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Fast Fashion Drives European Retailers

The fast fashion phenomenon continues, with catwalk designs speeding their way into stores at high street prices, and driving sales growth in the European clothing retail market.

It comes as no surprise that retailers such as Hennes and Mauritz, Zara and Mango have enjoyed enormous growth over the past five years. Zara, owned by Spanish company Gruppo Inditex, has grown by 146 per cent between 1998 and 2002, with sales worth €3.2bn in 2002. Although considerably smaller, Mango has also more than doubled its sales since 1998, growing 103 per cent to €950m in 2002.

Swedish retailer Hennes & Mauritz is probably the true winner in the European fast fashion stakes. As a much bigger company than Mango or Zara, H&M managed to almost double sales between 1998 and 2002, growing 91 per cent. With sales of around €4.7bn in 2002, H&M is now the third largest clothing retailer in Europe, behind Marks & Spencer and C&A.

There is no denying that H&M, Mango and Zara have been very successful of late and that they have upped the stakes in clothing retailing. They have combined up-to-the-minute fashionability and low prices in stores, which are clearly focussed on one particular market. This has further opened up a huge lead over the traditional high street clothing retailers, particularly those who still think they can be all things to all shoppers.

In today's market, where there is little customer loyalty in clothing, consumers, especially the young, are quick to move to the shop which serves them best. H&M and Zara have raised the stakes on the high street, but hypermarkets such as Asda are doing much the same at highly competitive prices out of town. Out-of-town specialists, such as Matalan in the UK, are having a big impact on the broad range, large store retailers on the high street. The clothing retailing sector is becoming much more fluid as retailers fight for their share of the spending of an ever more demanding consumer.

3 December 2003


Christmas Is Retail Therapy Time

In case you haven't been to the West-End in a few weeks, be warned: Christmas mayhem is in full throttle. Frenzied shoppers ready to boulder you over in order to purchase the next item on their family's Christmas list. Shopping for a suit on a Monday afternoon quickly turned into a need for post-retail therapy.

Normally the disorder of Christmas is partial to a build-up, starting late October with department stores opening over-lit rooms dedicated to yuletide festivities when you've barely adjusted to the rhythms of autumn. This year, however, it seemed to happen over night. Yesterday I spotted a lady being thrust out of her seat on the tube by another lady carrying an oversized faux white-needled Christmas tree which took up an entire row of seats. Imagine the pandemonium the week prior to the 25th? It's enough to make one want to head to Mexico for cheap sunshine and tequila toasts on New Year's Eve.

London transport not particularly lending itself to passengers carrying suitcase- sizes of Christmas lights and jingle bells, shopping in the west-end has become an absolute nightmare. With Oxford Street resembling more the Regent's Park zoo than a bustling high street, shopping for a suit, even on a Monday afternoon, was a painstaking experience.

Admittedly, I like to get dressed up for the holidays just as much as the next person. After all, it's the season of glitzy parties, endless champagne and lots of snogs, and to make it all the more memorable, one needs to look and feel good. While no Londoner in his right mind shops on a weekend, Monday seems a pretty good alternative. Not so, as I discovered. From being run over by mobs of shoppers in fierce mode to cueing for a changing room in department stores, this is shopping at its worst.

To me, retail therapy no longer implies making a purchase to compensate for bad feelings. It's the therapy needed to compensate for the bad feelings one gets from shopping.

Don-Alvin Adegeest
2 December 2003


Latest Retail Figures

The latest retail figures show that October saw 3.7 per cent underlying volume growth in UK retail sales. Slightly higher than the 3.5 per cent growth rate recorded in September, growth was strongest among clothing and footwear retailers.
The ONS said the strength in sales was reflected across all sectors, with sales boosted by bonfire night celebrations, Halloween and the onset of Christmas shopping.

On the three-monthly measure basis, sales were up 1.5 per cent on the previous three months. Commenting on the figures Paul Clarke, national director, retail & wholesale sectors at Barclays said: "Although retail sales growth is almost half of what it was last year, there is still no evidence to point to a decline in the retail sector. Sales figures for clothing and household goods have continued to be strong and consumer confidence remains fairly stable.

"The expectation is that we will not see a further interest rate rise this side of Christmas which, together with a stable housing and employment market, all lead to a general feel good factor. No one seems to be talking Christmas down.

21 November 2003


Primark To Expand In Growth

Value retailer Primark aims to grow by expanding its existing stores and buying more sites rather than seeking acquisitions.

