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Executive Summary

Table of Contents

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EXECUTIVE SUMMARY

• MARKET SECTORS
• RECENT TRENDS
• LONG-TERM MARKET TRENDS
• FASHION, SOCIETY AND TECHNOLOGY TRENDS
  • Branding Trends
  • The Role of Marks & Spencer
  • Manufacturing, Imports and Exports
• LEADING MANUFACTURERS
• RECENT RETAILING DEVELOPMENTS
  • Prospects

The UK clothing and footwear market is expected to be worth £33.5bn in 1999, showing growth of 2.9 percent over 1998.
As a proportion of consumer expenditure, clothing and footwear have been declining for many years because most products fall into the non-discretionary categories of spending. Since 1960, the share of household spending given to these products has fallen from 10 percent to 6 percent.

MARKET SECTORS

Clothing accounts for 84 percent and footwear 16 percent of the total market value.

Clothing sales are unevenly split, with a bias towards women's clothing. Defined to include girls' and infants' clothing, as well as most accessories and clothing costs (e.g. dressmaking), the women's market is worth £19.5bn, or 58.2 percent of the UK clothing and footwear market.
In the footwear market, the balance is different, with men's and children's products accounting for relatively high shares.
High proportions of male clothing are bought by women on behalf of men and boys.

RECENT TRENDS

Following a good recovery from the early 1990s recession, demand from consumers faltered during 1998 and retailers generally experienced a depressing time at Christmas 1998 and during the January 1999 sales. Downbeat trading statements came from most of the leading companies, including the market leaders for retailing clothing, Marks & Spencer and Arcadia.

LONG-TERM MARKET TRENDS

Historically, the outstanding market trend has been towards more casual dress, including the sports-based leisurewear category in both footwear and clothing -- although only a minority of the garments or shoes designed originally for sports participation are actually used for sport.
Sports clothing is valued at £2,68bn in 1999, representing 9.5 percent of all clothing sales, although its share is no longer increasing and is expected to fall to 8.9 percent between 1999 and 2003. In footwear, the proportion of consumer purchases given to sports designs ('trainers') is even higher.

FASHION, SOCIETY AND TECHNOLOGY TRENDS

Apart from the idiosyncratic influence of leading designers, fashions are influenced more basically by social changes and technology.
The most important social change has been the proportion of women working in full-time occupations, particularly those requiring a high standard of dress (white collar, service industries). However, relaxation of dress codes has also changed the demand.
Technology has influenced fashion by introducing new materials (e.g. Gore-Tex, Lycra) which have particularly increased the appeal of sporty and outdoor designs.

Branding Trends

Manufacturer or designer branding has grown steadily in importance over the years, whereas the retail source used to be much more important than the manufacturer brand.
This trend originated in jeans (Levi's, Wrangler), continued with the sports shoes from multinationals such as Reebok, Nike and adidas, and extended across leisurewear with brands such as Calvin Klein, Kappa and Ellesse.
In 1998, according to Key Note's field research with consumers, 48 percent of adults claimed to have bought an adidas product, followed by Levi's (39 percent), Nike (37 percent) and Reebok (35 percent).
In footwear, Timberland, Dr Marten and Caterpillar have challenged the brand supremacy of the sports companies.

The Role of Marks & Spencer

The shift to manufacturer brands has challenged the dominant position of Marks & Spencer, the leading clothing retailer with a 15 percent share of the market. (Apart from this share, distribution is extremely fragmented.)
Marks & Spencer has a policy of only selling its own brand, St Michael. This policy used to inhibit manufacturer brands but sourcing of St Michael products in the UK helped to support an ailing domestic manufacturing sector.
However, following a slump in profits, the possibility has been raised of the company persuading its many suppliers to source more of their products overseas, thus allowing the retailer to improve its margins without passing on higher costs to the customer. The company is also reviewing the status of its trademark St Michael label. In an effort to boost its fading image, Marks & Spencer is working on signing up designer names to create labels such as Paul Smith at Marks & Spencer, or CK@M&S.
After a particularly dismal year in 1998 and the issue of a profits warning at the start of 1999, Marks & Spencer announced in February 1999 the departure of 34 senior executives, including three main board directors. The restructure is intended to speed the decision-making process and may amount to the loss of 200 jobs, with additional voluntary redundancies.

