Amazon picks a new sector at gunpoint – the fashion industry

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    A week after the strengthening itself in the food segment, Amazon.com now targets in fashion, says Bloomberg. The last service of the technology giant, which allows users to try the products at home before buying them, caused selloff in shares of Macy’s and Nordstrom, as well as European online competitors Zalando, Boohoo.com and Asos. The same thing happened with the shares of the supermarket last week when Amazon announced that it buys Whole Foods for $13.7 billion.

    Prime Wardrobe, presented on Tuesday was “a new potential nail in the coffin of the sector with department stores,” says Wells Fargo research analyst Ike Boruchow.

    Amazon reinforces its fashion offers after acquiring physical retailer with over 400 stores of Whole Foods. This happens at a time when fashion companies from US to the UK are struggling to keep their increasingly rare customers and online competition heats up with new investments of fashion chains such as the owner of the Zara Inditex and H & M.

    The new service Amazon aims to eliminate one of the major drawbacks of online shopping for clothes – the time that consumers realize that you will never be able to be inserted in the new jeans that looked great on the website. Customers can bypass it by buying several pairs in different sizes, but it also means the return of those who have too big or small.

    Asos, whose shares fell 4.8 percent on Wednesday, could be one of the most exposed companies because of “poorly disseminated its global network,” says the analyst of Credit Suisse Sayman Aruin. London-based online retailer targets the young, price-sensitive consumers with brands in the mass market as Adidas and Abercrombie & Fitch – a market that Amazon can seize with your plan.

    Based in Berlin Zalando also reported a decline in its share price by 6.1%, before recovering. The fashion focus of the company, highlighted with photographs suitable for magazines and reviews, gives it a competitive advantage over the more general retailers.

    “Fast fashion is not an easy category brands that sell in the Amazon, as brands have to pay much or fight to take the lead on Amazon, but it does not always work so well with rapid return products”, says analyst by RBC Capital Markets Richard Chamberlain.

    Shares of Zalando, Asos and Boohoo.com, which are aimed at young women reached record highs in early June. Zalando, which owns 1% of the European fashion market, said profit margins may shrink this year as the company struggles with sluggish growth of users.

    Fashion online retailers in Europe are already facing tough competition from companies with physical stores, as the Spanish Inditex, which has online sales in 43 countries, and Swedish H & M – to more than 30.

     

    For now, Amazon will test Prime Wardrobe in the US, where some European online players like Asos trying to enter, but online marketing clothes still dominated by sites chains and department stores like Nordstorm.

    For them new service Amazon is a major threat because users “earn access to a wide range of real brands, supposedly more than there is any department store, and it is a familiar place for sale with minimal problems and free delivery and return,” wrote Burochov.

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    I am an independent trader currency and commodity with about eight years of experience. I love the financial world because it is like one big puzzle and I hope we help each other out to solve the puzzle to help us realize our dreams. I received my BBA in Accounting (With Honors) - from The University of Texas - San Antonio. Achievements: Beta Alpha Psi National Accounting Honors Fraternity member, Leadership Challenge Participant, Dean's List. I have passed the Series 63, 22, Texas Real Estate exam, and the DRI Business Continuity exam.

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