Clothing Retailing - UK

Published by: Mintel International Group Ltd.

Published: Oct. 1, 2009 - 215 Pages

Table of Contents

ISSUES IN THE MARKET

Main themes

Definitions

Abbreviations

MARKET IN BRIEF

Future

Deflation pervades

Consumer context

Competitive landscape

INTERNAL MARKET ENVIRONMENT

Key points

Clothing takes the biggest hit among those cutting back

Figure 1: The items adults are cutting back on in the recession, February 2009

The price dilemma for retailers

Figure 2: UK clothing price deflation, 2005-Q2 2009

The young - in denial?

Less concerned about their finances

Figure 3: UK: Concern over finances, % point change, Feb 2008-Jun 2009

But have they reached the tipping point?

Figure 4: UK: Concern over job prospects, 18-25s, February 2008-June 2009

Changing allegiances

Figure 5: Selected retailers where the 18-25s buy clothes, May 2008 and July 2009

Competition from non-specialists

Figure 6: Clothing specialists as % of all spending on clothing and footwear, 2001-08

The power of the internet

BROADER MARKET ENVIRONMENT

Key points

Mixed impact of changing demographics

Figure 7: Implications of changing demographics of the UK population for clothing market, 2009-14

Late 2008 - the economy moves into recession

Figure 8: UK: GDP real growth, 1999-Q2 2009

2008 - consumer confidence in freefall…but retail sales robust

Figure 9: Nationwide Consumer Confidence Index, Jan 2006-July 2009

2009 - confidence starts to recover…will retail sales follow?

Figure 10: UK: Retail sales value growth, 2007-09 (August)

Implications for clothes retailing

COMPETITIVE CONTEXT

Key points

Clothing performance held back by deflation

Figure 11: Consumer spending on clothing and other fashion-influenced product markets, 2004-08

Figure 12: Growth in spending on clothing and other fashion-influenced product markets, 2004-08

Spending patterns change in the recession

Figure 13: Growth in spending on clothing and other fashion-influenced product markets, 2007-09

And men cut back more

Figure 14: Clothing spending breakdown, 2004 vs 2008

Consumer prices

Figure 15: Consumer prices on select fashion-influenced categories, 1996-2008

Figure 16: Consumer prices on select fashion-influenced categories, 1996-2008

STRENGTHS AND WEAKNESSES IN THE MARKET

Strengths

Weaknesses

SECTOR SIZE AND FORECAST

Key points

Economic and consumer outlook

Retail forecasts

Improving short term outlook for retail

Clothing specialists should maintain retail market share in 2009

Longer term they should outperform all retail

Figure 17: UK: Clothing specialists sales, 2004-14

Past trends

Clothing specialists struggle to hold onto retail market share

Figure 18: UK: Clothing specialists sales, 2004-08

Figure 19: UK: Clothing specialists as % of all retail sales, 1999-2008

CHANNELS OF DISTRIBUTION

Figure 20: UK: Clothing market - channels of distribution, 2006 and 2008

Specialists

Department stores struggle to maintain market share

Grocers catch up with department stores

Home shopping

Others

RETAILER COMPETITOR ANALYSIS

Key points

Leading specialists

Value retailers make significant gains

Young fashion holds up too

But the mid-market has been seriously squeezed

Rebuilding for the future

Figure 21: Leading clothing retailers, 2008/09

Evaluation

Figure 22: Selected UK clothing retailers, evaluation, 2009

Market shares

Figure 23: UK: Leading clothing retailers, market shares, 2008

RETAIL ADVERTISING AND PROMOTION

Key points

Cutting back in the downturn

Figure 24: Main media advertising spend, by leading clothing retailers, 2004/05-2008/09

M&S dominates

Next builds why Matalan contracts

Figure 25: Top three advertisers - spending index, 2004/05-2008/09

Spending by media

Figure 26: Main media advertising spend, by leading clothing retailers, by media, 2008/09

THE CONSUMER - WHERE THEY BUY CLOTHING

Key points

Where they buy clothing

Figure 27: Where they buy clothes, July 2009

The changing face of the UK high street

Figure 28: Outlets used for purchasing clothing in the last 12 months, 2004-09

Who buys where

Women far more enthusiastic shoppers than men

Figure 29: Where they buy clothes - top 10, by gender, July 2009

Next corners the 25-44-year-old market

Figure 30: Where they bought clothes in the last 12 months - top 10, by select age bands, July 2009

And e-commerce grabs the attention of the young

Figure 31: Internet shoppers, by age, July 2009

M&S dominates the older end of the market

Figure 32: Where they bought clothes in the last 12 months - top 10, by select age bands, July 2009

