Introduction
Verdict Research: Menswear retailers have faced difficult times, and with inflation returning to the market in 2010 and margins being squeezed, the outlook remains challenging. This report looks at the key issues facing the sector as well as profiling the major retailers in the market including Marks & Spencer, Next, Asda and Tesco.
Scope
*10 year value and growth trends in UK menswear expenditure, including sub sectors of men's outerwear and underwear
*Outlook for the market including key issues and growth drivers and inhibitors
*Detailed profiles on 12 of the major players in the market including menswear and clothing market shares for 2005 - 2010e
*A further 9 concise profiles on smaller menswear retailers
Highlights
Menswear spending shrank by -1.3% in 2009. As we predicted it fell faster than womenswear and childrenswear as it was the first item to be cut from families' clothing budgets during the downturn.
We predict a return to growth, of 4.8%, in menswear spending in 2010 despite weak consumer optimism, fears about tax rises and public sector redundancies and falling real incomes. However, this will be driven by price inflation, which has returned to the menswear market after more than a decade of falling prices.
M&S remains the market leader in menswear with a share of 11.3% in 2010. Though it has improved menswear ranges, particularly in formalwear, it has been impacted by advances by grocers on entry price point merchandise and clothing basics, causing its market share to decline in 2010.
Reasons to Purchase
*Identify the key trends and issues for menswear retailers to exploit opportunities and minimise risk
*Comprehensive profiles provide essential information on business models and performance measures both crucial for benchmarking businesses
*Understand key success drivers using Verdict's detailed insight on major market players
Men's Clothing Industry in the United Kingdom
EXECUTIVE SUMMARY 2
Key Findings 2
Menswear market returns to growth in 2010; 2
But sourcing prices cause inflation, hitting volume; 2
Value players worst hit by rising prices; 2
Midmarket better placed to respond with mix change; 2
M&S remains market leader; 2
Next revamps its retail brand but still loses share; 2
Arcadia moves into number three slot on Bhs merger; 2
Asda depends on Living stores for menswear growth; 2
Primark biggest share winner as it raises menswear profile; 2
TK Maxx completes UK growth and targets rest of Europe; 2
Debenhams refocuses on core customer and improving stores; 2
Matalan restarts its expansion plans as revival continues; 2
Sports Direct needs to develop its stable of product brands; 2
River Island new CEO puts brand image under scrutiny; 2
Tesco plans Extra space growth to catch up with Asda; 2
Moss Bros cashes in on revival for men's 2
Main conclusions 3
Menswear market to grow 4.8% in 2010 3
Sourcing prices cause inflation, hitting volumes 3
Value players will be worst hit 3
Midmarket retailers have room to respond 3
M&S menswear still market leader 3
Next revamps its retail brand but fails to advance 3
Arcadia Group has held onto number three slot with 5.4% market share 4
Asda places hopes for non-food in Living format 4
Primark biggest share winner as it raises menswear profile 4
TK Maxx completes UK growth and targets rest of Europe 4
Debenhams refocuses on core customers 4
Matalan restarts expansion plans 5
Sports Direct needs to develop its stable of product brands 5
River Island new CEO puts brand image under scrutiny 5
Tesco grows non-food sales through its core Extra format 5
Moss Bros enjoys suit market revival 5
Table of Contents 6
Table of figures 7
Table of tables 8
MARKET ANALYSIS 9
Menswear market definition 9
Menswear market growth 9
Clothing market spending trends 10
Bounces back from downturn 10
Menswear spending in the context of clothing market 11
Menswear share carries on declining 12
Menswear spending trends 13
Volume growth peters out 13
Price inflation returns 15
Retail distribution 17
Grocers and department stores gain share in clothing overall 17
Grocers gain more slowly in menswear 18
COMPANY DATA ANALYSIS 19
Clothing market shares 19
Primark new challenger to Big Three specialists 19
Menswear market shares 21
M&S stronger in menswear 21
Winners and losers 23
Primark continues to march onwards 23
Arcadia reinforces position 24
Value players continue to gain 25