The retailer had been tipped as a potential buyer of Littlewoods' high street stores because parent group Associated British Foods (ABS) is sitting on a cash pile of GBP1.25 billion.

But ABF chief executive Peter Jackson said Primark's growth possibilities "will probably not be acquisitions." He further stated the store openings and extensions would be the focus of growth. Sales at Primark rose 15 per cent to GBP752 million, while profits were up 21 per cent to GBP87 m. Operating margins rose from 11 per cent to 11.6 per cent.

20 November 2003


Reiss Retailer of The Year

With the introduction of womenswear three year ago, Reiss has carved out a real niche on the high street and establish itself as a business with significant growth potential.

Reiss now makes a play of being couple-friendly, which has helped it boost customers' visit time and drive up average spend. Offering stylish designs at a bridge level, Reiss' turnover is forecast to be GBP 30million for this year, with womenswear accounting for almost half that figure.

The broader product offer has also helped the business expand beyond its South-East base, with strong representation in Manchester and stores in Leeds, Nottingham, Dublin and Glasgow. Recent opening at Canary Wharf demonstrate the company's commitment to innovative design.

Reiss stopped wholesaling in 2001 and has clearly benefited from a focused approach. It has created a genuine identity on the high street without resorting to heavily branded product and is now eyeing other international markets.

Reiss was named Retailer of the Year at the Lycra British Style Awards earlier this year.

12 November 2003


Sales Soar On The Net

UK retail spending on the Internet will grow by about 50 per cent this Christmas, according to research from Forrester due to be released this week. The company calculates that UK online spending will total EUR 14.5bn in 2003, Europe almost EUR 50bn and the US more than EUR100bn. Forrester believe retailers with experience in distance selling, such as Argos and Germany's Otto, are using the internet more effectively than traditional retailers.

10 November 2003


Retailers Await The Big Chill

Unseasonably warm weather puts a damper on autumn profits, but experts are forecasting good trading for the holiday season.

Unseasonably mild temperatures in late October and early November have been a boon for those wishing for a bit of warm weather before winter's onset. But they have hampered sales of winter clothes, which count on falling temperatures to move sweaters, jackets, and other cold-weather gear.

Although the season is lengthened by new arrivals selling in August, fabrics such as leather, fur and sheepskin are definitely winter sellers. Hopefully these will see a demand by customers for a bit Christmas glamour and the cold weather to come.

7 November 2003


Midland Stores Suffers Against Bullring Stampede

Retailers are reporting strong sales at Birmingham's newly opened Bullring, but at the cost of less buoyant sales at other branches.

Peter Davies, chief executive of Rubicon, which owns Warehouse and Principles, said that sales at the Warehouse store in the city's High Street had fallen, while its concession within Selfridges and its standalone store in the Bullring were both trading well.

Carl Lester, owner of designer label boutique Autograph, located in Ethel Street in the town centre said: "As we've been established 16 years, we've managed to hold on to our loyal customer base, but what we have lost is the young lad who might buy a GBP40 t-shirt and could be our higher spender of the future. He's now more likely to head to Selfridges in the Bullring, which is a shame."

While the department stores seem to be trading well, it is the smaller independents who are less enthusiastic. The Bullring has brought out of the woodwork a trendier Midland's shopper, who didn't shop in Birmingham before. While the new centre may have a better fashion selection on offer, shoppers are less keen to look elsewhere.

27 October 2003


Stock Control Trims Fashion Retailer Sales

Discount fashion retailer New Look, currently subject to a takeover offer from founder Tom Singh, reports UK like-for-like sales have slipped by 3.6% in the first half.

The UK's third largest women's clothing retailer, which has around 500 shops across the country, says sales have dipped due to tighter control of summer stocks which saw more merchandise sold at full price.

Weymouth-based New Look has been selling a high mix of cut-price fashion items such as skimpy vests, mini-skirts and three-quarter length trousers. The company said total sales in the six months to September 27 rose by 3.6% compared with the same period last year.

It said customer reaction to its new autumn ranges had been encouraging in the five weeks to September 27. Like-for-like sales for the period were ahead of last year with a 1.4% rise.

New retail space is key to New Look's strategy. The company expects to open a net 200,000 square feet of new space in the UK during the year to March 31, around 25,000 square feet ahead of plan.

3 October 2003


Regent Street Scheme Seeks Top Brands

The Crown Estate is looking to attract international retailers with no current UK presence to its development at Chesham House in Regent Street, London.

