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 (Burton’s, 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
£m %
Multiple specialists 1,829 26.5
Variety stores 1,173 17.0
Independent specialists 1,166 16.9
Mail order 338 4.9
Department stores 483 7.0
Discount/factory outlets 828 12.0
Others * 1083 15.7
6,901 100
Factors affecting Competition (2)
 New Entrants
 Branding / Private Labels
 Advertising
 Market Segmentation
 Competitors Focus
 Consumer’s 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 firm’s
suppliers
 The bargaining power of the firm’s
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