Market Research Clothing by daj15910

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UK Value Clothing Retailers 2010
Published on December 2010

                                                                                                              Report Summary

Introduction


Verdict Research: UK Value Clothing Retailers 2010 examines the top nine value clothing retailers and includes key operating
statistics, clothing and value clothing market share data and individual retailer outlooks. It analyses the key issues that value clothing
retailers face, including the impact of the economy and inflation, and also includes forecasts for sector growth up until 2014.


Features and benefits


* Comprehensive profiles and outlooks for the nine largest operators in value clothing including key operating statistics and store and
space data* Size of the UK value clothing market 2001-2011e, distribution channels, category share, store numbers and space* Value
clothing market forecasts up until 2014* Key issues and opportunities for the sector including international expansion and
performance of the value sector compared to mid market and premium


Highlights


Primark and Sainsbury grew their UK clothing sales by £1.1bn and £0.46bn respectively between 2005 and 2010. Each has added
substantial space to clothing in this period, but both will experience a slower pace of growth over the next five years which will slow
value clothing sales growth overall.We believe that new entrants, such as Morrison, Argos and US retailer Forever 21 will dilute sales
in the segment rather than grow the market as the retail environment is far more challenging for value retailers now than in the past
decade.A transactional website opens up the market geographically without the cost of operating stores and as high regional
unemployment will hit the profitability of regional stores, reconfiguring the store chain and investing in a website could overcome this.


Your key questions answered


* Use Verdict's practical and actionable analysis to shape future business strategy.* Identify the key issues in the market and plan
accordingly in order to reduce risk and maximise growth opportunities.* Benchmark your performance against the 9 leading value
clothing retailers' key operating statistics and growth plans.




                                                                                                              Table of Content


TABLE OF CONTENTS
Overview 1
Summary 1
Value segment still main growth engine of clothing sector ' 1
' but growth slows; 1
Primark and Sainsbury are major growth drivers; 1



UK Value Clothing Retailers 2010                                                                                                  Page 1/12
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New entrants will dilute sales, not expand the market; 1
Inflation a new challenge; 1
Economic factors not all in value retail's favour ' 1
' placing it head-to-head with midmarket; 1
Online development offers growth opportunities; 1
Executive Summary 2
Summary points 2
Value segment still main growth engine of clothing sector ' 2
' but growth slows; 2
Primark and Sainsbury are major growth drivers; 2
New entrants will dilute sales, not expand the market; 2
Inflation a new challenge; 2
Economic factors not all in value retail's favour ' 2
' placing it head-to-head with midmarket; 2
Online development offers growth opportunities; 2
Main conclusions 2
Value segment still main growth engine of clothing sector ' but growth slows 2
Primark and Sainsbury contribute more than half of value growth 2
New entrants will dilute sales, not expand the market 2
Inflation a new challenge 3
Economic factors not all in value retail's favour ' placing it head-to-head with midmarket 3
Online development offers growth opportunities 3
Market Analysis 23
Clothing market trends 23
Growth returns in 2010 23
Department stores and grocers make the most gains 25
Value clothing definition & market trends 26
Strong growth in uncertain times 26
Value continues to outperform clothing 28
Inflation hits hard in 2010 and remains an issue in 2011 29
Value market channels of distribution and sales mix 30
Grocers make largest gains 30
Deepest penetration of childrenswear 31
Womenswear the major contributor 32
Space and store numbers 33
Space receives a boost in 2010 33
Ethel Austin closure impacts on store numbers 34
Company Data Analysis 35
Clothing market shares 35
Grocers and department stores grow share 35
Value clothing market shares 37
Primark continues to lead 37
Winners and losers 38
Primark continues to make biggest gains 38
Key operating statistics 41
Operating margins 42
Clothing sales densities 44
Space allocation 45
Advertising media expenditure 49
Outlook 51


