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Brand ITAT reputation sweeping staff selling stocks to pay wages
Since its launch, ITAT was once seen as a groundbreaking force in China's fashion and retail sectors. However, the company has recently faced significant challenges. Since August of this year, ITAT has struggled with financial difficulties and internal management issues. It has begun to delay payments to suppliers and some employees have not received their salaries on time. As a result, numerous stores across the country have either closed or been transferred, marking a sharp decline for what was once a rising star.
On the afternoon of November 5, outside the Jinan World Shopping Garment Wholesale Plaza, more than a dozen ITAT employees were actively promoting their products to passersby. An employee surnamed Liu explained that they had previously worked at the ITAT store located on the first floor of the World Shopping Mall. Due to two months of unpaid wages, they resorted to selling inventory to cover their expenses. "This is the company’s headquarters," Liu said, adding that selling stock to pay wages was a desperate move. "The head of the Jinan office is currently missing. We’re now directly contacting the Shenzhen headquarters."
It was revealed that the clothing being sold by employees was originally held at the World Plaza to cover the rent that ITAT owed. However, the plaza has since stopped allowing ITAT from shipping out the sealed goods. A senior executive from the shopping center, who introduced himself as Mr. Wang, confirmed that ITAT still owes rent and both parties are in ongoing discussions.
According to ITAT staff, there are two member stores in Jinan: one at the World Plaza and another at Qiaokou, which is still operating smoothly.
**The ITAT "Fast" Model**
ITAT quickly gained popularity with its innovative and lightweight business model. However, upon closer inspection, the company had several critical weaknesses:
**Brand Culture**: ITAT marketed itself as an international brand, but many of its registered trademarks were simply English names or pinyin, without any real cultural or historical significance. Unlike established brands like YSL or CHANEL, ITAT lacked a strong brand identity.
**Product Quality**: While an unknown brand could potentially succeed with good management—like ZARA—ITAT expanded too rapidly, focusing only on distribution rather than quality control. This led to concerns about the standard of its products.
**Store Locations**: The core of ITAT’s strategy was to use underutilized commercial spaces, often located in less desirable areas. This limited foot traffic and made it difficult for the brand to gain traction. Some industry experts criticized the model, suggesting that ITAT convinced suppliers to stock shelves, but failed to get the property owners to promote the products effectively. One observer even joked that ITAT's business model amounted to “selling subpar products where no one else would.â€
Although the ITAT model initially seemed viable—enough to attract investments from Blue Mountain Capital and Morgan Stanley—it ultimately collapsed due to rapid expansion and mismanagement. The company’s quick rise and fall highlight the importance of long-term planning and integrity over short-term gains. In the end, it’s not the ones who rush to profit who succeed, but those who build with honesty and dedication. For businesses, staying grounded and committed to quality is essential for lasting success.
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