Wednesday, 30 October 2019 17:44

ChicGeek Comment India’s Fashion Gets Fast

Auto enrolment pension affects on retail salesIs the sleeping giant, India, about to wake? There have been many false starts over the years predicting that India would become a major player economically. It’s certainly got the numbers of people, and, its middle class, with its growing disposable income, is expanding fast. Depending on the measures used, the estimated size of India’s middle class ranges between 78 million (Economist, Jan. 2018) to 604 million (Krishnan and Hatekar, EPW June 2017). Even on the lowest estimates this is a huge amount of potential consumers and retailers and brands are moving in.

Japan’s ‘Fast Retailing’ opened its first Uniqlo store in India this month in New Delhi. The company is planning to open two more stores in Delhi’s metropolitan area this autumn. Uniqlo said the three stores will be testing grounds before the company decides its long-term strategy in the country, The company says high import duties imposed in India have impacted the brand’s pricing, but no doubt it will remain competitive against other western chains.

Up until May, this year, India was the world’s fastest growing economy. It has a population of 1.3 billon with 65% under 35. There are an estimated 530 million people online and an 491 million smartphones by 2022.

Apple is rumoured to have finalised a short list of locations for its first retail store in India and Ikea finally opened in 2018 after 12 years of trying. It was prevented from opening stores because of government restrictions on foreign investment. The company says it aims to have 25 outlets across the country by 2025.

Aiming to tap into the young and affluent Indian consumer and become the ASOS of India is Koovs.com. Its corporate site says it “brings western fashion authority though the Koovs Private Label, curated global and local fashion labels and designer & celebrity collaborations to create and build the leading online western fashion brand for young, style-conscious Indian customers.”

Waheed Alli founded the company in 2012. He was previously Chairman of ASOS plc between 2000 and 2012. Based in London, it had full year sales of INR1,178m/£12.8m year to March 2019. While a relative retail minnow, recent forecasts show the ecommerce market in India growing from $24billion in 2017 to $84billion in 2021 and $200billion in 2026. Online fashion is expected to grow from a $4billion market in 2017 to a $15billion market by 2022.

Koovs concessions have opened in three central stores in Delhi over the period. They are now rolling out this concession model to another five stores in Bangalore (two stores), Hyderabad, Pune and Noida. The company has struggled recently because of the disruptions in India caused by demonetisation and the introduction of the Indian Goods and Sales Tax (GST).

Vibhuti Vazirani, founder of new Indian-made fashion start-up, Zavi, specialising in less environmentally impactful fashion, says, “A couple of years ago H&M and Zara entered India and have seen a great response. Such fast fashion brands are a hype in India now when a large part of the world has reached its peak of fast fashion. Within India too, there are many domestic players that cater to a large fast fashion industry.”

Zara currently has 16 stores in India and H&M has 47. The huge Tata Group which has been Inditex SA's - Zara's parent company - partner running Zara stores in India is building its own apparel empire as trend-focused as Zara, but at half the price. As per a Bloomberg report, Tata’s retail arm, Trent Ltd, has fine-tuned its local supply chain to deliver “extreme fast fashion” which can get runway styles to customers in just 12 days. Trent now plans to open 40 outlets of its flagship 'Westside' chain every year and hundreds of its mass market 'Zudio' stores, where nothing costs more than $15. “The middle class is growing, incomes have grown, Indians are travelling more and they have more money to spend,” Tata said. “Now that we’ve built this capability and this model that’s working so well, it’s time to grow faster.” it says. Zara is still expensive to the average Indian consumer and Tata Group is tapping into that cheaper demand for western fashion.

“Due to its developing and socio economic status, India is quite a price sensitive market, so price is of more importance than quality.” she Vazirani. “Imported goods are also high on the consumer’s purchase journey, as a large part of our population does not often have opportunities to travel the world. When international brands enter our space, the local consumer is keen to access it and own it.
“I don’t see a lot of Indian brands trying to compete with the global fashion industry. The fast fashion Indian brands often stay within and capitalise within India as our population itself is a pretty good market size. 
“There are some traditional Indian designers and brands that are latching out of Indian boundaries to cater to the Indians around the world.” she says.

Zavi is being marketed at eco-conscious Western consumers rather than the domestic market. “I see Zavi entering the international space rather than India at this time because there are already some well informed countries that have made sustainability a priority and so that market is clear to respond better to what Zavi has to offer.” she says.