Manufacturing, Imports and Exports

Competition from countries with low-cost labour has been undermining UK manufacturing for many decades. This process continues in the 1990s, possibly faster than ever, with countries such as Morocco, Turkey and Romania joining the established major suppliers, such as Hong Kong and India.
The import ratios are high in both clothing and footwear. In clothing, imports now account for an estimated 65 percent of the UK market, but vary across the product sectors. For example, UK companies are strong in knitwear and underwear.
Fortunately, UK companies have a strong and rising export ratio, accounting for some 55 percent of their output. Less fortunately, in recent years they have been hit by the 'double whammy' of a strong pound and the financial crisis in some Far East countries, especially Japan, where the UK's quality products are appreciated.

LEADING MANUFACTURERS

The domestic supply is relatively fragmented, with many 'rag-trade' companies contributing to both High Street and export sales. However, there are also several very large groups with the scale to compete against imports and on international markets.
The largest clothing manufacturers are Coats Viyella, Courtaulds Textiles, William Baird, Dewhirst Group and Dawson International.
In footwear, the outstanding manufacturers are C & J Clark and R. Griggs of Dr Marten fame.

RECENT RETAILING DEVELOPMENTS

Changes in the High Street have reflected uncertainty in the marketplace. In 1998 and early 1999, the following major events occurred:

* Sears PLC, once the shoe retailing leader and a major force in womenswear, was dismantled and sold to a consortium of investors, the assets including 600 womenswear shops and a major mail order subsidiary.
* JJB Sports acquired Sports Division, creating the largest sports multiple, with 475 stores.
* Prospects are currently most favourable for companies emphasising low prices, such as New Look (over 500 stores) and Matalan, which floated in 1998.
* Grocery superstores are having an impact with their clothing departments, creating a new trend towards 'family shopping' for these products.

Prospects

Price inflation is now low or negative on most types of clothing and footwear. However, clothing sales will continue to reflect general trends in the consumer economy, since they include both essential items for families and the fashion element. Key Note's forecasts for 2000 to 2003 assume that inflation will move back up and that consumer demand will pick up, taking the total market to a value of £45.5bn by 2003.
The shift to sourcing abroad will continue, possibly even involving Marks & Spencer, whose domestic sourcing policy has long been a bedrock of UK manufacturing.

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TABLE OF CONTENTS

Executive Summary

Market Overview

DEFINITION

MARKET MEASUREMENT

INDUSTRY STRUCTURE

PEST ANALYSIS

THE TOTAL MARKET

MARKET SECTORS

KEY TRENDS

MAJOR CORPORATE DEVELOPMENTS

Table 1.1: UK Manufacturers' Sales of Clothing by Garment Type (£m), 1995-1998

Table 1.2: Production of Clothing (1995=100), 1995-1998

Table 1.3: Employment in the Clothing and Footwear Industries (000), 1995-1998

Table 1.4: Breakdown of Employment by the Clothing and Footwear Industries ( percent of total), 1998

Table 1.5: Investment by the UK Clothing and Footwear Industry (£m), 1994-1998

Table 1.6: Industry Concentration in UK Clothing and Footwear Manufacture by Turnover (number and percent), 1998

Table 1.7: Enterprises in Clothing and Footwear Manufacture by Product Category (number of businesses and percent), 1998

Table 1.8: Number of Businesses in the UK Clothing Industry by Sector and Turnover (number and percent), 1998

Table 1.9: Local Manufacturing Units in the Clothing and Footwear Industry by Employment Size, 1998

Table 1.10: Import and Export Ratios for UK ClothingÅ ( percent), 1993-1998

Table 1.11: Import and Export Ratios for UK Footwear and Leather GoodsÅ ( percent), 1993-1998

