Clothing Retailing - UK - October 2009

Table of Contents

• Issues in the Market
• Main themes
• Definitions
• Abbreviations
• Market in Brief
• Future
• Deflation pervades
• Consumer context
• Competitive landscape
• Internal Market Environment
• Key points
• Clothing takes the biggest hit among those cutting back
  • Figure 1: The items adults are cutting back on in the recession, February 2009
• The price dilemma for retailers
  • Figure 2: UK clothing price deflation, 2005-Q2 2009
• The young -- in denial?
• Less concerned about their finances
  • Figure 3: UK: Concern over finances, % point change, Feb 2008-Jun 2009
• But have they reached the tipping point?
  • Figure 4: UK: Concern over job prospects, 18-25s, February 2008-June 2009
• Changing allegiances
  • Figure 5: Selected retailers where the 18-25s buy clothes, May 2008 and July 2009
• Competition from non-specialists
  • Figure 6: Clothing specialists as % of all spending on clothing and footwear, 2001-08
• The power of the internet
• Broader Market Environment
• Key points
• Mixed impact of changing demographics
  • Figure 7: Implications of changing demographics of the UK population for clothing market, 2009-14
• Late 2008 -- the economy moves into recession
  • Figure 8: UK: GDP real growth, 1999-Q2 2009
• 2008 -- consumer confidence in freefall...but retail sales robust
  • Figure 9: Nationwide Consumer Confidence Index, Jan 2006-July 2009
• 2009 -- confidence starts to recover...will retail sales follow?
  • Figure 10: UK: Retail sales value growth, 2007-09 (August)
• Implications for clothes retailing
• Competitive Context
• Key points
• Clothing performance held back by deflation
  • Figure 11: Consumer spending on clothing and other fashion-influenced product markets, 2004-08
  • Figure 12: Growth in spending on clothing and other fashion-influenced product markets, 2004-08
• Spending patterns change in the recession
  • Figure 13: Growth in spending on clothing and other fashion-influenced product markets, 2007-09
• And men cut back more
  • Figure 14: Clothing spending breakdown, 2004 vs 2008
• Consumer prices
  • Figure 15: Consumer prices on select fashion-influenced categories, 1996-2008
  • Figure 16: Consumer prices on select fashion-influenced categories, 1996-2008
• Strengths and Weaknesses in the Market
• Strengths
• Weaknesses
• Sector Size and Forecast
• Key points
• Economic and consumer outlook
• Retail forecasts
• Improving short term outlook for retail
• Clothing specialists should maintain retail market share in 2009
• Longer term they should outperform all retail
  • Figure 17: UK: Clothing specialists sales, 2004-14
• Past trends
• Clothing specialists struggle to hold onto retail market share
  • Figure 18: UK: Clothing specialists sales, 2004-08
  • Figure 19: UK: Clothing specialists as % of all retail sales, 1999-2008
• Channels of Distribution
  • Figure 20: UK: Clothing market -- channels of distribution, 2006 and 2008
• Specialists
• Department stores struggle to maintain market share
• Grocers catch up with department stores
• Home shopping
• Others
• Retailer Competitor Analysis
• Key points
• Leading specialists
• Value retailers make significant gains
• Young fashion holds up too
• But the mid-market has been seriously squeezed
• Rebuilding for the future
  • Figure 21: Leading clothing retailers, 2008/09
• Evaluation
  • Figure 22: Selected UK clothing retailers, evaluation, 2009
• Market shares
  • Figure 23: UK: Leading clothing retailers, market shares, 2008
• Retail Advertising and Promotion
• Key points
• Cutting back in the downturn
  • Figure 24: Main media advertising spend, by leading clothing retailers, 2004/05-2008/09
• M&S dominates
• Next builds why Matalan contracts
  • Figure 25: Top three advertisers -- spending index, 2004/05-2008/09
• Spending by media
  • Figure 26: Main media advertising spend, by leading clothing retailers, by media, 2008/09
• The Consumer -- Where They Buy Clothing
• Key points
• Where they buy clothing
  • Figure 42: Where they buy clothes, July 2009
• The changing face of the UK high street
  • Figure 43: Outlets used for purchasing clothing in the last 12 months, 2004-09
