Abstract
Introduction
Verdict Research: Menswear retailers have faced difficult times, and with
inflation returning to the market in 2010 and margins being squeezed, the
outlook remains challenging. This report looks at the key issues facing the
sector as well as profiling the major retailers in the market including Marks
& Spencer, Next, Asda and Tesco.
Scope
*10 year value and growth trends in UK menswear expenditure, including sub
sectors of men' s outerwear and underwear
*Outlook for the market including key issues and growth drivers and
inhibitors
*Detailed profiles on 12 of the major players in the market including menswear
and clothing market shares for 2005 - 2010e
*A further 9 concise profiles on smaller menswear retailers
Highlights
Menswear spending shrank by -1.3% in 2009. As we predicted it fell faster than
womenswear and childrenswear as it was the first item to be cut from families'
clothing budgets during the downturn.
We predict a return to growth, of 4.8%, in menswear spending in 2010 despite
weak consumer optimism, fears about tax rises and public sector redundancies
and falling real incomes. However, this will be driven by price inflation,
which has returned to the menswear market after more than a decade of falling
prices.
M&S remains the market leader in menswear with a share of 11.3% in 2010.
Though it has improved menswear ranges, particularly in formalwear, it has
been impacted by advances by grocers on entry price point merchandise and
clothing basics, causing its market share to decline in 2010.
Reasons to Purchase
*Identify the key trends and issues for menswear retailers to exploit
opportunities and minimise risk
*Comprehensive profiles provide essential information on business models and
performance measures both crucial for benchmarking businesses
*Understand key success drivers using Verdict' s detailed insight on major
market players
Table of Contents
EXECUTIVE SUMMARY 2
Key Findings 2
Menswear market returns to growth
in 2010; 2
But sourcing prices cause inflation, hitting volume; 2
Value players worst hit by rising prices; 2
Midmarket better placed to
respond with mix change; 2
M&S remains market leader; 2
Next revamps
its retail brand but still loses share; 2
Arcadia moves into number three
slot on Bhs merger; 2
Asda depends on Living stores for menswear growth;
2
Primark biggest share winner as it raises menswear profile; 2
TK
Maxx completes UK growth and targets rest of Europe; 2
Debenhams refocuses
on core customer and improving stores; 2
Matalan restarts its expansion
plans as revival continues; 2
Sports Direct needs to develop its stable of
product brands; 2
River Island new CEO puts brand image under scrutiny;
2
Tesco plans Extra space growth to catch up with Asda; 2
Moss Bros
cashes in on revival for men' s 2
Main conclusions 3
Menswear market to
grow 4.8% in 2010 3
Sourcing prices cause inflation, hitting volumes 3
Value players will be worst hit 3
Midmarket retailers have room to respond
3
M&S menswear still market leader 3
Next revamps its retail brand but
fails to advance 3
Arcadia Group has held onto number three slot with 5.4%
market share 4
Asda places hopes for non-food in Living format 4
Primark biggest share winner as it raises menswear profile 4
TK Maxx
completes UK growth and targets rest of Europe 4
Debenhams refocuses on
core customers 4
Matalan restarts expansion plans 5
Sports Direct
needs to develop its stable of product brands 5
River Island new CEO puts
brand image under scrutiny 5
Tesco grows non-food sales through its core
Extra format 5
Moss Bros enjoys suit market revival 5
Table of
Contents 6
Table of figures 7
Table of tables 8
MARKET ANALYSIS
9
Menswear market definition 9
Menswear market growth 9
Clothing
market spending trends 10
Bounces back from downturn 10
Menswear
spending in the context of clothing market 11
Menswear share carries on
declining 12
Menswear spending trends 13
Volume growth peters out
13
Price inflation returns 15
Retail distribution 17
Grocers and
department stores gain share in clothing overall 17
Grocers gain more
slowly in menswear 18
COMPANY DATA ANALYSIS 19
Clothing market shares
19
Primark new challenger to Big Three specialists 19
Menswear market
shares 21
M&S stronger in menswear 21
Winners and losers 23
Primark continues to march onwards 23
Arcadia reinforces position 24
Value players continue to gain 25
River Island main midmarket success
27
Space allocation 29
Moss Bros and M&S leaders in formalwear 29
Key operating statistics 31
Asda takes lead on menswear densities 31
Operating margins 33
River Island enjoys best growth 33
Value players
outperform on sales growth 34
Space growth 37
Primark adds further
menswear space 37
Menswear sales densities 39
Asda improves but River
Island slips back 39
OUTLOOK 41
Preparing for inflation lift-off
41
Consumer spending recovery to lag rest of economy 41
Real incomes
under pressure 41
Optimism slips back again 42
But unemployment not as
bad as expected 42
Impact of public finances 43
Consumption expected
to lag the rest of the economy 43
Return to clothing inflation 44
Cost
increases to break through 44
Prospects for menswear 45
Volume
contraction in prospect 45
Impact on lower end of the market 46
Midmarket relies on pricing power 46
Cost containment and reduction
strategies 46
Rethinking logistics and IT 46
Concentrating the
supplier base 46
Unlocking spending power 47
Quality more important
but range and price still lead 47
Smart casualwear or casual fomalwear?
