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Since its launch, ITAT has been recognized as an innovative force in China's apparel and retail sectors. However, starting from August this year, the company began facing serious management challenges, leading to delayed payments to suppliers and unpaid wages for employees in some stores. As a result, numerous branches across the country have either closed or been transferred, marking a dramatic fall from grace. On the afternoon of November 5, a group of ITAT employees were seen selling costumes at a famous clothing wholesale market in Jinan, trying to make ends meet.
An employee surnamed Liu explained that they had worked at an ITAT affiliate store located on the first floor of a well-known shopping mall but hadn’t received their salary for two months. In response, they decided to sell inventory to cover their wages. “This is a desperate move,†Liu said. “The head office in Shenzhen is unreachable now, and we’re all in direct contact with them.†According to reports, these garments were originally stored by the WorldPay Plaza to secure the rent owed by ITAT. However, the plaza has since stopped allowing ITAT staff from moving the goods out of storage.
“The company owes us rent, and we are still negotiating,†said a senior executive from the shopping center. It is reported that in Jinan, ITAT operates two affiliated stores—one at the world-class shopping mall and another at Shangkou. The latter is currently functioning normally.
ITAT’s "fast" business model once made it a rising star, offering a completely new approach to retail. But upon closer examination, several critical weaknesses became apparent. First, the brand lacks cultural depth. While ITAT uses over 100 Chinese brands with English or pinyin names, it doesn’t possess any globally recognized fashion labels like YSL or Chanel. It claims to be an international brand with a long history, but in reality, it’s just a registered trademark without real heritage.
Second, product quality was neglected due to the company’s rapid expansion. Instead of focusing on quality control, ITAT prioritized speed, pushing distributors to stock products quickly. This led to inconsistent quality and consumer dissatisfaction.
Third, the location strategy also contributed to its downfall. ITAT aimed to utilize underused commercial spaces, often setting up in less popular areas rather than prime locations. This resulted in poor foot traffic and limited sales potential.
Some experts criticized the model, saying that while European suppliers might be willing to place clothes on racks, it's hard to convince property owners to sell the products. A sarcastic summary of ITAT’s approach was: "selling unwanted items where no one else dares to go."
Despite its initial success—enough to attract investments from Blue Mountain Capital and Morgan Stanley—the model failed due to overexpansion and speculative capital. The case of PPG Li Liang fleeing donations or quickly transferring wealth abroad highlights the lack of innovation and integrity among some leaders.
In the end, ITAT’s story serves as a cautionary tale. Success requires not only ambition but also solid foundations, ethical leadership, and a commitment to quality and sustainability. Our businesses should focus on being down-to-earth, honest, and long-term oriented.
June 29, 2025