• Who buys where
• Women far more enthusiastic shoppers than men
  • Figure 44: Where they buy clothes -- top 10, by gender, July 2009
• Next corners the 25-44-year-old market
  • Figure 45: Where they bought clothes in the last 12 months -- top 10, by select age bands, July 2009
• And e-commerce grabs the attention of the young
  • Figure 46: Internet shoppers, by age, July 2009
• M&S dominates the older end of the market
  • Figure 47: Where they bought clothes in the last 12 months -- top 10, by select age bands, July 2009
• M&S and department stores well placed to benefit from socio-economic shift
  • Figure 48: Selected retailers where they buy clothes, by socio-economic group, July 2009
• Cross category shopping
  • Figure 49: Where they bought clothes in last 12 months, by grocery stores used, July 2009
  • Figure 50: Where they bought clothes in last 12 months, by grocery stores used, July 2009
• Alexon Group
  • Figure 64: Alexon Group Plc: Sales as share of clothing retailers' sales in UK, 2004-08
• Recent history
• Financial performance
  • Figure 65: Alexon Group Plc: Group financial performance, 2004/05-2008/09
• Store portfolio
  • Figure 66: Alexon Group Plc: Outlet data, 2005-09
• Retail offering
• Market positioning
• Brands
  • Figure 67: Alexon Group: List of brands, 2008/09
• e-commerce and home shopping
• Arcadia Group
  • Figure 68: Arcadia Group Brands Ltd: Sales as share of clothing specialists in the UK, 2004-08
• Strategic evaluation
• Recent history
• Financial performance
  • Figure 69: Arcadia Group: Group financial performance, 2003/04-2007/08
• Store portfolio
  • Figure 70: Arcadia Group Brands Ltd: Outlet data, 2004-08
  • Figure 71: Arcadia Group: Breakdown of international outlets, September 2009
  • Figure 72: Arcadia Group: Breakdown of European outlets, by fascia, September 2009
• Retail offering
• Topshop
• Market positioning
• Brands/product offer
• Pricing
• Topman
• Market positioning
• Brands/product offer
• Pricing
• Dorothy Perkins
• Market positioning
• Brands/product offer
• Pricing
• Burton
• Market positioning
• Brands/product offer
• Pricing
• Miss Selfridge
• Market positioning
• Brands/product offer
• Pricing
• Evans
• Market positioning
• Brands/product offer
• Pricing
• Wallis
• Market positioning
• Brands/product offer
• Pricing
• e-commerce and home shopping
  • Figure 73: Arcadia Group: Websites, 2009
• Aurora Fashions (formerly Mosaic Fashions)
  • Figure 74: Aurora Fashions Ltd: Sales as share of clothing specialists' sales in Europe, 2004-08
• Strategic evaluation
• Recent history
• Financial performance
  • Figure 75: Mosaic Fashions: Group financial performance, 2004/05-2008/09
• Store portfolio
  • Figure 76: Mosaic Fashions: Outlet data, 2004-09
  • Figure 77: Mosaic Fashions: Outlets by country, August 2009
• Retail offering
• Coast
• Market positioning
• Brands/Product offer
• Pricing
• Karen Millen
• Market positioning
• Brands/Product offer
• Pricing
• Oasis
• Market positioning
• Brands/Product offer
  • Figure 78: Oasis: brands, 2009
• Pricing
• Warehouse
• Market positioning
• Brands/Product offer
• Pricing
• e-commerce and home shopping
• Benetton Group
  • Figure 79: Benetton (UK): Estimated retail sales as share of clothing specialists in the UK, 2004-08
• Strategic evaluation
• Recent history
  • Figure 80: Benetton Group: Group financial performance, 2004-08
  • Figure 81: Benetton UK: Financial performance, 2004-08
• Store portfolio
  • Figure 82: Benetton Group: Outlet data, 2004-08
• Retail offering
• Market positioning
• Product offer
• Advertising and marketing
• e-commerce and home shopping
• Bhs
  • Figure 83: Bhs Plc: Sales as share of clothing specialists' sales in UK, 2003-07
• Strategic evaluation
• History
• Financial performance
  • Figure 84: Bhs Plc: Group financial performance, 2003/04-2007/08
• Store portfolio
  • Figure 85: Bhs Plc: Outlet data, 2005-09
  • Figure 86: Bhs: International franchises, number of outlets, 2003-08
• Retail offering
• Market positioning
• Product offer
• Brands
  • Figure 87: Bhs: Brands, 2009
• Pricing
• Operational issues
• e-commerce and home shopping