47
Mass customisation stretches midmarket upwards 48
Tackling a
weighty problem: the under 45 obese male 48
Prospects for key menswear
retailers 49
Marks & Spencer 49
Next 49
Arcadia Group 49
Asda
49
Primark 50
TK Maxx 50
Debenhams 50
Matalan 50
Sports
Direct 50
River Island 50
Tesco 51
Moss Bros 51
ARCADIA GROUP
52
Bhs adds scale to Arcadia 52
Recent key events 53
Repositions
brands and gears up for global growth 53
Premium Collection replaces Black
Label at Burton 53
Rock and roll themed brand for TopMan 53
TopMan
expands store 53
New storefit for Bhs 53
Burton MD takes over Bhs
menswear 53
Bhs merged into Arcadia 54
TopMan in New York basement
54
Fashion performs well 54
Arcadia' s other brands stick to
franchising 54
Propositions 55
Financials 58
Profitability stays
high despite recession 58
Operating profits may be helped by rising
like-for-likes 61
Space 62
Bhs merger adds four million sq ft 62
Bhs pushes down densities 64
Space allocation 65
Sector performance -
menswear 72
Sector performance - menswear 72
Bhs boost to menswear
sales 72
Arcadia pushes into third place 74
Outlook 75
Major shift
of strategy in managing Arcadia brand stable 75
Brings brands together
rather than leaving them apart 75
Relocation strategy will help manage
costs 75
International offers opportunities - but requires logistical
support 75
Burton gains scale from Bhs but not risk-free 75
Bhs needs
to keep its older customer base 76
New Bhs storefit a radical departure
76
TopMan still strong but could suffer from lower price rivalry 76
ASDA 77
Fast track for non-food growth 77
Recent key events 78
New
initiatives support growth 78
Non-profit World Cup 78
Acquires 193
Netto stores 78
New chief executive appointed 78
New George MD targets
value and Asda Living 78
George targets online development 78
Plans
major growth in non-food standalones 79
Targets more quality conscious
customers 79
Shakes up global sourcing 79
Store innovations will
increase competitiveness 79
Proposition 80
Financials 81
Sales
performance improves during recession 81
Sales slow down again in 2010
84
Space 85
Asda Living included in growth plans 85
Turnaround in
density performance 86
Space allocation 87
Sector performance -
menswear 90
Best year for George menswear since 2006 90
George at Asda
maintains share 92
Outlook 93
Danger from growing competition and
economic recovery 93
Market share gains instore will be boosted by
expansion of Asda Living — 93
— while
George focuses on online expansion, too 93
Asda may suffer if consumer
finances recover 93
Growing rivalry from a variety of sources 93
DEBENHAMS 95
Focus on profitability more than sales growth 95
Recent
key events 96
Debt reduction clears way for investment in store estate
96
Introduces new younger menswear brand 96
Revamps Designers'
storefits 96
New international and online opportunities for standalone
brands 96
Reduction of debt 96
Buys Danish store chain 97
Restarts
store refurbishments 97
Moves towards more own bought 97
Proposition
98
Financials 99
Profits grow despite sluggish sales 99
Online
speeds ahead after relaunch 101
Margin begins a recovery 103
Space
104
Presses on with expansion 104
Densities continue to decline
105
Space allocation 106
Sector performance - menswear 109
Slowdown after improvement in 2008/09 109
Sector share recovery to stall
111
Outlook 112
Menswear sticks to safe territory in uncertain times
112
Newness and excitement could work better 112
Store refits badly
needed 112
Store expansion still offers growth potential 112
International comes to the fore 112
Online catch up gathers pace 112
MARKS & SPENCER 114
Formal menswear back on track 114
Recent key
events 116
New chief executive to give momentum 116
Former Morrison
chief executive takes reins 116
More experience in food than clothing
116
Spruces up smarter menswear ranges 116
M&S Direct heads for full
multichannel operation 116
Aims to be world' s most sustainable retailer by
2015 116
M&S keeps up marketing momentum with new faces 117
Cashes in
on World Cup 117
YouTube and m-commerce 117
Strategy to improve
operations and grow market share 117
