I wrote at the start of 2013 about the prospects for fashion in the first quarter of what is likely to be another hard-fought and challenging year, and this week we saw the first of what are likely to be a series of cutbacks and adjustments to fashion businesses desperate to weather the storm.
The public is restless already following another catastrophic week for retail in general, with Blockbusters and HMV both hitting the headlines for the worst of reasons, and shoppers’ nervousness increasing proportionally with each tabloid splash.
Now we hear that a number of fashion players are starting to feel the pressure. Midlands Co-op is getting out of fashion altogether, Gio-Goi has gone into administration, as revealed exclusively online by Drapers last week, and Republic is reportedly looking to ditch some of its underperforming stores.
These are all moves in keeping with the current climate, where business model really is everything - the balance of bricks-and-mortar and online, the proportion of wholesale to retail and the pricing architecture are critical.
In the case of the Co-op we can understand businesses pulling back from areas not core to their business - now is not the time to ‘dabble’ in a sector like fashion. Others like Republic have been undergoing review and change, and opinion is mixed about whether chief executive Paul Sweetenham’s plan to shake up the brand mix at the young fashion chain and move it more upmarket have been working, and certainly an estate of 120 in the current market seems excessive, so offloading would make sense.
In the case of Gio-Goi, those close to the business have told us it went too mass market with the product, lost its cool underground appeal and then failed to take the styles forward when their initial on-trend style went out of fashion - failure to update is sure to kill off a few more before the year is out and this highlights the need for constant evolution and laser-like focus on your consumer that has also been a key failing of M&S in recent times.
Add to the mix an autumn 13 deadline put in place by some Icelandic bank investors in businesses that will require some substantial refinancing activity to take place between now and then, and you have a recipe for more upheaval in the short term.
And of course we can’t underestimate our old friend the weather. With a cold snap gripping the country and the dregs of the warmer Sale stock now almost gone, most retailers will be hoping for some warmer weather to drive full-price spring sales, if not immediately then certainly in time for the unfortunately very early Easter this year.
If the factors above don’t play well for most of the sector, there has already been talk of a triple-dip recession, and we all know that talk can cost sales when the public reacts to headlines as if they were reality and purse strings remain tighter than ever.