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Executive predictions: The 2008 outlook from fashion’s forecasters

Executives from across the UK fashion industry look into their crystal balls to predict what’s in store for 2008

Michael Ziff chairman and chief executive, Stylo
“This year will be incredibly hard – I think we’ll see a 1973- or 1991-style economic climate. It will be a case of keeping stocks very tight, but it will also make us focused on getting our business in a better condition to survive the tough conditions.

“It would be good for the footwear market if one or two chains disappeared, but that will all depend on the banks. In retail, relationships are always important, but never more so than when the financial environment is hostile. You will have to be nicer than ever to your bank manager this year if you want to weather the storm.”

David Carter-Johnson chief executive, Adams Kids
“I think 2008 will be tough, with consumer confidence still pretty low. But customers never change and next year they will still demand the same things: more choice, lower prices, good service and nice shops. The better you are at achieving those goals, the better you’ll do.

“As far as Adams is concerned, we’ll be focusing on creating a destination kidswear chain, which is what all kidswear retailers need to do during the coming year if they want to succeed.”

John Kinnaird chief executive, Dolcis
“During 2008 there will be a lot of movement in the footwear market, with many retailers finding it tough. As a result there will be lots of acquisition opportunities. This summer has to be an improvement on last year. After all that flooding, it couldn’t get much worse.”

John Sunderland business development director, Select
“The jury is out on 2008 – we could either go into a significant recession or it could be a relatively soft landing. Either way, we should err on the side of caution.

“The big issue in 2007 was extraordinary weather patterns, therefore in some aspects 2008 will be easier. However, the economic climate will be more difficult.

“The value sector is often counter-cyclical, because when people are up against it they spend more carefully and become more value conscious. During a recession it is the top and bottom of the market that fare OK and the middle that gets squeezed.”

Lisa Montague chief operating officer, Mulberry
“It is all about having fun for 2008; in fashion we are seeing lots of colour, shine, gloss, metallic and coated materials. Bags will be super-sized or mini – for reference see the Roxanne tote, which Mulberry insiders tip to bring a revival of the iconic Roxanne.

“Fun and frivolity will be balanced by our social conscience. Brands will need to demonstrate the ritual of their heritage, authentic behaviour and integrity of their offer.”

Steve Borges founder of internet consultancy Biglight
“Online fashion retailing enjoyed unprecedented growth in 2007, and I have no doubt this will continue in 2008 and beyond.

“In a way it’s surprising that customers find buying clothing and footwear online so appealing, given the size and fit issues involved, but when you consider that this channel provides access to an incredible range of products, convenience and great value, it is easier to understand the attraction.

“In response to this customer demand, even more retailers will launch transactional websites next year.”

Phil Wrigley chief executive, New Look
“This year will be tougher than last year. The market is expecting clothing growth to be about 2% and we are estimating that there will be 3% more space coming onto the market, which puts like-for-likes on a negative of about 1%.

“At New Look we have strategies that we expect to help us outperform the market, and we plan to achieve modest like-for-like growth. We’ll be focusing on keeping stocks tight and trading more at full price, because like-for-like profit is what pays the bills.”

Peter Holder partner at risk consultancy company Kroll
“2008 is going to be a difficult year for all retailers and particularly so for the fashion sector. With disposable income getting tighter, consumers are going to be much more selective in their spending. This will seriously undermine the fast-fashion culture. Mid-market retailers that do not articulate a clear value proposition will suffer.

“On the upside we will see a phenomenon of ‘reward spending’, whereby consumers will make purchases in a more considered manner as a reward for the good husbandry that will be required in 2008. Fashion retailers with clearly defined quality, value and brand propositions will benefit from this trend.”

Adrian Mountford business unit director, Sainsbury’s Tu
“Shoppers will move away from really cheap clothing and look for premium value clothing – consumers want value for money.
“Sustainability will be even higher on the industry’s agenda, with retailers looking to increase their carbon-neutral sourcing and organic and fair trade ranges.”

Nick Preston brand manager, Republic
“It will get tougher before it gets better. There will be more consolidation and more movement in terms of ownership. Some businesses will struggle to survive another tough year.

