The premium market will enjoy the strongest rate of growth in
the clothing sector over the next three years according to new
research by Barclays Corporate.
By 2014 the premium segment is expected to be worth an estimated
£8.6 billion, an increase of £1.9 billion (29 percent)
from today's estimated value of £6.7 billion. The sector is
expected to benefit from a number of factors, including the
'Middleton effect' which has already catapulted key pieces from
Reiss and Whistles collections' onto the front pages of newspapers
and magazines around the world.
Jim Quantrill, Retail and Wholesale Director at Barclays
Corporate in the Midlands said: "Kate Middleton is expected to do
for many British High Street names what Michelle Obama did for J
Crew in the US. Shoppers really get inspired by these big glossy
images of her in styles which are very accessible."
Despite slowing sales in recent months, the sector has defied
recessionary trends enjoying a 6.2 percent increase in growth over
the past two years as an additional 3.4 million consumers lent
towards buying fewer, more expensive pieces and mixing and matching
with value items. The premium end of the market has also benefited
from Britain's ageing population as older consumers place more
emphasis on quality and service over price. This is expected to
lead to a shift in focus for many retailers which will increasingly
tailor offerings to the older shopper.
Jim Quantrill continued: "This is starting to be borne out by a
subtle shift in consumer mindset which is taking shape. Consumers
want quality as well as value, and are happy to trade up to buy
statement pieces. That said, the value end of the market will
remain buoyant and enjoy continued growth."
The number of consumers shopping at the value end of the market
has more than doubled during the past decade. Today 57 percent of
consumers regularly use value retailers with almost half of these
coming from the affluent ABC1 demographic. The research estimates
this segment of the market will grow from £9.9bn to
£12bn (around 21 percent) during the next three years -
slower than pre-recessionary growth rates.
As a whole, the clothing industry is expected to see real growth
of 9 percent by 2014 but, retailers will have to work hard and
adapt to survive as the premium market share grows.
Jim Quantrill continued: "The clothing market will undoubtedly
become more competitive with the middle market feeling the squeeze.
I would expect to see a shift in price structure with key players
focusing on premium in order to maintain growth and bolster
margins."