River Island main midmarket success 27
Space allocation 29
Moss Bros and M&S leaders in formalwear 29
Key operating statistics 31
Asda takes lead on menswear densities 31
Operating margins 33
River Island enjoys best growth 33
Value players outperform on sales growth 34
Space growth 37
Primark adds further menswear space 37
Menswear sales densities 39
Asda improves but River Island slips back 39
OUTLOOK 41
Preparing for inflation lift-off 41
Consumer spending recovery to lag rest of economy 41
Real incomes under pressure 41
Optimism slips back again 42
But unemployment not as bad as expected 42
Impact of public finances 43
Consumption expected to lag the rest of the economy 43
Return to clothing inflation 44
Cost increases to break through 44
Prospects for menswear 45
Volume contraction in prospect 45
Impact on lower end of the market 46
Midmarket relies on pricing power 46
Cost containment and reduction strategies 46
Rethinking logistics and IT 46
Concentrating the supplier base 46
Unlocking spending power 47
Quality more important but range and price still lead 47
Smart casualwear or casual fomalwear? 47
Mass customisation stretches midmarket upwards 48
Tackling a weighty problem: the under 45 obese male 48
Prospects for key menswear retailers 49
Marks & Spencer 49
Next 49
Arcadia Group 49
Asda 49
Primark 50
TK Maxx 50
Debenhams 50
Matalan 50
Sports Direct 50
River Island 50
Tesco 51
Moss Bros 51
ARCADIA GROUP 52
Bhs adds scale to Arcadia 52
Recent key events 53
Repositions brands and gears up for global growth 53
Premium Collection replaces Black Label at Burton 53
Rock and roll themed brand for TopMan 53
TopMan expands store 53
New storefit for Bhs 53
Burton MD takes over Bhs menswear 53
Bhs merged into Arcadia 54
TopMan in New York basement 54
Fashion performs well 54
Arcadia's other brands stick to franchising 54
Propositions 55
Financials 58
Profitability stays high despite recession 58
Operating profits may be helped by rising like-for-likes 61
Space 62
Bhs merger adds four million sq ft 62
Bhs pushes down densities 64
Space allocation 65
Sector performance - menswear 72
Sector performance - menswear 72
Bhs boost to menswear sales 72
Arcadia pushes into third place 74
Outlook 75
Major shift of strategy in managing Arcadia brand stable 75
Brings brands together rather than leaving them apart 75
Relocation strategy will help manage costs 75
International offers opportunities - but requires logistical support 75
Burton gains scale from Bhs but not risk-free 75
Bhs needs to keep its older customer base 76
New Bhs storefit a radical departure 76
TopMan still strong but could suffer from lower price rivalry 76
ASDA 77
Fast track for non-food growth 77
Recent key events 78
New initiatives support growth 78
Non-profit World Cup 78
Acquires 193 Netto stores 78
New chief executive appointed 78
New George MD targets value and Asda Living 78
George targets online development 78
Plans major growth in non-food standalones 79
Targets more quality conscious customers 79
Shakes up global sourcing 79
Store innovations will increase competitiveness 79
Proposition 80
Financials 81
Sales performance improves during recession 81
Sales slow down again in 2010 84
Space 85
Asda Living included in growth plans 85
Turnaround in density performance 86
Space allocation 87
Sector performance - menswear 90
Best year for George menswear since 2006 90
George at Asda maintains share 92
Outlook 93
Danger from growing competition and economic recovery 93
Market share gains instore will be boosted by expansion of Asda Living ... 93
... while George focuses on online expansion, too 93
Asda may suffer if consumer finances recover 93
Growing rivalry from a variety of sources 93
DEBENHAMS 95
Focus on profitability more than sales growth 95
Recent key events 96
Debt reduction clears way for investment in store estate 96
Introduces new younger menswear brand 96
Revamps Designers' storefits 96
New international and online opportunities for standalone brands 96
Reduction of debt 96
Buys Danish store chain 97
Restarts store refurbishments 97
Moves towards more own bought 97
Proposition 98
Financials 99
Profits grow despite sluggish sales 99
Online speeds ahead after relaunch 101
Margin begins a recovery 103
Space 104
Presses on with expansion 104
Densities continue to decline 105
Space allocation 106
Sector performance - menswear 109
Slowdown after improvement in 2008/09 109