According to the World Economic Forum, by 2030, India is on course to witness a 4x growth in consumer spend. It will remain one of the youngest nations on the planet and will be home to more than one billion internet users. By 2030, India will move from being an economy led by the bottom of the pyramid, to one led by the middle class. Nearly 80% of households in 2030 will be middle-income, up from about 50% today. The middle class will drive 75% of consumer spending in 2030.

The Indian market isn’t straightforward due to government restrictions and import taxes, but, the size of the growing middle class should be both tempting and terrifying for many international brands dealing with saturation and maturity in their established markets. They should have learnt their lessons from their early days in China and will be no doubt want to time their entry right to start making money early on. Brands can no longer afford to heamorrhage money for years on a speculative market. What is clear is that India is getting richer and there is a demand for international brands from Indian consumers with more money in their pockets. But is this the right time?

BUY TheChicGeek's new book - FASHIONWANKERS - HERE 

Book review Fashion Wankers Marcus Jaye

Are you more Romford than Tom Ford? My latest book, Fashion Wankers - It Takes One To Know One, has just been released. The idea is, in the age of Tom Ford’s 'Fucking Fabulous’, Eggslut and Bollocks To Brexit, the ‘Fashion Wanker’ is the new fashionista (or fashionisto). 

It’s all about confidence and being able to laugh at yourself. The truly stylish are the first to poke fun at themselves after all and it’s a very British thing.

Left - Fashion Wankers Cover - For those who make Quality Street look like Dover Street...

Book review Fashion Wankers Marcus Jaye how to throw shadeFashion Wankers is the funniest fashion book (obvs. I wrote it!) this side of fashion week. It shows you how to be a fashion wanker and will help you spot which wanker you are and what to look for out the selection of 16 fashion wankers. Once you’ve learnt to recognise your fellow Fashion Wankers, you will discover the fun of creating a Fashion Wanker look all of your own. It also comes with its own fun fold-out, style-guide game of #FashionWankers Bingo. 

Whether you are a self-confessed Fashion Wanker, know one, love one, are related to one or want to be one, then this book is for you. This is your Tough Mudder, if you will, your journey into becoming the biggest wanker of all the Fashion Wankers. OWN IT. 

Every fashion wanker should have this waiting for them under their Christmas tree. Shut the front Dior!

Published by Ammonite. 128 pages. You can buy signed & personalised copies for £13.50 (Free Postage) whilst stock last from www.fashionwankers.com

I love you for all your fashion-wankiness!

TheChicGeek XX

Also available at Amazon, WHSmith, Blackwell's, Foyles, Selfridges, Waterstones

Tag #FashionWankers in your social media with your copy 

Book review Fashion Wankers Marcus Jaye

Book review Fashion Wankers Marcus Jaye

Book review Fashion Wankers Marcus Jaye

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Left - BUY ME! EXCLUSIVE - Author signed copies available HERE

Auto enrolment pension affects on retail salesThe government wants us to save for the future. It makes sense. We’re living long lives and we need to plan for our financial futures if we are going to be able to live more comfortably when we retire. Pensions can be complicated and difficult to understand and, up until a few years ago, people were often asked to actively opt-in to a pension scheme and as such it had a low level of take up.

Things changed with the 2008 Pensions Act, when ‘auto enrolment’ was regarded as the best way to counter apathy and persuade people to get saving. Larger companies started the process back in 2012. Small and micro businesses, employing from one to 50 people, had to have everybody enrolled by February 2018 at the latest. The levels started small with minimum auto-enrolment contributions of 2% (split equally between employee and employer). In April, this year, it rose to 8% (5% employee and 3% employer).

It is estimated auto enrolment has lead up to 10 million people to start saving for their retirement for the first time. This is great news for individuals and society, long term, but for retailers, already seeing sales fall, it is less money in people’s pockets and reduced spending power. 

This has all been a long time coming. But, it’s still not enough. People will need to save an even higher percentage of their income. In 2017, the Pensions minister, Richard Harrington, set a target for savers to achieve a £250,000 pension pot by the time they retire. To reach this target, an individual whose salary builds up to £27,000 over their career and saves for 40 years with no breaks would need combined employee and employer contribution levels of 25% says research for Citywire's New Model Adviser® by pensions provider Aviva.