The GBP100m redevelopment on 132 Regent's Street is due to be completed by September 2005. With an abundance of retail space, it is likely to be subdivided into five units, with the top floors being taken up by office accommodation.

The Crown Estate plans to start marketing the site in a year's time. Developer City Offices has been appointed to start work in November. So far, it will not be pitched at the exclusive, Bond Street end of the market, but sought after are good quality international brands.

The facades on Regent Street, Beak Street and Regent Place will be retained with a new entrance planned for Warwick Street.

24 September 2003


Retailers Debut In Birmingham

Thursday saw 57 retailers make their debut in Birmingham, as the UK's second city marked its bid for retail premiership status with the opening of the new Bullring development.

Built around anchor department stores for Selfridges and Debenhams, Bullring has been designed with a distinct retail offer on each of its three levels. High street fashion and catering is on the lower level, young fashion and and lifestyle retailing at mid level and aspiration fashion on the upper level.

The Bullring, along with the redevelopment of nearby Martineau Place and the planned development of the Martineau Galleries, makes the Birmingham revamp Europe's largest retail-led regeneration project, with an investment of over GBP1bn. The project has been conceived by the Birmingham Alliance, a partnership between Hammerson, Henderson Global Investors and Land Securities.

5 September 2003


Scottish Retailers Call for Crime Protection

The Scottish Retail Consortium has called for an extension of a new anti-social law to cover shops and businesses north of the border, who are suffering from increasing amounts of theft, vandalism and threatening behaviours.

It is estimated that retailers across the UK are losing GBP1.7bn a year due to theft and other criminal activity, with a staggering eight million customer offences occurring every 12 months.

The problem, which seems more acute in Scotland, urges the Scottish Executive to extend the use of new anti-Social Behavious Orders (ASBOs) to include shops and other businesses.

As reported by, the govenment has promised to get tough with business-related crime by appointing a team of regional advisors to target offenders across England and Wales.

This new approach aims to foster closer links between police, local authorities and the government in the effort to cut crime and anti-social behaviour affecting British businesses.

1 September 2003


Retailers Name Pure Best Exhibition

Strong spring 04 collections, a bout of glorious weather and good sell-throughs produced a buoyant mood among buyers at Pure last week. Some claimed it was the best Pure in its six-year history.

Pure has a creative edge that is unmatched by other trade fairs. Many exhibitors produce contemporary and wearable clothes, making it a great scouting ground for the adventurous boutique buyer. More independent buyers than ever before have added Pure to their shopping list for spring 04, indicative of the mood for stores to offer something different to their customer.

Independents need to stay ahead of the high street and Pure provides the perfect atmosphere for finding a new profile of brands. With George at Asda bringing in a premium-priced range and the high street copying catwalk collections within days of release, independents must gear their buying in a more directional fashion in order to stay competitive.

28 August 2003


Retailers to Combat Fraud with PIN

Independent stores are being told to start upgrading their point of sale credit card readers by next May, if they are not to fall prey to changes in fraud liability that could hit them for £800m.

In January 2005 liability for card fraud, where preventative measures could have been taken, will shift from banks to retailers. By installing devices capable of reading the so-called chip and Pin cards, retailers will be able to protect themselves. But while some retailers hire their card readers from banks, those that do not will need to install new systems.

Following a successful trial of the technology in Northampton this year, retailers should start upgrading their systems by next May to have the readers installed before Christmas 2004. "The trial showed that time is a crucial factor and allowing enough time for planning, testing, approval, training and implementation is crucial to success," said David Smith, corporate affairs director at the British Retail Consortium.

If retailers want to avoid putting in new systems before the busy Christmas period, that would mean starting before May. Government figures put card fraud in 2002 at £424m, a figure which is predicted to rise to £800m by 2005. Most of this is from 'skimming', where fraudsters copy a genuine card's magnetic strip details and transfer them to another card.

Chip and Pin cards tackle the problem by getting customers to key in a four-digit code to authorise transactions rather than by signing a receipt

8 August 2003


Summer Sales Performance Good

The hot weather has been good for summer trading and the extra sales will help to makeup for lost ground from May's results. Some retailers seem to be out of stock, failing to take advantage of the weather's positive boost on business.

June's strong sales performance was confirmed by the British Retail Consortium's retail sales monitor, which showed like-for-like high street sales up 5.7 per cent in total, with summer clothing and footwear particularly strong. Poor results in May seem to have convinced retailer to go into sale with an aggressive pricing stance.

