Primark blames the weather for falling sales. Image copyright Getty Images A warm winter and a cold spring has been blamed for a fall in sales at low-cost fashion retailer Primark. Shoppers left winter clothes on the rails in the run up to Christmas due to unusually warm weather, and a cold March and April depressed sales of summer clothes. As a result Primark, like other stores, had to cut the price tag to sell them. The retailer expects like-for-like sales, which ignore new-store sales, to fall 2% for the year to 17 September.
"If the weather's warm consumers make do with clothes from the previous year," said Maria Malone, principal lecturer for fashion business at Manchester Metropolitan University. For retailers like Primark that causes a problem as they source their clothes from the Far East and South Asia and cannot adjust their stock to reflect the weather conditions. "Once stock is on its way you can't turn the ships around," points out Ms Malone. Pound impact Pension deficit. Rising costs pile on the agony for Britain’s fashion retailers | Fashion. From culottes to “cold shoulder” tops and woven loafers last seen in Miami Vice, many Britons have struggled with this summer’s fashions, but now there is an even more unpalatable trend on the horizon – in the shape of higher prices. The devaluation of sterling following the June Brexit vote has had major ramifications for store chiefs who pay in dollars for large quantities of imported goods.
The first indication of where prices could be heading came last week from Next, one of the UK’s biggest clothing retailers, which pencilled in increases of up to 5% in 2017. “We have always taken the view that if our costs go up, our selling prices will go up,” said Next chief executive Lord Wolfson. But fashion retailers are already struggling to persuade shoppers to part with their cash as weak wage growth is compounded by a cyclical shift towards spending on eating out and other leisure activities. Kantar analyst Glen Tooke says its most recent reading shows the decline deepening. Economy Of Fashion: How Different Trends Reflect The Financial State.
It's common knowledge fashion is cyclical in nature. The concept of “newness” in fashion doesn't refer to the premiere of a trend, but rather its revival. Why fashion cycles in this manner, however, is less obvious. There are lots of factors at play: cultural trends, politics, celebrity influence. One one of the most surprising factors to influence the cycle of fashion, though, is the state of the global economy.
If you think about it, it makes sense. When money’s tight, fashion is one of the first indulgences a consumer will sacrifice to save money. During tougher times, if you need new clothes, the focus is less on passing fads and more on classic, quality pieces worth the expenditure because they’ll last (which also aids in cutting down cost per wear). As FIT professor John Mincarelli tells ABC News, “In rough economic times, people shop for replacement clothes,” adding “basics” prevail during an economic downturn. Pinterest Once the market crashed, longer skirts became de rigueur. How? Fashion e-tailer Myntra claims $1-bn sales. Leading fashion brands e-tailor Myntra on Monday claimed it has crossed $1-billion (Rs.6,720 crore) in sales after discounts in July.
"We have crossed $1-billion run rate in annualised GMV (Gross Merchandise Value) post discounts in July," Myntra Chief Executive Ananth Narayanan told reporters here. GMV indicates total sales in online retailing for merchandise sold through a particular marketplace over a specific timeframe. "Sales volumes were propelled by growth of our brands, increased contribution of international brands, high growth in sportswear and womenswear category and 'End of Reason' sale," said Narayanan on the occasion.
The billion-dollar milestone in terms of GMV came in the month (July) when e-tailer Flipkart-owned Myntra bought e-store Jabong from the London-based Global Fashion Group for $70 million (Rs.471 crore) in cash to consolidate its position in the fashion and lifestyle segment. Bengaluru-based Flipkart acquired Myntra in May 2014 for an estimated $300 million. Mulberry luxury goods maker sees profit treble. Image copyright Getty Images Luxury goods company Mulberry sees profits treble following switch to focus on more affordable products. The company, best known for its leather handbags, saw annual pre-tax profits in the year to 31 March jump from £1.9m to £6.2m. Sales rose by 5% to £155.9m. Mulberry has struggled in recent years as a result of the company's failed attempt to compete with higher end brands, such as Prada and Fendi.
Chief executive Thierry Andretta said it had made "significant progress". Mulberry has spent the past two years introducing new designs and bringing in lower priced bags in the £500 to £800 range. This followed ill-fated efforts to compete at the top end of the market offering bags priced at £1,000 and more. However, the shake-up in strategy appears to be working. Mr Andretta said: "We have built a strong foundation for future growth as a result of the investment made in product design and development as well as our omni-channel infrastructure.
BHS staff face more uncertainty over closure. Economic contribution. The direct value of the UK fashion industry to the UK economy is estimated at £26bn, up from £21bn in 2009, according to data from Oxford Economics, the consultancy, published by the British Fashion Council. This represents an increase of 22 per cent in nominal terms between 2009 and 2014. If the indirect support for supply chain industries and the induced spending of employees' wages are added in, the total contribution from the UK fashion industry is £46bn.Oxford Economics estimates that fashion’s wider contribution to the UK economy in influencing spending in other industries has risen from £37bn in 2009 to over £46bn in 2014 - a 23 per cent increase.The UK fashion industry is estimated to support 797,000 jobs (down from 816,000 in 2009 which reflects an increase in productivity in the sector). Fashion is the largest employer of all the UK's creative industries. Source: The British Fashion Industry and London Fashion Week Facts & Figures, BFC, Feb 2016.
Economic Value. Rising costs pile on the agony for Britain’s fashion retailers | Fashion. Britain Now World's Cheapest Luxury Market | News & Analysis | BoF. LONDON, United Kingdom — In the wake of Britain's vote to leave the EU, which pushed down the value of the pound about 10 percent against the euro, the country has become the cheapest luxury goods market in the world, helping to buoy British luxury labels, at least in the short term, according to new research by Luca Solca, the head of luxury goods at Exane BNP Paribas. "The Brexit vote has made the UK the cheapest market in the world for luxury goods,” Solca told BoF. “A weak British pound will boost travel inflows to the UK, helping British luxury goods players like Burberry, Mulberry and Jimmy Choo.
" While luxury goods companies are not expected to raise prices in the UK in the coming months — at least until there is more clarity around exactly when and how the country might exit the EU — Britain should see a boost from tourist inflows and spending due to its weakened currency. From Bankruptcy to Billions: Fashion’s Greatest Second (and Third) Acts | Int... United Kingdom — In fashion, nothing is permanent. Even when creative directors flee their posts or companies shutter their operations, opportunities for reinvention are often waiting just around the bend. Indeed, some of today's most successful fashion businesses went through years — and sometimes decades — of financial turmoil before achieving the level of global success they enjoy today.
Rise: Gabrielle “Coco” Chanel opened her first store at 21 Rue Cambon in Paris in 1910. By the 1920s, the designer’s inimitable and thoroughly modern design point of view made her a fashion force. Her perfume, Chanel No. 5, which was introduced in 1921, made her a globally recognised icon. Breaking Point: In 1945, in the midst of World War II, Chanel was forced to shutter her couture house, although the company continued to produce fragrance and accessories. Rise: An icon of minimalism, Calvin Klein’s business was generating $30 million by 1977, just a decade after its founding.