Project 2020 aims to improve supply
chain 117
Proposition 119
Financials 120
Sales performance
improves but margins down 120
Start of 2010/11 shows big improvement
124
Online on track for half billion target 126
Space 127
Steady
rise in floorspace 127
Sales densities under pressure 129
Space
allocation 130
Sector performance - menswear 133
Menswear sales see
weak revival 133
Market share declines 135
Outlook 136
M&S
menswear benefits from improved ranges 136
Menswear influenced by fortunes
of womenswear 136
Needs to work on appeal to under 45s 136
Grocers
pose an increasing threat 136
New management may be focused elsewhere
136
E-commerce stretches availability 136
International business can
provide scale economies 137
Cost pressure worries for 2010/11 137
MATALAN 138
New wave of store openings begins 138
Recent key events
139
Pulls £1.5bn sale of company 139
Offers fall short 139
Refinances as ownertakes dividend 139
Returns to store expansion 139
Sponsors music show to boost younger audience 139
Proposition 140
Financials 141
Trading recovery remains on track 141
Sales start to
grow strongly again 144
Space 145
New store openings show Matalan
confidence 145
Store revamps help densities 146
Space allocation
147
Sector performance - menswear 150
Menswear underperforms
womenswear 150
Recovery has a long way to go 152
Outlook 153
Revival and expansion but also tough competition 153
Pushes menswear in a
more fashionable direction 153
More direct competition on the way 153
Refinances rather than selling company 153
Ambitious expansion plans
153
MOSS BROS 154
Strong recovery in trading raises hopes for future
154
Recent key events 155
New management team sharpens up trading
155
Launches made to measure tailoring stores 155
Fine tunes Cecil Gee
offer and plans online launch 155
Loses Canali franchise 155
Management changes 155
Proposition 156
Financials 157
Improvement
after long run of decline 157
Long term performance poor 160
Space
161
Temporary halt in expansion 161
Densities stabilise after slump
162
Space allocation 163
Sector performance - menswear 166
Sales
contract for three years 166
Holds on to share after a fall 168
Outlook 169
Need for further repositioning 169
Moss Bros enjoys suit
revival 169
Niche markets could hold potential 169
Moss needs more
brand investment 169
Moss store refits an urgent priority 169
NEXT
170
Fights back with revamped brand and internet Sale 170
Recent key
events 171
Focus on range development helps the brand turn a corner
171
Own label sports brand returns 171
Avoids price increases related
to decline of pound 171
Upgrades and expands Directory
online — 171
— but axes separate brands
website 171
Proposition 172
Financials 173
Sales recover growth in
2009/10 173
Operating margin improves once more 176
Directory
outperforms retail 177
Space 179
Growth in space slows, but larger
sites are targeted 179
Further slide in sales density 180
Space
allocation 181
Sector performance - menswear 184
Returns to sales
growth 184
Market share recovery peters out 186
Outlook 187
Performs well in exceptionally tough environment 187
Breaks out of run of
rapidly declining like-for-like sales 187
Range improvement shines through
in womenswear, but needs more focus on menswear 187
Next' s online business
faces serious rivalry 187
Branded offer needs further improvement 187
Develops in Germany and US 188
Low risk international strategy 188
PRIMARK 189
Advance into menswear market continues 189
Recent key
events 190
Maintains momentum 190
Smooth management change 190
Pushes product development and merchandising 190
Settles copyright case
with Superdry owner 190
Reiterates ethical policy and supports garment
workers 190
Develops logistics 190
Proposition 192
Financials
193
Trading performance provides positive outlook 193
Sales rocket
over a decade 196
Space 198
Store growth in UK slows dramatically
198
Sales densities bounce back 200
Space allocation 201
Sector
performance - menswear 204
Menswear growth slows 204
Rapid menswear
share growth sustained 206
Outlook 207
Primark well prepared for
future growth 207
New management shifts focus to product 207
