Clothing Retailing - UK - September 2008

Clothing Retailing - UK - September 2008

About this report
The UK clothing market 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 and increased competition in the marketplace.

Price-deflation has exerted downward pressure on retailers’ margins and is squeezing the middle-market. However, during this period, demand has remained strong. But, now with rising commodity prices possibly leading to the end of cheaper sourcing, and a domestic economic downturn, the outlook is looking uncertain for the leading UK clothing retailers.

Main report themes:

What impact will the continuing expansion of the supermarkets into the clothing market have on the high street players?

What is the potential for online clothing sales, and who are the likely winners in this sector?

Given the worsening economic outlook are consumers more likely to trade up or trade down?

Can the value retailers continue to grow at such an impressive rate?

Do consumers feel they are receiving the right levels of service in-store?

How are the UK’s changing demographics likely to impact the clothing market?

If you want more details about this particular report, please contact the Mintel information team on +1 312-932-0400 in the U.S., +44 028-90-241-849 in Northern Ireland, +353 048-90-241-849 in the Republic of Ireland or +44 (0)20-7606-6000 in the UK and the rest of the world, or email info@mintel.com.

Contents

Issues in the Market

Main themes
Definitions
Market in Brief
Clothing retailing in for a torrid time?
Cautious consumers already starting to cut-back on discretionary goods
Value retailers set to profit from the slowdown?
Is less (and more expensive) more?
Supermarkets sweep up a larger share of the clothing market?
Industry Insights
Key points
The market
Strategies
What’s selling?
Designer/celebrity collaborations
Pricing issues
Opportunities for growth – international
Opportunities for growth – fashion
Retail winners and losers
Online shopping
Green/ethical issues
Store design – important for the whole experience
Customer service – making a difference
The future
Internal Market Environment
Key points
Inflation
Figure 1: UK: Clothing & footwear inflation, 1997-2007
Competition from the supermarkets
Growing online sales
The seasons
Broader Market Environment
Key points
Will an ageing population force changes?
Figure 2: UK: Population forecasts, age group, 2003-13
Retail sales
Figure 3: UK: ONS retail sales v. BRC total sales, monthly year-on-year growth, May 2007-June 2008
Figure 4: UK: ONS retail sale, food v. non-food, Jan 2008-June 2008
Consumer confidence
Figure 5: Nationwide Consumer Confidence Index, UK, Jan 2006-July 2008
Strengths and Weaknesses in the Market
Strengths
Weaknesses
Sector Size and Forecast
Key points
The future
Recession, what recession?
Figure 6: Clothing specialists sales, UK, 2003-13
Winners and losers
The past
Market Size and Forecast
Key points
Market performance
Figure 7: UK: Consumer spending on clothing & footwear, 2003-07
Market size breakdown by sub-segment
Figure 8: Clothing spending, breakdown by COICOP category, UK, 2003-07
Forecast
Figure 9: Total spend on clothing & footwear and clothing specialsts (£m), 2003-13
Figure 10: Forecast of Total spend on clothing & footwear, and specialists at current prices, 2008-13
Clothing specialists share continues to decline
Figure 11: Percentage share, clothing specialists within clothing and footwear, 2003-13
Figure 12: Forecast, total spend on clothing and footwear, and specialists, at constant 2008 prices, 2003-13
Deflation masks higher real growth
Growing affluence bodes well
Factors used in the forecast
The Consumer – Where They Buy Clothing
Key points
Where they buy clothing?
Figure 13: Where they buy clothes, May 2008
Figure 14: Where they buy clothes, May 2008 (continued)
The changing face of the UK high street
Figure 15: Outlets used for purchasing clothing in the last 12 months, 2003-08
Your M&S
Figure 16: Where they buy for themselves, by gender, age and socio-economic group, May 2008
Next
Figure 17: Where they buy clothing for themselves, by gender, age and socio-economic group, May 2008
Primark
The supermarkets
Asda
Tesco
The others
Figure 18: Where they buy clothing for themselves, by gender, age and socio-economic group, May 2008
Other major clothing retailers
Figure 19: Where they buy for themselves, by gender, age and socio-economic group, May 2008
Clothing shoppers are more promiscuous
Figure 20: UK: Retailers used for clothing purchases, repertoire analysis, May 2008
