Is 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.
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?
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If things weren’t getting hard enough for ‘fast-fashion’ retailers along comes ‘Extinction Rebellion’ (XR). Protests the world over are warning of impending doom and trying to ram home and ostracise those who continue to shop at brands and retailers vilified for producing clothing that is deemed to be disposable.
While the traditional high-street has struggled, both here and in the US, Forever 21 filing for Chapter 11 bankruptcy protection, for example, the winners of the fashion internet, such as ASOS and Zalando, appear to be slowing. Recent profit warnings and falling share prices have put a wobble in this bright spark of retail.
Left - An impromptu anti-fashion show in London's Oxford Circus
While ASOS is expected to show an uplift in revenues this week, could this be the peak for these types of retailers? Is the much publicised message of Extinction Rebellion cutting through to the buying public and will this prove to be a tipping point for ‘Fast-Fashion’?
Morgan Stanley recently said the volume of clothes shoppers buy has plateaued, "we suspect it's primarily because consumers are now buying clothing in such large quantities that they get very little marginal 'utility' from any additional items.” they said.
Retailers such as Primark, H&M and Boohoo rely on large volumes with small profit margins. Is this slowing more a result of saturation rather than the start of a boycott of ‘fast-fashion’ brands for environmental concerns?
“There is some very muddled thinking around the debate on how to make the 21st-century world more environmentally-friendly.” says Eric Musgrave, fashion industry commentator and former editor of Drapers. “I am sure the fashion industry is wasteful, but I’d like to know which large-scale industries are not. Who, for example, ever talks about mass-produced furniture, or pots and pans? I am not an apologist for the fashion business, but it is seen largely as a frivolous unnecessary luxury, not a necessity, hence it is an “easy” (or some would argue “legitimate”) target.” he says.
“I see no desire from the mass of the British public to change their buying habits. It would be wrong to confuse problems that may have risen at individual companies like Quiz and ASOS with overall trends.
“Too often overlooked in all this analysis is that the UK is a very troubled economy, with little sign of it improving any time soon. We have had 11 years of austerity and many people do not have much money. Asking them to forgo the pleasures they derive from cheap fast fashion is the epitome of wishful thinking.” he says. “Fast fashion is here to stay for decades to come – within the sector there will always be winners and losers.
And ask yourself, seriously, what lasting impact on fast fashion did the grim Rana Plaza disaster in Dhaka in 2013 have?”
“The fast fashion firms will not adjust their model. If some disappear, others will appear to take their place.” he says. “Finally, I await the explanation from Extinction Rebellion and the like about what all the many millions of people who earn a living in the fashion supply chain will do if it were to shut down tomorrow.”
Fast-fashion retailer Quiz, a fast growing newcomer to the market, recently announced lower sales in the first half of the year in the face of a “very challenging” high street. The retailer said its stores and concessions had suffered weaker-than-expected sales over the six months to September after a slump in footfall. Quiz reported that total group revenues slipped 5% to £63.3 million during the period, as online growth (7%) failed to offset its high street decline.
The entire fashion industry seems quite content to push all the heat onto these ‘fast-fashion’ retailers. Now public enemy No.1, ‘fast-fashion’ has become a scapegoat for the fashion industry in general. Arguably, all fashion is fast and in its nature it is disposable. People are being forced to question their purchases and asking themselves if they really need it, but is it significantly changing behaviour?
As part of Extinction Rebellion’s #XR52 weeks of direct action, they are urging people to #BOYCOTTFASHION for a whole year, in order to disrupt business-as-usual and send a message to government, industry and public alike that enough is enough.
Olly Rzysko CMO + Retail Advisor, says, “It will take something big for there to be a significant shift, eg the ‘blue planet’ plastic straw moment.”
Kathryn Bishop, Deputy editor - LS:N Global, says, “On Question Time last week, an audience member said David Attenborough spoke to her more than XR activity did. Sadly…”
It appears people are still buying clothes in volume, but we reached a peak a few years back. Kantar data suggests consumers in the UK are buying 50 items of clothing a year, up from 20 items in the 1990s but down from 52 three years ago. In the US the figure is estimated to be as high as 65 items a year, compared with between 40 and 50 in the 1990s and almost 70 in 2005.
"Put simply, consumers would rather spend their marginal dollar on, say, going out for a meal, than on buying a 60th item of clothing in a year,” Morgan Stanley analysts Geoff Ruddell, Kimberly Greenberger and Maki Shinozaki said in their report.
"It is our contention, therefore, that the apparel markets in many developed countries may now be entering a lengthy period of structural decline.” they said. The main catalyst for increased consumption was falling prices. "If clothing volumes are plateauing in developed countries, the only way the apparel markets there can grow is if clothing prices go up," the report said. "But (potential US tariff impacts aside) we think it more likely that they will continue to fall ... as production continues to shift from China to lower-cost countries in the region (such as Vietnam and Bangladesh)," it said.
