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The Fashion industries are so far
constantly evolving compared to a hundred years ago.
The clothing retail industry has been and is undergoing significant changes
resulting from processes of globalisation, changes in consumer demand as well
as continual technological developments.

The UK clothing retail industry has
experienced significant growth which has focused attention on studies in the
field with this sector being considered as one of the most competitive markets
in Europe. Indeed, often perceived as a global fashion leader, for setting the
most innovative and unique trends that have dominated the fashion industries,
the UK has proved to be dedicated to producing some of the best fashion
designers in history, with each year new born designers joining the list.

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This report seeks to provide a broad
evaluation of the UK fashion market, its position in the global market as well
as its structure; who are ‘the winners’?, In addition to that, an understanding
of the role and importance of a Buying and Merchandising team in an Omni channel
business will be analysed, as well as the definition and importance of KPIs.



Size and structure of the UK fashion industry.


The UK fashion industries have been a major contributors to the economy
because of their annual revenue and value. Mintel estimates that
consumer spending on clothing will grow by 3.1% in 2017 to reach £57.7 billion
as people continue to buy clothes despite an uncertain economic backdrop.

Indeed, sales growth
has been weaker in 2017 compared to 2016, with consumer spending on clothing
estimated to grow by only 3.1% in 2017 compared with 4.1% growth the previous

Mintel estimates that
the clothing market will grow by 19% over the next five years to reach £69
billion by 2022.



Source: Mintel, Clothing
Retailing Europe- October 2017



Consumers have
continued to spend on clothing as a percentage of total spend, with spend on

clothes and
accessories continuing to account for 4.7% of total consumer spend in 2017. 

Most consumers still
describe their finances as “ok” (43%) or “healthy (26%), according to the
latest Mintel Report Consumers and the Economic Outlook: Quarterly Update – UK, July
2017. However, there has been an overall decline in confidence since
the Brexit vote, with the forward-looking measure of sentiment falling.



Source: Mintel, Clothing
Retailing Europe- October 2017



The Fashion industry has also proven to be a significant
employer, considering it is estimated to support 880,000 jobs between a wide range
of departments: fashion retail, wholesaling, suppliers, manufacturing,
textiles, media, marketing, creative, education…, which is illustrated in the
figure below (up from 797,000 in 2013). Fashion is the largest employer of all the UK’s
creative industries, the sector also provides opportunities to minority groups
to a greater extent than most other creative industries.

Source: The British council, The Value of the
uk fashion market


The fashion
industry is identified with women’s and men’s clothing, footwear, children’s
wear and accessories.


Source: Mintel, Clothing
Retailing Europe- October 2017




 The UK fashion market can be divided into
three different entities, and this includes; luxury also known as the premium
market, the midmarket and the value retailers. If we were to sum up all the different components of the fashion’s
structure, the first would be the high-end market that consists of Designers
Haute Couture, Demi-couture, Designers RTW, Bridge brands and Diffusion RTW.
While the second would more likely be focusing on the high street market that
offers more affordable prices, which automatically attract a wider range of
consumers; groups the upper high street, mainstream high street, and the value




2011 2016

Source: Verdict with
Conlumino (2016) UK Womenswear



Womenswear vs Menswear

However, while it is true that womenswear has always had the
biggest share in the sector, it is interesting to observe that menswear is so
far evolving. Indeed, the womenswear market is underperforming menswear, with
sales slowing considerably in the last year. According to Mintel, in 2015 it
was worth £26.9 billion, however it has slightly increased in 2016, by 1,3% and
is worth £27.25 billion, it is likely estimated to grow 23% by 2020 to £32
billion. The market is forecast to increase just by 1.1% in 2017 as
retailers across sectors are forced to pass on rising costs to consumers, and
the resulting squeeze on incomes may see clothing become less of a priority.
Menswear is forecast to be the fastest growing clothing subsector out to 2022,
with growth of 21.2%, outperforming womenswear by 5.8 percentage points.


The top five fashion brands that are
operating in the UK


Specialist clothing
retailers have seen their share of the total clothing market continue to
decline, with only 52.6% of all consumer spending on clothing and accessories
going through the specialists in 2017. The sector has continued to struggle,
with two of the major players in the market, M and Next, reporting
declining sales.

Next still remains
the leading clothing retailer, but it has seen revenue decline since 2015 due
to buying decisions that have impacted its product range. While its online
business grew 4.3% helped by its third-party Label website, this was not
sufficient to compensate for the 2.9% fall in sales at its retail division,
which has continued to see weak sales in the first half of 2017, plunging 8.3%.

