Clothing bosses are concerned about the worse-than-expected slump in the UK gross domestic product (GDP) for the second quarter of 2012, but optimistic that consumer spending will improve.
Yesterday the Office for National Statistics said Britain’s GDP fell by 0.7% in the second quarter of the year, marking its biggest fall in more than three years. The ONS attributed the drop to an unusually wet few months and the impact of the extra public holiday.
French Connection sounded a cautious note on the outlook but said a strategy on boosting its transitional pieces should help allay concern about the warm weather putting off customers from buying upcoming autumn stock.
Marketing director William Woodhams said: “We’ve not had an easy time of late but we’re steadily returning to profit. We brought forward our Sale because of the Olympics so as of Friday we’ll be going out all gun’s blazing. We’ve put more emphasis on transitional pieces for autumn as we wanted to be relevant and wanted people to be able to buy products that they could wear now and in a couple of months’ time. It’s not all doom and gloom but we’ve got to be realistic.”
Andy Rubin, chief executive of brand house Pentland Brands, which owns Boxfresh, Kickers and Speedo, said he hoped the fall in unemployment and inflation would “translate into increased spending in the second half and into next year”. He added: “Having said that, the European situation hangs over the UK economy and a failure in one of the European economies will affect us. We’ll continue to invest in design and marketing and be ready for whatever is thrown at us.”
Maureen Hinton, retail analyst at Verdict Research, said that while clothing retailers have recently experienced tough trading conditions, she hoped the current wave of warmer weather would lead to a bounce back.
“This weather will probably give retailers more of a boost that the Olympics as it will encourage people to buy,” she said. “It’s a tricky period but I think things are going in the right direction.”
Natalie Anderson, owner of women’s footwear and accessories indie Elisabeth May Shoe Boutique in St Andrews, also said that the fall in the GDP did not surprise her, given the cuts in many sectors. “I did think that the Queen’s Jubilee would have boosted the economy a little more,” she added.
However, Anderson is cautiously optimistic about the year ahead. “Our business has experienced growth compared to last year and St Andrews still has a brilliant tourist trade and those willing to have a staycation have it all in our area. But we still do everything to guarantee footfall such as promotions and events to create a buzz, as trade cannot be guaranteed.
“I’m slightly more confident this year for the second half than I did last year, as it is our second year of trade. However, I certainly won’t be resting on any laurels.”
The GDP fall was not a surprise to Daniel Rubin, executive chairman of footwear retailer The Dune Group, who was one of the most bearish commentators on the outlook of the economy.
“I’ve been working in this sector for over thirty years and this is one of the most challenging times I can remember. Fewer people are coming through the door and they’re careful about spending money. No doubt the weather has had more impact on us than the economy. If we’d have had decent weather there wouldn’t have been a major drop but because we’ve had mild weather for winter and then rain in the summer it’s not been good for retailers.”