US clothing prices have fallen by 0.8 per cent a year since 2001, while UK prices fell for 13 consecutive years until 2010. Volumes in the UK have more than doubled since 1998 and US volumes have grown almost 50 per cent since 2001, driving 28 per cent market growth. "Expecting consumers to buy clothing in ever-larger volumes, in response to ever-lower prices, was never likely to be sustained in the very long term," the Morgan Stanley report said. The allure of buying has also gone with consumers already own so many clothes that each new item they purchase doesn't spark happiness the report also said.
Personal stylist Elsa Boutaric with a focus on sustainable fashion and helping people build a sustainable wardrobe, and spend less, says with regards to the #ExtinctionRebellion movement, “I think it is definitely raising awareness of the issues surrounding fast-fashion, and putting it into the minds of the consumer. Publishing reports, stats and figures of the actual effect that the message is having has the potential to be more valuable in driving change.” she says
Is this the tipping point for fast-fashion?
“Consumer behaviour patterns are changing and though we still live in a generation of convenience, consumers are looking for more sustainable and ethical options than a cheap pair of jeans and shoes.” says Boutaric. “People shop on ASOS because it is a viable option compared to other online shops, so when their customer base moves away to look for sustainable alternatives, they don’t have anything to fall back on.
“ASOS is middle market, combined with high street and doesn’t really have a place in the future of fashion unless it learns to adapt, and this is what it is going to have to prove it can to do both its customers and its investors in order to secure its future.” she says.
“The disadvantage they (fast-fashion retailers) have is that they deliver huge volumes on low margins, so would need to change their business model drastically. This isn’t easy to do when you have developed a position in a market place and it would mean working with new designers and increase their prices. This not only has the potential to reflect badly on their own brand, but also the designers that they work with." she says.
Right - Are you ready to boycott fashion for a year? #ExtinctionRebellion
“They would need to introduce charitable angles or work with ethical designers without damaging their reputation or losing their market. Also, they would need to manage their stock and not have so much go to waste sitting in warehouses waiting to be sold. This could mean a change in manufacturers and distributors which could prove costly and time consuming. There are several factors that businesses would need to consider, and not all of them will survive.” she says.
“There has certainly been a shift, and it is being driven by consumers and some brands are struggling to keep up, but others are adapting and thriving.” says Boutaric. “I don’t think it’s a case of reducing their consumption, it’s more consumers buying more ethical options. More people are only buying what they need, or shopping charity shops, or attending clothes swaps. Buying new seems to be a new slur, unless it’s from ethical brands and designers.” she says.
We are constantly told that young people are the most engaged in these types of environmental movements and it’s their future we are ruining, but they are also fast-fashion’s target demographic and consumers. There’s a big disconnect here.
There could be a perfect storm brewing for fast-fashion with XR. If it connects with young people’s behaviour it could be significant. A swing away from this type of consumption could be detrimental to these giants of fashion.
Fast-fashion retailers are starting to make green noises with second hand stores - Read more here - popping up and others like H&M and Next moving into selling other brands to off-set the malaise in their own - Read more here - but investors think long term and will need to feel confident that these retailers will continue to grow and be profitable. One thing is certain, brands and retailers will want to distance themselves from the term 'fast-fashion' and its negative connotations. There needs to be a groundswell from the people passionately protesting at Extinction Rebellion to the average British consumer.
'Fast-Fashion' is the OxyContin of the fashion industry. Going cold turkey could have some serious side effects.
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To be a retailer today you need many fingers in many pies. Think a centipede Paul Hollywood and you’re getting some idea. So, it was with interest to hear the latest announcement from the world’s second largest fashion retailer, H&M. They’ve decided to start a pilot selling products from external brands.
While they have sold third party brands in some of their more premium chains before, it’s a first for the mother brand. H&M’s main, eponymous brand has been neglected and struggled as the company’s strategy was to roll out retail chains such as Arket, Weekday and &Other Stories.
The bottom end of the market is tough with margins continually squeezed. H&M’s huge undersold inventory, an undeveloped online offering and falling profits - for the eighth quarter in a row the Swedish fashion chain reported a decreasing profit, despite having recently achieved turnover growth - has taken its toll on this retail behemoth.
Left - Swedish fast-fashion giant is piloting a new strategy
It needs a new strategy and has clearly been watching the likes of ASOS and Zalando be all things to all people and expand rapidly.
A company spokesman said “The H&M brand will now develop our offer of external brands. The purpose is to complement our offer with external brands to add excitement and energy and we see great opportunities for growth and to find new customers,”.
You can charge more for branded product without the need to hold large amounts of stock. It also widens you target market, especially amongst men who still like branded items. While it’s not clear which brands will be sold, it’s likely to be dominated by sportswear. This is an area that has seen huge growth with the likes of JD Sports smashing their earnings. JD Sports’ last half-year revenues jumped 47% to £2.7 billion on the back of a 10% surge in like-for-like sales. Sportswear has higher margins and appeals to more age demographics.