M&S and department stores well placed to benefit from socio-economic shift

Figure 33: Selected retailers where they buy clothes, by socio-economic group, July 2009

Cross category shopping

Figure 34: Where they bought clothes in last 12 months, by grocery stores used, July 2009

Figure 35: Where they bought clothes in last 12 months, by grocery stores used, July 2009

ALEXON GROUP

Figure 36: Alexon Group Plc: Sales as share of clothing retailers’ sales in UK, 2004-08

Recent history

Financial performance

Figure 37: Alexon Group Plc: Group financial performance, 2004/05-2008/09

Store portfolio

Figure 38: Alexon Group Plc: Outlet data, 2005-09

Retail offering

Market positioning

Brands

Figure 39: Alexon Group: List of brands, 2008/09

e-commerce and home shopping

ARCADIA GROUP

Figure 40: Arcadia Group Brands Ltd: Sales as share of clothing specialists in the UK, 2004-08

Strategic evaluation

Recent history

Financial performance

Figure 41: Arcadia Group: Group financial performance, 2003/04-2007/08

Store portfolio

Figure 42: Arcadia Group Brands Ltd: Outlet data, 2004-08

Figure 43: Arcadia Group: Breakdown of international outlets, September 2009

Figure 44: Arcadia Group: Breakdown of European outlets, by fascia, September 2009

Retail offering

Topshop

Market positioning

Brands/product offer

Pricing

Topman

Market positioning

Brands/product offer

Pricing

Dorothy Perkins

Market positioning

Brands/product offer

Pricing

Burton

Market positioning

Brands/product offer

Pricing

Miss Selfridge

Market positioning

Brands/product offer

Pricing

Evans

Market positioning

Brands/product offer

Pricing

Wallis

Market positioning

Brands/product offer

Pricing

e-commerce and home shopping

Figure 45: Arcadia Group: Websites, 2009

AURORA FASHIONS (FORMERLY MOSAIC FASHIONS)

Figure 46: Aurora Fashions Ltd: Sales as share of clothing specialists’ sales in Europe, 2004-08

Strategic evaluation

Recent history

Financial performance

Figure 47: Mosaic Fashions: Group financial performance, 2004/05-2008/09

Store portfolio

Figure 48: Mosaic Fashions: Outlet data, 2004-09

Figure 49: Mosaic Fashions: Outlets by country, August 2009

Retail offering

Coast

Market positioning

Brands/Product offer

Pricing

Karen Millen

Market positioning

Brands/Product offer

Pricing

Oasis

Market positioning

Brands/Product offer

Figure 50: Oasis: brands, 2009

Pricing

Warehouse

Market positioning

Brands/Product offer

Pricing

e-commerce and home shopping

BENETTON GROUP

Figure 51: Benetton (UK): Estimated retail sales as share of clothing specialists in the UK, 2004-08

Strategic evaluation

Recent history

Figure 52: Benetton Group: Group financial performance, 2004-08

Figure 53: Benetton UK: Financial performance, 2004-08

Store portfolio

Figure 54: Benetton Group: Outlet data, 2004-08

Retail offering

Market positioning

Product offer

Advertising and marketing

e-commerce and home shopping

BHS

Figure 55: Bhs Plc: Sales as share of clothing specialists’ sales in UK, 2003-07

Strategic evaluation

History

Financial performance

Figure 56: Bhs Plc: Group financial performance, 2003/04-2007/08

Store portfolio

Figure 57: Bhs Plc: Outlet data, 2005-09

Figure 58: Bhs: International franchises, number of outlets, 2003-08

Retail offering

Market positioning

Product offer

Brands

Figure 59: Bhs: Brands, 2009

Pricing

Operational issues

e-commerce and home shopping

GAP

Figure 60: Gap Inc: UK sales as share of clothing specialists’ sales in UK, 2004-08

History

Financial performance

Figure 61: Gap Inc: Group financial performance, 2004/05-08/09

Figure 62: Gap UK: Financial performance, 2004/05-08/09

Store portfolio

Figure 63: Gap Inc: Outlet data, 2005-09

Retail offering

Market positioning

Brands

Figure 64: Gap Inc: Brands, 2008

Product offer/Pricing

e-commerce and home shopping

GRUPO INDITEX UK

Strategic evaluation

Recent history

Financial performance

Figure 65: Grupo Inditex: Group financial performance, 2004/05-2008/09

Figure 66: Grupo Inditex: Estimated sales in key European markets, 2004/05-2008/09

