The European fast fashion brand Venca recently filed for bankruptcy due to its inability to withstand the competitive market. The primary reason for this bankruptcy was the fierce competition from Asian companies in the e-commerce sectors of fashion, electronics, cosmetics, and home goods. This competition significantly impacted Venca's business operations, leading to an accumulation of about 7 million euros in debt, mostly owed to suppliers and other creditors.
Headquartered in Vilanova i la Geltrú, Barcelona, Venca was established in 1979 and later evolved into an online marketplace for clothing (primarily targeting women) and household products. The management team acquired Venca from its previous owner, the French 3SI Group, which is under the German Otto Group. Venca operated mainly under the fashion website Digital Lola Commerce, offering a range of products including men's and women's apparel, footwear, home goods, maternity and baby items, and sports goods.
Venca, operating under the Digital Lola Commerce brand, has recently filed for voluntary creditor bankruptcy. The company's General Manager, Jordi González, acknowledged the severe competition from Asian markets over the past year, which compelled them to make this decision. González expressed hope for reaching an agreement with creditors or potentially selling the production unit to another company. Despite the bankruptcy proceedings, Venca continues its business operations, including product supply, delivery service, and customer service. The company reports an annual turnover of approximately 20 million euros and employs around 150 staff.
The bankruptcy filing of Venca highlights the intense competition in the European online fashion market, particularly with the rise of companies like Shein and Temu. The European fashion industry is robust with a proliferation of fast fashion brands expanding their footprint in the market. Shein, known for its aggressive pricing and rapid inventory updates based on current trends, has emerged as a formidable competitor in the global fast fashion industry.
While the entry of Asian companies like Shein and Temu into the European market has been impactful, it may not be the sole reason for Venca's bankruptcy. The fast fashion industry is influenced by a variety of factors, including economic conditions, changes in consumer behavior, and technological advancements. All these elements could also have contributed to Venca's financial difficulties. In summary, the competition and challenges of operating in the increasingly crowded and dynamic online retail space have posed significant challenges for traditional and transitioning fashion retailers like Venca.