Sector share recovery to stall 111
Outlook 112
Menswear sticks to safe territory in uncertain times 112
Newness and excitement could work better 112
Store refits badly needed 112
Store expansion still offers growth potential 112
International comes to the fore 112
Online catch up gathers pace 112
MARKS & SPENCER 114
Formal menswear back on track 114
Recent key events 116
New chief executive to give momentum 116
Former Morrison chief executive takes reins 116
More experience in food than clothing 116
Spruces up smarter menswear ranges 116
M&S Direct heads for full multichannel operation 116
Aims to be world's most sustainable retailer by 2015 116
M&S keeps up marketing momentum with new faces 117
Cashes in on World Cup 117
YouTube and m-commerce 117
Strategy to improve operations and grow market share 117
Project 2020 aims to improve supply chain 117
Proposition 119
Financials 120
Sales performance improves but margins down 120
Start of 2010/11 shows big improvement 124
Online on track for half billion target 126
Space 127
Steady rise in floorspace 127
Sales densities under pressure 129
Space allocation 130
Sector performance - menswear 133
Menswear sales see weak revival 133
Market share declines 135
Outlook 136
M&S menswear benefits from improved ranges 136
Menswear influenced by fortunes of womenswear 136
Needs to work on appeal to under 45s 136
Grocers pose an increasing threat 136
New management may be focused elsewhere 136
E-commerce stretches availability 136
International business can provide scale economies 137
Cost pressure worries for 2010/11 137
MATALAN 138
New wave of store openings begins 138
Recent key events 139
Pulls £1.5bn sale of company 139
Offers fall short 139
Refinances as ownertakes dividend 139
Returns to store expansion 139
Sponsors music show to boost younger audience 139
Proposition 140
Financials 141
Trading recovery remains on track 141
Sales start to grow strongly again 144
Space 145
New store openings show Matalan confidence 145
Store revamps help densities 146
Space allocation 147
Sector performance - menswear 150
Menswear underperforms womenswear 150
Recovery has a long way to go 152
Outlook 153
Revival and expansion but also tough competition 153
Pushes menswear in a more fashionable direction 153
More direct competition on the way 153
Refinances rather than selling company 153
Ambitious expansion plans 153
MOSS BROS 154
Strong recovery in trading raises hopes for future 154
Recent key events 155
New management team sharpens up trading 155
Launches made to measure tailoring stores 155
Fine tunes Cecil Gee offer and plans online launch 155
Loses Canali franchise 155
Management changes 155
Proposition 156
Financials 157
Improvement after long run of decline 157
Long term performance poor 160
Space 161
Temporary halt in expansion 161
Densities stabilise after slump 162
Space allocation 163
Sector performance - menswear 166
Sales contract for three years 166
Holds on to share after a fall 168
Outlook 169
Need for further repositioning 169
Moss Bros enjoys suit revival 169
Niche markets could hold potential 169
Moss needs more brand investment 169
Moss store refits an urgent priority 169
NEXT 170
Fights back with revamped brand and internet Sale 170
Recent key events 171
Focus on range development helps the brand turn a corner 171
Own label sports brand returns 171
Avoids price increases related to decline of pound 171
Upgrades and expands Directory online ... 171
... but axes separate brands website 171
Proposition 172
Financials 173
Sales recover growth in 2009/10 173
Operating margin improves once more 176
Directory outperforms retail 177
Space 179
Growth in space slows, but larger sites are targeted 179
Further slide in sales density 180
Space allocation 181
Sector performance - menswear 184
Returns to sales growth 184
Market share recovery peters out 186
Outlook 187
Performs well in exceptionally tough environment 187
Breaks out of run of rapidly declining like-for-like sales 187
Range improvement shines through in womenswear, but needs more focus on menswear 187
Next's online business faces serious rivalry 187
Branded offer needs further improvement 187
Develops in Germany and US 188
Low risk international strategy 188
PRIMARK 189
Advance into menswear market continues 189
Recent key events 190
Maintains momentum 190
Smooth management change 190
Pushes product development and merchandising 190
