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MP52270

MAPS CLOTHING RETAILERS : UK APRIL 2000

Overview

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This report covers: retail sales, mens' standard clothing, womens' standard clothing, childrenswear, discount clothing, fashion, mens', womens', high fashion,

Companies covered include: Arcadia, Moss Bros, Ciro Citterio, Tie Rack, Debenhams, House of Fraser, British Home Stores, Allders, Arcadia, Next, Laura Ashley, Jaeger/Viyell, River Island, Alexon, Edinburgh Woollen Mills, Sock Shopo, C & A, Adams, Mothercare, Woolworths, Gymboree, Gap Kids, Matalan, Peacock, New Look, TJ Hughes, Austin Reed, Thomas Pink, French Connection, Gap, Karen Mills, Monsoon, Oasis, Fenwick, Harvey Nichols, Liberty, Selfridges, Dynamics, Marks & Spencer,

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Table of Contents
Executive Summary
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TABLE OF CONTENTS

1. Introduction	8
Methodology	10
2. Definition	11
3. Executive Summary	12
Market sectors	12
Figure 1: UK Clothing Market by Type of Clothing 1999	13
Table 1: UK Clothing Market by Type of Clothing ( percent) 1999	13
Value and growth	14
Table 2: UK Clothing Market by Value by Type of Clothing (£bn) 199914
Figure 2: UK Clothing market by Value by Type of Clothing (£bn) 1999 15
Largest sector	15
Significant players	16
Regulatory factors	16
Consumer factors	17
The market in the future	17
4. Strategic Overview	18
Market definitions	18
Market size and segmentation	18
Figure 3: Consumer Expenditure on Clothing 1994-99e	19
Table 3: Consumer Expenditure on Clothing (£m), 1994-99e	19
Table 4: Index of Retail Prices 1994-99e	20
Table 5: Market Sizes by Detailed Product Category (£m) 1994-99e21
Figure 4: Market Sizes by Detailed Product Category
1994-99e	22
Table 6: Market Share by Detailed Product Category ( percent) 1994-99e23
Table 7: Year-on-Year Change by Detailed Product Category ( percent) 1994-99e24
Table 8: Retail Sales Through Clothes Stores 1994-99e	25
Figure 5: Retail Sales Through Clothes Stores and Non-Food Non-Specialists 1994-99e 26
Table 9: Retail Sales Through Clothes Stores and Non-Food Non-Specialists 1994-99e26
Competitive structure	27
Figure 6: Clothing Market Share of Sales by Type of Outlet 1999 28
Table 10: Clothing Market Share of Sales by Type of Outlet ( percent) 199928
Supermarket Fashion	29
Table 11: Clothing Sales by Source of Purchase ( percent) 1998-99	30
Figure 7: Clothing Sales by Source of Purchase 1998-99	31
Market forecast	31
Figure 8: Clothing Market Forecast 1999-2004	32
Table 12: Clothing Market Forecast 1999-2004	32
Sector summary	33
Men’s Standard Clothing	33
Women’s Standard Clothing	33
Childrenswear	33
Discount Clothing	33
Fashion - Men’s	33
Fashion - Women’s	34
High Fashion	34
5. Men's Standard Clothing	35
Summary of sector	35
Table 13: Clothing for Men (£m)1994-99e	35
Figure 9: Clothing for Men 1994-99e	36
Major players	36
New products	37
Table 14: Men’s Standard Clothing Retailers, Outlets and Turnover, Latest Year37
Major players	38
Advertising campaigns	38
Figure 10: Advertising Spends, Categories of Clothing - Male Interest 1996-98 39
Table 15: Advertising Spends, Categories of Clothing - Male Interest 1996-9939
Share of sector	40
Corporate strategies	40
Arcadia	40
Table 16: Estimated Share of the Major Players in the Standard Menswear Sector ( percent) 199940
Moss Bros	41
Ciro Citterio	41
Tie Rack	41
6. Women's Standard Clothing	42
Summary of sector	42
Table 17: Market Sizes Womenswear (£m)1994-99e	42
Figure 11: Market Sizes Womenswear (£m) 1994-99e	43
Major players	43
Table 18. - Women’s Standard Clothing Retailers, Outlets and Turnover, 199945
New products	46
Advertising campaigns	47
Table 19: Women’s Clothing and Clothes Retailers by Advertising Spend 1996-9947
Appointments	48
Share of sector	48
Table 20: Estimated Share of the Major Players in the Standard Womenswear Sector ( percent), 1999	49
Corporate strategies	50
Marks & Spencer	50
