United Kingdom -Apparel Retail MarketLine Industry Profile Apparel Retail in the United Kingdom

United Kingdom - Apparel Retail 0183 - 2005 - 2014

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MarketLine Industry Profile

Apparel Retail in the United Kingdom May 2015

Reference Code: 0183-2005

Publication Date: May 2015

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EXECUTIVE SUMMARY

Market value The United Kingdom apparel retail industry grew by 2.9% in 2014 to reach a value of $63 billion.

Market value forecast In 2019, the United Kingdom apparel retail industry is forecast to have a value of $75.6 billion, an increase of 20% since

2014.

Category segmentation Womenswear is the largest segment of the apparel retail industry in the United Kingdom, accounting for 57.3% of the

industry's total value.

Geography segmentation The United Kingdom accounts for 15.3% of the European apparel retail industry value.

Market rivalry Low growth in recent years has done little to reduce the level of rivalry in the UK apparel market.



TABLE OF CONTENTS

Executive Summary ....................................................................................................................................................... 2

Market value ............................................................................................................................................................... 2

Market value forecast ................................................................................................................................................. 2

Category segmentation .............................................................................................................................................. 2

Geography segmentation ........................................................................................................................................... 2

Market rivalry .............................................................................................................................................................. 2

Market Overview ............................................................................................................................................................ 7

Market definition ......................................................................................................................................................... 7

Market analysis .......................................................................................................................................................... 7

Market Data ................................................................................................................................................................... 8

Market value ............................................................................................................................................................... 8

Market Segmentation ..................................................................................................................................................... 9

Category segmentation .............................................................................................................................................. 9

Geography segmentation ......................................................................................................................................... 10

Market distribution .................................................................................................................................................... 11

Market Outlook ............................................................................................................................................................. 12

Market value forecast ............................................................................................................................................... 12

Five Forces Analysis .................................................................................................................................................... 13

Summary .................................................................................................................................................................. 13

Buyer power ............................................................................................................................................................. 14

Supplier power ......................................................................................................................................................... 15

New entrants ............................................................................................................................................................ 16

Threat of substitutes ................................................................................................................................................. 17

Degree of rivalry ....................................................................................................................................................... 18

Leading Companies ..................................................................................................................................................... 19

Arcadia Group Limited ............................................................................................................................................. 19

Marks and Spencer Group plc .................................................................................................................................. 20

Mothercare plc ......................................................................................................................................................... 23

NEXT plc .................................................................................................................................................................. 26

Macroeconomic Indicators ........................................................................................................................................... 29

Country Data ............................................................................................................................................................ 29

Methodology................................................................................................................................................................. 31



Industry associations ................................................................................................................................................ 32

Related MarketLine research ................................................................................................................................... 32

Appendix ...................................................................................................................................................................... 33

About MarketLine ..................................................................................................................................................... 33



LIST OF TABLES

Table 1: United Kingdom apparel retail industry value: $ billion, 2010–14 ..................................................................... 8

Table 2: United Kingdom apparel retail industry category segmentation: $ billion, 2014 ............................................... 9

Table 3: United Kingdom apparel retail industry geography segmentation: $ billion, 2014 .......................................... 10

Table 4: United Kingdom apparel retail industry distribution: % share, by value, 2014 ................................................ 11

Table 5: United Kingdom apparel retail industry value forecast: $ billion, 2014–19 ..................................................... 12

Table 6: Arcadia Group Limited: key facts ................................................................................................................... 19

Table 7: Marks and Spencer Group plc: key facts ........................................................................................................ 20

Table 8: Marks and Spencer Group plc: key financials ($) ........................................................................................... 21

Table 9: Marks and Spencer Group plc: key financials (£) ........................................................................................... 21

Table 10: Marks and Spencer Group plc: key financial ratios ...................................................................................... 21

Table 11: Mothercare plc: key facts ............................................................................................................................. 23

Table 12: Mothercare plc: key financials ($) ................................................................................................................. 24

Table 13: Mothercare plc: key financials (£) ................................................................................................................. 24

Table 14: Mothercare plc: key financial ratios .............................................................................................................. 24

Table 15: NEXT plc: key facts ...................................................................................................................................... 26

Table 16: NEXT plc: key financials ($) ......................................................................................................................... 27

Table 17: NEXT plc: key financials (£) ......................................................................................................................... 27

Table 18: NEXT plc: key financial ratios ....................................................................................................................... 27

Table 19: United Kingdom size of population (million), 2010–14.................................................................................. 29

Table 20: United Kingdom gdp (constant 2005 prices, $ billion), 2010–14 .................................................................. 29

Table 21: United Kingdom gdp (current prices, $ billion), 2010–14 .............................................................................. 29

Table 22: United Kingdom inflation, 2010–14 .............................................................................................................. 30