One of the more traditional high-street retailers to make this third party brand strategy work is Next. Its ‘LABEL’ concept is now turning over £350 million in yearly sales with huge growth seen over the last few years. Brands such as River Island, adidas, Boss, Superdry and Fat Face sit alongside beauty and home. It’s the contemporary department store.
In their latest financial statement, they say they “continue to develop the business through the addition of new brands, increasing the breadth of offer with existing brands and (from early this year) offering items stocked in our partners’ warehouses through Platform Plus"
"‘Platform Plus’ allows our customers to order un-stocked items directly from our partners’ warehouses to be delivered through our network.
“In March this year we started selling items in this way with three of our partner brands. These items are offered to customers on a 48-hour delivery promise. Items are injected into our warehouse and then delivered through our courier and store network. For example, a Platform Plus item ordered on a Monday, is transferred to our warehouse by Tuesday and delivered to the customer on Wednesday.” they say.
“When customers order Platform Plus items with other items stocked in a Next warehouse (available in 24 hours) they can choose to receive one consolidated delivery, offered in 48 hours. Alternatively, customers can choose to split their delivery and have stocked items delivered in 24 hours. There is no additional charge for the split delivery. Currently, 50% are choosing to consolidate their order.”
Next says Platform Plus is more than a marketplace. “Platform Plus differs from many marketplaces because, rather than despatching parcels directly to consumers from third-party warehouses, items are inducted into our distribution network. The advantages of operating in this way are: We can consolidate orders into one delivery which can materially reduce distribution costs. Items can be delivered through stores which currently receive 50% of all our Online orders and we have visibility and control of all orders through our own trusted networks and tracking systems. This allows us to ensure quality of service and in the event of any delivery issues or queries, customers have one point of contact.
It seems to be working for Next with full price LABEL sales in the first half of this year up +26% and total sales (including markdown sales) up +29%. They expect full price sales in the second half top 2019 to be up around +13%, more in line with their original full year estimate of +15%. The expected slowdown in growth in the second half is mainly due to errors and stock shortages in their Lipsy - owned by Next - ranges which they believe will slowly be corrected.
For the full year, full price LABEL sales are forecast to be up +19%. Total sales (including markdown sales) are forecast to be up +21% with net margins, after central overheads, forecast to be around 15%.
In this retail environment this is very impressive. Sales are a combination of wholesale and commission, and although they make lower net margins on commission sales, they encourage their partners to adopt this model because they believe it generates higher sales growth. In the first half of this year commission sales grew by +32% compared to wholesale which grew by +18.5%. It's also less risky.
As of August 2019, they have four clothing brands operating on Platform Plus and plan to add at least ten more later this year, with more to follow in 2020.
Last month they also agreed a licensing deal with Ted Baker to create and sell Ted Baker children’s products. They intend to launch the first collection in Spring 2020.
Right - Next's Label sales over the last four years
Next, thanks to its Directory, has fine-tuned its delivery and database over many years and is trusted by its customers. H&M, on the other hand, doesn’t quite have the online reputation, but, being able to return to store could be a massive positive for consumers.
It will be interesting to see how fast and big they go with this concept and the brands they decide to stock. Third party branded goods allows for a faster turnover of brands and product, less risk, especially under this commission model, and the subsequent cool and elevation that can rub off on a tired umbrella brand.
Consumers are addicted to newness and H&M needs to try something new. This idea has the potential to work, though it is getting increasingly competitive, it just needs to judge when the sportswear trend will finally end, which brands connect with their customer and what the next big trend will be.
When New Look announced, at the beginning of this month, its menswear was going online only, it solidified what we already knew; high-street fashion is struggling, badly. It was only a few years ago, when the ‘dapper’ three-piece skinny suit was at its zenith and pocket squares were furnishing top pockets, that the good times were rolling and Britain’s high-street menswear retailers were expanding.
Left - Momager Kris Jenner loving an adidas tracksuit but with a Gucci bag or Fendi keyring
Back in 2016, New Look was busy rolling out menswear stores in university towns, appealing to those on a budget wanting fast fashion. New Look was fairly late to the menswear party, following in the footsteps of brands like Topman, River Island and Moss Bros, but it had lofty ambitions. They opened 22 menswear stores in places such as Shrewsbury, Exeter, Maidstone, Derby and Nottingham. They are all now closed, wth New Look saying in a recent statement, “New Look is removing menswear from its UK and Ireland stores but will continue to sell the range online and on third party platforms,” such as ASOS and Zalando.
So, what happened? Sportswear happened. Branded sportswear has been the main fashion story for the past few years. From trainers to tracksuits, sportswear is everywhere and on everybody.
Recent results from sportswear behemoth, JD Sports, illustrates its growth and dominance. JD Sports, which is now more than three times bigger than arch rival Sports Direct, almost-doubled revenue in its latest results for the 52 weeks to February 2, 2019. Revenue was up an incredible 49.2 percent to £4.7 billion for the period compared to the year before, with profit before tax increasing by 15.4 percent to £339.9 million pounds.