Table 20: Estimated Share of the Major Players in the Standard Womenswear Sector ( percent), 1999	50
Debenhams	51
House of Fraser	51
BhS	51
Allders	52
Arcadia (Womenswear)	52
Next	53
Laura Ashley	53
Jaeger/Viyella	54
River Island	54
Alexon	54
Edinburgh Woollen Mills	54
Sock Shop	54
C&A	55
7. Childrenswear	56
Summary of sector	56
Table 21: The Childrenswear Market (£m)1994-99e	56
Figure 12: The Childrenswear Market 1994-99e	57
Major players	57
New products	58
Advertising campaigns	58
Table 22: Children’s Clothing Retailers, Outlets and Turnover, 199958
Share of sector	59
Table 23: Advertising Spends on Childrenswear (£000) 1996-99	59
Table 24: Estimated Share of the Major Players of the Childrenswear Sector ( percent), 199959
Corporate strategies	60
Adams	60
Mothercare	60
Woolworth’s	61
Gymboree and Gap Kids	61
8. Discount Clothing	62
Summary of Sector:	62
Major players	62
Advertising campaigns	63
Share and profitability shifts	63
Table 25: Discount Clothing Retailers, Outlets and Turnover, Latest Year63
Corporate strategies	64
Matalan	64
Table 26: Estimated Share of Major Players of Standard Womenswear ( percent), 199964
Peacock	65
New Look	65
TJ Hughes	66
9. Men's Fashion	67
Summary of sector	67
Major players	67
New products	68
Share and profitability shifts	68
Table 27: Major Men’s Fashion Retailers, Outlets and Turnover, Latest Year68
Corporate strategies	69
Austin Reed	69
Thomas Pink	69
Table 28: Estimated Share of Major Players of Fashion Menswear ( percent), 199969
10. Women's Fashion	70
Summary of sector	70
Major players	70
New products	71
Table 29: Major Women’s Fashion Retailers, Outlets and Turnover, Latest Year71
Advertising campaigns	72
Share and profitability shifts	72
Table 30: Estimated Share of Major Players of Fashion Womenswear ( percent), 199973
Corporate strategies	74
French Connection	74
Gap	74
Karen Millen	74
Monsoon	74
Oasis	74
11. High Fashion	76
Summary of sector:	76
Major players	76
Share	77
Table 31: Major High Fashion Retailers by Outlets and Turnover, Latest Year77
Table 32: Estimated Share of Major Players of High Fashion ( percent), 199978
Corporate strategies	79
Fenwick	79
Harvey Nichols	79
Liberty	79
Selfridges	79
12. Innovations and New Research	80
New fabrics	80
The influence of ’naturals’	80
The Internet and New technology	81
13. Consumer Issues and
Dynamics	83
noP survey February 2000	83
Table 33: Clothing Retailing Decisions by Sex	84
Table 34: Clothing Retailing Decisions by Socio-Economic Group	85
Table 35: Clothing Retailing Decisions by Age Group	87
Table 36: Clothing Retailing Decisions by Work Status	88
14. Future Prospects	89
Trends and developments	89
The Death of Fashion (Again)?	89
Teen Fashion - How Old Can it Go?	89
Table 37: Index of Weekly Spending on Clothing versus National Average, 1998/9990
Figure 13: Index of Weekly Spending on Clothing versus National Average, FES 1998/99 91
Table 38: Women’s Clothing Items Bought in 1999 by Average Price92
Table 39: Women Purchasers by percentage Price Band ( percent)	93
Table 40: Women Buying for Men by percentage Price Band ( percent)	94
Table 41: Men’s Clothing Items Bought in 1999 by Average Price Band95
External influences	96
The Media	96
Table 42: Men Purchasers by Proportion Price Band ( percent)	96
Broadcasting	97
The Market for High Fashion	97
The Demographic Shift	98
Figure 14: Demographic Changes 1996-2011	99
The Working World (Work Suits and Leisure Wear)	99
Table 43: Demographic Changes 1996-2011 (million)	99
Supplier dynamics	100
Third World Garment Manufacture	100
Table 44: Balance of Trade in Clothing (£m) 1994-98	101
Figure 15: Balance of Trade in Clothing 1994-98	102
High Cost and Low Cost Manufacture	102
Table 45: Productivity in UK Clothing Manufacturing
1994-99e	102
Marks & Spencer Sourcing: the Fall-Out	103
Table 46: Clothing Manufacturing, Number of VAT Registered UK Enterprises by Turnover (000s) 1998	103
15. Sources	105
16. Glossary of Terms	106
ABOUT THE SOURCES USED	107
PROBLEMS IN CALCULATING	108

