In a difficult climate where competition is fierce and the consumer is fickle what does it take to beat the brand backlash and succeed in the young fashion field?
Last week was a veritable rollercoaster on the young fashion front with Irish chain A-wear slipping into receivership while at the other end of the spectrum etailer Boohoo listed on the stock market.
Troubled high street chain A-wear had been trying to restructure since it went into the process of examinership on October 8, but appointed receivers to the business on November 29, blaming high rents, diminished footfall and increased competition for its problems.
The retailer’s 31 stores will continue to trade while the feasibility of the units is assessed. However, closures across its store portfolio are “inevitable”.
As an A-wear shopper I was particularly dismayed at the news, there was a time when the fashion chain was the go to store for an embellished party dress or cosy knits at very reasonable prices but as a fellow former fan described it, A-wear has been a bit “hit or miss” of late. The chain failed to keep up with its rivals and without a point of difference it lost its identity and with it the attention of its core demographic.
However other young fashion companies have flourished, honing in on two areas which A-wear seemed to ignore- ecommerce and international expansion.
As reported by Drapers last week, young fashion etailer Boohoo.com’s decision to float is likely to value the ecommerce platform above its bricks and mortar counterparts thanks to its growing international footprint. In August the etailer announced it was recruiting 50 employees, taking its total headcount to 650. In the last year it launched into Australia, New Zealand, the US and Canada. According to its most recent accounts, Boohoo grew pre-tax profits by 79% to £248,790 for the year to February 29, 2012, with sales up 18% to £29m.
Similarly ecommerce site Missguided has doubled like-for-like sales to £60m, helped by strong international sales.
The women’s young fashion business increased UK sales by 102.2% for the year to March 31 and saw strong performances in new markets such as Australia and the US, where Missguided launched local websites in February and June respectively this year.
At present international sales make up 15% of total sales at Missguided, a figure that is forecast to double in 2014 and has the potential to grow to between 60% to 70% in the next five years.
And it’s not just pure play etailers enjoying a slice of the young fashion pie, last month Lipsy broke its record for online sales last week following the launch of the Kardashian Kollection, with some garments already selling on eBay for twice their RRP.
The brand, the brainchild of US reality TV stars Kim and Khloe Kardashian, launched at Lipsy at 10am on October 24 and more than 50,000 vistors accessed the Lipsy website during the one hour chat and by 4pm the retailer had smashed its record for daily online sales.
In order to keep up with the competition young fashion retailers need to adapt to the way consumers shop. Young shoppers in particular are spending on the move with mcommerce and transactional sites from their fashion favourites increasingly in demand. With online sales expected to peak at £605m today, Cyber Monday, its clear that keeping up with the Kardashians and co can be a very lucrative business.