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Brands angry at ‘panic discounts’ on high street

More than a quarter of floor space on the high street has been given over to  discounts this March, leaving brands threatening to pull out of retailers if the aggressive markdowns continue.

A number of high street multiples have attempted to lure shoppers with discounts of up to 70% in an effort to shift spring stock while battling with cold and snowy weather.

Promotions include mid-season Sales at Coast, Dune and Warehouse, with womenswear retailer Oasis offering a mid-season Sale featuring up to 70% off selected lines. Department store chain  Debenhams is holding an Easter Extravaganza with 20% off selected departments in store and online, as well as its usual mid-season half-price Sale. Marks & Spencer is also holding a 20% Easter promotion.

Ricky Attenborrow, insight analyst at research firm RetailMap, said there was a “dramatic increase” in the amount of space on promotion, coinciding with the drop in temperature in mid-March.

Early estimates suggest the total floor space dedicated to Sales will reach 26%, up from 22.1% in March 2012.

Also among the retailers slashing prices is House of Fraser, which is holding a 50% Sale, and Dorothy Perkins, which is offering up to 60% off.

One brand manager said his label had pulled out of House of Fraser for autumn 13 due to the intense discounting. “It’s doing more damage for us having stock in there than not,” he said, noting discounting during spring 13 had been particularly excessive.

“Retailers are using it to get traffic to the website and people through the doors. It is getting more aggressive,” he said. “If trade doesn’t pick up we’re going to be seeing a lot more of it, as rent and rates need to be paid. There will be even more discounting as people need to free up cash flows.”

Another young fashion brand is considering pulling out of womenswear retailer Dorothy Perkins if its discounting strategy continues. The Arcadia Group-owned retailer has held a number of promotions over the past fortnight, including a run of TV adverts highlighting price reductions of up to 30% on selected lines.

The brand manager spoken to by Drapers said: “There seems to be much more ad hoc panic discounting than last year. They keep moving the goalposts, so I’m thinking about packing it up.”

One industry source said retailers needed to “hold their nerve”.

She added: “Discounting is not going to lure people into spending. The only thing that is going to do that is the sun. All this will do is appeal to the bottom end of the market.”

Readers' comments (12)

  • name the brands. otherwise this is a non-story

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  • Agree with the above, if you're going to run stories like this you could at least give some examples.

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  • Totally agree with the above.

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  • The brands that are pulling out are going to get their turnover from where then? Like all brands all talk no action

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  • The Government need to intervene and regulate time periods for discounting. I visited HoF Glasgow and Oxford Street this week and it's clear these are headline grabbing, footfall generating markdowns of previous season stock, but it makes the experience poor and consumers' are reluctant to pay full price anticipating further sales.

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  • I have to agree that the brands need to be mentioned in this article, otherwise it is all hypothetical. In my experience, most brands that deal with HOF have no balls at all. However, brands have the power but they don't care. The go for numbers.

    The irony is that brands have the power. The onus needs to be placed on retailers from brands that if you want to us to continue with you in the future, stop discounting NOW. That way the retailer has a choice - Either they continue to discount and lose the brand, or stop discounting and retain it.

    It's a simple solution, but the bottom line is the brands won't do it - whatever Drapers says to the contrary.

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  • 'Promotions include mid-season Sales at Coast, Dune and Warehouse, with womenswear retailer Oasis offering a mid-season Sale featuring up to 70% off selected lines. Department store chain Debenhams is holding an Easter Extravaganza with 20% off selected departments in store and online, as well as its usual mid-season half-price Sale. Marks & Spencer is also holding a 20% Easter promotion'

    Exactly which of these stores sell branded product?

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  • Well I decided to take advanatage of these sales and it is all the old stuff and not the nice new season items I had my eyes on. I would have said it's just headline grabbing to get footfall into stores and online...which worked as I went online to have a reccy.
    Can't see the problem really. Only way out for brands who don't like it is to open their own retail outlets instead. I also think the view that discounting devalues things is a bit passe and old fashioned as the younger generation expect a 'deal' as standard and don't see it as de-valueing at all.....they just see it as normal selling practise.

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  • One has to have a degree of sympathy for the smaller brands. looking to grow in UK is a difficult dilemma. With the decline of the Independent in terms of numbers, mini independent chains being bought up and with there being only 3 major branded retailers left that being Debenhams, HOF & John Lewis, if not dealing with one of them where exactly are the brand left to go? if they open own retail they are castigated and if they go online they are seen as being greedy! The only future is to regulate the sale periods as in Europe so there is a level playing field for all retailers. Painful in the beginning for some but better for all in the long run.

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  • ...but brands can adapt to this new retail climate. To be called 'greedy' for trading online directly is insane...it's the most sensible and profitable thing a brand can do.
    Apart from profitable direct sales, they can present the entire range to them and get direct customer feedback rather than being filtered by a buyer.
    Regulating markets to try + control their profits is never going to work.

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