Figure 67: Inditex brands: Sales in the UK, 2006/07-2008/09

Store portfolio

Figure 68: Grupo Inditex: Outlet data, 2005-09

Figure 69: UK: Grupo Inditex: Stores by fascia, 2005-09

Retail offering

Market positioning

Zara

Brands

Product offer

Massimo Dutti

Product offer/pricing

Bershka

Product offer/pricing

e-commerce and home shopping

Figure 70: Grupo Inditex: Company websites, 2009

H&M HENNES & MAURITZ

Figure 71: H&M Hennes & Mauritz: Sales as share of clothing specialists’ sales in the UK, 2004-08

Strategic evaluation

Recent history

Financial performance

Figure 72: H&M Hennes & Mauritz: Group financial performance, 2004-08

Figure 73: H&M Hennes & Mauritz UK Ltd: Financial performance, 2003/04-2007/08

Store portfolio

Figure 74: H&M Hennes & Mauritz: Outlet data, 2004-08

Retail offering

Market positioning

Product offer

Brands

Figure 75: H&M: Own brand portfolio, 2009

Pricing

Operations

COS

Advertising and marketing

Figure 76: H&M Hennes & Mauritz: Breakdown of UK advertising expenditure, 2008/09

e-commerce and home shopping

MACKAYS STORES GROUP

Figure 77: Mackays Stores Group Ltd: Sales as share of clothing specialists’ sales in UK, 2004-08

Recent history

Financial performance

Figure 78: Mackays Stores Group Ltd: Group financial performance, 2004/05-2008/09

Store portfolio

Figure 79: Mackays Stores Group Ltd: Outlet data, 2005-09

Retail offering

Market positioning

Product offer

Pricing

e-commerce and home shopping

MANGO

Figure 80: Mango UK: Sales as share of clothing specialists’ sales in the UK, 2004-08

Strategic evaluation

Recent history

Financial performance

Figure 81: Mango Group: Group financial performance, 2004-08

UK performance

Figure 82: Mango UK Ltd: financial performance, 2004-08

Store portfolio

Figure 83: Mango Group: Outlet data, 2004-08

Retail offering

Market positioning

Brands

Product offer

Pricing

Advertising and marketing

e-commerce and home shopping

MARKS & SPENCER

Figure 84: Marks & Spencer (UK): Sales as share of clothing specialists’ sales in the UK, 2004-08

Strategic evaluation

Recent history

Financial performance

Figure 85: Marks & Spencer (UK): Group financial performance, 2004/05-2008/09

Figure 86: Marks & Spencer (UK): UK sales and like-for-like growth, 2004/05-2008/09

Figure 87: M&S: UK retail sales by product category, 2004/05-2008/09

Store portfolio

Figure 88: M&S: UK and ireland Outlet data, 2005-09

Figure 89: M&S: Outlets not specialising in food, by type, 2008-09

Retail offering

Market positioning

Brands/Product offer

Figure 90: Marks & Spencer: Clothing own brand portfolio, 2009

Pricing

Figure 91: Marks & Spencer: Clothing price architecture, 2004-08

Operational issues

Advertising and marketing

e-commerce and home shopping

Figure 92: M&S: M&S Direct sales, 2006/07-2008/09

MATALAN

Figure 93: Matalan: Sales as share of clothing specialists’ sales in UK, 2004-08

Strategic evaluation

Recent history

Financial performance

Figure 94: Matalan: Group financial performance, 2004/05-2008/09

Store portfolio

Figure 95: Matalan: Outlet data, 2005-09

Retail offering

Market positioning

Brands/product offer

Figure 96: Matalan: Own-brand portfolio, 2009

Pricing

Advertising and marketing

e-commerce and home shopping

MONSOON

Figure 97: Monsoon Plc: Sales as share of clothing specialists’ sales in UK, 2004-08

History

Financial performance

Figure 98: Monsoon Plc: Group financial performance, 2003/04-2007/08

Store portfolio

Figure 99: Monsoon Plc: Outlet data, 2003-08

Retail offering

Market positioning

Brands/Prices

Figure 100: Monsoon Plc: Brand ranges, 2008

Product offer

e-commerce and home shopping

NEW LOOK

Figure 101: New Look Group Plc: Sales as share of clothing specialists’ sales in Europe, 2004-08

Figure 102: New Look Group Plc: Sales as share of clothing specialists’ sales in UK, 2004-08

