According to studies, rising costs and profit pressures will force British women's clothing retailers to rethink this year's product pricing and procurement strategy, and the British ready-to-wear manufacturing industry is expected to re-emerge.
Market research firm Verdict Research’s latest “British Women’s Retail†research report pointed out that issues such as inflation, sales declines, and product discounts for clearing inventory will continue to plague British women’s retailers in the coming year.
The report also revealed that the average operating profit margins of British womenswear brands Arcadia, Debenhams, M&S, Matalan, New Look, Next, Primark, Tesco and TK Maxx declined from 9.8% in 2010 to 9% in 2011, highlighting retail sales Shangzheng is facing the pressure of falling profits.
Because cotton prices and freight rates have driven rising clothing costs, retailers have escalated commodity prices to curb profits. The inflation rate for women's wear in 2012 is expected to be 2.6%.
However, higher selling prices and limited disposable income also mean that consumers' spending on their clothing will be even more cost-effective - this limits the growth of sales in 2012 and is expected to grow by only 0.4%. Weak demand also means that most retailers have only to appeal for discounts to attract customers.
According to Honor Westnedge, an analyst at Verdict Research, large-scale price reductions and discounts in 2012 will lead to increased profit pressure, affect overall profitability, and drive retailers to rethink cost-saving strategies.
In particular, fast-fashion companies are planning to purchase garments from the UK in order to offset the rise in international procurement costs. Because labor costs in China and India are high, and freight rates are high, they must also bear import duties; these factors have increased the pressure on retailers to make them have to increase retail prices or assume a decline in profits.
Westnedge added that even if the UK's labor and production costs will remain at higher prices, freight and import tariffs will be exempted, delivery time will be shortened, and more flexibility will be provided for retailers' additional orders and orders; It is retail brands that must express their boutique styles quickly from the runway to create popular clothing that the general public can wear.
The report raises the alarm that if retailers do not rethink the 2012 discounts and sourcing strategy, they will face the risk of loss of profits, and it seems that retailers can't bear the long-term discount because the profit cannot be sustained, and Consumers will be more and more reluctant to pay high prices for garments.
The report also predicts that the first place in the UK women's wear market in 2012 will be M&S (11.6%), followed by the second to eleventh place in order of Arcadia/Bhs (8.1%), Next (6.9%), Primark (6.2%) ), New Look (3.5%), Asda (3.2%), Debenhams (2.9%), TK Maxx (2.8%), Matalan (2.7%), H&M (2.5%) and Tesco (2.1%).
Market research firm Verdict Research’s latest “British Women’s Retail†research report pointed out that issues such as inflation, sales declines, and product discounts for clearing inventory will continue to plague British women’s retailers in the coming year.
The report also revealed that the average operating profit margins of British womenswear brands Arcadia, Debenhams, M&S, Matalan, New Look, Next, Primark, Tesco and TK Maxx declined from 9.8% in 2010 to 9% in 2011, highlighting retail sales Shangzheng is facing the pressure of falling profits.
Because cotton prices and freight rates have driven rising clothing costs, retailers have escalated commodity prices to curb profits. The inflation rate for women's wear in 2012 is expected to be 2.6%.
However, higher selling prices and limited disposable income also mean that consumers' spending on their clothing will be even more cost-effective - this limits the growth of sales in 2012 and is expected to grow by only 0.4%. Weak demand also means that most retailers have only to appeal for discounts to attract customers.
According to Honor Westnedge, an analyst at Verdict Research, large-scale price reductions and discounts in 2012 will lead to increased profit pressure, affect overall profitability, and drive retailers to rethink cost-saving strategies.
In particular, fast-fashion companies are planning to purchase garments from the UK in order to offset the rise in international procurement costs. Because labor costs in China and India are high, and freight rates are high, they must also bear import duties; these factors have increased the pressure on retailers to make them have to increase retail prices or assume a decline in profits.
Westnedge added that even if the UK's labor and production costs will remain at higher prices, freight and import tariffs will be exempted, delivery time will be shortened, and more flexibility will be provided for retailers' additional orders and orders; It is retail brands that must express their boutique styles quickly from the runway to create popular clothing that the general public can wear.
The report raises the alarm that if retailers do not rethink the 2012 discounts and sourcing strategy, they will face the risk of loss of profits, and it seems that retailers can't bear the long-term discount because the profit cannot be sustained, and Consumers will be more and more reluctant to pay high prices for garments.
The report also predicts that the first place in the UK women's wear market in 2012 will be M&S (11.6%), followed by the second to eleventh place in order of Arcadia/Bhs (8.1%), Next (6.9%), Primark (6.2%) ), New Look (3.5%), Asda (3.2%), Debenhams (2.9%), TK Maxx (2.8%), Matalan (2.7%), H&M (2.5%) and Tesco (2.1%).
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