abercrombie & fitch

Sears launches a fast fashion Hail Mary

April 2, 2014: 10:26 AM ET

The struggling retailer is introducing its Now + Here shop in stores and online in an attempt to capture a piece of the growing fast fashion market.

Employee Mary Exley organizes apparel at a Sears store at the Del Amo shopping mall in Torrance, Calif., in November 2012.

Employee Mary Exley organizes apparel at a Sears store at the Del Amo shopping mall in Torrance, Calif., in November 2012.

FORTUNE -- Forget its softer side, Sears just wants to be cheap and trendy.

On April 14, Sears (SHLD) will launch its new Now + Here shops in Sears stores and online, which the Chicago-based retailer touts as "fast fashion" shops that will keep customers "on the pulse of fashion at affordable prices," according to its release. It will offer "fashion tops, bottoms, cardigans and vests" -- yes, even vests.

It's no secret that Sears needs a revenue infusion. For the 2013 fiscal year, it recorded a net loss of $1.4 billion. In the fourth quarter alone, the retailer lost $358 million, which is actually an improvement over the $489 million it lost in the fourth quarter of 2012. But going after the 18- to 34-year-old woman is a curious move for a retailer that's likely better known for its appliances and tools than its fashion sense.

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Then again, who wouldn't try to win even a fraction of the global fast fashion market -- known for its ultra-trendy looks, near-disposable quality, and modest price tags? The fast fashion market has more than tripled in size since before the recession, according to Euromonitor, which measures the market by specialty apparel and footwear sales. In 2007, fast fashion sales totaled $41.6 billion. Last year they reached $124 billion.

European powerhouses H&M and Zara -- which have perfected the process of identifying clothing trends and delivering them to consumers quickly and cheaply -- dominate the global fast fashion scene. In 2007, Sweden's H&M owned 1.3% of the specialty retail and footwear market; now it has the largest market share -- 1.6% -- as its sales increased 62% in the past five years to $18.3 billion in 2013, Euromonitor says. Likewise, Spanish retailer Zara increased its market share from 0.9% to 1.2% in the five-year span, with sales surging 60% to $12.9 billion last year.

As a more traditional retailer trying to catch up, Sears is certainly not alone. For instance, when teen retailer Abercrombie & Fitch (ANF) announced in February that its fourth-quarter same-store sales shrank 8%, CEO Mike Jeffries emphasized that the company would focus on improving its women's fashions and increasing style differentiation, all at a lower cost.

What's fueled the current fast fashion frenzy is the more discerning, penny-pinched consumer, who's now shopping for apparel the way she shops for everything else: based on immediate need. As the recession constricted consumers' discretionary spending, and as the global reach of the Internet accelerated fashion trends, the everyday shopper started buying clothing that she could wear now instead of shopping for the coming season, says Marshal Cohen, a chief industry analyst at The NPD Group. "I don't care who you are, no one is buying a swimsuit in February anymore," he says.

The increasing immediacy of fashion is a challenge for traditional retailers that typically decide what they'll hang on their racks six to nine months ahead of time. Fast fashion retailers, meanwhile, have programmed their supply chains to work six to 10 weeks in advance, which allows them to follow trends more closely.

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Succeeding in fast fashion isn't easy; it depends on three things, says Ashma Kunde, a retail analyst for Euromonitor: quickly bringing clothes to market, identifying and capitalizing on trends, and affordability. Sears promises its Now + Here apparel will range from $20 to $42, but whether it can deliver on speed and style remains to be seen. Sears has been working to speed up its supply chain for some time now, according to Nick Grayston, president of apparel at Sears. Positive responses to a test run of Now + Here's monthly deliveries last fall prompted the larger roll-out of the shops, Grayston said in an email, adding that the company's roster of designers and buyers in San Francisco and New York will be able to "quickly assess market trends to get them into the hands of our members while they're still hot."

Also looming over Sears' fast fashion launch is how the store will coax teens and twenty- and thirtysomethings through its doors in a crowded U.S. market. Forever 21 is the U.S.'s longest fast fashion resident, Kunde says, but H&M, Zara, and newcomers like online retailer ASOS have upped the competition. "What's going to make [Sears] stand out?" Kunde says. "The market's at the point where you can't rely on the basics anymore because everyone's doing that." Grayston, for his part, says that Sears' shop-in-shop concept has helped attract a new type of customer since it enhances the shopping experience with signage, fixtures, and mannequins that communicate "a distinct brand point of view."

Luckily for Sears, in addition to being frugal and demanding, today's fast fashion consumers are tremendously disloyal. They care about what the clothes look like, not which stores sell them. "If you have a really great product at the right time, it'll spread like wildfire. All it takes is a couple of wins," Cohen says. But that theory comes with a flip side: As quickly as fast fashion brands enter the market, he says, they can disappear.

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