Table 23: United Kingdom consumer price index (absolute), 2010–14 ........................................................................ 30

Table 24: United Kingdom exchange rate, 2010–14 .................................................................................................... 30



LIST OF FIGURES

Figure 1: United Kingdom apparel retail industry value: $ billion, 2010–14 .................................................................... 8

Figure 2: United Kingdom apparel retail industry category segmentation: % share, by value, 2014 .............................. 9

Figure 3: United Kingdom apparel retail industry geography segmentation: % share, by value, 2014 ......................... 10

Figure 4: United Kingdom apparel retail industry distribution: % share, by value, 2014 ............................................... 11

Figure 5: United Kingdom apparel retail industry value forecast: $ billion, 2014–19 .................................................... 12

Figure 6: Forces driving competition in the apparel retail industry in the United Kingdom, 2014 ................................. 13

Figure 7: Drivers of buyer power in the apparel retail industry in the United Kingdom, 2014 ....................................... 14

Figure 8: Drivers of supplier power in the apparel retail industry in the United Kingdom, 2014 ................................... 15

Figure 9: Factors influencing the likelihood of new entrants in the apparel retail industry in the United Kingdom, 201416

Figure 10: Factors influencing the threat of substitutes in the apparel retail industry in the United Kingdom, 2014 ..... 17

Figure 11: Drivers of degree of rivalry in the apparel retail industry in the United Kingdom, 2014 ............................... 18

Figure 12: Marks and Spencer Group plc: revenues & profitability .............................................................................. 22

Figure 13: Marks and Spencer Group plc: assets & liabilities ...................................................................................... 22

Figure 14: Mothercare plc: revenues & profitability ...................................................................................................... 25

Figure 15: Mothercare plc: assets & liabilities .............................................................................................................. 25

Figure 16: NEXT plc: revenues & profitability ............................................................................................................... 28

Figure 17: NEXT plc: assets & liabilities ....................................................................................................................... 28



MARKET OVERVIEW

Market definition The apparel retail industry consists of the sale of all menswear, womenswear and childrenswear. The menswear market

includes mens activewear, casual wear, essentials, formalwear, formalwear-occasion and outerwear.

The womenswear market includes women's activewear, casual wear, essentials, formalwear, formalwear-occasion and

outerwear.

The childrenswear market includes baby clothing, boys activewear, boys casual wear, boys essentials, boys formalwear,

boys formalwear-occasion, boys outerwear, girls activewear, girls casual wear, girls essentials, girls formalwear-

occasion, girls outerwear and toddler clothing.

The industry value is calculated at retail selling price (RSP), and includes all taxes and levies.

All currency conversions used in this report have been calculated at constant 2014 annual average exchange rates.

For the purposes of this report, North America consists of Canada, Mexico, and the United States.

South America comprises Argentina, Brazil, Chile, Colombia, and Venezuela.

Europe comprises Austria, Belgium, the Czech Republic, Denmark, Finland, France, Germany, Greece, Ireland, Italy,

Netherlands, Norway, Poland, Portugal, Russia, Spain, Sweden, Switzerland, Turkey, and the United Kingdom.

Scandinavia comprises Denmark, Finland, Norway, and Sweden.

Asia-Pacific comprises Australia, China, Hong Kong, India, Indonesia, Kazakhstan, Japan, Malaysia, New Zealand,

Pakistan, Philippines, Singapore, South Korea, Taiwan, Thailand, and Vietnam.

Middle East comprises Egypt, Israel, Saudi Arabia, and United Arab Emirates.

Market analysis The UK apparel retail industry experienced low levels of growth from 2010 to 2014. The industry is projected to maintain

stable levels of moderate growth from 2014 through to the end of the forecast period in 2019.

Although they remain as small players in the market; supermarkets and hypermarkets have gone from strength to

strength in recent years. These retailers, because of their bulk buying power are able to capture an increasingly large

section of the market that requires more budget items. The main players in this space are Asda (George), Tesco (F&F)

and Sainsbury’s (Tu). There has been a shift in retail attitudes, which allows supermarkets to be considered by the

consumer for clothes where previously the company would be mainly synonymous with food products. Consumers are

now able to shop for clothes whilst buying their groceries and household items and this can be enticing especially as

there is no need for consumers to go to specialist retailers as they are able to do all their shopping under one roof.

The UK apparel retail industry had total revenues of $63.0bn in 2014, representing a compound annual growth rate

(CAGR) of 2.1% between 2010 and 2014. In comparison, the French and German industries grew with CAGRs of 0.4%

and 1.3% respectively, over the same period, to reach respective values of $48.7bn and $76.9bn in 2014.

The womenswear segment was the industry's most lucrative in 2014, with total revenues of $36.1bn, equivalent to 57.3%

of the industry's overall value. The menswear segment contributed revenues of $16.8bn in 2014, equating to 26.7% of

the industry's aggregate value.