• Gap
  • Figure 88: Gap Inc: UK sales as share of clothing specialists' sales in UK, 2004-08
• History
• Financial performance
  • Figure 89: Gap Inc: Group financial performance, 2004/05-08/09
  • Figure 90: Gap UK: Financial performance, 2004/05-08/09
• Store portfolio
  • Figure 91: Gap Inc: Outlet data, 2005-09
• Retail offering
• Market positioning
• Brands
  • Figure 92: Gap Inc: Brands, 2008
• Product offer/Pricing
• e-commerce and home shopping
• Grupo Inditex UK
• Strategic evaluation
• Recent history
• Financial performance
  • Figure 93: Grupo Inditex: Group financial performance, 2004/05-2008/09
  • Figure 94: Grupo Inditex: Estimated sales in key European markets, 2004/05-2008/09
  • Figure 95: Inditex brands: Sales in the UK, 2006/07-2008/09
• Store portfolio
  • Figure 96: Grupo Inditex: Outlet data, 2005-09
  • Figure 97: UK: Grupo Inditex: Stores by fascia, 2005-09
• Retail offering
• Market positioning
• Zara
• Brands
• Product offer
• Massimo Dutti
• Product offer/pricing
• Bershka
• Product offer/pricing
• e-commerce and home shopping
  • Figure 98: Grupo Inditex: Company websites, 2009
• H&M Hennes & Mauritz
  • Figure 99: H&M Hennes & Mauritz: Sales as share of clothing specialists' sales in the UK, 2004-08
• Strategic evaluation
• Recent history
• Financial performance
  • Figure 100: H&M Hennes & Mauritz: Group financial performance, 2004-08
  • Figure 101: H&M Hennes & Mauritz UK Ltd: Financial performance, 2003/04-2007/08
• Store portfolio
  • Figure 102: H&M Hennes & Mauritz: Outlet data, 2004-08
• Retail offering
• Market positioning
• Product offer
• Brands
  • Figure 103: H&M: Own brand portfolio, 2009
• Pricing
• Operations
• COS
• Advertising and marketing
  • Figure 104: H&M Hennes & Mauritz: Breakdown of UK advertising expenditure, 2008/09
• e-commerce and home shopping
• Mackays Stores Group
  • Figure 105: Mackays Stores Group Ltd: Sales as share of clothing specialists' sales in UK, 2004-08
• Recent history
• Financial performance
  • Figure 106: Mackays Stores Group Ltd: Group financial performance, 2004/05-2008/09
• Store portfolio
  • Figure 107: Mackays Stores Group Ltd: Outlet data, 2005-09
• Retail offering
• Market positioning
• Product offer
• Pricing
• e-commerce and home shopping
• Mango
  • Figure 108: Mango UK: Sales as share of clothing specialists' sales in the UK, 2004-08
• Strategic evaluation
• Recent history
• Financial performance
  • Figure 109: Mango Group: Group financial performance, 2004-08
• UK performance
  • Figure 110: Mango UK Ltd: financial performance, 2004-08
• Store portfolio
  • Figure 111: Mango Group: Outlet data, 2004-08
• Retail offering
• Market positioning
• Brands
• Product offer
• Pricing
• Advertising and marketing
• e-commerce and home shopping
• Marks & Spencer
  • Figure 112: Marks & Spencer (UK): Sales as share of clothing specialists' sales in the UK, 2004-08
• Strategic evaluation
• Recent history
• Financial performance
  • Figure 113: Marks & Spencer (UK): Group financial performance, 2004/05-2008/09
  • Figure 114: Marks & Spencer (UK): UK sales and like-for-like growth, 2004/05-2008/09
  • Figure 115: M&S: UK retail sales by product category, 2004/05-2008/09
• Store portfolio
  • Figure 116: M&S: UK and ireland Outlet data, 2005-09
  • Figure 117: M&S: Outlets not specialising in food, by type, 2008-09
• Retail offering
• Market positioning
• Brands/Product offer
  • Figure 118: Marks & Spencer: Clothing own brand portfolio, 2009
• Pricing
  • Figure 119: Marks & Spencer: Clothing price architecture, 2004-08
• Operational issues
• Advertising and marketing
• e-commerce and home shopping
  • Figure 120: M&S: M&S Direct sales, 2006/07-2008/09
• Matalan
  • Figure 121: Matalan: Sales as share of clothing specialists' sales in UK, 2004-08
• Strategic evaluation
• Recent history
• Financial performance
  • Figure 122: Matalan: Group financial performance, 2004/05-2008/09
• Store portfolio
  • Figure 123: Matalan: Outlet data, 2005-09
• Retail offering
• Market positioning
• Brands/product offer
  • Figure 124: Matalan: Own-brand portfolio, 2009
• Pricing
• Advertising and marketing
• e-commerce and home shopping
