Brands call on stores to refresh their offers to keep customers engaged.
Young fashion brands and agents are confident the branded menswear sector will stay strong despite the demise of three young fashion retailers in recent weeks.
Southern mini-chain Base Menswear entered administration last week, citing the squeeze in the sector and excessive business rates. Both seven-store Scottish menswear retailer Core and 15-store Northwest-based Duffer Menswear were both on the brink of liquidation as Drapers went to press.
Simon Poole, managing director of men’s young fashion brand Luke, says the recent collapses highlight the challenges of working in the sector.
“While buyers put on optimistic faces at trade shows, and the news shows optimistic shoots of recovery, the underlying
performance for smaller stores and mid-sized groups is flat at best,” he says.
“I’m not shocked by some of these failures, however. A multi-brand group trading in city centres without an element of own brand to support the margin will find it difficult with today’s rents, overheads and legislation. A multi-brand store with too much own brand will find it equally hard though.”
The main struggles for such retailers appear to be continued footfall declines and difficulties with cash flow as credit limits have been reduced, meaning retailers have had to pay for stock in cash.
Poole adds: “We’ve all become dependent on making money at Christmas as these wet, cold springs are driving customers to the shelter of large, dry, warm shopping centres, leaving high street retailers popping their heads out the doors looking for customers.”
This branded market has been subject to many shifts over the past couple of years, with a number of retailers struggling to keep their heads above water. Mini-chains including Ark, Cruise, Flannels and Originals Clothing have been mopped up by JD Sports Fashion and Sports Direct. The retailers have also snapped up failed young fashion brands including Gio-Goi and Firetrap.
Retailers and brands have not been helped by a reduction in revenues, with spend on clothing for under-25s menswear falling over the past year. According to analyst Kantar Worldpanel, sales of menswear bought for the under-25s fell 0.3% to £5bn year on year in the 24 weeks to December 22, 2013. This was driven by a 2% fall in sales of branded menswear, despite a 0.5% growth in own-label menswear.
Traditionally the branded market has been more important to menswear than womenswear, with branded clothing accounting for 34.6% of total menswear spend, compared with just 14% of womenswear spend.
Retailers are also being hit by brands opening their own stores on the high street, with many such as G-Star and Superdry choosing to have control over all aspects of their business.
One brand owner, who does not want to be named, says that in order to prosper, multi-brand retailers must search for fresh labels. Reluctance to take a risk on new brands could be contributing to the downfall of some retailers, he believes.
Ashwin Shah, managing director of men’s young fashion brand Duck and Cover, agrees: “People aren’t engaging with the consumer as much. The retailers that have gone are great retailers but they haven’t taken any risks. They may not have tried taking on different brands or updated their stores.
“The important thing is the merchandising, the passion of the staff and the store theatre; they are the things that will sell the stock.”
However, Shah says that despite a flurry of failures, there is a feeling of optimism across the sector.
“The guys who have their heads switched on are pretty confident and these people are saying this January was better than last January,” he explains. “There is definitely a feelgood factor, confidence is coming back.”
Perry Davies, director of Apex Agency, which represents men’s streetwear brand Serge DeNimes, says retailers are now adapting for a new generation of customers.
“The stores that are moving on and experimenting with new brands are the ones up on previous years. It’s not all about taking loads of short-order brands on but about giving the customers something new, something to refresh the shop or site.”
Davies reiterates that retailers need to take a gamble on new stock. “There are a lot of great new brands coming out of the UK and abroad,” he says. “Stores need to take that risk and invest the time to grow awareness of these brands.
“Stores want ready-made brands because of the tough economic times and they haven’t got the time to invest in growing the up-and-coming brands. But without these brands we aren’t offering the new generation anything fresh.”
Men behaving branded
● Around a quarter of branded menswear is bought online, against just 15% of own-label menswear
● Sports footwear accounts for the largest proportion of branded menswear spend for the under-25s (29%)
● More than half of branded menswear items (54%) were bought on discount, compared with 28% of own label.
Source: Kantar Worldpanel