Figure 21: UK: Retailers used for shopping for clothing, repertoire analysis, May 2008
Retailer Competitor Analysis
Key points
Leading retailers
UK bellwether M&S one of the first to show the effects of the slowdown
Next grappling with growing store portfolio
Value retailers poised for credit crunch boom?
Figure 42: UK: Leading clothing retailers, 2007/08
Non-specialists
Evaluation
Figure 43: UK: Selected UK clothing retailers, evaluation, 2008
Market shares
Figure 44: UK: Leading clothing retailers, market shares, 2007
Alexon Group
Figure 45: Alexon Group Plc: Sales as share of clothing specialists in UK, 2003-07
History
Financial performance
Figure 46: Alexon Group Plc: Group financial performance, 2003/04-2007/08
Store portfolio
Figure 47: Alexon Group Plc: Outlet data, 2003/04-2007/08
Retail offering
Market positioning
Brands
e-commerce and home shopping
Arcadia Group
Figure 48: Arcadia Group Brands Ltd: Sales as share of clothing specialists in UK, 2003-07
Strategic evaluation
Varied portfolio
But not all fascia performing to their potential
Extending the boundaries
Recent history
Financial performance
Figure 49: Arcadia Group: Group financial performance, 2003-07
Topshop
Topman
Burton’s
Dorothy Perkins
Miss Selfridge
Evans
Wallis
Store portfolio
Figure 50: Arcadia Group Brands Ltd: Outlet data, 2003-07
Figure 51: Arcadia Group: Breakdown of International outlets, July 2008
Figure 52: Arcadia Group: Breakdown of European outlets by fascia, July 2008
Retail offering
Topshop
Topman
Dorothy Perkins
Burton
Miss Selfridge
Evans
Figure 53: Evans – Sub-branding portfolio, 2008
Wallis
Figure 54: Arcadia Group: Breakdown of advertising spend of main fascia, 2007
Figure 55: Arcadia Group: Websites, 2008
Benetton Group
Figure 56: Benetton (Europe): Sales as share of clothing specialists in Europe, 2003-07
Strategic evaluation
History
Financial performance
Figure 57: Benetton Group: Group financial performance, 2003-07
Store portfolio
Figure 58: Benetton Group: Outlet data, 2003-07
Retail offering
Figure 59: Benetton Group: Sales by brand, 2007
Bhs
Figure 60: Bhs: Sales as share of clothing specialists’ sales in UK, 2003-07
Strategic evaluation
Background
Financial performance
Figure 61: Bhs: Group financial performance, 2002/03-2006/07
Store portfolio
Figure 62: Bhs: Outlet data, 2003-07
Figure 63: Bhs: International franchises, number of outlets, 2003-08
Retail offering
Womenswear
Figure 64: Bhs: Own-brand clothing product offer, 2008
Menswear
Childrenswear
Ethel Austin
Figure 65: Ethel Austin Ltd: Sales as share of clothing in UK, 2003-07
History
Financial performance
Figure 66: Ethel Austin Ltd: Group financial performance, 2003-07
Store portfolio
Figure 67: Ethel Austin Ltd: Outlet data, 2003-07
Retail offering
Gap
Figure 68: Gap Inc: Sales as share of clothing specialists in UK, 2002-06
History
Financial performance
Figure 69: Gap Inc: Group financial performance, 2003/04-2007/08
Store portfolio
Figure 70: Gap Inc: Outlet data, 2004-08
Retail offering
Womenswear
Menswear
Childrenswear
Grupo Inditex
Figure 71: Grupo Inditex: Sales as share of clothing specialists’ sales in Europe, 2003-07
Strategic evaluation
Recent history
Financial performance
Figure 72: Grupo Inditex: Group financial performance – continuing operations, 2003/04-2007/08
Figure 73: Grupo Inditex: Sales growth by type, 2003/04-2007/08
Figure 74: Grupo Inditex: Estimated sales in key European markets, 2004/05-2007/08
Figure 75: Grupo Inditex: Consolidated sales by geographic region, year to January 2004-08
Figure 76: Grupo Inditex: Sales performance by fascia, 2003/04-2007/08
Store portfolio
Figure 77: Grupo Inditex: Outlet and country numbers, 2003/04-2007/08
Figure 78: Grupo Inditex: Outlet numbers by fascia, 2003/04-2007/08
Figure 79: Grupo Inditex: Outlet data by fascia, 2003/04-2007/08
Figure 80: Grupo Inditex: European outlet numbers by country and fascia, January 2008
Figure 81: Grupo Inditex: Breakdown of proportion of company owned and franchise stores, by fascia, 2006-07
Figure 82: Grupo Inditex: Expansion plans, 2008
Retail offering
Zara
Massimo Dutti
Bershka
Figure 83: Grupo Inditex: Company websites, 2008
H&M Hennes & Mauritz
Figure 84: H&M Hennes & Mauritz: Sales as share of clothing specialists’ sales in Europe, 2003-07
Figure 85: H&M Hennes & Mauritz: Sales as share of clothing specialists’ sales in the UK, 2003-07
Strategic evaluation
Recent history
Financial performance
Figure 86: H&M Hennes & Mauritz: Group financial performance, 2002/03-2006/07
Figure 87: H&M Hennes & Mauritz Sales by: country, 2002/03-2006/07
Store portfolio
Figure 88: H&M Hennes & Mauritz: Outlet data, 2003-07