The performance of the industry is forecast to accelerate, with an anticipated CAGR of 3.7% for the five-year period 2014

- 2019, which is expected to drive the industry to a value of $75.6bn by the end of 2019. Comparatively, the French and

German industries will grow with CAGRs of 1.4% and 1.4% respectively, over the same period, to reach respective

values of $52.1bn and $82.6bn in 2019.



MARKET DATA

Market value The United Kingdom apparel retail industry grew by 2.9% in 2014 to reach a value of $63 billion.

The compound annual growth rate of the industry in the period 2010–14 was 2.1%.

Table 1: United Kingdom apparel retail industry value: $ billion, 2010–14

Year $ billion £ billion € billion % Growth

2010 57 9 35.1 43.6

2011 58.8 35.7 44.3 1.5%

2012 59.6 36.2 44.9 1.4%

2013 61.2 37.2 46.1 2.8%

2014 63.0 38.3 47.4 2.9%

CAGR: 2010–14 2.1%

SOURCE: MARKETLINE M A R K E T L I N E

Figure 1: United Kingdom apparel retail industry value: $ billion, 2010–14




MARKET SEGMENTATION

Category segmentation Womenswear is the largest segment of the apparel retail industry in the United Kingdom, accounting for 57.3% of the

industry's total value.

The Menswear segment accounts for a further 26.7% of the industry.

Table 2: United Kingdom apparel retail industry category segmentation: $ billion, 2014

Category 2014 %

Womenswear 36.1 57.3%

Menswear 16.8 26.7%

Childrenswear 10.1 16.0%

Total 63 100%


Figure 2: United Kingdom apparel retail industry category segmentation: % share, by value, 2014




Geography segmentation The United Kingdom accounts for 15.3% of the European apparel retail industry value.

Germany accounts for a further 18.6% of the European industry.

Table 3: United Kingdom apparel retail industry geography segmentation: $ billion, 2014

Geography 2014 %

Germany 76.9 18.6

Italy 63.1 15.3

United Kingdom 63.0 15.3

France 48.7 11.8

Spain 18.0 4.4

Rest of Europe 142.8 34.6

Total 412.5 100%


Figure 3: United Kingdom apparel retail industry geography segmentation: % share, by value, 2014




Market distribution Clothing, foot/sportswear & accessories retailers form the leading distribution channel in the United Kingdom apparel

retail industry, accounting for a 80.3% share of the total industry's value.

Department stores accounts for a further 10.5% of the industry.

Table 4: United Kingdom apparel retail industry distribution: % share, by value, 2014

Channel % Share

Clothing, foot/sportswear & accessories retailers 80.3%

Department stores 10.5%

Hypermarket, supermarket & discounters 7.1%

Discount, variety & general merchandise retailers 1.7%

Other 0.4%

Total 100%


Figure 4: United Kingdom apparel retail industry distribution: % share, by value, 2014




MARKET OUTLOOK

Market value forecast In 2019, the United Kingdom apparel retail industry is forecast to have a value of $75.6 billion, an increase of 20% since

2014.

The compound annual growth rate of the industry in the period 2014–19 is predicted to be 3.7%.

Table 5: United Kingdom apparel retail industry value forecast: $ billion, 2014–19

Year $ billion £ billion € billion % Growth

2014 63.0 38.3 47.4 2.9%

2015 65.8 40.0 49.6 4.5%

2016 68.0 41.3 51.2 3.3%

2017 70.4 42.7 53.0 3.5%

2018 72.9 44.3 54.9 3.6%

2019 75.6 45.9 57.0 3.7%

CAGR: 2014–19 3.7%


Figure 5: United Kingdom apparel retail industry value forecast: $ billion, 2014–19




FIVE FORCES ANALYSIS

The apparel retail market will be analyzed taking retailers as players. The key buyers will be taken as individual

consumers, and clothing manufacturers and wholesalers as the key suppliers.

Summary

Figure 6: Forces driving competition in the apparel retail industry in the United Kingdom, 2014


Low growth in recent years has done little to reduce the level of rivalry in the UK apparel market.

Clothing is an essential item, with consumer choice being influenced by factors such as fashion and a desire to signal

social success. Demand patterns are susceptible to branding and advertising, which, despite the lack of significant

switching costs, tends to weaken buyer power. There is a fast pace of change in the demands of individual buyers. This

means that, in an attempt to maintain market share in a highly competitive market, players aim to attract customers by

creating strong brand consciousness and running intensive marketing campaigns. Low barriers to entry and relatively low

requirements for capital mean there is a high likelihood of new entrants in this market. Substitutes to apparel retail

include bespoke tailoring, factory shops, homemade clothing, and second hand clothing, although these pose a minimal

threat to market players. Sales are boosted by the popularity of fast-fashion and disposable clothing. Predominantly, this

has been a visible factor of growth within the womenswear sector. However, as the fashion industry becomes more

focused on styles for men, fast-fashion trends for menswear are becoming just as prevalent as those for women.