Settles copyright case with Superdry owner 190
Reiterates ethical policy and supports garment workers 190
Develops logistics 190
Proposition 192
Financials 193
Trading performance provides positive outlook 193
Sales rocket over a decade 196
Space 198
Store growth in UK slows dramatically 198
Sales densities bounce back 200
Space allocation 201
Sector performance - menswear 204
Menswear growth slows 204
Rapid menswear share growth sustained 206
Outlook 207
Primark well prepared for future growth 207
New management shifts focus to product 207
Quality improvements needed to prepare for upturn 207
Keeping true to value origins could be difficult 207
Menswear could be given more prominence 207
Online should be an immediate priority 207
RIVER ISLAND 209
Store expansion slows down 209
Recent key events 210
New ranges and website 210
Moves to sharpen brand image 210
Management succession 210
Launches community website 210
Celebrities promote ranges 210
New distribution centre 210
Exits Turkey 210
Proposition 211
Financials 212
Sales growth lags new space 212
Operating margins come under pressure 215
Space 216
Expansion reined in 216
Density high but declining 217
Space allocation 218
Sector performance - menswear 221
Slowdown from rapid growth 221
Steady progress in building share 223
Outlook 224
Cautious approach during economic downturn 224
Reins back on store expansion 224
Must continue to invest in design credentials 224
Format development needs to be maintained 224
Social website needs a push 224
SPORTS DIRECT INTERNATIONAL 225
Benefitting from weaker competition 225
Recent key events 226
On the lookout for further rivals to buy 226
Office of Fair Trading and Serious Fraud Office investigate 226
Purchase of 31 stores from rival JJB Sports cleared 226
Drops bid to take over rival Blacks Leisure ... 226
... though still a Blacks Leisure shareholder 226
Moves into TV advertising 226
Proposition 227
Financials 228
Margins slip as pound's fall hits 228
Operating margins likely to recover 231
Space 232
Moderate growth as store size rises 232
Densities revive after earlier slump 233
Space allocation 234
Sector performance - menswear 237
Revival after heavy decline 237
Clothing share fails to rise 239
Outlook 240
Needs to devise long term strategy 240
Revival of JJB Sports an uncertainty for the future 240
Drives online sales 240
Stores improvement has further to go 240
Acquisition trail goes cold for now 240
New strategy needed 240
Soccer World Cup will boost sales 241
TESCO 242
Extra store openings promise further growth 242
Recent key events 243
Continuous initiatives to ride out of the recession on top 243
Sir Terry Leahy to step down as chief executive 243
Former Sainsbury's TU man takes over from Terry Green 243
International expansion continues to be a focus 243
One off high street format 243
Launches ASOS-style website ... 243
... with 20 brands 244
Promotes online with discounts 244
Aims to strengthen fashion credentials 244
Clubcard relaunch includes double value vouchers when spent on clothing 244
Investment in price cuts help sales recover 244
Proposition 245
Financials 246
Lower space growth reflected in sales 246
Consistent sales and profit growth 249
Online sales growth slackens 250
Space 251
Space growth slows 251
Sales densities under pressure 253
Space allocation 254
Sector performance - menswear 257
Menswear growth comes to a halt 257
Menswear lags behind clothing performance 259
Outlook 260
Scope for further gains 260
Space growth crucial to clothing advance 260
Challenge from other value operators on the rise 260
Visual merchandising improves, but further to go 260
Online brands could improve fashion credentials instore 260
TK MAXX 261
Completion of UK expansion moves closer 261
Recent key events 262
Aggressive expansion plans shift focus to rest of Europe 262
Management changes in preparation for European push 262
Buying teams shaken up 262
Experiments with different store formats 262
Targets expansion both in UK and rest of Europe 262
Proposition 263
Financials 264
Downturn helps sustain growth 264
Profitability on the rise 267
Space 268
UK space increase slows 268
Steady density improvement since 2006 269
Space allocation 270
Sector performance - menswear 273
Sales boosted by downturn 273
Market share on steady upward trend 275
Outlook 276
Focus moves away from UK clothing 276