JD Sports’ results includes its acquisition of the Finish Line business in America. The brand was bought for around £400 million in June 2018, and saw JD Sports take ownership of Finish Line’s 600 stores in the US.
JD Sports executive chairman, Peter Cowgill, said in a statement: "We believe that our acquisition of the Finish Line business in the United States, the largest market for sport lifestyle footwear and apparel and the home to many of the global sportswear brands, will have positive consequences for our long-term brand engagement whilst significantly extending the group's global reach. We maintain our belief that Finish Line is capable of delivering improved levels of profitability.” JD Sports said it stayed clear of reactive discounting while offering a point of difference in the goods it sold.
This American dominance, particularly of the internet and social media channels, has helped grow this market. When American football is coming to Wembley and there’s even talk of baseball making inroads into this country, then you know the power of the American online world we now live in. When you see Kris Jenner wearing a full adidas tracksuit on multiple episodes of the Kardashians, instead of the luxury labels she used to be wearing, it really illustrates how far this trend has come and it’s global.
JD Sports is now in 10 countries in mainland Europe with its first store in Austria at Mariahilfer Strasse in Vienna opening in the next few months. The JD fascia saw a net increase of 39 stores in the period with new stores in all of the retailer’s existing territories as well as its first two stores in Finland. In Asia, JD Sports has opened its first stores in Singapore, Thailand and South Korea with its local partner Shoemarker Inc, and now has 16 JD stores, including 14 conversions of the multibrand Hot-T fascia which was acquired in the previous year.
New Look recently closed all of their stores in China, Belgium and Poland, 85 stores in the UK and, potentially, those in France and Portugal too. It has returned to profit after its underlying operating profit came in at £38.5 million to Dec 2018, compared to an underlying operating loss of £5.1 million for the same year-to-date period the year prior, but like-for-like sales are still falling, they’ve just slowed.
These woes aren't just restricted to New Look. The fall in the value of these high-street companies is illustrated by Arcadia recently buying a 25 per cent stake in retailers Topshop and Topman back from US investor Leonard Green for $1 or 76p. It was rumoured the US private equity firm bought the 25 per cent stake from Sir Philip Green’s Arcadia in 2012 for £350 million. That’s some devaluation.
Another British high-street brand suffering from the dominance of sportswear is Moss Bros. The menswear retailer recorded a £4.2 million loss for the 52-week period ending January 26, 2019, compared to a profit of £6.7 million the year prior. Revenues were down 2.1 per cent to £129 million and like-for-like sales dropped 4.3 per cent. Interestingly, full-year figures showed that like-for-like hire sales plummeted by 9.3 per cent. People aren’t even renting formalwear now?! Moss Bros chief executive, Brian Brick, said it was an “extremely challenging” year. “We suffered from a combination of a significant stock shortage and extremes of weather, alongside sporting distraction in the first half, which impacted footfall into our stores,” he said. That “sporting distraction” was the World Cup with people no doubt wearing yet more sportswear.
“Looking forward, in common with many UK retailers, we continue to anticipate an extremely challenging retail landscape, particularly within our physical stores, as a result of reduced footfall and rising costs.” he said.
This sportswear as a fashion trend is slowing, but sportswear is beyond a trend, now, and it’s a lifestyle and ease of dressing that is resonating around the world and to every age group. These once dominant British high-street stars are contracting and they are cutting off limbs (menswear) to save the vital organs. Karl Lagerfeld once said, “Sweatpants are a sign of defeat. You lost control of your life so you bought some sweatpants.” He couldn't be more wrong.
Returns cost money, lots of money. Free delivery and no quibble returns are starting to become a strain on online retailers and it seems ASOS has had enough. The British fast-fashion giant recently announced it was cracking down on ‘serial returners’. An extension in its returns policy - items can be returned up to 45 days after purchase with a cash refund up to 28 days and credit thereafter - was also issued with a threat to investigate and ‘take action’ if it notices anything unusual with people returning more items than usual. If it suspects someone is wearing and returning goods, or ordering and returning ‘loads’, it may deactivate the account.
Left - ASOS' returns are costing them dearly
ASOS is one of the world’s largest online retailers, particularly amongst younger demographics, and its ease of ordering and returning is, arguably, part of the their success and growth story.
Becky, 29, says “I think it’s against the whole nature of online shopping. When you go into a shop you can take 10 items into the changing room and not like any of them, e-retailers need to expect the same thing to happen with their sites and customers should be able to return the items they don’t want.
"I buy a lot from ASOS and return a lot simply because it doesn’t fit right or because it doesn’t look how I expected it to when I bought it.” she says. “If it starts impacting how quickly refunds come through – or if I start having refund requests declined – then it definitely would discourage me. I love ASOS though – majority of my wardrobe is from ASOS, now, where they host so many brands – so I’m intrigued to see what happens!”