Buyer power

Figure 7: Drivers of buyer power in the apparel retail industry in the United Kingdom, 2014


Buyer power in the apparel retail industry is weakened by the small size of buyers: virtually all buyers are individual

consumers. What’s more, retailers tend to have large numbers of individual customers, which further weakens buyer

power as the loss of one is unlikely to have a significant impact on revenues.

Despite the fact that brand consciousness in this market is substantial, the loyalty of consumers to specific brands is not

always the overriding factor in their decision making. Buyer power is enhanced by a high level of choice, which is

generated by the absence of switching costs. Brand loyalty within the top end of the apparel retail industry is connected

more with the particular designer than the retailer, although some labels also have their own retail operations. The depth

of price sensitivity varies regionally, although clothes are perceived as closely linked to lifestyle and social status, which

grants retailers the opportunity to influence consumer behavior. There is a large market for non-designer apparel retail,

especially among customers with lower disposable incomes.

Retailers can differentiate themselves fairly strongly through the styles of clothing offered and the price range of this

clothing, meaning buyer power is weakened. Apparel is an essential item for consumers, and they are significantly

exposed to the penetration of marking icons and images into most forms of media. However, retailers must remain aware

of the developments that shape public perception and subsequent demand.

Despite consumers lacking financial muscle, the position of retailers at the end of the value chain makes it impossible to

integrate forwards. This means that they are obliged to offer buyers what they demand, in a market often subject to

unpredictable and rapid changes in fashion. These factors strengthen buyer power. Overall, buyer power is assessed as

moderate.



Supplier power

Figure 8: Drivers of supplier power in the apparel retail industry in the United Kingdom, 2014


The key suppliers in this industry are clothing manufacturers and wholesalers. These are typically small to medium sized

enterprises, giving retailers the possibility to source from both. In the UK, the wholesale and clothing manufacturing

sectors are fairly fragmented. Supplier fragmentation is made greater by the ability of retailers to source from foreign

manufacturers. With the liberalization of international trade, supplier power in the UK industry is decreased through

competition from manufacturers in low-wage regions, most notably China and India. Although retailers’ switching costs

are not very high, switching includes the risk of choosing a supplier with a more extended supply chain or who may not

be able to cope with sudden changes in demand on the market. The lack of diversity between suppliers weakens their

power, as the apparel retail industry is highly important to their business. Apparel manufacturing is almost always labor

intensive, due to the difficulty of automating processes such as the sewing of garments. The existence of a minimum

wage in many countries slightly increases the power of suppliers of labor. The Bangladesh Rana Plaza disaster in 2013,

in which more than 1,100 people died and many were left injured; has put increasing ethical pressure on retailers to

source responsibly. So far $21.5m has been paid into the Rana Plaza Donors Trust Fund through contributions from

buyers, the Bangladesh Prime Ministers Fund and other private donors. A number of brands have refused to provide

adequate payment into the fund. Walmart, Mango and The Children's Place have been criticized for making donations

which fall short of expectations. Benetton initially was reluctant to pay into the fund; however in April 2015 the company

made a $1.1m contribution. Overall, supplier power in this industry is assessed as moderate.



New entrants

Figure 9: Factors influencing the likelihood of new entrants in the apparel retail industry in the United Kingdom, 2014


The UK apparel retail industry has experienced low levels of low growth in recent years, which may potentially make it

less attractive to new entrants.

Barriers to entry are not high, with capital requirements being low enough for individuals to enter. However, a small

number of large corporations, such as Marks & Spencer and Arcadia Group, account for a significant share of total

market revenues. They benefit from scale economies that allow them to build brands in multiple retail outlets, and greater

buying power when negotiating with suppliers. The latter allows them to compete more intensely on price.

There is little regulation as such for retailers in the market, but there are some self-imposed conventions related to child

labor, working conditions and workers' wages. New entrants who are known to have items manufactured outside of such

conventions may lose customers and suffer long-term reputational damage.

Low switching costs for buyers and a low level of product differentiation make it easier for new entrants to compete with

existing players. One rising player in the market in recent years has been supermarket and hypermarket retailers, who,

because of their bulk buying power are able to capture an increasingly large section of the market that requires more

budget items. In the UK the main players in this market are Asda (George), Tesco (F&F) and Sainsbury’s (Tu).

Contributing to this rise is a shift in retail attitudes, which allows supermarkets to be considered by the consumer for

clothes where previously the company would be mainly synonymous with food products. Consumers are now able to

shop for clothes whilst buying their groceries and household items. This can be enticing, especially as there is no need

for consumers to go to specialist retailers as they are able to do all their shopping under one roof. Budget clothing

retailers have also become an increasing threat to traditional retailers as young consumers with little disposable income

have shown a shift away from brand consciousness in recent years. This has been evident in the UK, where discount

clothing retailer Primark has expanded rapidly and this might be where the best opportunities lie for potential new

entrants.

