April 2014

Womenswear Retailing in the UK

Womenswear spend per head

Women will spend an extra £21.46 on clothing in 2014

Figure 1: Womenswear spend per head (£), 2009–14e

733.03 778.40 789.22 807.96 825.29 846.75

2009 2010 2011 2012 2013 2014e

£

+£113.72

£

733.03 778.40 789.22 807.96 825.29 846.75

2009 2010 2011 2012 2013 2014e

£

+£113.72

733.03 778.40 789.22 807.96 825.29 846.75

2009 2010 2011 2012 2013 2014e

£

+£113.72

£

Source: Verdict estimates V E R D I C T

Note: based on ONS population estimates

Inflation has had a positive impact on spend per head. We believe that expenditure on

womenswear per adult female will grow by 2.6% in 2014, equivalent of £21.46, and will be

up 14.0% between 2009 and 2014 – an extra £113.72 which has be incremental to those

retailers achieving growth – though this has subsequently caused volume growth to be

weaker throughout the downturn. The period of high volumes at low prices has been

exchanged for fewer higher priced items with consumers seeking high quality and good

value for money – causing spend per head to rise but volumes to be more muted. However,

for the first time since 2009 volume growth will exceed the level of inflation in 2014, as

consumers gradually start to feel more confident about spending on discretionary clothing

pieces.

Weaker growth in lingerie spend per head due to value retailers investing

in the sector

While women's outerwear spend per head will grow by 14.3% in the five years to 2014

reaching £701.02, we forecast consumer expenditure on women's underwear will rise by

just 8.8% to £145.72. The likes of Primark and the grocers have vastly improved their

ranges by providing more choice, interpreting more trends into designs and investing in fit

and comfort which has lured consumers to trade down from retailers such as M&S and

Debenhams. We expect this trend to continue, with consumers likely to purchase items

more frequently due to regular newness and lower price points.

April 2014

Womenswear Retailing in the UK

CHANNEL SHARES

Grocers and home shopping specialists are the winners

Figure 2: Channel summary, 2014–19e

Source: Verdict V E R D I C T

Online pureplays threaten multichannel players

UK online clothing & footwear grew by over 165% between 2009 and 2014

The value of the UK online clothing & footwear market is forecast to grow at a rapid pace

from 2014 to 2019, as spend continues to shift online from more traditional channels such

as stores and catalogues. The likes of House of Fraser, Next and M&S continue to invest

and update their online proposition and facilities to ensure they are maximising the

channel's potential and protecting themselves from the growing competition.

April 2014

Womenswear Retailing in the UK

H&M, New Look and Topshop threatened by Pretty Little Thing and Daisy

Street

While Boohoo and Missguided are currently the biggest threats to not only ASOS but also

multichannel players such as New Look and H&M, there are two smaller players that will

pose a threat to these retailers in the coming five years – Pretty Little Thing and Daisy

Street. Both of these online pureplays launched in 2011, and while they may be a few years

behind Boohoo and Missguided, they have the potential to reach their current level of sales.

These players will be part of the next wave of online pureplays and are set to experience

high growth rates – though retail sales and market share will remain small.

As ASOS continues to invest in its transactional website, these two players must do the

same, introducing new features, content and products to attract new customers and drive

sales. Key aspects of their offers that need investment are the delivery and returns options,

maintaining a consistent brand personality across editorial features and engaging

consumers with regular editorial updates. By doing this, they will stand a better chance of

attracting new visitors and stealing sales from established rivals.

Figure 3: Strengths and opportunities for Pretty Little Thing and Daisy Street to grow sales, 2014

• Animation brings offer to life• Strong basics offer• Editorial trend-focused

content

• Easy website navigation• Customer engagement via

social media• Customer support service

well highlighted

• Must improve delivery offer• Increase returns period• Ensure blog is kept up to date• Enhance filtering options

• Blog should better reflect proposition

• Increase returns period• Offer delivery via Collect+

Strengths

Opportunities

Will threaten

Source: Verdict V E R D I C T

April 2014

Womenswear Retailing in the UK

Opportunity for womenswear retailers across all price segments to

grow sportswear sales

Sports clothing and footwear expenditure will grow 21.3% in the five years

to 2019

There is significant opportunity for womenswear retailers to place greater focus on

introducing or growing their sportswear ranges, as consumers seek more fashion

influences in products and sporting events such as the Olympics and World Cup drive

footfall and purchases. Consumers are taking a greater interest in catwalk trends, and

increasingly want to look fashionable while exercising following on from the likes of

Alexander Wang and Lacoste using sporting influences in their runway shows, playing into

the hands of clothing retailers.

Womenswear players expand ranges to capitalise on the popularity of

sports

The fashion element in sportswear has become increasingly relevant, and womenswear

retailers across all price segments of the market have succeeded in catering for this

consumer demand, leaving some sports specialists lagging behind. Over the next five

years, we expect high street clothing retailers, lifestyle brands and luxury players to steal

share from sports specialists as they improve and widen ranges.

April 2014

Womenswear Retailing in the UK

With fashion playing a greater role in sportswear, we believe that there are further

opportunities for clothing retailers to develop sports ranges and expand within the market.

They must take advantage of shoppers visiting their stores for core collections, and drive

footfall to their sportswear ranges, boosting convenience for those shoppers that are time

pressed and boosting average spend per head.

Marketing instore, online and in editorial content will raise awareness of

sports ranges

More womenswear retailers such as Topshop and White Stuff should learn from these

players within each segment of the market and widen sports ranges and sports

performance credentials to increase their share of this robust and lucrative market.

Dedicating an area to sports in stores or online and making it a standalone category will

draw attention to ranges and allow shoppers to easily access products. Moreover, by

promoting ranges in feature spreads in health magazines and on health websites, clothing

specialists would be able to target a larger customer base outside of their core regular

shoppers.

Figure 4: Clothing specialists investing in sportswear, 2014

• Fat Face’s new Activ88

performance range

provides sportswear

products for running,

jogging, walking, cycling

and yoga

• The capsule range

focuses around the

hobbies of its core

customer base and still

encompasses the brand’s

design handwriting

• In January 2014, Primark launched a new

video campaign to raise awareness of its

expanded women’s fitness range, Workout

• Primark has an opportunity to add more

fashion influences to its sports ranges,

especially since H&M has upped the ante

and targets a similar customer base

• Hermès launched a new theme

for its 2013 autumn/winter

range called ‘a sporting life’,

which uses sports influences

• Hermès has researched the

hobbies and lifestyle of its

customer base and has tapped

into sports growth areas where

it can bring performance, style

and ultimate luxury into its

collections

• Following the 2012 Olympics, H&M

has rolled out a new sports concept

across all of its UK stores

• H&M Sport has dedicated

performance-led ranges for different

sporting activities such as running,

tennis and yoga

• Products incorporate fast-drying

functional fabrics, but in a fashion-

forward way by integrating the latest

catwalk trends through prints and

colours

Source: H&M, Primark, Fat Face, Hermès, Verdict V E R D I C T

April 2014

Womenswear Retailing in the UK

For more information on our Clothing & Footwear analysis please contact

enquiries@verdictretail.com

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