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Value segment issues & opportunities 51
Maturing sector faces new challenges 51
Issues 51
Opportunities 51
Issues 51
Value segment drives clothing market, but less so as it matures 51
North-east, north-west and Wales to be worst hit as new economic environment impacts on profitability 54
Inflation returns to clothing ' prices up and volumes down 55
Overlap with midmarket increases competition 56
Reduced scale and volume threatens viability 56
New entrants dilute sales 57
Opportunities 58
Cut costs and add value ' strategies to offset rising prices 58
Develop online 59
Expand internationally 60
New store formats and flexible space 62
Invest in marketing 64
Value segment growth forecast to 2014 66
Growth will continue to slow 66
Asda 67
Work to do as competitors make advances 67
Recent key events 68
New initiatives support growth 68
Proposition 72
Financials 73
Profits grow despite sluggish sales 73
Sales growth slows down once more in 2010 76
Space 78
Space 78
Growth from Asda Living ' before including Netto 78
Space allocation 80
Sector performance ' clothing 82
Sales densities stay level 83
Market shares 84
Outlook 85
Value price points and good choice no longer enough 85
Matalan 88
Benefits from cash strapped shoppers 88
Recent key events 89
Pulls sale of company 89
Proposition 90
Financials 91
Growth to slow in 2010/11 against strong comparatives 91
Sales remain positive in 2010/11 94
Space 95
Expansion increases in 2011 95
Space allocation 96
Sector performance ' clothing 98
Clothing a star performer in 2010 98
Market shares 100


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Outlook 100
Revival and expansion but also tough competition 100
New Look 102
Growth to become tougher 102
Recent key events 103
Initiatives to drive presence in value clothing market 103
Proposition 108
Financials 109
Value proposition and fashion credentials boost sales 109
Profit grows 112
Online sales steam ahead 113
Space 114
Refurbishment programme is rolled out as new space slows 114
International space 115
Space allocation 116
Sector performance ' clothing 118
Clothing sales continue to rise 118
Market shares 120
Outlook 121
Upward pressures on prices could hinder competitiveness in the value market 121
Peacock Group 123
Growth and profitability under pressure 123
Peacocks 124
Recent key events - Peacocks 124
Question mark over sale 124
Proposition 127
Financials 128
International business boosts sales 128
Growth opportunities for Peacocks, but will be challenging 131
Space 132
Space productivity improves ' slowly 132
Sector performance ' clothing 133
Space allocation 133
Fashionability and newness helping to increase clothing sales ' as well as new space 135
Market share 137
Outlook for Peacocks 138
International compensating for a difficult home market 138
Bonmarché 139
Recent key events 139
Bonmarché launches transactional website 139
Proposition 140
Financials 141
Sliding sales and margins 141
Space 144
Space productivity relatively low 144
Sector performance ' clothing 145
Space allocation 145
Heading for minor recovery 146
Market share 147
Outlook for Bonmarché 147


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Primark 149
A value star 149
Recent key events 150
Maintains momentum 150
Proposition 152
Financials 153
Trading performance provides positive outlook 153
Sales rocket over a decade 155
Space 156
Store growth in UK slows dramatically 156
Space allocation 158
Sector performance ' clothing 160
Clothing sales speed up 160
Market shares 162
Outlook 163
Primark well prepared for future growth 163
Sainsbury 165
Fast clothing growth driven by space expansion 165
Recent key events 166
Presses on with expansion after its recovery 166
Proposition 168
Financials 169
Strong set of results for 2009/10 169
Margin below past performance 172
Space 173
Accelerates space growth 173
Space allocation 174
Sector performance ' clothing 176
Market shares 178
Outlook 179
Opportunities to continue robust growth in clothing 179
Tesco 181
Back on track following a challenging 2009 181
Recent key events 182
Continuous initiatives to ride out of the recession on top 182
Proposition 184
Financials 186
Lower space growth reflected in sales 186
Consistent sales and profit growth 189
Space 190
Space allocation 194
Sector performance ' clothing 196
Market shares 198
Outlook 199
Makes headway as a clothing retailer 199
TJ Hughes 202
Attractive proposition helps drive sales 202
Recent key events 203
Woolworths demise is TJ Hughes' gain 203
Proposition 205