Overall, there is a strong threat of new entrants to this market.



Threat of substitutes

Figure 10: Factors influencing the threat of substitutes in the apparel retail industry in the United Kingdom, 2014


While there are no substitutes for apparel as such, there are alternatives to retail. One option is purchasing clothing

directly from the manufacturer as opposed to the conventional distribution chain. This is facilitated by the growth of online

sales. All major apparel retailers now have their own online stores as there is an increased consumer acceptance of the

internet as an alternative shopping channel. This is particularly prevalent in the UK, where online shopping is widely used

and accepted. In 2013, an estimated 14% of all clothing was bought via e-commerce, showing this channel's threat to

traditional bricks-and-mortar retail.

A growing number of ‘pureplay’ online fashion stores, like UK-based ASOS, have emerged in the market, as they look to

take advantage of lower running costs from not having to pay for the overheads incurred by running a high street store.

The online sale avenue opens the door for manufacturers who may be tempted by the opportunity of selling directly to

end users without the need for the retailer.

Home-made and custom-made (couture) clothing are also niche alternatives to the retail of ready-made clothes.

Counterfeit clothing can be a significant threat to revenues of manufacturers in some countries. Another option is

purchasing second-hand clothing from charity shops and internet sites such as eBay.

The threat of substitutes to the apparel retail industry is assessed as weak overall.



Degree of rivalry

Figure 11: Drivers of degree of rivalry in the apparel retail industry in the United Kingdom, 2014


The UK apparel retail industry is typically composed of large numbers of similar retailers, many of which are

independents. However, there is still room for large numbers of smaller players in this industry.

Major increases in capacity may be fairly costly to smaller players if they require the outlay of opening additional outlets,

although this may be lessened if it can be accomplished by taking on more staff on a flexible basis.

While some retailers selling apparel have diversified into the retail of other items, such as jewelry, many retain a strong

emphasis on apparel specifically, which intensifies rivalry. Furthermore, 'Black Friday' is a sales event that originated in

the US but has begun to take root in the UK. Retailers will slash prices on a variety of goods including clothing in the run-

up to Christmas. According to the ONS, Black Friday deals, which saw thousands of shoppers rush out to snap-up

bargains on November 28, 2014, had a significant impact on sales. Retail sales volumes rose by 1.6% in November

2014 compared with the previous month; with growth in all main store types - including food, clothing, fuel and household

goods, for the first time in almost a year. On an annual basis, sales volumes rose by 6.4% in 2014. This demonstrates

that it is easy for customers to move from one retailer to another based on price and this boosts the intensity of rivalry.

A fast pace of change in fashions in the apparel retail industry does little to alleviate rivalry, due to fairly low growth in

recent years. Overall, rivalry is assessed as moderate.



LEADING COMPANIES

Arcadia Group Limited

Table 6: Arcadia Group Limited: key facts

Head office: Colegrave House, 70 Berners Street, London W1T 3NL, GBR

Telephone: 44 844 243 0000

Website: www.arcadiagroup.co.uk

Financial year-end: August

SOURCE: COMPANY WEBSITE M A R K E T L I N E

Arcadia Group (Arcadia) is a privately-held clothing retailer that offers fashion clothing, shoes and accessories for men

and women. It has operations in the Americas, Europe, the Middle East and Asia.

The group operates through eight fashion brands: Dorothy Perkins, Evans, Miss Selfridge, OUTFIT, TOPSHOP,

WALLIS, Burton, and TOPMAN.

Dorothy Perkins is one of the biggest fashion retailers in the UK, with nearly 600 UK stores and over 120 international

outlets. It offers going out dresses, women's shoes, skinny jeans, maternity clothing, jackets, high heels, women's

dresses, maxi dresses, knitwear, coats, skirts and accessories. The company's e-commerce platform is

dorothyperkins.com which ships to over 110 countries and showcases over 6,000 lines that are updated daily. The site

receives approximately 1.2 million customers every week.

Evans operates over 180 stores across the UK and Ireland. These stores offer plus size clothing, going out tops, ladies

boots, party dresses, women's jeans, wide fitting boots, leggings, plus size lingerie, wide fitting shoes, plus size dresses,

plus size swimwear and plus size clothes.

Arcadia's Miss Selfridge brand operates around 250 stores worldwide and targets female customers in the 18-24 age

group.

The group's OUTFIT brand offers Arcadia branded clothing in 49 out-of-town retail parks. Outfit carries a mix of all the

Arcadia brands as well as other selected additional ranges. Outfit has 70 stores across the UK.

