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KN52000

KEY NOTE CLOTHING RETAILING DECEMBER 2000

Overview

Editor: Lynsey Barker
ISBN: 1-84168-141-5

This report covers: outerwear, underwear, hosiery, suits, jackets, trousers, coats, pants, vests, lingerie, socks, tights, women's wear, girls' wear, infants' wear, men's wear, boys' wear, department stores, fashion chains, sports shops, general mail order catalogues, discount shops, charity shops, agency catalogues, direct selling, direct marketing, internet, digital television,franchises,

Companies covered include: BhS, Debenhams Retail, House of Fraser, Marks and Spencer, Matalan, Alexon Group, Arcadia group, Austin Reed, Ciro Citterio Menswear, French Connection Retail, GPS, Gap, H&M Hennes, Laura Ashley Holdings, Monsoon Accessorize, Moss Bros, New Look, Next Retail, Oasis Stores, River Island Clothing, Ted Baker,

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Table of Contents

Executive Summary

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TABLE OF CONTENTS

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EXECUTIVE SUMMARY

There is currently a highly competitive retail market in the UK, which has consequently affected the clothing sector. The UK retail clothing market is estimated to be worth £30.07bn in 2000, having grown by just 3.8 percent over the past year.

Textile manufacturing, once a stalwart of the UK economy, is in serious decline. Clothing retailers continue to find trading conditions difficult in the face of weak consumer demand and heavy discounting. Marks and Spencer PLC, Arcadia Group PLC, BhS Ltd, and Moss Bros Group PLC are among well-known High Street names struggling to maintain their position. Meanwhile, the chain of C&A has admitted defeat and is to withdraw completely from the British market by early 2001.

It is companies such as these, competing in the middle market, which are finding business so hard, since the market favours either value or premium brands. Those that are thriving include value chains such as Matalan PLC, Peacock’s Stores Ltd and Primark Stores Ltd, which are expanding rapidly and are predicted to increase their market share. Furthermore, the upmarket Ted Baker PLC has recently recorded a pre-tax profit margin of almost four times that of the industry average.

Women’s, girls’ and children’s clothing accounts for the major share of the market with 68.7 percent of the value attributable to same. On the one hand, the increase in working women might be expected to cause an upsurge in demand for smart clothing but, on the other, a major feature of the market has been the trend towards dressing down. Men’s tailors, such as Moss Bros Group PLC and Austin Reed Group PLC, have suffered from the demise of the formal suit, while Ted Baker PLC has embraced the trend with the opening of a ‘Ted’s the Business’ shop in London’s Canary Wharf. The store is devoted to ‘smart casual wear, which has been developed to meet the needs of the dress down market’, and initial reaction to the store is described as extremely favourable. Certainly, in the world of fashion, it is the ability to identify and respond immediately to trends that is all-important.

Latest figures from National Statistics show a 4.6 percent increase in all retail sales from September 1999 to September 2000, well ahead of that expected. There may be high levels of High Street buying, but the clothing sector has to compete with spending on other home-related products, not to mention leisure and financial services. With depressed demand and the prevalence of discounters, UK clothing retailing is expected to see modest growth. A value of £36.41bn is expected to be reached by the year 2005.

Text © 2000Key Note

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Last updated by Paul Tucker 6th February 2001