Gap has successfully implemented many of the processes at Old Navy that have made fast-fashion houses a success.

Have we hit peak fast fashion? The signs are there that the retail market may have reached a saturation point for disposable clothing. And with the biggest names in the niche having second thoughts, it spells trouble for retailers like Gap (NYSE:GPS), which is only just now going all-in on the concept.

A quick transformation
Fast fashion took the American mall by storm. H&M (OTC:HNNMY) Forever 21, and Zara were suddenly everywhere, bringing to rolling racks cheap fashion that was only just seen on the runways. Yet although the clothes were offered at a discount that then made them very popular, they were also made from inferior-quality materials that gave rise to the sobriquet of "disposable clothing."

But it was a well-timed entry into the market. The U.S. was just coming out of a deadening recession and the opportunity to get the high-end looks of Milan and Paris at an off price proved too irresistible. Besides, something new would be coming out in a few months anyway, so why pay a lot for an outfit that was only going to sit in your closet?

The fast-fashion houses soared. H&M grew to 132,000 employees in more than 3,600 stores across 55 countries generating sales of almost $22 billion. That made it the second-largest retailer in the world behind Inditex, the Spanish owner of Zara.

Japan's own fast-fashion giant, Fast Retailing, sought to capitalize on the opportunity and believed it could go from a single Uniqlo U.S. store in 2006 to 200 or more by 2020.

Fast Retailing's Uniqlo chain thought it could conquer U.S. suburban malls, but its sprawl has slowed to a crawl as it reins in its expansion plans. Image source: Uniqlo.

Slow boat to China
Traditional U.S. retailers, however, were slow to catch on to the phenomenon. Comparable-store sales at Gap -- the important retail metric that strips out growth achieved simply by adding new stores -- fell 5% last year at its namesake brand. American Eagle Outfitters also saw comps drop 5% in 2014 as net sales sagged 1% year over year. Comps sales at Abercrombie & Fitch tumbled 9% while store sales plunged 12%.

There were many factors at play for the weakness U.S. retailers are experiencing, but even they believed the rise of fast fashion was a leading cause and now they're pursuing the concept themselves.

Abercrombie & Fitch, for example, introduced fast-fashion concepts at its Hollister brand while department stores like Macy's, J.C. Penney, and Sears Holdings -- Sears! -- are introducing their own fast-fashion lines.

Yet just as fast fashion is going mainstream, it may have reached a market top -- that peak fast fashion, if you will.

Hurry up and wait
Sales growth at H&M is slowing, up 12% over the first nine months of the year but below the 15% growth achieved in the same period in 2014. And though its sales were up 18% for the full year, Forever 21 and Zara rose less than 10% each.

And now H&M is expanding not into new fashion lines but into makeup, while Uniqlo is more ominously giving up on its U.S. expansion plans.

It has only managed to open 44 stores in the U.S., but recently announced that rather than the 15 stores it was going to open this year, it will only open five. The reason for scaling back was blamed on the 12 stores it opened last year, which haven't performed up to expectations. In particular, its suburban malls are underperforming, leading it to post wider financial losses.

Can Gap's Banana Republic duplicate the success of Old Navy? The retailer thinks it's key to future growth.

That's bad news for Gap, which is doubling down on the fast-fashion trend. Having successfully implemented many of the supply chain practices that have made fast-fashion house such a success at its Old Navy chain, CEO Art Peck reiterated Gap wants to expand that companywide. He estimated Old Navy gained $1 billion in market share over the past three years, so by implementing those same backroom processes at both its Gap stores and at Banana Republic, it can achieve the turnaround investors have been waiting for.

Gap turning to fast fashion for salvation just as consumers are going back to slow fashion suggests it could lead to precisely the wrong outcomes and leave the clothing chain hopelessly out of fashion.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.