year low in late November 2016 when its value fell by 6.5% to RM4.46 to US$1,” he said.
In addition to that, inflation levels had been severe throughout 2017, hitting its highest in eight years in March with a 5.1% rate due to higher fuel prices.
“The Consumer Sentiment Index has been below the threshold 100 psychological mark since the fourth quarter of 2014, suggesting that confidence level has not regained, while month by month inflation was rangebound between 3.2% and 5.1%, leading to a higher cost of living,” he said.
As a result, consumers also become more price conscious. While still trying to look as stylish and “expensive”, they have to resort to stores that offer better bargain.
Names like FOS (Factory Outlet Stores), BO (Brands Outlet) and Haulmark are among the favourites, while those who do not seem to mind preloved branded goods have a variety of stores they can choose from nationwide.
One example is, Jalan Jalan Japan (also known as JJJ) at Skypark One City in Subang Jaya.
The brand-conscious fashionistas with shrinking wallets are also thronging places that offer great discounts like Johor Premium Outlet, Genting Premium Outlet, Freeport A’Famosa Outlet or the Mitsui Outlet Park KLIA.
Retail Group Malaysia Sdn Bhd MD Tan Hai Hsin said there has also been a shift in the ever-changing trends in Malaysia, taking it through a transformation in recent years.
Even the largest trendsetters have shifted the way they conduct their businesses via e-commerce shopping platforms.
“Online retailers have taken some shares away from brick-and-mortar retailers. Many online retailers are selling a wide variety of branded fashion items. At the same time, more and more overseas retailers are setting up Malaysian online stores as well as offering delivery to Malaysia,” Tan said.
He added that while some fastfashion retailers are welcomed by Malaysians, brands like Gap and Banana Republic also have loyal customers till today, who are happy to shop online and get their items shipped across the globe.
“Gap and Banana Republic are both established brands from the US. Due to the exchange rate, their merchandise can be rather pricey to some. However, for the same fashion items, Malaysians have many choices at lower prices,” he said.
These days, even the most stylish of Oxford shoes that are not available in any store in Malaysia can be delivered to one’s doorstep.
Chances are, some of the fashion goods sold online might not be as pricey (inclusive of delivery charges) as the same items sold in boutiques and retail outlets in the country.
Chan said even though online sales only constitute 2% of the total retail sales in Malaysia right now, a report by Euromonitor reveals that online retail sales have increased from RM1 billion in 2011 to RM2.4 billion in 2016, with an annual growth rate of 18.5%.
“In contrast, store-based retail sales achieved an annual growth rate of 3.2%. The growth of online shopping presented people with choices,” Chan said.
He foresees a growing trend of an Asian wave that will see more brands penetrating the market, especially from China.
“Asian brands will grow in influence, be it physically or digitally. I’m looking at countries like China, Japan and Korea,” he said.
As for the direction of Malaysia’s “retail therapy”, Chan said that much consideration should be given to brands that manage to stay relevant in today’s market.
Fashion brands should also remember that the success of their products would also be dictated by the customers’ share of wallet.
While the second-tier brands are facing a slight setback, other imported brands like Uniqlo, H&M and Top Shop are still packing the punch among the younger and trendier crowd.
Top Shop still maintains its presence via its eight shops in Penang, Kuala Lumpur and Johor.
Uniqlo, on the other hand, has over 40 outlets all over the country, while H&M can be found in even smaller towns like Kluang in Johor.
At the end of the day, any fashionable people would tell you that you need to stay relevant to remain in the game.