Figure 89: H&M Hennes & Mauritz: Sales per outlet, 2003-07
Figure 90: H&M Hennes & Mauritz: Comparison of percentage increase in sales vs percentage increase in outlet numbers, European markets, 2005/06-2006/07
Retail offering
Figure 91: H&M, own brand portfolio, 2008
H&M – Cos
Figure 92: H&M Hennes & Mauritz: Breakdown of advertising expenditure in the UK, 2007
Marks & Spencer
Figure 93: Marks & Spencer: Sales as share of clothing specialists in the UK, 2003-07
Strategic evaluation
Recent history
Financial performance
Figure 94: M&S: Group financial performance – continuing operations, 2002/03-2007/08
Highlights in the UK
Figure 95: M&S: UK retail sales by product category, 2005/06-2007/08
Figure 96: M&S: International sales performance, 2005/06-2007/08
Store portfolio
Figure 97: M&S: Outlet data, 2004-08
European franchises
Figure 98: M&S: Breakdown of European franchise outlets, 2004-08
Figure 99: M&S: Other global locations, April 2008
Retail offering
Figure 100: Marks & Spencer: Womenswear and menswear own brand portfolio, 2008
Figure 101: Marks & Spencer: Clothing price architecture 2004-08
Figure 102: Marks & Spencer: Menswear – Suits, price architecture, 2008
Figure 103: M&S: Breakdown of advertising expenditure in the UK, 2007
Mackays Stores Group
Figure 104: Mackays Stores Group Ltd: Sales as share of clothing specialists in UK, 2002-06
Recent history
Financial performance
Figure 105: Mackays Stores Group Ltd: Group financial performance, 2002/03-2006/07
Store portfolio
Figure 106: Mackays Stores Group Ltd: Outlet data, 2003-07
Retail offering
Brands
Mango Group
Figure 107: Mango Group: Sales as share of clothing specialists’ sales in Europe, %, 2003-07
Figure 108: Mango Spain: Sales as share of all clothing specialists’ sales in Spain, 2003-07
Strategic evaluation
Recent history
Financial performance
Figure 109: Mango Group: Group financial performance, 2003-08
Figure 110: Mango: Estimated performance by major markets, 2007
Store portfolio
Figure 111: Mango Group: Outlet data, 2002-07
Figure 112: Mango Group: Breakdown of stores in Europe, 2004-08
Retail offering
Figure 113: Mango: Breakdown of advertising expenditure in the UK, 2007
Matalan
Figure 114: Matalan: Sales as share of clothing specialists’ sales in UK, %, 2003-07
Strategic evaluation
Right economic situation, wrong location?
Potential consumer backlash
Attempting to be the same, but different
Recent history
Financial performance
Figure 115: Matalan: Group financial performance, 2003-08
Store portfolio
Figure 116: Matalan: Outlet data, 2003-07
Retail offering
Figure 117: Matalan: Own brand womenswear portfolio, 2008
Operational issues
Monsoon
Figure 118: Monsoon Plc: Sales as share of clothing specialists in UK, 2002-06
History
Financial performance
Figure 119: Monsoon Plc: Group financial performance, 2002/03-2006/07
Store portfolio
Figure 120: Monsoon Plc: Outlet data, 2003-07
Retail offering
Mosaic Fashions
Figure 121: Mosaic Fashions Ltd: Sales as share of clothing specialists’ sales in UK, 2004-07
Strategic evaluation
Recent history
Financial performance
Figure 122: Mosaic Fashions Ltd: Group financial performance, 2003/04-2007/08
Figure 123: Mosaic Fashions Ltd: Estimated share of sales by fascia, 2007/08
Store portfolio
Figure 124: Mosaic Fashions Ltd: Outlet data, 2004-08
Retail offering
Warehouse
Oasis
Coast
Principles
Karen Millen
Operational issues
e-commerce and home shopping
New Look
Figure 125: New Look: Sales as share of clothing specialists’ sales in Europe, %, 2003-07
Figure 126: New Look: Sales as share of clothing specialists’ sales in UK, 2003-07
Strategic evaluation
Recent history
Financial performance
Figure 127: New Look Group Plc: Group financial performance, 2003/04-2007/08
Store portfolio
Figure 128: New Look Group Plc: Outlet data, 2004-08
Figure 129: New Look Group: Outlet data by country, 2007-08
Retail offering
Figure 130: New Look womenswear own brand clothing portfolio, 2008
Figure 131: New Look: Breakdown of advertising expenditure in the UK, 2007
Next Group
Figure 132: Next Group: Sales as share of clothing retailers’ sales in UK, 2003-07
Strategic evaluation
Background
Financial performance
Figure 133: Next: change in average selling prices, by season, 2006-08
Figure 134: Next Group: Group financial performance, 2003/04-2007/08
Store portfolio
Figure 135: Next Group: outlet data, 2003-07
Figure 136: Next: Refit /refurbishment plans, 2008-09
International
Figure 137: Next: International outlets, 2007-09
Retail offering
Figure 138: Next: Menswear suits price architecture, 2008
Peacocks/Bonmarché

