Abstract
Why buy this report
- Get insight into trends in market performance
- Pinpoint growth sectors and identify factors driving change
- Identify market and brand leaders and understand the competitive
environment
Executive summary
Clothing and footwear with opposite performances in value terms
During 2008, the clothing and footwear sectors demonstrated contrasting
performances in value terms. The clothing sector had its worst performance
ever, which was a result of the Portuguese clothing industry' s inability to
compete efficiently with aggressive overseas management models based on low
prices. On the other hand, the fine quality of Portuguese shoes was
increasingly recognised throughout Europe, and resulted in the Portuguese
footwear industry achieving one of the more dynamic performances for footwear
in Europe. This was largely attributed to the successful campaign waged by the
Portuguese footwear associations, to promote high quality, both at home and
overseas.
Portuguese economic crisis impacts on the clothing and footwear market
The current weak state of the Portuguese economy, which has resulted in a
decrease in consumer purchasing power, increased unemployment and decreased
consumption levels, has badly affected the performance of all industries,
including the clothing and footwear sectors. Consumers' preference for
low-priced clothing products resulting from the decline in their purchasing
power has hit value sales and average prices. This impact is especially
negative for Portuguese clothing manufacturers and retailers whose inability
to innovate is leading to an increasing number of bankruptcies. On the other
hand, Portuguese consumers have not changed their preferences in footwear
products; they continue to prefer high quality shoes. However, the loss of
purchasing power has limited this sector' s potential for growth because
footwear' s average prices have decreased.
Growth of men' s clothing and footwear sales outperform women' s
Men' s growing passion for fashionable clothing and footwear products is
driving the positive performance of the men' s outerwear and footwear
subsectors in terms of volume. Despite the increasing demand for men' s items
in 2008, in terms of value, the children' s wear and women' s footwear
subsectors were the better performers. TV programmes such as "Morangos com
Açucar" and "Rebelde way", are directly targeted at younger audiences and are
noticeably influencing the fashion demands of young men. In the developed
world, fashion has taken on an international flavour as global marketing makes
use of modern media to communicate fashion concepts -- for example,
internationally recognised fashion magazines are using celebrities as a
marketing tool. As a consequence, being fashionable is increasingly taking
root in Portuguese culture, including in men.
Rising power of largest multinational retail groups
The Portuguese clothing and footwear market is characterised by the presence
of domestic and multinational companies. The multinational companies are
gaining footholds as result of the increasing power of Inditex, which is the
leader in the market and has almost the same share as the sum of all the other
top companies operating in the sector. Even though this market is
traditionally considered a mature market, Inditex' s positive performance has
demonstrated the market' s growth potential.
Future performance will be characterised by continuing reduction in average prices
Over the forecast period, the clothing and footwear market is expected
maintain its trend of positive sales performance in volume terms and negative
sales performance in value terms. The gap between these two should decrease as
consumer demand for quality products increases. Gradual modernisation and
innovation should reduce companies' production costs and lead to changes in
their business models, as companies that are more efficient will produce
better quality products at lower prices.
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