This issue is experienced by many retailers. Research conducted by resource planning platform Brightpearl, who surveyed 200 retailers across the UK, found more than a third of shops have seen an increase in serial returns over the last year. As a result, 45 per cent of retailers, including ASOS and Harrods, said they were planning to blacklist repeat offenders. It can cost double the amount for a product to be returned into the supply chain as it does to deliver it and in the UK, it can pass through seven pairs of hands before it is listed for resale. This all takes time and money.
Meli, 26, says “I’m glad that this prevents people returning used items as I’ve had something sent to me from ASOS before that was definitely used. However I’d hate to be blacklisted for genuinely returning items that don’t fit/I don’t like!
“I often order in bulk with multiple options and different sizes then do a try on at home to see what I like best, and return the rest. I think the real problem is sizing as ASOS stocks so many different brands, it’s hard to rely on standard sizing to be the same across all.” she says. “If I was blacklisted then it would certainly drive me to other online retailers or just shop directly with the brands that ASOS stocks. For now, it will make me think more carefully about exactly what I’d be likely to keep if it did fit.” says Meli.
Earlier this year, Zalando started a trial in which it would attach very big clothing labels to items to make it more difficult to ‘wear and return’ or post on Instagram. That label reads: “Dear customer, feel free to fit this article and try it, but if this label is removed, it will not to be accepted as a return by Zalando.”
Retailers have somewhat encouraged some of this behaviour with their ‘try-before-you-buy’ options. Consumers can order what they like and then just pay for what they keep. This encourages over ordering and a large number of returns. Amazon currently restricts this service to between 3 and 8 items.
Research from Barclaycard found that almost 1 in 10 UK shoppers have bought clothes online with the intent to wear them for social media and then return them. Surprisingly, it was the older demographic, men and women aged 35 to 44, with 17 per cent, revealing that they are guilty of shopping only for their #OOTD. The research also found that is was men who were more inclined to shop and return as they are more ‘socially self-conscious’ than women - with 12 per cent admitting to posting a clothing or accessory item on social media and returning it to the retailer afterwards.
Right - Zalando taking on the 'Serial Returners'' with their large tags
Lois Spencer-Tracey, fashion blogger, says, “Must confess, I'm a bit annoyed by this. I probably send back 80-100% of an order I receive purely because of their sizing and my body shape. Nothing to do with my Instagram or blog.”
Last year, Next announced it would start to charge customers a £1 fee for returns they make through a courier or through a Hermes Parcel Shop. The collection charge will be applied for each collection, regardless of the number of items collected. Returning items at any of Next’s retail or clearance stores in the UK remains free.
ASOS are playing the fashion police by admitting had resorted to checking people’s social media accounts in a bid to catch out consumers who wear clothes before sending them back, and falsely claim they have not received items bought online.
“I’m a massive online shopper. I find it so much easier to just order clothes in and try them on at home because then you can try on a full outfit, matching with the shoes and accessories you want. It’s so much easier to do in your own home rather than in a squished changing room. And usually returns are easy with things like collect+ which is much better than working out when you’ll next be in town to take clothes back to a store.” says Becky.
This is a difficult line for online brands to tread. On the one hand they don’t want to discourage consumers from ordering or being frightened to return things, and, on the other hand, they need to let excessive returners or people who are wearing things and returning them, know they are being monitored. It's definitely easier to return something into a faceless plastic bag than been quizzed by a sales assistant. This is probably an empty threat from ASOS, but does illustrate how serious this issue is becoming for fashion e-tailers. Rather than look at the volume of returns, maybe look at the conversion percentages of sales from shoppers. You don’t want to alienate active and engaged consumers, but neither do you want to service those costing the company dearly.
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Fashion trends come and go, it’s in their nature, but, every so often, there is a trend which seems to carry on, continue to grow, get bigger and bigger, look unstoppable and you can’t judge when it’s going to run out of steam. One thing for certain is, they always will, but it’s just trying to pinpoint the moment when something peaks.
Left - Buy? Bye, Balenciaga?! - Zapatillas Triple S - € 725
The trend I'm referring to is the chunky, fugly trainer. The have proliferated so far down the fashion food chain that every designer, brand and retailer has brought out their own version, so, it was obvious to ask, when will this fugly trainer madness end?
This is a trend that started building three years ago, which, in fashion trend terms, is a long time. During that time we’ve seen them get bigger and badder, with the end result of people looking like they were wearing concrete blocks on their feet. I’m looking at you, the Triple S!
Learning when to call a trend in fashion takes experience, but, also, a lot of guess work. It takes instinct, an amount chutzpah and the early data to say when something is about to start its descent.
“It’s a “trend” that will see people paying £150 for a pair of shoes which they won’t be wearing in about 4 weeks time. I think many are over it already.” says Katie Owen, Founder, Sargasso & Grey, a British shoe company that create fashionable wide fitting shoes for women who have wide feet.
