International Business Environment

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International Business Environment

International Business Environment


The UK retail fashion environment has emerged from the most recent recession with a heavy legacy.Spending on clothing, fashion particularly, has not risen significantly between 1991 and 1995, fluctuating between -2 per cent and +2 per cent. This was the period during which the display function became centralised and often refocused as visual merchandising. In the same period, retail clothing prices have grown at a slower rate than inflation and in relation to household expenditure have shown no real growth.

The British retail fashion market is characterised by high levels of market share concentration, with a relatively small number of the UK's 12,000 fashion retailers controlling a large proportion of the total market(Trade Development Authority 2005). The UK retail fashion market is dominated by the own brand retailers who control every aspect of their offer including their visual identity. The new entrants to the market and intensified competition has inevitably made the UK fashion retailers confront their complacency in the promotional area.

A strategic overhaul of own label retailers design elements demonstrated in the number of refits, range developments, refurbishments and re-positioning exercises has been under way for some time, for example in Dorothy Perkins, Etam, Wallis, BHS, and Debenhams. These are often supported by an increased promotional spend. However, it is difficult to apportion spend to the visual merchandising element in isolation, as media advertising is often replicated in window stills and graphics; this not only provides cost benefits, but also ensures an integrated approach to the brand communications process.

The Countries

Country A (United Kingdom)

The clothing market is one of the most competitive and fragmented retail sectors, with operators battling for growth in a relatively low growth environment. UK Fashion Multiples 2008 profiles a representative sample of smaller, but influential, men's and women's fashion retail brands, and explores the dynamics, growth trends and drivers of the market and retailers responses.

Market size, sales and growth rates for the clothing market 2002-2007 and retail distribution of clothing expenditure for 2006 and 2007. Six year market share records with key operating statistics and store portfolio analysis for the 10 fashion multiples profiled in the report. Men's and women's space allocation for each brand split across eight product categories. Total advertising spend in 2006 for each retailer.

Niche retailers are outperforming the clothing market. We estimate the premium segment grew by 13.9% in 2007 - faster than either the value or middle market segments. The 10 specialists profiled highlight this trend collectively adding 0.3% points in 2007. Proof that dynamism takes market share is evident in the performance of two retailers at very different stages of maturity - River Island and Fat Face - where sustained sales densities and profitability have underpinned gains in market share. The growing internationalisation of fashion tastes has generated high potential for international growth for smaller fashion multiples. The retailers in this report are almost all in the process of developing networks of stores in overseas ...
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