The Naumy name is increasingly gaining recognition – the French clothing manufacturer offers a wide range of women’s, men’s and children’s fashion and has made a remarkable brand entry by competing directly with fast fashion giants Shein and Primark. The company aims to open 100 stores in France and recently celebrated the opening of three stores in Belgium. Naumy wants to reach all of Europe and possibly expand worldwide.
Who is Naumy aimed at?
Although Naumy’s online presence appears to focus on women’s fashion and accessories, the company’s brick-and-mortar stores offer a wide range of products for women, men and children, as well as a separate section for beauty products. Nevertheless, the label stands out from the rest of the fast fashion landscape with its own style and business approach. A look at the website shows a different target group than that of competitor Shein. The Chinese e-commerce giant primarily targets GenZ. At Naumy the models, the poses and the designs are less focused on high fashion. The images show more discreet, essential styles that are based on the rapidly changing trends in the fashion industry.
In an interview with French news platform Actu, Lin Can, the company’s managing director, said Naumy offers a diverse offering in its stores, which he described as “a mix of everything typically found in a shopping center.” He emphasized that the company wants to “offer something for everyone at an affordable price.” At the same time, he highlighted Naumy’s commitment to offering different styles and thus appealing to different socio-economic groups and age groups. A look at Naumy’s website underlines this ambition: the clothing provider’s offering ranges from skinny jeans for ten euros to cargo pants for 25 euros. Dresses are priced at 15 euros and long-sleeved tops at twelve. The company also offers high-priced products that range between 100 and 150 euros. Naumy offers options for different budgets and stylistic preferences.
How can the French fast fashion retailer keep its sales prices low?
Naumy – like Primark and Shein – has an online presence and, like its competitors, offers its customers new products every week. The company’s goal is to quickly track fashion trends and make them accessible at affordable prices. This flexibility is made possible by the fact that 60 percent of clothing is made in Europe, primarily in Italy. This is what sets Naumy apart from its competitors. The proximity between production and distribution points allows for minimal inventory, thereby promoting sales in stores.
Lin Can emphasizes the importance of offering customers a wide choice. He also highlights the family atmosphere of the Naumy stores, which are particularly successful in suburbs and shopping centers. Many retail stores are closing, but Naumy’s offering seems to meet real demand and offers customers a new shopping alternative.
The managing director emphasizes that the company does not aim to be in direct competition with Primark. In an article by the Belgian media company Gondola, Can explained: “We have created our own identity and built customer loyalty. Unlike Primark, we make a large proportion of our products in Europe, which results in slightly higher prices – but we are also more fashion forward.”
Even if Naumy has not expressly expressed any ambition to compete with the discount retailer, the company appears to be pursuing a similar strategy to Primark: with an enormous number of store openings and special offers at each new location that are tailored to local customers. Hélène Janicaud, fashion expert at the British market research company Kantar, comments: “At the end of September 2023, Primark only had 24 stores, but the company was in seventh place with a market share of 3.1 percent. By opening more stores, Primark has the chance to move into the top five of the textile market.” According to the French magazine LSA, which specializes in trend analysis in the food industry, retail and consumer sectors, the cost of each store opening for Primark is between 16 and 17 million euros.
What is Naumy’s financial situation?
As for the costs associated with opening stores, Naumy continues to expand and expand its presence in France and Belgium. The company began its store network in the Île-de-France region of France in 2014 with the opening of its first store in Fleury-Mérogis. Ten years later, Naumy has almost 40 stores in France and an extensive product range of over 100,000 items in the online store. Naumy recently opened a 1,500 square meter store near the Bastille in Paris. “The aim is to build a strong presence in the heart of the capital and attract Parisian customers,” said Can. This strategic move could enable the brand to transition from regional locations to urban centers and European capitals. A development that could be confirmed by Naumy’s expansion to Brussels. The fast fashion retailer is planning to open a 1,700 square meter store in the Galeries Saint-Lambert. Shops are also opening in Liège and Namur. In France alone, 15 more new openings are planned this year. But Naumy doesn’t want to be satisfied with that – the company has set itself the goal of opening 100 branches in France. “It will happen quickly, within two or three years. But we will strive for more if it is feasible,” said Can in an interview with Actu.
