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The Retail Clothing

Industry

In the clothing manufacturing


Industry the market structure is
very mature and highly
competitive.
(ICC Report August 1999)

The Main Players


Arcadia Group (Burtons, Hawkshead, etc.)
Variety Stores (M&S, BHS, etc.)
Department Stores (Debenhams, John
Lewis, Selfridges, etc.)
Supermarkets (Tesco, etc.)
Individual stores (Next, Gap, etc.)
The Internet (dot com!)

Trends within the industry

Poor performance compared to the retail sector as


a whole
downward pressure on price and upward pressure
on rents and rates
polarisation and changing consumption patterns
dominance of large businesses over small firms
International competition
E-commerce

Factors affecting Competition (1)

Distribution Channels
Multiple specialists
Variety stores
Independent specialists
Mail order
Department stores
Discount/factory outlets
Others *

m
1,829
1,173
1,166
338
483
828
1083
6,901

%
26.5
17.0
16.9
4.9
7.0
12.0
15.7
100

Factors affecting Competition (2)


New Entrants
Branding / Private Labels
Advertising
Market Segmentation
Competitors Focus
Consumers Power

Is the UK a relevant boundary?


Globalisation
Sourcing garments
Specialisation in clothing
Internet
New entrants (ie: supermarkets)
Market competition

The Competitive Environment:


The Five Forces Model
The threat of new entrants
The bargaining power of the firms suppliers
The bargaining power of the firms
customers
The threat of substitute products
The intensity of rivalry among competing
firms

SWOT Analysis
Strengths

Developed economy and therefore easy access to stores, well educated staff and a legislation that allows
7 working days a week.
Mature market, businesses know what they are doing
Low entry barriers: low set up costs and therefore low risk
The economy as a whole is in a state of steady growth, which will ensure stable demand and
consumption.

Weaknesses

U.K. shifted from a sellers to a buyers market, resulting in more competition, requiring firms to offer the best
value for money.
The average price in the clothing market has fallen by 3% in the last two years
Mature market, danger of complacency by businesses
Higher costs in UK rent, labour and transport.

Opportunities

Increasing demand from an ageing population


35-44 year olds are the largest age band in an ageing population demanding certain types of clothing
Increasing number of single person households, thus more houses and a higher demand for quantity of food
and shopping outlets
Increasing level of employment; more disposable income to spend on clothing
Higher demand for sport/leisure/designer wear clothing
Higher number of men and women reading magazines has impacted the clothing market, particularly
designer wear
Greater popularity for shopping as a past-time
Massive opportunity to develop internet shopping for clothing.

Threats
Demand for formal outwear has fallen due to a relaxation in dress codes and a changed working environment.
Growth in designer wear has threatened demand for high-street wear.
Competition from new overseas entrants e.g. GAP, Hennes and Zara
Ageing population means that the age market of 15-24 the most frequent buyers of clothes is getting smaller.
Slower growth in school wear consumption has threatened suppliers.
The increasing popularity of out-of-town retail parks and catalogue companies (such as Matalan and
Littlewoods) are steering shoppers away from the town centre.
Higher disposable income in homes, but money now being spent on DIY, mobile phones, electrical goods

and leisure
Finding strong competition in its newest venture, Internet shopping
Lots of changes in the industry. For example Boo.com a web clothes shopping page, which went bust. This is
unchartered territory.

Presentation Group:
Andrew Bowden
James Brailey
Jennie Capps
Ed Elderfield
Laura Hankins
James Streeter