The statutory contributions rate looks like it will rise further, no firm plans have been set just yet, but are we starting to see the affects this new level of saving is having on retail sales?

September 2019 saw the worst retail sales figures since British Retail Consortium (BRC) records began in 1995. Sales decreased by 1.3% in September. Sales decreased by 1.7% on a Like-for-like basis from September 2018, when they had decreased 0.2% from the preceding year. The BRC said the “spectre” of a potential no-deal Brexit is weighing on consumers’ purchasing decisions, but surely higher levels of minimum pension contributions are resulting in lower retail sales?

Pension provider Royal London produced research looking into what would happen if someone who has only contributed the minimum to their pensions under government 'auto-enrolment' rules, decides to draw a state pension as soon as they can and immediately cuts down to part-time work. Royal London defines a ‘gold standard’ retirement - income at retirement is two-thirds of pre-retirement levels - or a ‘silver standard’ retirement - income is half of pre-retirement levels. Someone pursuing a flexible retirement would have to work until they are 79 to achieve the ‘gold standard’. The age comes down to 74 for a worker who defers taking a state pension and maintains full-time hours until they stop working. A worker targeting ‘silver standard’ retirement but who retires gradually would have to work on until they were 69 – or 68 if they defer their state pension and continue in full-time work. The report encourages workers to contribute more than the legal minimum of 8% (combined employee and employer contribution) to a workplace pension. It said a 10% rate allows an individual to retire around three years earlier, while a contribution rate of 12% allows an individual to retire around six years earlier than if they contributed just the minimum

The older you are when you start to save, the higher the contributions will have to be. So someone starting aged 32 should contribute 16% of their salary for the rest of their working life. While 16% may seem a huge commitment, this figure includes your employer's contribution. All employers must 'auto-enrol' their qualifying employees in a workplace pension. Qualifying employees are those that are aged between 22 and State Pension age, earn more than £10,000 a year and work in the UK.

According to a report by Scottish Widows, the average income that people state they will require for comfortable retirement is £23,000 a year and it recommends that 12% of income should be channelled into a pension throughout your working life.

Almost 50 per cent of workers are still not putting away enough to meet those expectations. In 2015, one in five weren’t contributing anything to any pension at all and out of 6,000 workplace schemes more than 5,000 were in deficit. Figures from the Pension Protection Fund in May 2016 showed that the shortfall was a colossal £300 billion.

“In future contribution rates are going to rise. There’s a consensus in the industry that even when we get to 8% that’s still not enough. That can’t be the end and we must not rest on our laurels.” says Emma Douglas, Head of Defined Contribution at Legal and General, told ‘Smart Pension’, a company founded by experienced finance & technology professionals and designed specifically to support UK businesses faced with the challenges of auto enrolment.

“We will need to raise awareness about the importance of saving enough to provide a really comfortable retirement. There may be some pain to come, but I think that once people see their pension pot growing there will be acceptance and engagement. We need to make sure pension statements are transparent and easy to understand.” she says. “Overall, I think auto enrolment has been very positive.”

Tom Selby, senior analyst at AJ Bell told Moneywise: “To put it into perspective, someone earning around £27,000 and paying in the auto-enrolment minimum will see their personal contribution rise from about £500 this year to more than £850 in 2019/20.”

£850 for somebody on a £27,000 income is a chunk of money. It could be a month’s rent. Looking at Millennials and Generation Z already spending significant amounts of their incomes on renting and paying pack student loans, it will put more of a squeeze on their already reduced disposable incomes.

“While for most people this is still not enough to enjoy a comfortable retirement, we are now getting to the stage where some reluctant savers could start to feel the pinch. Rising average pay should help ease the pain, but anyone missing out on a salary hike could well be tempted to prioritise spending today over saving for tomorrow.” he says.

People can choose to opt out at any time. “Anyone thinking of quitting their workplace pension needs to understand that they will be losing out on both tax relief and their employer contribution, which put together double the value of the money they put in. Put another way, opting out of your pension is a bit like taking a voluntary pay cut – so nobody should do it lightly!” he says.

According to Jenny Condron, the ACA's (Association of Consulting Actuaries) chairwoman, this phased increase in contributions is needed to ensure that many more people save sufficient amounts, for both an adequate retirement income and one where they have real choices to spend some of their accumulated savings, as they approach or reach retirement.

She said: “Actions are needed to draw more of those on lower incomes and the self-employed into auto-enrolment levels of contributions, beginning with the gig economy’s quasi-employers.

