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Since its launch, ITAT has been celebrated as a groundbreaking force in the Chinese garment and retail sectors. However, starting from August this year, the company began facing serious challenges in its capital chain and internal management. As a result, it started to delay payments to suppliers and some employees were unable to receive their salaries on time. Numerous stores across the country have either closed or been transferred, marking a dramatic fall from grace for what was once a shining star.
On the afternoon of November 5, a group of ITAT staff members could be seen selling costumes near a famous clothing wholesale market in Jinan. An employee surnamed Liu explained that they had not received their wages for two months and had decided to sell inventory to cover their expenses. "This is a desperate move," he said. "The head office in Shenzhen is unreachable, and we are now directly communicating with the headquarters."
It was revealed that the employees' sales of these garments were originally intended to help secure the rent that ITAT owed to WorldPay Plaza. However, the mall no longer allows ITAT staff to take goods out of storage. "ITAT still owes us rent, and we're still in talks," said a senior executive from the plaza. According to ITAT staff, there are two affiliated stores in Jinan: one located in the World Shopping Mall and another in Shangkou. The latter is currently operating normally.
The rapid expansion of ITAT's "fast" model initially captured attention due to its unique approach. It quickly gained popularity by leveraging underutilized commercial real estate and targeting less central locations, which allowed for lower operational costs. However, this strategy also exposed several critical weaknesses.
Firstly, brand culture. While ITAT used over 100 registered trademarks with English or pinyin names, it lacked the cultural depth and historical significance of established fashion brands like YSL or CHANEL. The company claimed to represent long-standing international brands, but in reality, it had no meaningful brand identity.
Secondly, product quality. As an emerging brand, ITAT had the potential to become a major player, similar to ZARA. But due to its fast-paced growth, the focus shifted from quality control to speed of distribution, leading to concerns about the standard of its products.
Lastly, the store location strategy. By focusing on marginal, non-central areas, ITAT aimed for low overheads, but this also limited customer traffic and visibility. Some experts criticized the model, joking that ITAT was essentially selling unwanted items in places no one else wanted.
Despite these flaws, the ITAT model was once considered viable, which is why it attracted investments from Blue Mountain Capital and Morgan Stanley. However, the combination of rapid expansion and speculative capital ultimately led to its downfall.
Facts show that both PPG Li Liang and others who invested in ITAT eventually withdrew, revealing a lack of innovation and long-term vision. In contrast, successful businesses are those that remain grounded, honest, and focused on sustainable growth. This story serves as a cautionary tale: no matter how fast you grow, without solid fundamentals, even the brightest stars can fade quickly.
June 29, 2025