Arcadia's TOPSHOP brand operates more than 300 stores across the UK and over 140 stores in international territories.

It offers clothing, shoes and accessories.

The group's WALLIS brand operates around 400 stores in the UK and Ireland. It offers women's clothing, dresses,

evening dresses, cardigans, blouses, women's tops, women's trousers, women's shoes, maxi dresses, petite clothing

and petite dresses.

Arcadia's Burton stores offer a range of men's clothing ranging from casual wear and leisure wear to formal wear, shoes

and accessories. The group's TOPMAN stores offers branded clothing, shoes and accessories for young men.

Key Metrics

The group recorded total sales of GBP2,706.5m (approximately $4,456.6m) in the fiscal year ended August 2014, an

increase of 0.9% over 2013.



Marks and Spencer Group plc

Table 7: Marks and Spencer Group plc: key facts

Head office: Waterside House, 35 North Wharf Road, London W2 1NW, GBR

Telephone: 44 20 7935 4422

Website: www.marksandspencer.com

Financial year-end: March

Ticker: MKS

Stock exchange: London


Marks and Spencer Group (M&S) is the holding company of the Marks & Spencer Group of companies. The company is

one of the UK's leading retailers. M&S offers clothing and home products, as well as food sourced from various suppliers

globally. It operates through both wholly-owned stores and franchise stores. As of FY2014, the company operated 798

stores in the UK, and 455 international stores in 54 territories across Europe, the Middle East, and Asia.

The company operates in two segments based on its geographies, namely, the UK and international. The UK segment

consists of the UK retail business and UK franchise operations. The international segment consists of Marks & Spencer

owned businesses in the Republic of Ireland, Europe and Asia, together with international franchise operations. Although

the company reports its revenues in terms of geographic segments, its operations can be categorized under two

divisions - food and general merchandise.

The food division concentrates on four main areas: fresh, natural, healthy food; special celebration products; authentic

ready meal ranges; and everyday food. The company operates a chain of 185 Simply Food owned stores and 262

Simply Food franchise stores in high streets, motorway service stations, railway stations and airports in the UK.

The general merchandise division of the company offers clothing which includes womenswear, beauty products,

menswear, lingerie, childrenswear; and home-related products such as kitchenware, dining room accessories, and

furniture. The division's prominent brands include Autograph, Limited Collection, Blue Harbour and Per Una.

M&S offers its products and services online as well as through flagship stores, high street stores, retail park stores, M&S

outlets, Simply Food owned stores, and Simply Food franchised stores.

In addition to general merchandise and food, the company provides financial services, such as credit cards; home and

travel insurance; personal loans; and banking services.

Key Metrics

The company recorded revenues of $16,976 million in the fiscal year ending March 2014, an increase of 2.8% compared

to fiscal 2013. Its net income was $864 million in fiscal 2014, compared to a net income of $747 million in the preceding

year.



Table 8: Marks and Spencer Group plc: key financials ($)

$ million 2010 2011 2012 2013 2014

Revenues 15,703.3 16,038.7 16,358.1 16,510.5 16,976.3

Net income (loss) 861.2 1,007.7 844.9 746.7 864.2

Total assets 11,778.7 12,093.0 11,976.5 12,532.0 13,013.3

Total liabilities 8,179.3 7,684.3 7,400.8 8,383.3 8,556.4

SOURCE: COMPANY FILINGS M A R K E T L I N E

Table 9: Marks and Spencer Group plc: key financials (£)

£ million 2010 2011 2012 2013 2014

Revenues 9,536.6 9,740.3 9,934.3 10,026.8 10,309.7

Net income (loss) 523.0 612.0 513.1 453.5 524.8

Total assets 7,153.2 7,344.1 7,273.3 7,610.7 7,903.0



Table 10: Marks and Spencer Group plc: key financial ratios

Ratio 2010 2011 2012 2013 2014

Profit margin 5.5% 6.3% 5.2% 4.5% 5.1%

Revenue growth 5.2% 2.1% 2.0% 0.9% 2.8%

Asset growth (1.4%) 2.7% (1.0%) 4.6% 3.8%

Liabilities growth (3.7%) (6.1%) (3.7%) 13.3% 2.1%

Debt/asset ratio 69.4% 63.5% 61.8% 66.9% 65.8%

Return on assets 7.3% 8.4% 7.0% 6.1% 6.8%




Figure 12: Marks and Spencer Group plc: revenues & profitability


Figure 13: Marks and Spencer Group plc: assets & liabilities




Mothercare plc

Table 11: Mothercare plc: key facts

Head office: Cherry Tree Road, Watford, Hertfordshire WD24 6SH, GBR

Telephone: 44 1923 241 000

Fax: 44 1923 206 376

Website: www.mothercareplc.com

Financial year-end: March

Ticker: MTC



Mothercare is a UK-based retailer that sells apparel for babies and young children, home and travel products, maternity

clothing and toys. It has operations in Europe, the Middle East, Africa and the Far East.