Right Tod’s - Shoeker No_Code_02 in High Tech Fabric - £450
I knew it was all over when I saw a chunky trainer from LK Bennett. Yes, the home of the home counties kitten heel has moved into the chunky trainer arena. A stylist friend had been to their #SS19 press day preview, before Christmas, and had taken an image of the shoe and put it on their Instagram Stories. Instantly images of Sam Cam in a Roland Mouret or Kate Middleton picking Prince George up from school flashed across my mind, and it was then that I knew it was over. Stabbing a stiletto into the heart of this youth driven trend, this is what kills trends; when the parents start to wear it.
Another case in point, Tod’s, long the bastion of the nobbly driving shoe, flew the fashion press over to Milan for the big reveal of a new product in October, 2018. It turned out all the fuss was over a new trainer/sneaker or “shoeker”, as they’re calling it. The Tod’s “No_Code”, they said, “represents the constantly evolving change we’re seeing in the design industry, a progressive more elastic world that has no boundaries. We are living in a world where we are constantly on the move, whether it’s a boardroom meeting or weekend coffee with friends, the way we dress needs to adapt with ease.”
While not exactly a chunky trainer, the Shoeker - this name is not going to catch on - showed the attention these middle aged brands are giving to casual footwear and trainers. It was unveiled as part of the Tod’s No_Code brand umbrella, designed by Korean designer Yong Bae Seok who before joining the world of footwear at Tod’s, worked in the automotive industry. This is a trainer or sneaker for dads, who want to spend £450 on a pair and wear it to work along with their Donegal tweed jackets and slim jeans.
“Fashion is constantly trying to reinvent and occasionally we come across a novelty style that sticks. It then doesn’t matter if it’s flattering or a clever design, the hype takes over and makes it a sellout. The chunky trainer is a classic case of shoe marketing that we will look back at, and.. well, cringe, in all honesty,” says Paula O’Connor, Fashion Director. “You wouldn’t see Sarah Harris.. Jackie Kennedy , or (all hail ) Kate Moss in a pair, so leave we’ll alone .. “ she says.
When “Sneakers” is the first drop down on the shoes section on zegna.co.uk you know what the brand’s new priorities are. Another luxury “dad brand", the minute the kids see their parents in these, they’ll be ditching them faster than you can say “Jeremy Clarkson”.
When ASOS announced its shock slowing of growth before Christmas, one of the most interesting snippets of information from ASOS CEO, Nick Beighton, was that, in menswear, they had seen "a slowdown in sneaker brands, which has been quite dramatic”, he said.
It is well known the young male shoe buyer was becoming the biggest consumer of footwear - read more here - and it was trainers and sneakers he was buying. There could be many factors at work here, but undeniably the market is saturated and the trend has run its course. Trainers will continue to be a huge business, but it won’t be a “thing” anymore.
Left - Ermenegildo Zegna - Leather Cesare Sneakers - £540
Designer brands liked this trend because they could increase the prices for chunkier styles and nobody would complain that they were made from plastic and glue. The margins and volumes are huge.
There was interesting data from the NPD - the industry authority for the footwear market - on Q4 2018 footwear: "The 'democratization' of Adidas’s Yeezy franchise also led unexpected gains, with sales up more than 6X. Whether Yeezy can withstand the pressure of the expanded allocation remains to be seen.”
This is a classic case of over exposure and the generation gap killing a trend. The clock on your chunky trainers is counting down, so get stomping in them now.
The darling of British online retail, ASOS, today, issued a statement saying it saw “significant deterioration” in trading in the run-up to Christmas. Blaming the weather and a high level of discounting and promotional activity across the market, it said it lead it to increase its own special offers, which typically eat into profit margins.
November 2018 is set to go down as one of the worst retail months in recent memory. Mike Ashley, the Sports Direct boss, was recently quoted as saying, “November was the worst on record, unbelievably bad”. He said “No one could have budgeted for that. Retailers just cannot take that kind of November. It will literally smash them to pieces.”
Left - ASOS' HQ - Black cats for Black Friday?
While ASOS only saw a slowing in sales growth - it now expects sales growth of 15% for the year to August 2019, down from 20% to 25% - it also shows the chill running through the entire retail sector.
A perfect storm of lower footfall, Black Friday discounts, Brexit shaking consumer confidence and a highly competitive market in general, is making things very dicey for the retail sector. Retailer, Stuart Rose, formerly of Marks & Spencer, told ITV News, “I sense this is a very slow Christmas … You have the uncertainty of Brexit, people are uncertain about what the future is going to look like next year. [Consumers] have their hands in their pockets. Car sales? Down. House sales? Down. Big ticket sales? Down. I suspect there will be some uncomfortable trading statements in the early part of January.”