As the second largest
clothing retailer by turnover in the UK, M’ continued struggles with its
clothing business have a big impact on the underperformance of the specialist
clothing sector. M&S’ clothing sales fell 4.2% in 2016 and 1.2% in the
first quarter of 2017.

Several other
clothing retailers performed badly as the fashion sector was hit by a tough
year, with Arcadia Group and New Look both seeing big declines in revenue as
young women opted to shop at young fashion pureplays that are quicker at
responding to the latest trends.

Primark and TK Maxx
were among the few big players in the market to see a rise in revenues in 2016
as consumers continued to be drawn to their value-led propositions.



The different fashion retail


There are
various retail market formats that are operating in the UK fashion industry
that acts as the retail points for different consumers. This retail market
formats includes; specialists stores (multiples
and independents), pop up stores that open on a  short-term sales spaces,

stores such as Debenhams. However department stores are losing share in the clothing market as Debenhams
and House of Fraser have seen disappointing sales for clothing and are seeking
to adapt to the changing dynamics of the marketplace. Other formats can be value retailers which involves low prices on
a daily basis e.g. Primark, lifestyle stores that sell a wide
variety of product categories under a single brand, for example Urban Outfitters and Stories,  factory outlet; a good example is Bicester
Village. Supermarkets are tightening their grip on the
clothing market as they look to turn themselves into fashion destinations.
Sainsbury’s has been expanding its clothing offer to include more trend-led and
exclusive items, as well as growing its focus in quality and design with a
premium Tu collection and an occasion wear range.


The importance of E-commerce.


this is likely to change due to e-commerce which has taken a different
dimension, from e-marketing to online retail. The introduction of e-commerce
has indeed tremendously changed the target market for the industry and consumer
preference. According to Mintel, online sales of
clothing, footwear and accessories are estimated to grow by 17.3% to reach
£13.9 billion in 2017, accounting for 24% of all spend in the clothing retail

Next remains the
largest online retailer with 12% of the market. However, it has lost a large
amount of share while pureplay retailers such as Amazon and ASOS have gained,
with Amazon overtaking M&S as the second largest online retailer in
clothing, footwear, and accessories.


Source: Mintel, Clothing
Retailing Europe- October 2017



Online-only retailers are rapidly
increasing their share of the clothing market driven by Amazon’s focus on fashion. While none of the
young fashion pureplays have
yet made it into the top 20, although ASOS was 21st on the list, they
are shaking up the fashion sector as young
women choose to shop at e-tailers including Boohoo and Missguided. 

It is
estimated that the number of physical retail market formats are likely to
experience low turnout of consumers by the year 2018 because this will be
overtaken by technology, for example, using mobile phone applications to access
online shopping services (Information Resources Management Association 2018).
This, therefore, means that it is necessary that physical retail markets invest
in the e-commerce to be able to maintain their customers and provide for them a
platform that they can easily use to shop at their own comfort and their own
specified time.


Buying and
merchandise team in an omni-channel business.


comes from the word Omnis which can mean all or universal. This is in
comparison to other categories out there, like “multichannel”, from the Latin
word Multus, meaning multiple or many and from cross channel the way that many
are explaining omnichannel today is: ‘cross channel being done well’. It is
basically an expansion of a multi channel business as it focuses more on the
contact that a company can develop with the customers, it is about true
continuity of your experience.

The retail buyers have a responsibility of identifying
and or producing finalized products for their divisions depending and the
customers demand and the brand of the industry. The buying personnel are
responsible for price negotiation and supply management. Merchandisers, on the other
hand, work in unison with the buying team by providing systematic support and
through envisioning and trend inquiry, to ensure that buyers have the intended
accurate figures and data in order to source products. Merchandisers also
ensure that stock is ordered in reference to previous trends arrangement and
data collated.


Key performance indicators for buying and merchandising

Key Performance Indicator also knew as KPI is used in
various companies and industries to help in identifying various challenges that
need to be improved for the purpose of increasing sales and customer
engagement. It is a valuable measurement used to demonstrates
how effectively a company is achieving key business objectives.

In order to
that, the B calculates the profit of the company, this involves the
difference between the selling price and the cost price. The stock is also
taken into consideration, as it defines what the company didn’t sell at the end
of the season. The cover, which is the number of weeks in which an option would
sell is calculated through the formula; stock divided by sale.




Finally, we can conclude that the uk clothing market is
one of the most performing and richest one in Europe. However due to some
economical backdrop, some retailers are suffering leaving them with less
profit. E-commerce is quickly changing the norms of fashion shopping and is
estimated to grow further more in the future.