[Fashion Barometer] 6 charts to explain why omnichannel players are soaring in profitability while e-commerce is suffering

Key points

-Shein dethrones Inditex to become the world’s No.3 fashion brand in terms of GMV, after TJX (No.1) and Nike (No.2). The Spanish firm moves to no. 4.

-In 2023, the panel’s sales growth accelerated by 7.7% (compared with 4.2% a year earlier). Combined turnover is US$266 billion.

-Almost all the omnichannel players have improved profitability. Inditex and Fast Retailing remain the most profitable, as they were in 2022. Operating margins range from 13% to 19% of sales as an average of 1.5 percentage point more than in 2022.

-Profitability gains are not an exclusive for top-of-the-range players. Primark and TJX, focused on discount, also gained profit.

-Apart from Shein, sales of pure-players are ‘flat’ or in double-digit decline. Margin figures are a concern.

-With 25% of sales online, only Inditex has seen e-commerce grow in 2023. 2 players exceed 30% e-commerce. There is still room for improvement.

For the second year running, mind Retail compiled key figures from annual reports of the 12 largest fashion retailers from 2019: turnover, growth, share of online sales, operating margin, net margin and headcount (see methodology).

These 12 players include 9 brick & mortar retailers (Nike, TJX Companies, Inditex, Adidas, H&M, Fast Retailing, The Gap, JD Sports and Primark) and 3 pure-players (Zalando, Asos and Boohoo). This year, the panel has been slightly modified. E-commerce site Farfetch failed to disclose financial results following a takeover by Coupang in January 2024, and has been dropped from the ranking in favour of discounter Primark (Associated British Food). Shein, which does not publish its detailed financial results, is only included in the first chart on sales, thanks to data from the Financial Times. This ranking does not include multi-sector marketplaces such as Amazon.

According to Grand View Research, the fashion industry is one of the largest in the world, generating sales of US$1,710 billion in 2023 (up 11% in one year). Over the past 3 years, however, there have been major changes, including a digital and omnichannel shift, environmental issues, rising production costs, falling purchasing power and logistical challenges.

In terms of turnover, TJX Companies overtakes Nike

In 2023, the combined revenues of the 12 retailers on this panel reached US$266 billion, up 7.7% in one year (US$247 billion in 2022). In 2022, this growth was 4.2%. While Nike dominated the market in 2022, the American discounter TJX Companies took ascendancy in 2023. TJX Companies (2023 sales: US$54.2 billion) is in first place, followed by Nike (US$52.4 billion) and Inditex (US$38.9 billion), which remains in third place. Apart from the top of the podium,…

Aymeric Marolleau, Sophie Baqué, Morgane Monteiro