“Customers will question a brands’ equity more deeply as they compare them with the vertical operators; some will adapt, others will hibernate. There has to be change.”

Curtis Jacoby owner of womenswear agency The Jacoby Partnership
“With every retail sector, from Peacocks to Austin Reed, talking about premiumisation, I think our relationship with independent retailers means we have to offer an ever-greater point of difference.

“To succeed against heavier competition from own-brand multiples we have to produce more highly designed and labour-intensive collections that stand out.”

Jason Gerrard director, Geko Fashion Marketing
“The middle market will bounce back in 2008 while the discount end polarises and the top end rationalises. There will be casualties on the high street, especially at the discount end. Primark, TK Maxx, Tesco and George will leave little room for any other players. At the top end, luxury will be safe, but the premium end will see a fall in transaction value – the £800 sale will become a £500 one.

“There will be a return to fashion retailing from accountant retailing. No longer will it be about churning out product; instead it will be about selling better product to more discerning consumers. If an economic downturn does materialise, the creative retailers will grab market share. The same is true on the supply side.”

Nick Samuel chief executive, Hobbs
“It will be a tough first half, but 2008 won’t be a disaster. Gradually, as interest rates and petrol prices drop back and the Northern Rock crisis is resolved, consumers will be more confident and will come back out spending in the second half.”

Anne Horton managing director of department store Hoopers
“Customers will be more aware of getting value for the pound their pockets. But Hoopers’ customers will not be so concerned with the housing market, because they are older and more established. I’m concerned that the media is talking us into a problem.

“We will do marketing, but focus more on customer service and in-store experience rather than discounting. People are tired of the discount thing. We had a great in-store event the other day with no discounting.”

Philip Green owner, Arcadia and Bhs
“2008 will be a challenge. It’s very competitive and everyone has opened a lot of space. Most of the growth that people have generated over the past few years has come from opening space. Very few people have put much on the top line.

“We can’t be complacent and there are no quick wins. Next year it will be a 52-mile marathon and we’ll work the best way we can. No one has got an advantage. We’ll all be starting from a similar place.”

Carol Duncumb chief executive, Intimas Group
“I think 2008 will see the rise of specialist retailers and the continued dominance of etail. Stores such as Bravissimo, as well as out-of-sector retailers such as Hotel Chocolat and L’Occitane, will do well because they have maximised on a niche. Retailers that stay true to their brand, such as department store group John Lewis, will also fare well.

“Consumers will opt for retailers that stand for something specific. We’ll also continue to see a rise in internet shoppers. As we become more time poor, we’ll turn to the internet after dinner to do some shopping.”

Paul Clarke national director, retail & wholesale team, Barclays
“This year confounded many commentators who foretold doom for the high street. It is probable they were just a year too early in their predictions. 2008 will be tough, with interest rate rises beginning to affect those whose two-year low fixed rate mortgages have expired, which will be compounded by a reduction in confidence as house values stall.

“It’s possible there will be a flurry of business sales over the first quarter as owners try to beat the new capital gains tax rules, which may bring about a more realistic approach to business values.But the good news is that the clothing sector remains strong, and we will aim to increase our lending to the sector.”

Oliver Watson director of fashion agency Subranded
“In the coming year, colours and choice of fabrics will give a vibrancy to menswear that will flood back into wardrobes in the shape of fully embellished garments. I see our part of the sector splitting into two core areas. Certain brands will offer a full lifestyle offer of footwear, outerwear and tailoring, while others will stay strictly streetwear, doing good-quality product with minimal details.”

Ronan Faherty commercial director, Land Securities
“Too much negativity from market commentators could put the retail industry under pressure. But here are some of the positives. The Bank of England’s recent interest rate cut will boost consumer confidence.

“The momentum and demand for the creation of high quality, vibrant new shopping destinations will continue. The current financial climate will bring an even tighter focus on providing retailers with individual property solutions, to enable them to balance risk with flexibility.”