A Drapers Record survey carried out by retail consultancy Compability showed that there was deep discounting from the start of the sales, with New Look, Miss Selfridge and H&M showing discounts of 54, 49 and 48 per cent respectively. The survey noted that the number of retailers with high fashion in the sales was surprisingly low, with spring transitional product in strong evidence instead.

24 July 2003



Retail Property Awards

Supermarkets triumphed at this year's Retail Property Awards, with Tesco taking both the award for Retailer of the Year and for International Retail Achievement.

Next won Accessible Retailer's Property Strategy of the year for its out-of-town Next to Nothing stores.

The event, run by Property Week, attracted property directors from all the major fashion retailers. Other award winners were Philip Green, who was awarded the Town Centre Retail Deal of the Year for his purchase of Arcadia.

Best Major Shopping Centre or Refurbishment went to Festival Place in Basingstoke. Best High Street Infill Development was won by Paul Davis and Partners/Cadogan Estates for their work on the Duke of York Square in Chelsea, London.

10 July 2003


Reiss Looks Toward International Market

Trendy fashion retailer Reiss is planning to explore the wider international market after opening its first store in Dublin late last year.

The company is using the store to judge its performance in a market where it is not well known. Owner David Reiss said its strong trading had prompted it to look further abroad, of which a decision will be made later this year.

Reiss said: "We have been approached by a French company about opening stores. We are also looking at Scandinavia and the US. The company has been working hard to develop a broader offer ahead of the international expansion, and build up the brand.

Two more London stores are set to open before the end of the year, including a prime West-End location and a standalone womenswear store in the City. This will take Reiss' UK portfolio to 28 stores.

19 June 2003


UK Retailers Join Visa Initiative

Visa has confirmed that over 4,000 European retailers have now signed up for the Verified Visa scheme, aimed at improving consumer confidence in online shopping.

The initiative, was launched in April 2002, alongside 30 acquiring banks and 35 issuing banks. Verified by Visa is designed to improve security for retailers, while boosting customer confidence in shopping online. For increased security, customers get a Pin to use online alongside their credit card.

11 June 2003


Retail Figures Slowdown

A slowdown in consumer spending is underway and UK retail sales rose only slightly less than expected in April, official figures showed on Thursday.

The Office for National Statistics said retail sales volume was 0.3 per cent higher than in March, making the annual rate of 2.7 per cent the lowest since 1999.

Unofficial survey data on retail sales in April were positive, suggesting consumer confidence had grown post-war Iraq and the affect of a short bout of warm weather earlier that month.

Recent survey data, however, has been affected the fact that Easter, a key shopping period, fell later this year in April rather than in March, and distorted a like-for-like comparison.

The strongest areas in April were household goods and food, up an annual 7.7 per cent and 5.8 per cent respectively.

23 May 2003


Sales Up for British Retailers

April was good month for retailers, according to figures from the British Retail Consortium. The result, published this week, will help justify the Bank of England's decision to freeze interest rates at 3.75 per cent.

The British Retail Consortium KPMG retailer-sales monitor is set to show that sales last month were up by 4 per cent on a year earlier on a like-for-like basis, a return to the growth rates of last autumn.

Amanda Aldridge, UK head of retail at KPMG commented 'young fashion in particular seems to have had a good time.' 'But bigger items for the home, such as furniture, appear to have had a disappointing Easter, which is normally a good period.'

The Bank's monetary-policy committee left rates unchanged in spite of calls from industry for a cut. Figures on Friday showed 0.4 per cent drop in manufacturing output in March, and are likely to result in a downward revision to the already weak 0.2 per cent first-quarter growth rate for gross domestic product.

The MPC is widely believed to have held off because of the weak pound, which has fallen 7 per cent this year.

14 May 2002


 Consumer Confidence Recovers

April's consumer confidence index from market research group Martin Hamblin showed confidence up by five points since March to stand at -5. Good news, at least, showing some bounce back from war worries. Consumers are optimistic about the next 12 months - up 15 points - and perceptions of personal finances are up by two points. However, consumers say it is neither a good time to save or to make major financial purchases, which suggests that areas such as fashion might continue to prosper, the report said.

Retail sales figures for March from National Statistics showed three-month growth rates against last year slowing to 4.1 per cent, the lowest growth rate for three years, with department stores seeing the biggest decline.

8 May 2003


Small rise UK apparel sales

Last month UK retail sales rose an unexpected 0.6 per cent due to strong demand for apparel and footwear. This was revealed by figures from the Office for National Statistics (ONS). The data showed that warm weather helped boost overall high street sales in March. Sales of clothing and shoes were up a better-than-expected 1.1 per cent.