Strategic evaluation

Recent history

Financial performance

Figure 103: New Look Group Plc: Group financial performance, 2004/05-2008/09

Store portfolio

Figure 104: New Look Group Plc: Outlet data, 2005-09

Figure 105: New Look Group PLC: Outlet data, by country, 2008-09

Retail offering

Market positioning

Brands/Product offer

Figure 106: New Look: Womenswear own brand collections, 2009

Pricing

Operational issues

Advertising and marketing

Figure 107: New Look Breakdown of advertising expenditure in the UK, 2008

e-commerce and home shopping

NEXT GROUP

Figure 108: Next Group: Sales as share of clothing specialists’ sales in the UK, 2004-08

Strategic evaluation

History

Financial performance

Figure 109: Next Group: Group financial performance, 2004/05-2008/09

Store portfolio

Figure 110: Next Group: Next Retail like-for-like sales performance, 2005/06-2008/09

Figure 111: Next Group: Outlet data, 2005-09

Figure 112: Next: International outlets, 2007-09

Retail offering

Market positioning

Brands

Product offer

Pricing

Figure 113: Next: Change in average selling prices, by season, 2006-08

Advertising and marketing

e-commerce and home shopping

PEACOCK GROUP

History

Financial performance

Figure 114: Peacock Group: Group financial performance, 2004/05-2008/09

Store portfolio

Figure 115: Peacock Group: Outlet data, 2005-09

Retail offering

Market positioning

Product offer/brands

Figure 116: Peacocks and bonmarche sub-brands, 2009

Pricing

e-commerce and home shopping

PRIMARK/PENNEYS

Figure 117: Primark: Sales as share of Clothing specialists’ sales in the UK, 2004-08

Strategic evaluation

History

Financial performance

Figure 118: Primark Stores Ltd: Group financial performance, 2004-09

Store portfolio

Figure 119: Primark Stores Ltd: Outlet data, 2004-09

Retail offering

Market positioning

Brands/product offer

Figure 120: Primark: Own brand portfolio, 2008/09

Pricing

Operational issues

Advertising and marketing

e-commerce and home shopping

RIVER ISLAND CLOTHING

Figure 121: River Island Clothing Co Ltd: Sales as share of clothing specialists’ sales in UK, 2004-08

History

Financial performance

Figure 122: River Island Clothing Co Ltd: Group financial performance, 2004-08

Store portfolio

Figure 123: River Island Clothing Co Ltd: Outlet data, 2004-08

Figure 124: River Island Clothing Co Ltd: Breakdown of overseas outlets, by market, 2008

Retail offering

Market positioning

Product offer

Pricing

e-commerce and home shopping

TK MAXX

Figure 125: TK Maxx: Sales as share of clothing specialists’ sales in UK, 2004-08

History

Financial performance

Figure 126: TK Maxx: Group financial performance, 2004/05-2008/09

Store portfolio

Figure 127: TK Maxx: Outlet data, 2005-09

Retail offering

Market positioning

Product offer/brands

Pricing

e-commerce and home shopping

APPENDIX - INTERNAL MARKET ENVIRONMENT

Figure 128: Selected retailers where the 15-24s buy clothes, May 2008 and July 2009

APPENDIX - WHERE THEY BUY CLOTHING

Figure 129: Where they bought clothing in last 12 months, by demographics, July 2009

Figure 130: Where they bought clothing in last 12 months, by demographics, July 2009

Figure 131: Where they bought clothing in last 12 months, by demographics, July 2009

Figure 132: Where they bought clothing in last 12 months, by demographics, July 2009

APPENDIX: RESEARCH METHODOLOGY

Abstract

There is more choice than ever before in the UK’s clothing mass-market. But it has been dominated by price for much of the last ten years, as cheaper sourcing from the Far East has facilitated the growth of value retailers.

This has increased competition and squeezed the middle-market players. And with youth unemployment rising fast, competition looks set to continue revolving around price for the foreseeable future.

This will exert further downward pressure on retailers’ margins and inhibit their ability to invest in new initiatives and stores. Not only that but it will make it hard for retailers to pass on the full price increases on imported goods.

But there is a glimmer of hope for the mid/upper mass market players. Over one in ten people in a survey commissioned especially for this report say they will spend more on clothing in the year ahead. But this figure rises to 22% of the ABC1 pre-/no family lifestage - a group that is less economically challenged and is more likely to be influenced by quality rather than low prices.

Main themes

• How has the recession changed consumers’ shopping habits for clothing and are there key differences by demographic group?
• Who have the retail winners and losers been as a result?
• How have the under 25s, a key group for fashion, responded to the downturn and will their shopping habits change as youth unemployment rises.
• How are the UK’s future demographic trends likely to impact the clothing market?
• What are consumer’s future spending intentions on clothes?
• How have clothing specialists performed relative to non-specialist competition and what part did the Internet play in this?

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