Daniel Morris managing director, Boxfresh
“I think the biggest issue for the industry next year will be the continued threat to independents, both brands and stores, particularly from etailing, which is now such a global phenomenon. The big challenge is going to be enabling independent brands like us to flourish on the high street, and I’m not sure if that can happen.”

Peter Ruis buying director for fashion, John Lewis
“Most retailers will be cautious until Easter, but no one’s really thinking further than that at the moment. We have new space coming in with openings in Liverpool and Leicester, so we’ll have more confidence from that.

“Trend-wise, I think we’ll be surprised. This season was about knits and outerwear, and wovens were not as strong. It suggests that there are different trading patterns and pent-up demand. People will still want value but are more inclined to look for quality, and conspicuous consumption is in decline. They want something made in the right place and a little bit special. Organic and ethical is here to stay, but it still has to be fantastic product.

“Last week our online sales were £5m higher than our London Oxford Street store, so we’ll look at how to maintain the momentum of the website.”

Nick Robertson chief executive, Asos
“If we thought last year was bad, wait until we see what 2008 has in store before we call 2007 a complete disaster.

“For the coming year I can see John Lewis shining and Next paddling hard, and you can’t ignore the Tesco and Sainsbury’s clothing figures.
“I love what Reiss is doing, and River Island is doing so much right. I believe French Connection will make a comeback in 2008. Online growth for all will be meteoric.”

Kevin Stone group sales & marketing director, BMB Group
“All the data is predicting that 2008 is going to be a bumpy ride. Today’s consumers are best described as the choice generation, so finding ways to communicate with them will be one of the greatest challenges. Brands will need to be more creative then ever. They can use ideas such as exclusive collaborations, Made in England product and eco-friendly merchandise to add value to their offers.

“Consumers don’t want the boredom of more sameness. We will be driving our brands forward, as well as making sure that our products are authentic and exclusive.”

Henrik Madsen regional director UK, McArthurGlen
“Trading conditions will continue to be tough throughout 2008. With price deflation on the high street, the designer outlet business will have to challenge itself to perfect its brand and category mix. It is more than ever about customer experience, value for money and making smart purchases.”

Alan White chief executive, N Brown
“As the extent of the banking crisis becomes more transparent, it will lead to a rebound in consumer confidence, and spending will be better than the market is saying.

“More retailers will develop an online presence as customers become more used to shopping online. I don’t see it as increasing the competition for us, because the sector will grow as a whole. But it will be bad news for the high street. The best online performers will be those that have a clear niche, whether that is larger sizes or targeting a market that is not well served on the high street.”

LeeWalker managing director of store design agency Barlows
“Sustainability will really affect the retail market in 2008, and the recent trend of refurbishing stores in a cheap and cheerful way will not be allowed to continue. Retailers will be forced to consider extending the proposed lifecycle of their refurbishment schemes to minimise the environmental impact of unnecessary waste materials and processes.”

Ben Luscombe managing director, Henleys
“Consumers are much cleverer than they have ever been, so the issue will be keeping them interested. The days of retailers sitting back and buying twice a year are over, so as a brand you must offer something to retailers all year round. This should be a priority for every brand next year.”

Stephanie Thiers-Ratcliffe European marketing manager, Cotton Council
“Along with ‘natural’ and ‘renewable’, ‘sustainable’ will be a message that resonates on the catwalk as designers place a higher importance on the provenance of their fibres and fabrics. Cotton in 2008 will be ruled by quality and sustainability. Consumer demand for cotton products that not only maintain, but also benefit, the environment will grow.”

Perry Watts chief executive of consumer retail, DHL Logistics
“The fashion supply chain is even more fast-paced now, and 2008 looks set to continue that trend. Consumer demand and speed-to-market will feature high on the agenda as retailers strive to remain competitive.

“We will start to see true supply chain collaboration and a greater focus on environmental impact. Customer needs, reduced road miles and consolidated shipments will all have an important part to play.”

Stuart Rose chief executive, Marks& Spencer,
“I believe 2008 will be the year of value, in the true sense of value being a mix of price and quality. This is what more UK consumers will be looking for. This has always been a priority for M&S and I believe we’ll be well placed to deliver on this in 2008.”

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