ONS cautioned though that the overall sales trend is still "weaker than it has been". For instance sales in the three months to March were up a mere 0.1 per cent due to weak consumer spending and war in Iraq.

April 30, 2003


Sharp drop in retail sales

The pattern of sales recorded by the British Retail Consortium-KPMG Sales Monitor for the month of March recorded a decrease in retail sales of 0.6% on a like-for-like basis, and a growth of 2.1% on a total basis, compared with a year earlier.
The three-month trend rates of growth decreased from 2.5% in February to 1.6% in March for like-for-like sales, from 5.1% to 4.3% for total sales.

Bill Moyes, Director General of the BRC commented: "It's difficult to determine an absolute figure this month, due to the difference in timing of Easter. However, it's clear that the trend is moving downwards at a worrying rate. Retail is vital to the economy and if the trend in high street sales is not reversed, the Chancellor has no hope of achieving his optimistic growth forecasts. Brown needs to stimulate demand by pushing for America to reflate and persuading the British consumer that their financial future is underpinned by a sound domestic economy."

April 17, 2003


Retailers stay behind in tech-innovation

According to a new IBM survey of retailers released on Monday a majority of leading retailers are still lagging in effectively using technology to create the "Store of the Future" and are beginning to lose competitive ground to a small group of innovators who are. The survey asked retailers to identify what technology initiatives they are likely to pursue, as well as the key challenges they will face in evolving the in-store experience.

“In the retail industry today, we have increasingly discerning customers, who have grown accustomed to researching and buying products on the Internet and are demanding more services and information. Plus, we have heightened competition in mature, saturated markets that makes it more difficult for retailers to sustain differentiated brands and value propositions,” said David Petiford, general manager, Worldwide Retail Industry, IBM. “Therefore, the rapid evolution and adoption of new technologies will help determine which retailers thrive in this new environment, and which ones fall behind. Our survey showed that retailers understand that, but are proceeding in different directions and at different speeds.”

The survey results showed four major themes about retailers' attitudes and priorities when it comes to how technology will shape shopping in the future: First of all, retailers are actively investing in employee empowerment and improved marketing effectiveness, while placing less priority on direct customer-facing capabilities. On the other hand significant opportunities remain unexploited, as a result of both business and technical challenges that include outdated point-of-sale systems, competing organizational priorities and budget constraints. Retailers identified a number of high-value initiatives that are not yet widely adopted. For instance, 55 percent of survey respondents said that giving store employees access to customer purchase records would be “extremely effective” in improving the returns process and optimizing sales -- but only one-fifth are making this happen today.

A small group of innovators is taking the lead. By testing the limits of what's possible in the store environment, these early adopters may be able to distance themselves from competitors and create a "Store of the Future" that appeals to informed, empowered customers and creates true differentiation in shopping. Finally retailers are not taking full advantage of the multi-channel opportunity. Many retailers are still playing “catch up” and have significant gaps in their multi-channel shopping capabilities.

This survey result was somewhat surprising given that 40 percent of the respondents were from department and specialty stores, segments where online shopping is highly penetrated, and that nearly all stated that cross-channel shopping was "moderately" or "extremely prevalent" in their customer base.

“However, these retailers appear to be underestimating the growing population of consumers who research competing offerings on the Internet,” said Julian J. Chu, director of the survey. “Consequently, they may be missing an opportunity to create and strengthen relationships with customers before those customers even walk in the store.”

January 14, 2003


Retailers beware!

This Saturday thousands of anti-consumerism activists worldwide will take to the malls to persuade shoppers not to shop. It's all part of Buy Nothing Day, a growing, global, grassroots protest against the holiday shopping frenzy.

Spearheaded by Adbusters, the Canadian anti-consumerism oranization, Buy Nothing Day events are being organized by a wide variety of consumer groups, environmentalists, globalization protestors and, for the first time, faith-based groups.

This year promises to be bigger than ever: More than one million people in at least 65 countries are expected to observe the call not to shop. Now in its 11th year, Buy Nothing Day continues to grow, a testimony to the organizing power of the Internet.

Buy Nothing Day started as a prank in the Pacific Northwest, taking off in 1995 when Adbusters started promoting it on its website.

Even though there's a large contingent of activists in the United States, Buy Nothing Day tends to go down better in Europe. European shoppers seem to be more sympathetic to the campaigners' goals. Retailers beware!

November 29, 2002