UK expansion nears completion 276
Online development promising 276
Flexibility will aid final growth spurt 276
Upturn in consumer confidence could hurt progress 276
SMALLER RETAILERS 277
ASOS 277
Growth focus switches to international 277
Recent key events 277
Carries on adding new product 277
Improves service proposition 277
Financials 278
Profitability improves as international takes off 278
Outlook 278
Reaps benefits of scale 278
International offers huge potential 278
Jack Wills 279
Embarks on international growth 279
Recent key events 280
Moves into the US Market 280
Launches Aubin & Wills concept store 280
Financials 280
Rapid growth and high profit margins 280
Outlook 280
Lifestyle fashion with an English accent 280
UK Growth continuing 280
International could be a success 281
JOHN LEWIS 282
Fashion sales take off 282
Recent key events 282
Targets online fashion development 282
Moves into younger market and improves own label 283
Financials 283
Booming sales make fashion a major category 283
Outlook 283
Online offers genuine incremental sales growth 283
Shifting younger with its customer mindset 283
N BROWN 284
Cornering larger men's market 284
Recent key events 285
Snaps up larger sizes specialist High & Mighty 285
New men's range and promotes Jacamo 285
Financials 285
Menswear leading growth category 285
Outlook 285
Leader in a niche market 285
Lack of real competition 286
NEW LOOK 287
Still struggling to break into menswear 287
Recent key events 288
Growth from international and online 288
Pushes development of online sales 288
Global expansion priority 288
Holds off £1.7bn stockmarket flotation 288
Menswear develops its presence and profile 288
Financials 289
Trading continues to impress 289
Outlook 289
Brand credibility still lacking in menswear 289
Will press on with product development 289
Will suffer from Primark advance 289
REPUBLIC 290
Strong own label boosts profits 290
Recent key events 291
New ownership could boost growth 291
Record Christmas trading 291
High profile brand Diesel launches in Republic stores 291
Transactional site is strong 291
Financials 291
Strong trading performance continues to impress 291
Outlook 292
Successful base from which to grow 292
Adding space could strengthen position on high street ... 292
... particularly in cities and university towns 292
Own brands provide differentiation and third party brands could offer exclusivity 292
Beginnings of branded upturn could provide extra impetus 292
Sainsbury 293
Targets clothing as non-food growth area 293
Recent key events 294
Needs to find extra store space for clothing 294
Non-food central to growth plans 294
Organisational changes highlight non-food focus 294
Tyler takes chair 294
Non-food offer launched online ... except clothing 294
Financials 295
Strong set of results for 2009/10 295
Outlook 295
Abundant opportunities 295
Realigns prices 295
Space expansion vital for clothing success 295
Value competitors up their game 295
TU would benefit from more publicity 296
Clothing online launch essential 296
Huge clothing potential if it can overcome space barriers 296
SUPERGROUP 297
Stock market float clears way for further growth 297
Recent key events 298
Stockmarket flotation gives expansion a boost 298
Expansion in Ireland 298
Launches new fascia 298
Financials 298
Outstanding sales performance continues 298
Outlook 299
Base established for short term growth 299
Expansion looks set to continue at a speedy rate 299
Stockmarket flotation will aid this growth 299
Supergroup must consider its future fashion direction carefully 299
TED BAKER 300
Needs new menswear momentum 300
Recent key events 301
Keeps to its tradition of quirky design 301
Shows off new flagship store format 301
International growth in India and US 301
Sub brands target market more effectively 301
Clearance website separates old stock from new 301
Financials 301
Sales continue to grow 301
Outlook 302
Menswear rising star comes to maturity 302
Problem of how grow menswear further 302
Risks devaluing brand 302
International an opportunity and a risk 302
APPENDIX 303
Definitions 303
Clothing & Footwear 303
Financial Statistics - VAT 303
Profiles 304
Physical Development 304
Abbreviations 304
Methodology 305
Market Sizing 305
Market Share 305
How we calculate sales densities 305
Inflation/deflation & volume 305
Further reading 305
Ask the analyst 305
Verdict consulting 306
Disclaimer 306