Table 1.12: Foreign Trade in Clothing and Footwear (£m), 1993-1998

Table 1.13: Clothing Retailing Companies Classified by Turnover (number and percent), 1998

Table 1.14: Footwear Retailing Companies Classified by Turnover (number and percent), 1998

Table 1.15: Retail Price Indices for Clothing and Footwear (index 1987=100), 1987-1998

Table 1.16: The Total UK Clothing and Footwear Market (£m at rsp), 1994-1998

Table 1.17: The UK Clothing and Footwear Market by Sector (£m at rsp and percent), 1994-1998

Key Note Consumer Research

INTRODUCTION

PLACE OF PURCHASE

AGE VARIATIONS AMONG RETAIL OUTLETS

BRAND PENETRATION

Table 2.1: Place of Purchase of Clothing and Footwear ( percent of adults, women and men), 1999

Table 2.2: Age Differences in Place of Purchase for Clothing and Footwear ( percent of adults), 1999

Table 2.3: Brands of Clothing or Footwear Bought ( percent of adults), 1998

Table 2.4: Sports Brands Bought ( percent of adults), 1998

Table 2.5: Designer Clothing Brands Bought ( percent of adults), 1998

Table 2.6: Jeans and Footwear Brands Bought ( percent of adults), 1998

Competitor Analysis

INTRODUCTION

CLOTHING MANUFACTURERS

FOOTWEAR MANUFACTURERS

SPORTS AND LEISURE BRAND MANUFACTURERS AND DISTRIBUTORS

OTHER MANUFACTURERS

Women's Clothing

INTRODUCTION

KEY TRENDS

MARKET SIZE

INDUSTRY STRUCTURE

EXPORTS

IMPORTS

DISTRIBUTION

MAJOR MANUFACTURERS

ADVERTISING AND PROMOTION

BUYING BEHAVIOUR

FORECASTS

Table 4.1: Retail Price Indices for Women's and Children's Outerwear (index 1987=100), 1987-1998

Table 4.2: The UK Women's, Girls' and Infants Clothing Market (£m at rsp), 1994-1998

Table 4.3: Sectors of the Women's Clothing Market (£m at rsp and percent ), 1998

Table 4.4: Gross Output of the Women's Clothing Sector (£m), Census Results 1993-1996

Table 4.5: UK Manufacturers' Sales of Clothing by Garment Type (£m), 1995-1998

Table 4.6: Exports of Women's, Girls' and Infants' Clothing (£m), 1994 and 1998

Table 4.7: Imports of Women's and Girls' and Infants' Outerwear (£m), 1994 and 1998

Table 4.8: Imports of Women's and Girls' Dresses and Skirts (£m), 1994 and 1998

Table 4.9: Imports of Women's and Girls' Trousers and Shorts (£m), 1994 and 1998

Table 4.10: Imports of Women's and Girls' Blouses and Shirts (£m), 1994 and 1998

Table 4.11: Imports of Women's and Girls' Underwear and Nightwear (£m), 1994 and 1998

Table 4.12: Imports of Women's and Girls' Hosiery (£m), 1994 and 1998

Table 4.13: Imports of Babywear (£m), 1994 and 1998

Table 4.14: Imports of KnitwearÅ (£m), 1994 and 1998

Table 4.15: Place of Purchase of Clothing and Footwear by Women ( percent of women), 1999

Table 4.16: Leading Multiples Selling Womenswear by Number of Outlets, 1999

Table 4.17: Leading Childrenswear Multiples by Number of Outlets, 1999

Table 4.18: Selected Leading Womenswear and Infantswear Manufacturers by Turnover (£m), 1997/1998

Table 4.19: Brands of Clothing or Footwear Bought ( percent of women), 1998

Table 4.20: Main Media Advertising Expenditure on General Women's Clothing and Unisex Ranges (£000), Year Ending September 1998

Table 4.21: Main Media Advertising Expenditure on Specialist Women's Clothing, Children's Clothing and Baby Clothing (£000), Year Ending September 1998

