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| KN52007 |
| KEY NOTE CLOTHING RETAILING OCTOBER 1997 |
| Overview |
ISBN 1-85765-745-4
This report covers:
Companies covered include:

The UK clothing market emerged from the recession
of the late 1980s around 1992 and has continued to benefit from the resurgence
of High Street spending throughout the 1990s. In 1996/1997, the clothing retail
market showed signs of being boosted by the continued growth in personal
spending, aided most recently by the windfall payments consumers received from
building society conversions. However, the late boom of 1996 was not sufficient
to raise revenues dramatically and the growth in consumer spending will
probably only be evident clearly in 1997/1998.
The market has also benefited from the growth in
the number and range of clothing retailing outlets with expansion and
diversification of outlets both in the chain and independent sector at the
high-, mid- and low-end of the market. Additionally, the mail-order catalogue
sector has continued to grow and has been joined by the arrival of television
(TV) and Internet-based clothing outlets, such as the QVC cable TV channel. The
widespread acceptance and legal ratification of Sunday shopping has also been
to the overall benefit of UK clothing retailers.
In 1996, the UK retail market for clothing was
estimated to be worth £22bn, a growth of 19.6 percent over 1992, but only 2.3 percent
over 1995. In 1996, women's clothing sales accounted for 67.7 percent of the total
market. The resurgence of the retail clothing market towards the end of 1996
and into 1997 reinforces the general belief of the industry that clothing
retailers perform poorly in times of recession, but have the ability to emerge
from downturns rapidly in comparison with other retailers, e.g. retailers of
electronic goods, cars and travel agents, etc. However, clothing retail is also
generally subject to rapid overheating, which can result (as was the case in
1995/1996) in large amounts of unsold stock forcing prolonged sales and reduced
margins on items sold.
There are abundant signs in 1997 that both the UK Government and the major financial institutions are keen to dampen consumer spending to prevent economic overheating. This has already occurred with the Bank of England's decision to raise interest rates. It is forecast that, while the current levels of consumer spending may be somewhat curbed, the general performance of the UK economy will remain strong allowing clothing retailers to increase revenues to the year 2001. Between 1997 and 2001, Key Note estimates that the retail market for clothing in the UK will grow by 11.3 percent to £25.6bn by 2001.
Text © 1997 Key Note
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Last updated by Duncan Nottage 5th March 1999