EXECUTIVE SUMMARY

Faced by declining real prices and soft demand patterns, UK clothing retailers have been forced to re-examine their consumer positioning very closely. UK clothes shoppers have noted that out-of-town discount stores seem able to supply clothing in styles and at a quality, which, although not the equal of mid-range High Street clothes, is acceptable at the price.

MARKET SECTORS

Beyond the split by male and female clothing or the style of retail operation, it is possible to look at the market in terms of consumer perception. Broadly, the market can be split between everyday wear, clothes which have a fashion quotient (High Street fashion) and clothing at the top end of the fashionable ready to wear market.

Looking at the markets for 'standard' clothing, High Street fashion and 'high fashion', Market Assessment estimate that the divisions by value are as follows. 'Standard' clothing accounts for by far the major part of the market for male and female clothing, with fashion wear taking only about 15 percent of all sales.

Standard clothing is the core market for the High Street mixed retailers and department stores, which are the first port of call for many consumers when they are shopping, although for major purchases the fashion chains have an important role.

Table 1: UK Clothing Market by Type of Clothing ( percent) 1999
Standard womenswear	40
Standard menswear	20
Discount clothing	17
Childrenswear	8
Fashion womenswear	7
High fashion	5
Fashion menswear	3
Total	100

The standard and discount sectors are dominated by major players with a national profile while fashion wear, although there are many national chains, is much more fragmented and there are also a number of regionally strong chains without national exposure (especially in London and other major cities). High fashion is restricted to fashion-orientated department stores such as Harvey Nichols and Selfridges, independents in affluent parts of the country and to a limited number of specialised chains such as Joseph.
Value and growth
The growth sector of the market in recent years has undoubtedly been the discount clothing market, which still has considerable opportunities to take sales away from the 'standard' clothing market.
Market Assessment estimates the current market for discount clothing at £4.7bn. However, the major operators in this sector such as Matalan are growing fast, and year-on-year growth in excess of 10 percent across the sector can be anticipated for the near future. Growth in sales in other sectors, however, is difficult to predict especially with continuing price pressures.
Table 2: UK Clothing Market by Value by Type of Clothing (£bn) 1999
Standard womenswear	11.2
Standard menswear	5.6
Discount clothing	4.7
Childrenswear	2.2
Fashion womenswear	2
High fashion	1.4
Fashion menswear	0.8
Total	27.1
Source: Market Assessment

Largest sector

Womenswear is the largest sector within the market; in general, clothing for women and children is worth double the market for men and boyswear. This reflects the inclusion of babywear and accessories in the 'womenswear' sector, but also the simple fact that women buy clothes more frequently for themselves and often spend more per year than a man.

Within womenswear, day clothing and outer clothing are the primary sectors by value, and this is the sector most sensitive to changes in weather, fashion and disposable income. Unusually, hot or cold conditions can cause havoc in clothing manufacturing order cycles, as can a trend that simply fails to take-off. The industry is moving to just in time (JIT) production systems, but the volumes and range of sizes and colours required across ranges means that this is not necessarily easy to achieve.

Sales of womenswear in 1999 suffered from a combination of these factors and the 'missed target' by major retailers such as Marks & Spencer, had a disproportionate effect across the whole market. Major retailers such as Laura Ashley, Next and Monsoon have all misread the all-important female fashion market in 1998/1999, and had to rapidly restructure their offer. So Marks & Spencer, though it has an exceptionally high profile, was not actually exceptional in other respects.

Significant players

The major groups in UK clothing retailing are the mixed and department stores, led by Marks & Spencer and the men's and womenswear chain Arcadia (which includes both the Burton Group and Selfridges clothing chains).