Table 4.22: Main Media Advertising Expenditure by Fashion Stores for Women and Unisex Stores (£000), Year Ending September 1998

Table 4.23: Women's Spending on Outerwear by Value in the Last 12 Months ( percent of women spending), 1998

Table 4.24: Women's Spending on Underwear by Value in the Last 12 Months ( percent of women spending), 1998

Table 4.25: Women's Purchases of Hosiery by Volume in the Last 12 Months ( percent of women), 1998

Table 4.26: Women's Spending on Children's Clothing by Value in the Last 12 Months ( percent of women), 1993 and 1998

Table 4.27: Forecast of the Women's Clothing Market at Current Prices (£m), 1999-2003

Men's and Boys' Clothing

INTRODUCTION

KEY TRENDS

MARKET SIZE

INDUSTRY STRUCTURE

EXPORTS

IMPORTS

DISTRIBUTION

MAJOR MANUFACTURERS

ADVERTISING AND PROMOTION

BUYING BEHAVIOUR

FORECASTS

Table 5.1: The UK Men's and Boys' Clothing Market (£m at rsp), 1994-1998

Table 5.2: Sectors of the Men's Clothing Market (£m at rsp and percent), 1998

Table 5.3: Gross Output of the Men's Clothing Sector (£m), Census Results 1993-1996

Table 5.4: UK Manufacturers Sales of Clothing by Garment Type (£m), 1995-1997

Table 5.5: Exports of Men's and Boys' Clothing (£m), 1994 and 1998

Table 5.6: Imports of Men's and Boys' Outerwear (£m), 1994 and 1998

Table 5.7: Imports of Men's and Boys' Shirts (£m), 1994 and 1998

Table 5.8: Imports of Men's and Boys' Underwear and PyjamasÅ (£m), 1994-1998

Table 5.9: Imports of T-Shirts and VestsÅ (£m), 1994 and 1998

Table 5.10: Imports of SocksÅ (£m), 1994 and 1998

Table 5.11: Place of Purchase of Clothing and Footwear by Men ( percent of men), 1999

Table 5.12: Leading Multiples Selling Menswear by Number of Outlets, 1999

Table 5.13: Selected Leading Menswear Manufacturers by Turnover (£m), 1997/1998

Table 5.14: Brands of Clothing or Footwear Bought ( percent of men) in 1998

Table 5.15: Main Media Advertising Expenditure on Men's Clothing and Unisex Ranges (£000), Year Ending September 1998

Table 5.16: Main Media Advertising Expenditure by Fashion Stores for Men and Unisex Stores (£000), Year Ending September 1998

Table 5.17: Spending on Men's Shirts and Knitwear by Value in the Last 12 Months ( percent of adults, men and women), 1998

Table 5.18: Spending on Men's Underwear and Ties by Value in the Last 12 Months ( percent of adults, men and women), 1998

Table 5.19: Spending on Men's Outerwear by Value in the Last 12 Months ( percent of men), 1998

Table 5.20: Forecast Men's Clothing Market at Current Prices (£m), 1999-2003

Sports Clothing

INTRODUCTION

KEY TRENDS

MARKET SIZE

INDUSTRY STRUCTURE

DISTRIBUTION

MAJOR MANUFACTURERS

ADVERTISING AND PROMOTION

BUYING BEHAVIOUR

FORECASTS

Table 6.1: Sports Clothing in the Total Clothing Market (£m at rsp), 1993-1998

Table 6.2: The UK Sports Clothing Market (£m at rsp), 1994-1998

Table 6.3: Estimated Segmentation of the Sports Clothing Market (£m and percent), 1998

Table 6.4: Imports of Swimwear (£m), 1994 and 1998

Table 6.5: Imports of Tracksuits (£m), 1994 and 1998

Table 6.6: Imports of T-Shirts and VestsÅ (£m), 1994 and 1998

Table 6.7: Leading Multiple Sportswear and Outdoor Retailers by Number of Outlets, 1999