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Financials 206
Value proposition and fashion credentials boost sales 206
Profit grows, while operating margin stays level 209
Space 210
Refurbishment programme is rolled out as new space slows 210
Space allocation 212
Sector performance ' clothing 214
Focus on menswear helps to drive clothing sales 214
Market shares 216
Outlook 216
Over expansion a risk 216
TK Maxx 218
Completion of UK expansion moves closer 218
Recent key events 219
Aggressive expansion plans shift focus to rest of Europe 219
Proposition 222
Financials 223
Downturn sustains growth 223
Sales remain strong 226
Space 227
UK space increase slows 227
Space allocation 230
Sector performance ' clothing 232
Market shares 234
Outlook 235
Focus moves away from UK clothing 235
Appendix 236
Financial Statistics ' VAT 236
Trading Profile 236
Key Operating Ratios 236
Physical Development 236
Abbreviations 236
Methodology 237
Further reading 238
Ask the analyst 238
Global Retail FreeView 238
Verdict consulting 238
Disclaimer 238




TABLE OF FIGURES
Figure 1: Clothing market growth vs value market growth 2000'10e 28
Figure 2: Value segment grows clothing market 2000'10e 29
Figure 3: Overall clothing inflation/deflation & volume growth 2000'09 and forecast to 2014e 29
Figure 4: Value clothing retailers share of clothing segments 2005 and 2010e 31
Figure 5: Value retailers clothing sales mix 2005 & 2010e 32
Figure 6: Value clothing specialists space and y'o'y change % 2005'10e 33
Figure 7: Value clothing specialists store numbers and y'o'y change % 2005'10e 34
Figure 8: Value clothing market shares 2005 and 2010e 38


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Figure 9: Value winners & losers in clothing market share 2010e on 2009 40
Figure 10: Winners & losers in value clothing market share 2010e on 2009 40
Figure 11: Value clothing retailers UK operating margins 2004/05 and 2009/10 42
Figure 12: Value clothing retailers clothing sales density 2008/09 & 2009/10e 44
Figure 13: Value clothing retailers share vs midmarket and premium 2005 and 2010e 52
Figure 14: Value clothing segment growth vs clothing market growth 2005'11 52
Figure 15: Value market growth with and without Primark & Sainsbury 2005'10 53
Figure 16: Breakdown of gains in value segment 2010e on 2005 54
Figure 17: Impact of economy on value segment 2011 54
Figure 18: Inflation and volume growth in the clothing market 2004'14e 55
Figure 19: Sales densities and operating margins in the value segment 2009 56
Figure 20: Value segment retailer positioning 2011 57
Figure 21: Methods of minimising and disguising cost price increases for value retailers 2010 58
Figure 22: International presence of value clothing retailers 2010 60
Figure 23: Benefits and disadvantages of value clothing store formats 2011 62
Figure 24: Matalan's Christmas TV advert and Hollyoaks collaboration 2010 64
Figure 25: TK Maxx Christmas 2010 TV advert and Tesco S/S 2010 TV advert 65
Figure 26: Value market growth 2009'14 66
Figure 27: Asda, 2010 67
Figure 28: Charlie Allen menswear range, George website November 2010 69
Figure 29: Barbara Hulanicki collection, December 2010 70
Figure 30: Asda UK sales and growth to December 2005'10e 74
Figure 31: Asda UK operating profit to December 2004'09 75
Figure 32: Asda clothing space breakdown 2006'10 80
Figure 33: George at Asda clothing sales 2005e'10e 82
Figure 34: George at Asda clothing sales per sq ft 2005e'10e 83
Figure 35: George at Asda clothing and value clothing market shares 2005'10e 84
Figure 36: Matalan, 2010 88
Figure 37: Matalan retail sales and growth to February 2006'11e 92
Figure 38: Matalan operating profit to February 2005'10 93
Figure 39: Matalan clothing space breakdown 2006'10 96
Figure 40: Matalan clothing sales year end February 2006e'11e 98
Figure 41: Matalan clothing sales per sq ft to February 2006e'11e 99
Figure 42: Matalan clothing and value clothing market shares 2005'10e 100
Figure 43: New Look 102
Figure 44: Relaunched transactional website October 2010 103
Figure 45: Well segmented and desirable Limited Edition range, flagship store 2010 104
Figure 46: Spacious fitting rooms, flagship store 2010 105
Figure 47: Yes Yes denim range, Watford store October 2010 106
Figure 48: New Look UK sales and growth to March 2005'10 110
Figure 49: New Look group operating profit to March 2005'10 111
Figure 50: New Look clothing space breakdown 2006'10 116
Figure 51: New Look clothing sales to March 2005e'10e 118
Figure 52: New Look clothing sales per sq ft to March 2005e'10e 119
Figure 53: New Look clothing and value clothing market shares 2005'10e 120
Figure 54: Peacock Group Fascias ' Peacocks & Bonmarché 123
Figure 55: Pearl & Daisy Lowe for Peacocks 2010 125
Figure 56: Peacocks website November 2010 126
Figure 57: Peacocks UK sales and growth to March 2005'10e 129
Figure 58: Peacocks group operating profit to year end March 2005'09 130


