Disappearing fashion brands and consumer spending

Changes in spending trends, global restructuring, etc, have taken the wind out of sails for some brands


In the 1990s, international fashion brands rushed into Malaysia, hoping to capitalise on the rising middle income, a bubbling economy and the people’s hunger for brands.

The opening of the world’s tallest building, the Petronas Twin Towers and Suria KLCC, had elevated the country’s position as a shopping destination, denting decades of neighbouring Singapore’s stature as the high fashion brand capital in the region.

High fashion brands like Prada, Armani, Burberry, Tiffany & Co, Gucci, Louis Vuitton and Dior were on the lips of fashion buff.

Mid-range fashion houses like Guess, Gap, Banana Republic, Kenneth Cole New York, Calvin Klein, Izod and Tommy Hilfiger joined the bandwagon to cater for a different group of consumers.

Today, however, some of these brands have exited the local market. Changes in consumers spending, sales and cost considerations, brand longevity, global restructuring and online shopping madness have taken the wind out of sails for some brands.

Earlier this year, Gap Inc announced the ceasing of its two clothing lines Gap and Banana Republic.

To date, Gap has shuttered its stores in Queensbay Mall (Penang), Pavillion (Kuala Lumpur) and the Gardens Mall in Mid Valley (Kuala Lumpur).

More than 200 Gap and Banana Republic’s stores ceased operations in the US last year as sales dropped. A few other international brands have also pulled the shutter on their businesses in Malaysia.

Malaysia Retail Chain Association president Datuk Seri Garry Chua said the exit of some brands does not reflect the overall situation.

He said in the case of Gap, the decision in the US had significant impact on its operation abroad.

“The US is a huge market for the apparel and retail segment. With Gap closing down 200 of its stores in the US, it is naturally difficult for the brand to survive overseas.

“It is predictable that the regional stores will be ceased as well,” he told The Malaysian Reserve.

He said similar ending could also be expected from toy store giant Toys ‘R’ Us which is going through the winding-up process.

The US-based retail toy giant is closing 20% of its US stores as it is difficult to compete with online retailers.

Chua said although the departure of some brands may suggest instability for its audience, other brands have continued to thrive.

“(Gap) has announced that it are closing down its branches in Malaysia, as well as Toy ‘R’ Us.

“However, people are still buying other similar brands such as Spanish-based clothing line Zara. They seem not to be affected by the perception of the reduced spending power by Malaysians.

Other powerful brands like Uniqlo and H&M have thrived in what has become a very niche and challenging business for a slice of the consumers’ fashion wallet.