Table 6.8: Brands of Clothing or Footwear Bought ( percent of adults), 1998

Table 6.9: Leading Sportswear and Swimwear Manufacturers by Turnover (£m), 1997/1998

Table 6.10: Main Media Advertising Expenditure on Sports Clothing and Leisurewear (£000), Year Ending September 1998

Table 6.11: Spending on Sports Clothing by Value in the Last 12 Months ( percent of men and women), 1998

Table 6.12: Adults Who Have Purchased Sportswear by Type ( percent of adults), 1993-1998

Table 6.13: Spending on Swimwear by Value in the Last 12 Months ( percent of men and women), 1998

Table 6.14: Penetration of Sports Clothing by Age and Sex ( percent of adults), 1998

Table 6.15: Forecast of the Sports Clothing Market at Current Prices (£m), 1999-2003

Clothing Accessories

INTRODUCTION

KEY TRENDS

MARKET SIZE

INDUSTRY STRUCTURE

DISTRIBUTION

MAJOR PLAYERS

ADVERTISING AND PROMOTION

BUYING BEHAVIOUR

FORECASTS

Table 7.1: Accessories and Other Clothing Costs in the Total Clothing Market (£m at rsp), 1993-1998

Table 7.2: Breakdown of the Accessories Market (£m rsp and percent), 1998

Table 7.3: Exports of Clothing Accessories (£m), 1994 and 1998

Table 7.4: Imports of Clothing Accessories (£m), 1994 and 1998

Table 7.5: Leading Multiples Selling Accessories by Number of Outlets, 1999

Table 7.6: Family Expenditure on Clothing Accessories (£ weekly), 1998

Table 7.7: Spending on Handbags in the Last 12 Months ( percent of women), 1993 and 1998

Table 7.8: Forecast of the Accessories Market at Current Prices (£m), 1999-2003

Footwear

INTRODUCTION

KEY TRENDS

MARKET SIZE

INDUSTRY STRUCTURE

DISTRIBUTION

MAJOR MANUFACTURERS

SPORTS AND LEISURE BRANDS

ADVERTISING AND PROMOTION

BUYING BEHAVIOUR

FORECASTS

Table 8.1: Footwear in Consumer Expenditure (£bn at rsp), 1984-1998

Table 8.2: The UK Footwear Market (£m at rsp), 1994-1998

Table 8.3: Main Sectors of the Footwear Market (£m at rsp and percent), 1998

Table 8.4: Import and Export Ratios for UK Footwear and Leather GoodsÅ ( percent), 1993-1998

Table 8.5: Concentration of the Footwear Industry by Turnover (number and percent), 1998

Table 8.6: Local Units in Footwear Manufacturing by Employment Size, 1998

Table 8.7: Imports of FootwearÅ (£m), 1994 and 1998

Table 8.8: Imports of Sports Footwear (£m), 1994 and 1998

Table 8.9: Distribution Shares for Footwear by Value ( percent), 1998

Table 8.10: Leading Multiples Selling Footwear by Number of Outlets, 1999

Table 8.11: Selected Leading Footwear ManufacturersÅ by Turnover (£m), 1997/1998

Table 8.12: Sports and Leisure Brands Bought ( percent of adults), 1998

Table 8.13: Main Media Advertising Expenditure on Footwear (£000), Year Ending September 1998

Table 8.14: Spending on Footwear by Value in the Last 12 Months ( percent women and men), 1998

Table 8.15: Family Expenditure on Footwear by Age of Head of Household (£ weekly), 1998

Table 8.16: Forecast of the Footwear Market at Current Prices (£m), 1999-2003

Strengths, Weaknesses, Opportunities and Threats (SWOT)

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS

The Future

THE FUTURE

FORECASTS 1999 TO 2003

Table 10.1: Forecast Market for Clothing and Footwear at current prices (£m), 1999-2003

Further Sources

ASSOCIATIONS

PERIODICALS

DIRECTORIES

GENERAL SOURCES

HBI UK INFORMATION SOURCES

GOVERNMENT PUBLICATIONS

OTHER SOURCES

Text © 1999 Key Note

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