Value and middle-market fashion retailers are trying to cash in on shoppers’ desire for quality by launching premium ranges. But will this strategy survive the current trading climate?
It’s been a long time coming, but it seems the value fashion market is finally beginning to slow down. According to consumer research firm TNS Worldpanel Fashion, the sector peaked last year, when its clothing and footwear market share grew by just 0.7%, compared with 1.3% growth between 2004 and 2005. The slowdown has been a blessing for middle-market retailers, which have been hammered by the relentless rise of Primark and Matalan over the past decade.
Unable to compete on price, retailers such as Marks & Spencer and Next have taken advantage of the value market slowdown to ramp up their premium offer with better quality fabrics and design, so far with considerable success.
M&S is due to launch its most premium range ever under its Autograph banner in stores next month, while Next has parachuted in a top-end collection called Signature, with an average selling price of £75, £30 higher than the mainline.
Next chief executive Simon Wolfson says the strategy is working, with the chain’s overall average selling price 6.2% higher this season. Wolfson plans to grow Signature, which accounted for 3% of the womenswear buy this autumn, to between 5% and 6% in the new year.
Upmarket womenswear chain Hobbs is also set to give its Limited Edition premium collection a boost, increasing the number of options and depth of the buy by 25%, as well as making it available in more stores. Chief executive Nick Samuel says: “People want special pieces and to have something they can be proud of, but that still has value for money. We think the premium range strategy works, but at the same time the premium range is a small proportion of our offer.”