What is behind this remarkable success? The director of British supply chain company 5 Stars Trading recently visited Naumy in Paris. He highlights Naumy’s resilience and business acumen. Despite the major challenges faced by global retail, Naumy Group has weathered the pandemic well and even continued to grow, now owning over 42 stores, with another 60 planned to be added this year. Naumy CEO Chaowen Ni attributes his company’s success to two crucial factors: a robust supply chain and offering cost-effective products. Looking at the financial performance breakdown, the group appears to be in a solid financial position as it does not rely on loans or other financial support. According to Verif, an organization that provides corporate information, Naumy France was founded in 2014 with a share capital of 20,000 euros and is led by Chaowen Ni. The company operates in the clothing retail sector in specialist stores and employs 39 people. In the latest corporate balance sheet published on December 31, 2021, Naumy France reported a turnover of 5,692,294 euros, thus maintaining its status as a small and medium-sized enterprise (SME).
Development of Naumy’s financial income
The online debt collection agency Rubypayeur even prepared an analysis of Naumy’s financial situation. Accordingly, the company’s financial indicators for the 2020/21 financial year are very positive. Naumy can report an EBITDA of 396,505 euros in 2021, which corresponds to growth of 32.91 percent compared to 2020. A positive EBITDA indicates that a company’s operating cycle is profitable and generates a profit after deducting interest, taxes, depreciation and amortization. Naumy’s cash flow was 315,034 euros in 2020 and 307,666 euros in 202. The company’s financial independence increased from 35.4 percent in 2020 to 40.5 percent in 2021.
In terms of operational efficiency, Naumy required 7.8 days of revenue to fund the 2020 operating cycle. In 2021, this number increased to 13.7 days. It is noteworthy that the ratio of wages and salaries to sales appears to be rather low at around 13 percent in 2020 and 14.5 percent in 2021. There is no generally applicable rate that quantifies the ratio of the total wage burden in retail, but a share of 66 percent is often expected – Naumy is far lower at 36.9 percent in 2021. But even though Naumy produces around 60 percent of its products in Italy, the company – like many of its fast fashion competitors – does not seem to pay its employees appropriate and fair wages.
“[Diese] Large companies do not create jobs on European and French soil. They export 100 percent of their products by air and do not respect our environmental, social and sometimes even our health standards. This is unfair competition against all French textile manufacturers…”
However, it is important to note that there are no concrete figures for the 2021/22 and 2022/23 financial years. These are exactly the years in which Naumy implemented its intensive expansion plans. As a result, the impact of the numerous new openings remains unknown.
Another potential advantage that Naumy could have over its competitors is the company’s leadership in ESG financial strength. Since a large part of the workforce is employed in Italy, the company can adapt to the wage standards of the Organization for Economic Co-operation and Development (OECD). However, due to Naumy’s low salary weighting of 36.9 percent, which Rubypayeur published, the online company recommends checking wage payments. In addition, hianus’ manufacturing in Italy ensures compliance with EU product requirements and proximity to European customers adheres to the principle of the ‘Circuit Court’, which deals with environmental concerns.
A new draft law in France could potentially change the situation. A French lawmaker has tabled a proposal to impose a five-euro tax on Shein products and other fast-fashion brands in a bid to address issues of unfair competition and environmental impact. “[Diese] Large companies do not create jobs on European and French soil. They export 100 percent of their products by air and do not respect our environmental, social and sometimes even our health standards. This is unfair competition against all French textile manufacturers. We recommend a ‘bonus-malus system’ so that ‘Made in France’ is cheaper and ‘Made in China’ is more expensive. “If you buy a T-shirt on one of the major online platforms that have no stores in France, it is a product that pollutes the environment enormously, so we will impose a penalty based on the polluter pays principle,” demanded MP Antoine Vermorel -Marques. The bill aims to introduce stricter requirements for imported fast fashion items in order to promote domestic production and reduce pollution. This proposal is an important step towards solving similar problems faced by European fashion retailers and reflects ongoing discussions in the US about cheap fast-fashion imports from China.