Quality
improvements needed to prepare for upturn 207
Keeping true to value
origins could be difficult 207
Menswear could be given more prominence
207
Online should be an immediate priority 207
RIVER ISLAND 209
Store expansion slows down 209
Recent key events 210
New ranges and
website 210
Moves to sharpen brand image 210
Management succession
210
Launches community website 210
Celebrities promote ranges 210
New distribution centre 210
Exits Turkey 210
Proposition 211
Financials 212
Sales growth lags new space 212
Operating margins come
under pressure 215
Space 216
Expansion reined in 216
Density high
but declining 217
Space allocation 218
Sector performance - menswear
221
Slowdown from rapid growth 221
Steady progress in building share
223
Outlook 224
Cautious approach during economic downturn 224
Reins back on store expansion 224
Must continue to invest in design
credentials 224
Format development needs to be maintained 224
Social
website needs a push 224
SPORTS DIRECT INTERNATIONAL 225
Benefitting
from weaker competition 225
Recent key events 226
On the lookout for
further rivals to buy 226
Office of Fair Trading and Serious Fraud Office
investigate 226
Purchase of 31 stores from rival JJB Sports cleared
226
Drops bid to take over rival Blacks Leisure — 226
— though still a Blacks Leisure shareholder 226
Moves
into TV advertising 226
Proposition 227
Financials 228
Margins
slip as pound' s fall hits 228
Operating margins likely to recover 231
Space 232
Moderate growth as store size rises 232
Densities revive
after earlier slump 233
Space allocation 234
Sector performance -
menswear 237
Revival after heavy decline 237
Clothing share fails to
rise 239
Outlook 240
Needs to devise long term strategy 240
Revival of JJB Sports an uncertainty for the future 240
Drives online
sales 240
Stores improvement has further to go 240
Acquisition trail
goes cold for now 240
New strategy needed 240
Soccer World Cup will
boost sales 241
TESCO 242
Extra store openings promise further growth
242
Recent key events 243
Continuous initiatives to ride out of the
recession on top 243
Sir Terry Leahy to step down as chief executive
243
Former Sainsbury' s TU man takes over from Terry Green 243
International expansion continues to be a focus 243
One off high street
format 243
Launches ASOS-style website — 243
— with 20 brands 244
Promotes online with discounts
244
Aims to strengthen fashion credentials 244
Clubcard relaunch
includes double value vouchers when spent on clothing 244
Investment in
price cuts help sales recover 244
Proposition 245
Financials 246
Lower space growth reflected in sales 246
Consistent sales and profit
growth 249
Online sales growth slackens 250
Space 251
Space growth
slows 251
Sales densities under pressure 253
Space allocation 254
Sector performance - menswear 257
Menswear growth comes to a halt 257
Menswear lags behind clothing performance 259
Outlook 260
Scope for
further gains 260
Space growth crucial to clothing advance 260
Challenge from other value operators on the rise 260
Visual merchandising
improves, but further to go 260
Online brands could improve fashion
credentials instore 260
TK MAXX 261
Completion of UK expansion moves
closer 261
Recent key events 262
Aggressive expansion plans shift
focus to rest of Europe 262
Management changes in preparation for European
push 262
Buying teams shaken up 262
Experiments with different store
formats 262
Targets expansion both in UK and rest of Europe 262
Proposition 263
Financials 264
Downturn helps sustain growth 264
Profitability on the rise 267
Space 268
UK space increase slows
268
Steady density improvement since 2006 269
Space allocation 270
Sector performance - menswear 273
Sales boosted by downturn 273
Market
share on steady upward trend 275
Outlook 276
Focus moves away from UK
clothing 276
UK expansion nears completion 276
Online development
promising 276
Flexibility will aid final growth spurt 276
Upturn in
consumer confidence could hurt progress 276
SMALLER RETAILERS 277
ASOS
277
Growth focus switches to international 277
Recent key events
277
Carries on adding new product 277