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Figure 59: Peacocks clothing space breakdown 2006'10 133
Figure 60: Peacocks clothing sales to March 2005e'10e 135
Figure 61: Peacocks clothing sales per sq ft to March 2005e'10e 136
Figure 62: Peacocks value clothing market share 2005'10e 137
Figure 63: Bonmarché website November 2010 139
Figure 64: Bonmarché sales and growth to March 2005'10e 142
Figure 65: Bonmarché clothing sales to March 2005'10e 146
Figure 66: Bonmarché clothing sales per sq ft to March 2005e'10e 146
Figure 67: Bonmarché value clothing market share 2005'10e 147
Figure 68: Primark 2010 149
Figure 69: Primark mens formalwear range 2010 150
Figure 70: Primark UK retail sales and growth to September 2005'10e 153
Figure 71: Primark UK operating profit to year end September 2003'08 154
Figure 72: Primark group store numbers to September 2005'10 157
Figure 73: Primark space breakdown 2010 158
Figure 74: Primark clothing sales to September 2005e'10e 160
Figure 75: Primark clothing sales per sq ft to September 2005e'10e 161
Figure 76: Primark clothing and value clothing market shares 2005'10e 162
Figure 77: Sainsbury 2010 165
Figure 78: Sainsbury UK sales and growth to March 2005'10 170
Figure 79: Sainsbury operating profit to March 2005'10 171
Figure 80: Sainsbury clothing space breakdown 2007'10 174
Figure 81: Sainsbury clothing sales to March 2005'10e 176
Figure 82: Sainsbury clothing sales per sq ft to March 2005e'10e 177
Figure 83: Sainsbury clothing and value clothing market shares 2005'10e 178
Figure 84: Tesco, 2010 181
Figure 85: Tesco UK sales and growth to February 2005'10 187
Figure 86: Tesco group operating profit to February 2005'10 188
Figure 87: New clothing shopfit, Watford October 2010. 191
Figure 88: New clothing shopfit, Walkden store, 2010 192
Figure 89: New clothing shopfit, Walkden store, 2010 193
Figure 90: Tesco clothing space breakdown 2006'10 194
Figure 91: Tesco clothing sales to February 2005e'10e 196
Figure 92: Tesco clothing sales per sq ft to February 2005e'10e 197
Figure 93: Tesco clothing and value clothing market shares 2005'10e 198
Figure 94: TJ Hughes, 2010 202
Figure 95: TJ Hughes UK sales and growth to January 2005'10 207
Figure 96: TJ Hughes UK operating profit to January 2005'10 208
Figure 97: TJ Hughes space breakdown 2010 212
Figure 98: TJ Hughes clothing sales to January 2005e'10e 214
Figure 99: TJ Hughes clothing sales per sq ft to January 2005e'10e 215
Figure 100: TJ Hughes clothing and value clothing market shares 2005'10e 216
Figure 101: TK Maxx 2010 218
Figure 102: TK Maxx Gracechurch Street London 2010 220
Figure 103: TK Maxx retail sales and growth to January 2006'11e 224
Figure 104: TK Maxx operating profit to January 2005'09 225
Figure 105: TK Maxx menswear range Gracechurch Street, London 2010 228
Figure 106: TK Maxx womenswear range Gracechurch Street, London 2010 229
Figure 107: TK Maxx clothing space breakdown 2006'10 230
Figure 108: TK Maxx clothing sales to January 2006'11e 232


