Market research firm Verdict Research's latest "British Retail women," the study pointed out that with inflation falling sales and discount merchandise clearing inventory and other issues in the coming year will continue to plague the British women's apparel retailer.
The report also revealed that British women's brands Arcadia, Debenhams, M & S, Matalan, New Look, Next, Primark, the average operating margin Tesco and TK Maxx fell from 9.8% in 2010 to 2011 by 9%, highlighting the retail Shangzheng is facing the pressure of falling profits.
Because cotton prices and transportation costs have driven up the cost of garments, retailers have escalated their prices to curb profits. The inflation rate for womenâ€™s wear in 2012 is expected to be 2.6%.
However, higher selling prices and limited disposable income also mean that consumers' spending on their clothing will be more cost-effective - this limits the growth of sales in 2012 and is estimated to grow by only 0.4%. Weak demand also means that most retailers have only to appeal for discounts to attract customers.
According to Honor Westnedge, an analyst at Verdict Research, large-scale price reductions and discounts in 2012 will lead to increased profit pressure, affect overall profitability, and drive retailers to rethink cost-saving strategies.
In particular, fast-fashion companies are planning to purchase garments from the UK in order to offset the rise in international procurement costs. Because labor costs in China and India are high, and freight rates are high, they must also bear import duties; these factors have increased the pressure on retailers to make them have to increase retail prices or assume a decline in profits.
Westnedge added that, even if the British labor and production costs will be maintained at a higher price, but can be exempted from import duties and shipping costs, but also shorten delivery times, and provide more flexibility retailers additional orders and rush orders; in particular, It is retail brands that must express their boutique styles quickly from the runway to create popular clothing that the general public can wear.
The report warning that if retailers do not consider re-purchasing strategy and discounts in 2012, will face the risk of impairment of earnings, and now it seems that retailers can not afford to discount long been the practice, because profits can not be sustained damaged, and Consumers will be more and more reluctant to pay high prices for garments.
The report also predicts that the first place in the UK women's wear market in 2012 will be M&S (11.6%), followed by the second to eleventh place in order of Arcadia/Bhs (8.1%), Next (6.9%), Primark (6.2%) ), New Look (3.5%), Asda (3.2%), Debenhams (2.9%), TK Maxx (2.8%), Matalan (2.7%), H&M (2.5%) and Tesco (2.1%).
June 08, 2019
According to studies, rising costs and profit pressures will force British women's clothing retailers to rethink this year's product pricing and purchasing strategies, and the British ready-to-wear manufacturing industry is expected to re-emerge.