Marks & Spencer alone accounts for almost 15 percent of all clothing sales in the UK, a scale of operation only approached by the joint sales of Arcadia. However, all High Street department stores, such as BhS, House of Fraser and Debenhams, rely heavily on their clothing sales, which range from standard everyday products through to premium concessions (such as those operated by Alexon and William Baird).

Fashion chains are highly fragmented and a large proportion appear to be targeting the same consumer; the young woman on a limited budget. However, the emergence of discount warehouses over the last five years is challenging this sector as prices offered through Matalan, Bay Trading or TJ Hughes are significantly below most High Street fashion brands.

Regulatory factors

The main regulation that has impacted across the textile and fashion business has been the minimum wage. Textiles and clothing manufacture have historically been poorly paid businesses, which in turn impacted on wholesale prices and margins through the business. Labour costs are a major element of costing and this has been a key reason why manufacture is moving out of the UK.

However, this is becoming a matter of public concern since British jobs are being replaced by potentially exploitative manufacturing elsewhere. Several newspapers reported in late 1999 that 'Conditions in a number of clothing factories in eastern Europe, being used by British High Street retailers such as C&A, Debenhams, Laura Ashley and Marks & Spencer, are shameful with workers being paid starvation wages and having to work in environments which are damaging to their health. In Hirlau, Romania, 900 women are producing clothes for British stores with some only being paid 20 pence an hour' (Sunday Times, September 1999).

The changes to the Multi-Fibre Agreement, which will phase in over the next couple of years, will open the UK market to even more low priced imports, in a market which is already estimated to be almost 70 percent imported. Eastern Europe has become an important source of tailored articles and the future for UK-sourced goods appears to be shrinking rapidly into sectors such as high specification fabrics, (eg cashmere) or tailoring.

Retail regulation has had less impact in clothing than other sectors such as food. Clothes shops are not as regulated as food stores and their scale of operation means that most do not run into planning problems - the only stores where planning permission is a major concern are department stores.

However, the scale of the retail estate of most significant clothing chains is large, as clothing is often an impulse buy, locations in high traffic areas are a must. Other factors such as business rates place a large part in the costs of clothes retailing, as does rent in general. Fashion stores are the core offer in out-of-town shopping malls such as Bluewater or Trafford Park, and it is fashion stores that normally take the prime A1 sites in city centre developments. Regent Street in London is a case in point. Department stores, with their strong mid- to upper-market fashion position, are still normally the anchor stores for new developments.

Consumer factors

The age distribution of the UK population is going to show some major shifts over the next 10 years, of which the well-documented decline in the teen market is probably the most important for clothing chains. Many specialised fashion chains lead on their young fashion offer, which will be a shrinking proportion of the total market.

Peak spending in some high value sectors such as outer wear is already in the older age groups, with a high level of spend among the over 50s. The good news, however, is that the over 50s are no longer always identifying themselves as a separate fashion group. Fashions, that are not teen-related, are worn by men and women of any age from 30 upwards and this has been noted especially in the trend to less formal wear. Garments such as jeans, chinos, casual shirts and sweaters are effectively ageless, as long as they are not outrageously youthful in design.

The market in the future

The pressure on pricing and the phasing out of the Multi-Fibre Agreement (a result of the latest GATT talks) means that the UK market will be opened up to even more cheap imported clothing. This will play into the discounters' hands, even if the expected entry of Wal-Mart into the UK Market (after its takeover of Asda, which already has a sizeable clothing business) does not happen as quickly as many anticipate.

The bulk and standard clothing end of the market - the mainstay of High Street stores such as Marks & Spencer - will come under much more pressure, unless stores differentiate their products far more in terms of quality and style. It is notable how youth-orientated the UK clothing retail market is, at a time when the youth market itself is shrinking and when the highest disposable incomes are in older age groups.

By 2004, because of the real decreases in prices which are anticipated to largely cancel out any volume increases in the market, the total market is expected to be worth £29.9bn, or only 7 percent more than it is in 2000. Sales of men's and boyswear are expected to grow slightly more rapidly than women's and girlswear due to the increasing interest in sports clothing, which is becoming part of the mainstream clothing offer.

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