History
Financial performance
Figure 139: Peacocks/bonmarché: Group financial performance, 2002/03-2006/07
Store portfolio
Figure 140: Peacocks/Bonmarche: Outlet data, 2003-07
Retail offering
Figure 141: Peacocks and Bonmarche sub-brands, 2008
e-commerce and home shopping
Primark/Penneys
Figure 142: Primark/Penneys: Sales as share of clothing specialists’ sales in UK, 2003-07
Strategic evaluation
Background
Financial performance
Figure 143: Primark/Penneys: Group financial performance, 2002/03-2006/07
Store portfolio
Figure 144: Primark/Penneys: Outlet data, 2003-07
Retail offering
Figure 145: Primark: Breakdown of sales revenue by product category, 2007
Figure 146: Primark: Own brand portfolio, 2007
River Island
Figure 147: River Island Clothing Co Ltd: Sales as share of clothing specialists in UK, 2003-07
History
Financial performance
Figure 148: River Island Clothing Co Ltd: Group financial performance, 2002-07
Store portfolio
Figure 149: River Island Clothing Co Ltd: Outlet data, 2002-07
Retail offering
Product offer
TK Maxx
Figure 150: TK Maxx: Sales as share of clothing specialists’ sales in UK, 2003-07
History
Financial performance
Figure 151: TK Maxx: Group financial performance, 2003/04-2007/08
Store portfolio
Figure 152: TK Maxx: Outlet data, 2003/04-2007/08
Retail offering
Major Non-specialists
Figure 153: UK: Major non-specialists clothing sales estimates, 2007
Supermarkets
George at Asda
Sainsbury’s (Tu)
Tesco
Retail Advertising and Promotion
Key points
Trends in total advertising expenditure
Figure 154: Main media advertising spend, by leading clothing retailers, 2003-07
Figure 155: Main media advertising spend by leading clothing retailers, by media, 2003-07
Appendix
Abbreviations
Appendix: Market Size and Forecast
Definition of the market
Appendix: Where They Buy Clothing
Figure 156: Where they buy for themselves, by Mintel’s special groups, region, ACORN groups, technology users, daily newspapers, commercial TV viewing and supermarket used, May 2008
Figure 157: Where they buy clothing for themselves, by Mintel’s special groups, region, ACORN groups, technology users, daily newspapers, commercial TV viewing and supermarket used, May 2008
Figure 158: Where they buy clothing for themselves, by Mintel’s special groups, region, ACORN groups, technology users, daily newspapers, commercial TV viewing and supermarket used, May 2008
Figure 159: Where they buy clothing for themselves, by Mintel’s special groups, region, ACORN groups, technology users, daily newspapers, commercial TV viewing and supermarket used, May 2008
Figure 160: Where they buy clothing for themselves, by Mintel’s special groups, region, ACORN groups, technology users, daily newspapers, commercial TV viewing and supermarket used, May 2008
Figure 161: Where they buy clothing for themselves, by Mintel’s special groups, region, ACORN groups, technology users, daily newspapers, commercial TV viewing and supermarket used, May 2008
Figure 162: What they think of buying clothes, by Mintel’s special groups, region, ACORN groups, technology users, daily newspapers, commercial TV viewing and supermarket used, May 2008