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£500m up for grabs in value sector

The turmoil at Ethel Austin, Internaçionale, Select and MK One has thrown open the doors to an extra £500 million worth of sales for rival retailers.

Verdict Research estimates that the four retailers have a combined 5.7% share of the £8.6 billion value sector, which could be snared by the likes of Peacocks, Primark, Matalan and New Look if they can grab share while the future of these businesses is decided.

However, former MK One chief executive Elaine McPherson, who has been linked to a rescue deal for Ethel Austin and a purchase of MK One – which was put up for sale by Baugur last week – believes there is still potential for a value player to squeeze between Primark and the supermarkets.
McPherson said: “It is no secret in the retail industry that every potential bidder has taken a look at Ethel Austin in the past year, and passed. It is a tragedy that a business with the heritage of Ethel Austin faced such a bleak future,but that is the reality of the UK high street in 2008. If the company has any viable future, restructuring is needed.”

A source close to Ethel Austin blamed management for the chain’s problems and said they had alienated core customers by ditching menswear and chasing New Look’s fashion customers.

In response to the value sector meltdown, new Select owner Cafer Mahiroglu is repositioning the business away from its value roots towards a more Jane Norman-style young fashion offer.

Value clothing market share for 2007
George at Asda 16.1%
Primark 15.9%
TK Maxx 10.7%
Tesco 10.7%
Matalan 10.2%
New Look 9.8%
Peacock Group 8.4%
Ethel Austin 1.8%
Internaçionale 1.5% est
MK One 1.5%
Select 0.9% est

Source: Verdict Research

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