Even the juggernaut of Primark is reporting a slowdown. It has warned of “challenging” trading conditions. John Bason, the finance director of Primark’s parent Associated British Foods (ABF), said “I think it is a call on quite mild weather during November and I think it’s affected footfall.” This is important to Primark because it doesn’t sell online. Bason told Reuters that while sales at stores open more than one year were “just positive” in September and October, they had turned negative in November.
On a brighter note, overall consumer spending rose 3.3% year on year in November, but it was the lowest growth since March, despite the boost from Black Friday, according to Barclaycard. Clothing spending contracted by 2.9%, the biggest fall since October 2017, while spending on household appliances was down by 14%.
One thing interesting to note is ASOS mentioning its slowdown in Europe. It said trading conditions across Germany and France, which account for 60% of the retailer’s EU sales, have become significantly more challenging, which means this is a wider problem than Brexit. ASOS said “The current backdrop of economic uncertainty across many of our major markets together with a weakening in consumer confidence has led to the weakest growth in online clothing sales in recent years. We have recalibrated our expectations for the current year accordingly.”
So, let’s look at this weather. According to the Met Office, “November began with relatively cold quiet weather, but from the 3rd to 14th it was mild with a predominance of southerly winds. It was cold with easterly winds from the 19th to 26th, with frequent rain or showers for the east and south-west. It turned very mild, wet and windy in all parts of the country from the 27th onwards. The provisional UK mean temperature was 7.3 °C.” This up and down weather isn’t particularly unusual for November and we had two decent cold spells to help shift more seasonal, colder weather stock. The weather is always an easy excuse for retailers reporting bad figures.
Right - Primark is opening its largest store in the world in Birmingham this month
Black Friday, though, is wiping out profit margins for retailers with consumers expecting huge discounts and it’s stopping people from hitting the high-street. UK retail endured the biggest drop in footfall for the month of November since 2009. It also marked the 12th consecutive month of footfall decline. Discounts were made for online; no pushing and shoving to then leave disappointed. If they’ve got it, it’s in the basket, and you probably don’t buy anything else while you’re there unlike if you’d gone to the high-street or a shopping centre.
Laura Ashley just announced it was closing a further 40 stores and, last week, Bonmarché issued a profit warning and Blue Inc fell into administration.
Many retailers will be praying for a good Christmas, but to make up these sales in the three weeks to Christmas will be tough, especially with so many factors working against them. Primark and ASOS are strong retailers and will weather this storm, but many will not. To continue the weather metaphors, this could be the hardest frost to hit the retail sector in many years and anybody small or not hardy enough will be dead before the winter is out.
Move over Millennials, sadly, it’s not all about you anymore. Generation Z is primed to take centre stage and retailers and brands are asking this constantly ‘on’ generation exactly what they want.
Generation Z are those born between 1995 and 2010, which means that the oldest are about 23 and are entering the workforce. Their spending power is increasing, their influence growing and they are a generation who doesn’t know life before the internet and mobile phones.
Younger focussed fashion and sports brands want to know what these young people want and what better way to do that than getting them to design the clothes themselves.
Left - ASOS's new Generation Z designed COLLUSION label
This new trend in Generation Z designers is mirroring the multifaceted desires and identities of this group of people.
Online behemoth, ASOS, recently launched its ‘COLLUSION’ brand. The entire brand is shaped and ‘focused' by Gen-Z with a line-up of 6 collaborators. The brand is exclusive to ASOS and can be found on COLLUSION.com which links through to the main ASOS site. The blurb says it “is built for a new generation united in their pursuit for inclusivity and representation. The 200-piece, animal-free collection is designed to fit seamlessly into the wardrobes of those who helped shape it”.
It goes on, “From the cut of a jacket, to the way that it is marketed, photographed, styled and sold, this collection is the result of extensive research into the values that this generation sees as non- negotiable”.
The brand speaks as a collective. Categorisation by gender is unnecessary, COLLUSION is ranged as one collection – for everyone. The brand’s website allows for navigation by product category, style or mood, rather than by men’s or women’s. The debut collection and the regular drops beyond it will be available up to a size 6XL. Price points for launch range from £5 for jersey basics to £70 for statement outerwear.
The initial six collaborators were selected by COLLUSION's cultural social team who find tastemakers and talent. The six were chosen from a wide pool of young creatives and all come from different backgrounds, areas, and professions. Students, stylists, activists, image-makers, authors and YouTubers.
It says, “COLLUSION is a manifestation of what this first contingent of six want the future of the fashion industry to look and feel like. Working in collaboration with a team of standalone designers and creatives assembled by ASOS, each industry experts in affordable fashion, the six are consumers of, consultants to, and architects of this brand. Their brief: to realise an authentic, vibrant wardrobe which speaks directly to themselves and their Gen-Z peers”.
Chidera Eggerue, 23, blogger and author, says, “I joined Collusion because I wanted to be part of something that created the change that I want to see,”. Chidera is known to her followers as The Slumflower.
