Apparel Retailing in W.Europe Would Be More Competitive In 2003

Continued sluggish retail sales growth in 2003 across much of Western Europe will exacerbate the already tough competitive environment for apparel retailers, reports Retail Forward in a recently published study entitled, Apparel Retailing in Western Europe.

Despite the difficult environment, major European clothing retailers, and particularly multi-national specialty chains, are succeeding by taking market share through innovative, fast-changing product offers and lower cost, more efficient business models. "The ability of these specialty chains to implement faster and more flexible supply chains is giving them a real competitive advantage," comments Ira Kalish, Director of Retail Forward's Global Intelligence Program.

The Changing Face of Apparel Retailing

Several factors are transforming apparel retailing in Western Europe like never before:

-- Weakening Demand. While apparel spending in Western Europe grew at an annual rate of 3.8 percent from 1997 to 2000, the industry's share of total consumer spending is declining as the economy decelerates and consumer confidence slips.

-- Rapid Consolidation. Although apparel distribution channels and the concentration of apparel sales are still quite different across Europe, rapid consolidation reflects growing market maturity.

-- Greater Internationalization of Styles. Multi-national retailers like H&M, Zara, and Mango, have moved toward greater internationalization of styles and more disposable fashion through low prices and fast rotation of inventory.

-- Supply Chain Flexibility and Speed to Market. Faster and more flexible supply chains are the principal drivers of the retail apparel industry in Europe, and are key to the success of specialty apparel chains.

"Consolidation, internationalization and the speed of the fashion cycle will continue to drive change in the structure of European apparel retailing," Kalish states.

According to Kalish, the most significant issue transforming the retail apparel industry in Europe is fast response. "Speed and integration of the supply chain will continue to shape the future of the retail apparel industry in Europe by enabling more flexible, demand-driven fulfillment," comments Kalish. "The hallmark of successful apparel retailers is an ability to create distinctive product ranges that are responsive to quickly changing consumer expectations," he continues.

The ability of specialty chains to implement fast response is placing pressure on traditional retailers, including independents and department stores. Their explosive growth is shifting apparel market share and is changing the structure of apparel distribution across Europe, reports Retail Forward.

Recent tough market conditions have favored those retailers who can respond to consumer demand more quickly and at lower cost. A handful of specialty retailers such as Sweden's H&M and Spain's Zara, continue to defy the global economic downturn. "These companies are particularly adept at understanding what consumers buy - and want to buy - in real time and responding quickly to sales trends and customer feedback," Kalish adds.