The company offers its products through the following three channels: UK stores, direct (in-home and in-store internet-

based businesses and catalogue mail order) and international (the company franchises or participates in joint venture

operations).

The company operates through the following three brands: Mothercare, Early Learning Centre (ELC) and Gurgle.com.

Mothercare is a retailer of products for mothers-to-be, babies and children up to the age of eight. It offers a range of

maternity and children's clothing, furniture and home furnishings, bedding, feeding, bathing, travel equipment and toys

through its retail and internet operations in the UK. It operates internationally through retail franchises under the

Mothercare brand name. The company operates around 92 in town stores, 97 out of town stores and 819 international

Mothercare stores.

ELC is a designer and retailer of toys and other children's products primarily for birth to six years range. It operates a

direct internet and catalogue business and a wholesaling business, providing products to domestic and international

customers. Its toys and games comprise its own brands, designed and sourced through a sourcing center in Hong Kong.

The company operates around 31 in town stores, 128 inserts in Mothercare stores and 402 international ELC stores.

Gurgle.com is a social networking site for new parents. It provides information and marketing opportunities through the

website, mothercare.com.

The company's subsidiaries include Early Learning Centre Limited, Mothercare UK Limited and Mothercare Procurement

Limited.

Key Metrics

The company recorded revenues of $1,194 million in the fiscal year ending March 2014, a decrease of 3.3% compared

to fiscal 2013. Its net loss was $45 million in fiscal 2014, compared to a net loss of $36 million in the preceding year.



Table 12: Mothercare plc: key financials ($)

$ million 2010 2011 2012 2013 2014

Revenues 1,262.0 1,306.8 1,338.2 1,234.0 1,193.6

Net income (loss) 38.9 10.7 (151.2) (36.2) (45.3)

Total assets 675.1 674.0 557.2 560.5 494.3

Total liabilities 364.9 356.5 437.5 496.6 469.3


Table 13: Mothercare plc: key financials (£)

£ million 2010 2011 2012 2013 2014

Revenues 766.4 793.6 812.7 749.4 724.9

Net income (loss) 23.6 6.5 (91.8) (22.0) (27.5)

Total assets 410.0 409.3 338.4 340.4 300.2

Total liabilities 221.6 216.5 265.7 301.6 285.0


Table 14: Mothercare plc: key financial ratios

Ratio 2010 2011 2012 2013 2014

Profit margin 3.1% 0.8% (11.3%) (2.9%) (3.8%)

Revenue growth 5.9% 3.5% 2.4% (7.8%) (3.3%)

Asset growth 7.8% (0.2%) (17.3%) 0.6% (11.8%)

Liabilities growth 22.0% (2.3%) 22.7% 13.5% (5.5%)

Debt/asset ratio 54.0% 52.9% 78.5% 88.6% 94.9%

Return on assets 6.0% 1.6% (24.6%) (6.5%) (8.6%)




Figure 14: Mothercare plc: revenues & profitability


Figure 15: Mothercare plc: assets & liabilities




NEXT plc

Table 15: NEXT plc: key facts

Head office: Desford Road, Enderby, Leicester LE19 4AT, GBR

Telephone: 44 844 844 8888

Fax: 44 11 6284 8998

Website: www.nextplc.co.uk

Financial year-end: January

Ticker: NXT



NEXT (or 'the company') is primarily engaged in the retail sale of clothing, footwear, accessories and home products in

the UK, Europe, the Middle East and Asia.

The company operates through seven business segments: NEXT Retail, NEXT Directory, NEXT International Retail,

NEXT Sourcing, Lipsy, property management and other.

NEXT conducts its distribution activities through three business segments: NEXT Retail, NEXT Directory, and NEXT

International Retail. NEXT Retail operates a chain of more than 537 stores in the UK and Ireland. NEXT Directory is the

online and catalogue business with approximately four million active customers. It serves customers in around 70

countries outside the UK through its international website, nextdirect.com. The company's NEXT International Retail

segment operates 189 stores in 35 countries overseas.

The company retails homewares, clothing, shoes and accessories for men, women and children.

The NEXT Sourcing segment is engaged in the design, sourcing, buying, merchandising and quality control of NEXT

branded products.

Lipsy designs and sells its own branded younger women's fashion products through retail, internet and wholesale

channels.

NEXT's property management segment holds properties which are sub-leased to other segments and external parties.

The other segment comprises third party distribution activities.

Key Metrics

The company recorded revenues of $6,586 million in the fiscal year ending January 2015, an increase of 6.9% compared

to fiscal 2014. Its net income was $1,045 million in fiscal 2015, compared to a net income of $911 million in the

preceding year.



