For the past few years the value sector has been dominated by one key player - Primark. JD is throwing down the gauntlet - but how easy will it be to take a slice of the value pie?
This week Drapers revealed that JD Sports Fashion, a huge player in the retail market, is to launch a new chain this year. Open will focus on the value basic fashion market and will sell own label.
Although JD has already had great success with its sportswear fascias its fashion retailers have struggled of late, therefore a leap into a new area of the fashion sector could be somewhat of a gamble for the group.
Value is already a crowded sector with Primark taking up a huge market share. There are also some other strong players with New Look and H&M both continuing to provide fast fashion at low prices. In out of town areas Matalan is another competitor that could provide some obstacles to JD’s Open and due to their convenience supermarket clothing brands have also proved popular.
Another possible problem for JD could be securing prime retail space.
“Primark are continuing to snap up larger properties,” said Honor Westnedge, senior retail analyst at Verdict Research. “H&M are continuing to expand and so it will be difficult for JD to get prime high street space.”
In its favour, JD has the power of size and therefore economies of scale, but will it succeed in getting people through the doors? The current value players already have a very loyal following and so getting shoppers to part with their pennies could prove tough for JD with an unknown shop front.