“Then, from 2025, with due notice having been given, there is the need to gradually phase in rises in total contributions until they reach 12-14% of earnings.”

Minimum contributions were increased overall from 2 to 5 per cent in April 2018, which for 85 per cent of employers didn’t have an adverse impact on scheme participation, the ACA said.

It’s obvious that those on lower incomes have always saved less for their retirement. They are also more sensitive to the increased contributions. Putting 12%-14% of earnings into a pension pot will be difficult for many and sacrifices will have to be made if they decide to stay in the scheme. It could see increasing numbers of people opting out or a marked decrease in disposable incomes. People on lower incomes will have to make a difficult choice. This is very large group of people who weren’t saving before.

More stats show how retail is seeing sales fall. IMRG Capgemini Online Retail Index showed a drop of -22.5% in menswear digital sales year-on-year for September, with overall clothing sales seeing its first negative growth in over two years. Womenswear, footwear and accessories also declined with year-on-year growth rates of -13.3%, -9.8% and -9.0% respectively.

Auto enrolment is a fantastic idea for people’s long-term financial futures. Contemporary retail is in a perfect storm and auto enrolment pensions encouraging an estimated 10 million people to save at least 5% (& rising) of their income for the first time will only increase the squeeze and could be an extra of contributing factor to the current retail malaise. Will the British go from spenders to savers? Retailers will hope not.

Read more ChicGeek expert Comments - here 

BUY TheChicGeek's new book - FASHIONWANKERS - HERE

Tuesday, 22 October 2019 16:18

First Look Giambattista Valli X H&M Menswear

H&M Giambattista Valli collaboration menswear Product menswearWe’ve had a few years off from the hysteria of the H&M fashion collaborations. There was a time when we had 6 month’s build up to the launch and you knew the date regardless of whether you liked the designer in question or wanted anything in particular. Now, all that is over and H&M’s parent brand isn’t quite as successful as it once was, we can take our time and judge it simply on the clothes. From the preview pictures (below), it looks pretty good.

Left - Coat - £179

This year’s collab. is with the Italian designer, Giambattista Valli, who, as far as I’m aware, hasn’t done menswear before. Known for his pleated, tiered evening wear, and haute couture, his ‘Valli Girls’ are finally getting their ‘Valli Boys’.

The press release says, “Valli explored the idea of free-spirited men taking pieces, patterns and fabrics from the women’s wardrobe; sampling and mixing freely, like DJs. The choice of flesh pink as the base colour – the simplest tee in the collection is pink, not white – which says it all.”

The leopard long coat (£199) and the embroidered black riding coat (£299) sum up Valli’s approach to menswear: they started life in Valli’s women’s collections and are now adapted to a man’s wardrobe. The embroidered tailcoat is an homage to the jacket worn by French intellectuals and artists when they join the Académie Française.

I like the punky, rockabilly feel to the menswear. The leopard coat is fun and the pearl necklace is a good entry piece. The prices are quite pricey, so if you're buying the outerwear you'll want to see the finish and quality before you decide to buy/keep it.

Launches Nov. 7th

BUY TheChicGeek's new book - FASHIONWANKERS - HERE

 

 

 

H&M Giambattista Valli collaboration menswear Product menswear

H&M Giambattista Valli collaboration menswear Product menswear

H&M Giambattista Valli collaboration menswear Product menswear

Banksy clutch brick bag Croydon Gross Domestic Product menswearThe biggest thing to hit Croydon since the tram, Banksy’s pop-up, Gross Domestic Product, the homewares brand from Banksy, opened a shop showcasing his latest and greatest hits collection of social commentary. The affordable, well, in the context that one of his paintings recently went for £10 million, pieces are available through a ballot system. You’ll be notified if you’re lucky to win anything and then you have the option to buy it. You only get one pick!

Here’s my choice: “This fashion-forward accessory is made from a genuine real life house brick and is perfect for the kind of person who doesn’t carry much but might need to whack someone in the face. Probably no less practical than the output of most haute couture fashion houses. Made from random bits of old handbag so yours may differ from the one pictured. Signed.” says the website.

Not that Banksy seems to know that clutches don’t usually have handles, but who am I to tell him anything…

You have until October 28th 2019 to register your interest.

BUY TheChicGeek's new book - FASHIONWANKERS - HERE

 


Advertisement