Table 16: NEXT plc: key financials ($)

$ million 2011 2012 2013 2014 2015

Revenues 5,430.1 5,666.2 5,866.6 6,158.4 6,586.2

Net income (loss) 660.1 781.8 837.6 910.9 1,045.4

Total assets 2,951.3 3,053.2 3,118.1 3,531.4 3,758.1



Table 17: NEXT plc: key financials (£)

£ million 2011 2012 2013 2014 2015

Revenues 3,297.7 3,441.1 3,562.8 3,740.0 3,999.8

Net income (loss) 400.9 474.8 508.7 553.2 634.9

Total assets 1,792.3 1,854.2 1,893.6 2,144.6 2,282.3



Table 18: NEXT plc: key financial ratios

Ratio 2011 2012 2013 2014 2015

Profit margin 12.2% 13.8% 14.3% 14.8% 15.9%

Revenue growth (3.2%) 4.3% 3.5% 5.0% 6.9%

Asset growth 5.8% 3.5% 2.1% 13.3% 6.4%

Liabilities growth 0.0% 4.6% (1.4%) 15.6% 5.5%

Debt/asset ratio 87.0% 88.0% 84.9% 86.7% 85.9%

Return on assets 23.0% 26.0% 27.1% 27.4% 28.7%




Figure 16: NEXT plc: revenues & profitability


Figure 17: NEXT plc: assets & liabilities




MACROECONOMIC INDICATORS

Country Data

Table 19: United Kingdom size of population (million), 2010–14

Year Population (million) % Growth

2010 62.8 0.8%

2011 63.3 0.8%

2012 63.7 0.7%

2013 64.1 0.6%

2014 64.5 0.6%


Table 20: United Kingdom gdp (constant 2005 prices, $ billion), 2010–14

Year Constant 2005 Prices, $ billion % Growth

2010 2,362.9 1.7%

2011 2,389.3 1.1%

2012 2,395.9 0.3%

2013 2,437.7 1.7%

2014 2,507.1 2.8%


Table 21: United Kingdom gdp (current prices, $ billion), 2010–14

Year Current Prices, $ billion % Growth

2010 2,296.9 3.6%

2011 2,464.6 7.3%

2012 2,481.3 0.7%

2013 2,531.8 2.0%

2014 2,853.7 12.7%




Table 22: United Kingdom inflation, 2010–14

Year Inflation Rate (%)

2010 3.3%

2011 4.5%

2012 2.8%

2013 2.5%

2014 1.6%


Table 23: United Kingdom consumer price index (absolute), 2010–14

Year Consumer Price Index (2005 = 100)

2010 114.5

2011 119.7

2012 123.1

2013 126.2

2014 128.2


Table 24: United Kingdom exchange rate, 2010–14

Year Exchange rate ($/£) Exchange rate (€/£)

2010 0.6475 0.8589

2011 0.6235 0.8674

2012 0.6311 0.8111

2013 0.6397 0.8491

2014 0.6073 0.8062




METHODOLOGY

MarketLine Industry Profiles draw on extensive primary and secondary research, all aggregated, analyzed, cross-

checked and presented in a consistent and accessible style.

Review of in-house databases – Created using 250,000+ industry interviews and consumer surveys and supported by

analysis from industry experts using highly complex modeling & forecasting tools, MarketLine’s in-house databases

provide the foundation for all related industry profiles

Preparatory research – We also maintain extensive in-house databases of news, analyst commentary, company

profiles and macroeconomic & demographic information, which enable our researchers to build an accurate market

overview

Definitions – Market definitions are standardized to allow comparison from country to country. The parameters of each

definition are carefully reviewed at the start of the research process to ensure they match the requirements of both the

market and our clients

Extensive secondary research activities ensure we are always fully up-to-date with the latest industry events and

trends

MarketLine aggregates and analyzes a number of secondary information sources, including:

- National/Governmental statistics

- International data (official international sources)

- National and International trade associations

- Broker and analyst reports

- Company Annual Reports

- Business information libraries and databases

Modeling & forecasting tools – MarketLine has developed powerful tools that allow quantitative and qualitative data to

be combined with related macroeconomic and demographic drivers to create market models and forecasts, which can

then be refined according to specific competitive, regulatory and demand-related factors

Continuous quality control ensures that our processes and profiles remain focused, accurate and up-to-date



Industry associations

International Textile and Apparel Association

PO Box 1360, Monument, CO 80132-1360, USA

Fax: 1 719 488 3716

www.itaaonline.org

British Apparel and Textile Confederation 5 Portland Place, London, W1B 1PW, GBR

Tel.: 44 20 636 77 88

Fax: 44 20 636 75 15

www.apparel-textiles.co.uk

Related MarketLine research

Industry Profile

Global Apparel Retail

Apparel Retail in Europe

Apparel Retail in Asia-Pacific

Apparel Retail in Germany



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