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Clothing and footwear sales down September 2015 v 2016 by -5.4% in volume and -5% in value. Why?

Julia Reynolds
07 November 2016

I was not at all surprised to read the latest clothing, textile and footwear figures published a couple of weeks ago. 88% of those figures relate to clothing, 10% is footwear and 2% textiles.

There is much talk about it being weather related and one of the warmest Septembers on record. This I do accept, but as a consumer and a retailer I have other ideas that I believe are influencing the numbers.

Two seasoned Italian retailers that I have known for years, came over to the UK from Italy recently. We had a couple of days looking around the clothing retailers, mainly at the entry price point and mid-market end of the sector. We visited all of the high street players, the supermarkets, the specialists and the generalists. There were a couple of common observations that they raised, but that were already obvious to me, having done these visits recently.

They continuously commented on the poor quality of the clothing in ALL the retailers we visited. We experienced racks and racks of limp, creased, puckered, over pressed garments made in cheap fabrics with threads hanging off.

Each retailer we visited looked just like the last one we had walked out of. Similar styles, similar fabrics, same colours, lacklustre, no excitement. They all merged into one, lacking in excitement, style and quality and none creating any excitement for us as customers and consumers in general.

You know when British fashion retail is in trouble when your 82 year-old mother with a young outlook on life bemoans for the M&S of years ago; today she claims the offer is boring and very poor quality, "It looks like a charity shop" she says. She was just as scathing about Monsoon and Next.

Once Primark and the supermarkets offered great value for money and while much of it was throw-away fashion, you could find some good pieces, be it a cashmere jumper, a pair of basic jeans or a decent pack of tights. Alas this all seems to have all but disappeared, in what would appear the incessant campaign to drive prices down. The quality has diminished and has been the price to pay for keeping prices competitive.

The mid market players have followed suit in chasing price it would appear. Where once M&S stood out for its quality and customer service and not its fashion, it would appear from recent visits that it has lost those too. Next’s childrens clothing is still excellent for style and quality and the men’s is still pretty reasonable however, the women’s offer looks like everyone else, cheap tacky, poor quality and boring.

The entire portfolio of Acardia fascias is an homogenised hotch-potch of boring, poor quality product and even the star performer of the group, Topshop, is not looking great. River Island, like Topshop, appeared to be full of cheap, PU handbags all embellished with gilt trims and shoes only suitable to wear for a few hours on a Friday night.

I have even heard complaints of the much loved and coveted Zara losing its halo recently along with H&M with complaints of poor quality. Not one of the supermarkets clothing offers looks good, with all three looking like they have been forced to focus on the food side of their businesses as customers move away from shopping in superstores. Once George and F&F populated the pages of glossy magazines, heralded as the smart way to buy pieces to enhance your designer wardrobe. Notably the quality has seriously diminished, probably in an endeavour to compete with Primark on price.

The upper mid-market players must be doing better, just on the back of slightly wealthier customers wanting to buy something that is better quality and more stylish. Brands such as Whistles, Jigsaw, Mint Velvet, Hobbs, Joules Clothing, Ted Baker and Cos must be having a better time and or even a revival. All of these have a clear brand identity and know who they are and who their customer is. This does not mean the customer is spending more, they are buying fewer items in order to get style and quality.

Even the department store groups are not looking good, with both Debenhams and House of Fraser looking messy and unclear about who they are and what they are doing and parts of John Lewis are starting to look tired and boring.

Is this me or are many customers feeling the same? I have a friend who owns an independent store, catering for a regular clientele who come to her for the customer service and to buy something different. She told me that her business is very buoyant, having the best season ever. Her customers are coming to see her complaining of M&S and Next in particular. Poor quality, boring and repetitive homogenised styling is what is driving them away. I cannot find any data on how independents are doing but, certainly in my home town and surrounding areas there appears to be lots of new independents springing up, but that just may be me noticing this.

There does appear to be many more specialist clothing brands putting paper catalogues together and appearing on social media marketing campaigns. They are however, still at the premium end of the market, are we seeing them as more expensive because we have become used to the entire high street being so cheap?

Online/mail order shopping for fashion appears to have reached a plateau according to the latest figures published. So the decline appears to be coming from the high street and or changing shopping habits, for example browsing the shops and buying online when they get home. While many UK brands are reporting big rises in shipping goods overseas, ASOS and Yoox Net-a-Porter to name two businesses who are reporting strong increases in exports, I wonder how many UK-based customers are buying brands from overseas seeking better quality and different styling?

Banana Republic has announced that it is exiting the UK. I am not a bit surprised, it looks terrible in their stores, with the same challenges as the UK retailers. Banana Republic used to be a fantastic place to shop with beautiful quality clothing and when I was a buyer I relished the thought of wandering around Banana Republic in New York, admiring their proposition and affordable prices for wardrobe staples that would last years in both quality and style.

So what are the causes in my view?

We have become too price-focused in the UK – all following the Primark model – and we have been too obsessed that this is the way the consumer wants to go. Great value for money has been misinterpreted as great value or cheap. The need to keep prices low or reduce them in order to compete has led sourcing teams and suppliers to head further and further into developing countries in order to find lower labour costs and cheaper production. This comes with its own challenges, the recent Panorama report on factories in Turkey exploiting Syrian children and asylum seekers says it all.

The 2008 recession and the rapid change in shopping habits, moving online, has sent fashion retail into a tailspin. These business have spent the last eight years, cutting costs in their operations, cutting prices and margins. They have made little or no investment in real-estate and have been wrestling with over-inflated rents and rates and are tied into long-term leases and retail portfolios that are too large.

They have had to invest in e-commerce and their marketing budgets have been redirected into paying for ad-words and optimising content. They have had to set up logistics processes to accommodate the growth in e-commerce at great cost and disruption to business. So recession, price reduction, investment in IT and logistics has taken their toll on innovation and product development.

Business leaders and management teams stifling creativity down the ranks during tough times, cashflow being tighter and in turn restricting creativity, and few opportunities to try new things have all contributed to everything being too safe and all about costs. Clearly there has to be a balance but, as any money available has been diverted into adapting to the changing market, this has left little or none for investing in the reason for being.

It has to change. I, as a consumer, want good value for money. I want stylish, good quality product with new styles and looks to enhance last year’s wardrobe. I want things to last and look good after more than one wash. This is not my age or life stage; my nieces in their early 20s and my mother and friends, we all feel the same and we cannot be alone.

I don't want to spend more money but I am happy to spend more on fewer, better made and more stylish products. After all, all women have several items in their wardrobe that they wear a lot and a lot they wear a little or not at all. Perhaps women need to shop more like men. More replacement clothing, topped up with a few special items.

Technology for producing clothing and footwear has to move on, we cannot keep relying on low-cost semi-skilled labour. To bring better quality, innovation, but maintaining value for money the industry has to become more automated. This can be done with investment in the country of the consumer, reducing critical paths dramatically, sea and air miles, improving our environmental footprint and tapping into skilled engineering labour. America is making great strides in bringing back manufacturing closer to home, to provide work for their population and gaining control back of their supply chain.

Robots making our clothes, down the road from where we live, managed by skilled engineers, similar to the hosiery market is the way forward.

As part of the work I do as a business adviser, I have started to talk much more about great value for money, real choice, customer experience and the strength of the brand and what you stand for. How far does British high street fashion have to decline, as the consumer votes with their purse and their feet, before the tipping point comes?

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