Right - Brands giving the next generation what they want by getting them to design it - ASOS COLLUSION
The collection is animal-free and has been recognised a number of times in PETA’s vegan fashion awards, first launched in 2013, celebrating the most desirable cruelty-free clothing and accessories on the market.
So, what’s been the reaction? The brand says, “COLLUSION has been applauded both on social media and in the press for its unwavering commitment to diversity and body positivity. Publications such as Vogue, i-D, Dazed and Grazia have featured the brand and commended the daring approach for a big backed brand towards gender neutrality and its direct involvement with Gen-Z”.
I’m not sure this generation even read these publications anymore, but, it’s commercial success will be judged with how many follow up collections there are.
This burgeoning woke generation has also come to the attention of sports brand, Champion. They’ve just launched a capsule line of T-shirts inspired by the power of words and how the negative labels used to describe young people can influence and determine their identity and behaviour.
Partnering with the London-based charity ‘London Youth’, which represents 400 community youth projects across the city, and called ‘Champion London Youth’, the T-shirts are each inspired by the personal stories of five young people who have faced stereotyping and have overcome this with the help of their youth clubs and organisations.
Local authority youth service budgets across London in 2017/18 are £39 million lower than in 2011/12. This represents an average cut of £1.5 million or 44% per local authority. During that period, 81 youth centres were closed and there were 800 fewer youth workers.
Gill Goodby, Head of Communications at London Youth, says “We combined with The Corner agency to produce a film to challenge the perceptions of young people and every newspaper headline having ‘youth’ and ‘violence’ in the title wasn’t representative. The T-shirts with Champion came from that film,” she says.
Subira Damali, 23, from Lewisham is one of the chosen designers of the T-shirts, and describes how she became involved, “I’m part of Lewisham Youth Theatre. They send me acting opportunities and I applied to be on the film”.
Left - Subira Damali & her daughter
A young mum, she was interviewed for the film and wrote a few words that people used negatively to describe her. “Then somebody said, ‘This is going to be on a T-Shirt’. It’s about breaking down stereotypes and designing clothes helps confidence, leadership and is therapeutic,” she says.
Renowned designer Tim Head transformed the experiences of these young people into limited edition designs, which will be available for sale in Champion’s Soho store and at Urban Outfitters. Champion will be donating all profits to London Youth to help fund the charity’s arts, sports development, youth social action, employability and outdoor learning programmes.
If they design it, then, hopefully, they’ll buy it. Or, so the thinking goes. Asking the next generation what they want seems almost too simple in its concept. But, this generation is very individual and it wants to be seen that way.
This feels like the natural progression of personalisation and customisation and a step to the future where we’ll all be able to share a hand in designing what we want.
Today, retailers and brands are up to the size and speed of being able to tailor collections for certain generational groups or be reactive to their wants and desires. It makes business sense, but will it be this straightforward?
This is a generation of confident young individuals who know what they want and want their clothes to reflective their disparate identities. Brands will just have to try as hard as they can to keep up.
Sometimes in danger of believing his own hype, Jeff Goldblum, is a cool customer. On a recent Graham Norton Show, Goldblum totally nailed this year’s evening look. A snakeskin jacket was teamed with a lurex shirt and tie combo and striking zebra socks and matching shoes.
Left - Jeff on Graham's sofa showing the zebra shoes and matching socks
What, on paper, shouldn’t work, totally does and shows it’s all about the sparkle and animal prints, this party season. This is confident evening wear and shows everybody at the office party what a lounge lizard you are.
Get the look below:
Right - Smart evening wear with character
Left - River Island - Black Snakeskin Print Skinny Fit Blazer - £85
Left - Saint Laurent - Damier Lurex Shirt - £685
Left - Moss London - Black & Silver Knitted Tie - £20
Left - Dr Martens Core Fusion Zebra Creepers In Black - £112 from ASOS
Left - Saint Laurent - Men’s Deck 20 Loafers In Black Suede And Black And White Zebra-look Calfskin - £795
When party season hits - it won’t be long - we often forget about our dancing feet. For something simple and fashionable opt for a dose of sparkle in the sock department. Lurex or ‘Glitter’ socks add a Michael Jackson element to your shoe and look great particularly with slip on loafers and cropped trousers. Gucci pioneered the look with their logo lurex socks and while there are a few styles for men, the majority are women’s, so just buy the largest size and they’ll stretch.
Left - Gucci lurex logo socks - Chintz optional!
Below - Gucci - Lurex Interlocking G Socks - £100
Left - Ignore the high-heels - Leg Avenue Xmas Lurex Glitter/Shiny Ankle Pop Socks/Anklets - £9.25 from eBay.co.uk
Left - ASOS DESIGN - Sports Style Socks in Glitter - £4
Below - ASOS DESIGN party socks in glitter zebra design - £4
Need some more sparkle in your life? - Read Menswear Trends Daytime Sequins
Need more inspiration? See Best Dressed Chic Geek Jeff Goldblum rocking party season