• Monsoon
  • Figure 125: Monsoon Plc: Sales as share of clothing specialists' sales in UK, 2004-08
• History
• Financial performance
  • Figure 126: Monsoon Plc: Group financial performance, 2003/04-2007/08
• Store portfolio
  • Figure 127: Monsoon Plc: Outlet data, 2003-08
• Retail offering
• Market positioning
• Brands/Prices
  • Figure 128: Monsoon Plc: Brand ranges, 2008
• Product offer
• e-commerce and home shopping
• New Look
  • Figure 129: New Look Group Plc: Sales as share of clothing specialists' sales in Europe, 2004-08
  • Figure 130: New Look Group Plc: Sales as share of clothing specialists' sales in UK, 2004-08
• Strategic evaluation
• Recent history
• Financial performance
  • Figure 131: New Look Group Plc: Group financial performance, 2004/05-2008/09
• Store portfolio
  • Figure 132: New Look Group Plc: Outlet data, 2005-09
  • Figure 133: New Look Group PLC: Outlet data, by country, 2008-09
• Retail offering
• Market positioning
• Brands/Product offer
  • Figure 134: New Look: Womenswear own brand collections, 2009
• Pricing
• Operational issues
• Advertising and marketing
  • Figure 135: New Look Breakdown of advertising expenditure in the UK, 2008
• e-commerce and home shopping
• Next Group
  • Figure 136: Next Group: Sales as share of clothing specialists' sales in the UK, 2004-08
• Strategic evaluation
• History
• Financial performance
  • Figure 137: Next Group: Group financial performance, 2004/05-2008/09
• Store portfolio
  • Figure 138: Next Group: Next Retail like-for-like sales performance, 2005/06-2008/09
  • Figure 139: Next Group: Outlet data, 2005-09
  • Figure 140: Next: International outlets, 2007-09
• Retail offering
• Market positioning
• Brands
• Product offer
• Pricing
  • Figure 141: Next: Change in average selling prices, by season, 2006-08
• Advertising and marketing
• e-commerce and home shopping
• Peacock Group
• History
• Financial performance
  • Figure 142: Peacock Group: Group financial performance, 2004/05-2008/09
• Store portfolio
  • Figure 143: Peacock Group: Outlet data, 2005-09
• Retail offering
• Market positioning
• Product offer/brands
  • Figure 144: Peacocks and bonmarche sub-brands, 2009
• Pricing
• e-commerce and home shopping
• Primark/Penneys
  • Figure 145: Primark: Sales as share of Clothing specialists' sales in the UK, 2004-08
• Strategic evaluation
• History
• Financial performance
  • Figure 146: Primark Stores Ltd: Group financial performance, 2004-09
• Store portfolio
  • Figure 147: Primark Stores Ltd: Outlet data, 2004-09
• Retail offering
• Market positioning
• Brands/product offer
  • Figure 148: Primark: Own brand portfolio, 2008/09
• Pricing
• Operational issues
• Advertising and marketing
• e-commerce and home shopping
• River Island Clothing
  • Figure 149: River Island Clothing Co Ltd: Sales as share of clothing specialists' sales in UK, 2004-08
• History
• Financial performance
  • Figure 150: River Island Clothing Co Ltd: Group financial performance, 2004-08
• Store portfolio
  • Figure 151: River Island Clothing Co Ltd: Outlet data, 2004-08
  • Figure 152: River Island Clothing Co Ltd: Breakdown of overseas outlets, by market, 2008
• Retail offering
• Market positioning
• Product offer
• Pricing
• e-commerce and home shopping
• TK Maxx
  • Figure 153: TK Maxx: Sales as share of clothing specialists' sales in UK, 2004-08
• History
• Financial performance
  • Figure 154: TK Maxx: Group financial performance, 2004/05-2008/09
• Store portfolio
  • Figure 155: TK Maxx: Outlet data, 2005-09
• Retail offering
• Market positioning
• Product offer/brands
• Pricing
• e-commerce and home shopping
• Appendix -- Internal Market Environment
  • Figure 156: Selected retailers where the 15-24s buy clothes, May 2008 and July 2009
• Appendix -- Where They Buy Clothing
  • Figure 157: Where they bought clothing in last 12 months, by demographics, July 2009
  • Figure 158: Where they bought clothing in last 12 months, by demographics, July 2009
  • Figure 159: Where they bought clothing in last 12 months, by demographics, July 2009
  • Figure 160: Where they bought clothing in last 12 months, by demographics, July 2009