Improves service proposition
277
Financials 278
Profitability improves as international takes off
278
Outlook 278
Reaps benefits of scale 278
International offers
huge potential 278
Jack Wills 279
Embarks on international growth
279
Recent key events 280
Moves into the US Market 280
Launches
Aubin & Wills concept store 280
Financials 280
Rapid growth and high
profit margins 280
Outlook 280
Lifestyle fashion with an English
accent 280
UK Growth continuing 280
International could be a success
281
JOHN LEWIS 282
Fashion sales take off 282
Recent key events
282
Targets online fashion development 282
Moves into younger market
and improves own label 283
Financials 283
Booming sales make fashion a
major category 283
Outlook 283
Online offers genuine incremental sales
growth 283
Shifting younger with its customer mindset 283
N BROWN
284
Cornering larger men' s market 284
Recent key events 285
Snaps
up larger sizes specialist High & Mighty 285
New men' s range and promotes
Jacamo 285
Financials 285
Menswear leading growth category 285
Outlook 285
Leader in a niche market 285
Lack of real competition
286
NEW LOOK 287
Still struggling to break into menswear 287
Recent key events 288
Growth from international and online 288
Pushes
development of online sales 288
Global expansion priority 288
Holds
off £1.7bn stockmarket flotation 288
Menswear develops its presence
and profile 288
Financials 289
Trading continues to impress 289
Outlook 289
Brand credibility still lacking in menswear 289
Will press
on with product development 289
Will suffer from Primark advance 289
REPUBLIC 290
Strong own label boosts profits 290
Recent key events
291
New ownership could boost growth 291
Record Christmas trading
291
High profile brand Diesel launches in Republic stores 291
Transactional site is strong 291
Financials 291
Strong trading
performance continues to impress 291
Outlook 292
Successful base from
which to grow 292
Adding space could strengthen position on high
street — 292
— particularly in cities and
university towns 292
Own brands provide differentiation and third party
brands could offer exclusivity 292
Beginnings of branded upturn could
provide extra impetus 292
Sainsbury 293
Targets clothing as non-food
growth area 293
Recent key events 294
Needs to find extra store space
for clothing 294
Non-food central to growth plans 294
Organisational
changes highlight non-food focus 294
Tyler takes chair 294
Non-food
offer launched online — except clothing 294
Financials
295
Strong set of results for 2009/10 295
Outlook 295
Abundant
opportunities 295
Realigns prices 295
Space expansion vital for
clothing success 295
Value competitors up their game 295
TU would
benefit from more publicity 296
Clothing online launch essential 296
Huge clothing potential if it can overcome space barriers 296
SUPERGROUP
297
Stock market float clears way for further growth 297
Recent key
events 298
Stockmarket flotation gives expansion a boost 298
Expansion
in Ireland 298
Launches new fascia 298
Financials 298
Outstanding
sales performance continues 298
Outlook 299
Base established for short
term growth 299
Expansion looks set to continue at a speedy rate 299
Stockmarket flotation will aid this growth 299
Supergroup must consider
its future fashion direction carefully 299
TED BAKER 300
Needs new
menswear momentum 300
Recent key events 301
Keeps to its tradition of
quirky design 301
Shows off new flagship store format 301
International growth in India and US 301
Sub brands target market more
effectively 301
Clearance website separates old stock from new 301
Financials 301
Sales continue to grow 301
Outlook 302
Menswear
rising star comes to maturity 302
Problem of how grow menswear further
302
Risks devaluing brand 302
International an opportunity and a risk
302
APPENDIX 303
Definitions 303
Clothing & Footwear 303
Financial Statistics - VAT 303
Profiles 304
Physical Development
304
Abbreviations 304
Methodology 305
Market Sizing 305
Market
Share 305
How we calculate sales densities 305
Inflation/deflation &
volume 305
Further reading 305
Ask the analyst 305
Verdict
consulting 306
Disclaimer 306