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Figure 109: TK Maxx clothing sales per sq ft to January 2006e'11e 233
Figure 110: TK Maxx clothing and value clothing market shares 2005'10e 234



TABLE OF TABLES
Table 1: Overall clothing trends 2001'11e 23
Table 2: Clothing sector trends 2001'11e 24
Table 3: Clothing channels of distribution 2009 and 2010e 25
Table 4: Value clothing market definition 2011 26
Table 5: Value clothing trends 2001'11e 26
Table 6: Value clothing channels of distribution 2009 and 2010e 30
Table 7: Clothing market shares 2005'10e 35
Table 8: Non specialists clothing market shares 2005'10e 36
Table 9: Value clothing market shares 2005-10e 37
Table 10: Value clothing retailers key UK operating statistics 2009/10 41
Table 11: Value clothing retailers clothing space allocation 2010 45
Table 12: Value clothing retailers womenswear space allocation 2010 46
Table 13: Value clothing retailers menswear space allocation 2010 47
Table 14: Value clothing retailers childrenswear space allocation 2010 48
Table 15: Value clothing retailers advertising media spend 2004'09 49
Table 16: Value clothing retailers advertising spend by media type 2009 50
Table 17: Asda company overview 2010 67
Table 18: Asda retail proposition 2010 72
Table 19: Asda UK key operating statistics 2005'10e 73
Table 20: Netto UK key operating statistics 2005'10e 73
Table 21: Asda UK trading record 2000'10e 76
Table 22: Netto UK trading record 1999'2009e 77
Table 23: Asda store portfolio 2000'10e 78
Table 24: Netto UK store portfolio 1999'2009e 79
Table 25: George at Asda clothing space allocation 2010 81
Table 26: Matalan company overview 2010 88
Table 27: Matalan retail proposition 2010 90
Table 28: Matalan key operating statistics 2006'11e 91
Table 29: Matalan trading record 2001'11e 94
Table 30: Matalan UK store portfolio 2001'2011e 95
Table 31: Matalan space allocation 2010 97
Table 32: New Look overview 2010 102
Table 33: New Look retail proposition 2010 108
Table 34: New Look key operating statistics 2005'10 109
Table 35: New Look trading record 2000'10 112
Table 36: New Look UK store portfolio 2000'10 114
Table 37: New Look store portfolio as at March 2009 and 2010 115
Table 38: New Look space allocation 2010 117
Table 39: Peacock Group overview 2010 123
Table 40: Peacocks retail proposition 2010 127
Table 41: Peacocks key operating statistics 2005'10e 128
Table 42: Peacocks trading record 2001'11e 131
Table 43: Peacocks UK store portfolio 2000'10e 132
Table 44: Peacocks space allocation 2010 134
Table 45: Bonmarché retail proposition 2010 140


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Table 46: Bonmarché key operating statistics 2005'10e 141
Table 47: Bonmarché trading record 2001'11e 143
Table 48: Bonmarché UK store portfolio 2000'10e 144
Table 49: Bonmarché space allocation 2010 145
Table 50: Primark overview 2010 149
Table 51: Primark retail proposition 2010 152
Table 52: Primark key operating statistics 2005'10 153
Table 53: Primark trading record 2000'10e 155
Table 54: Primark UK store portfolio 2000'10e 156
Table 55: Primark space allocation 2010 159
Table 56: Sainsbury overview 2010 165
Table 57: Sainsbury retail proposition 2010 168
Table 58: Sainsbury key operating statistics 2005'10 169
Table 59: Sainsbury trading record 2000'10 172
Table 60: Sainsbury UK store portfolio 2000'10 173
Table 61: Sainsbury clothing space allocation 2010 175
Table 62: Tesco company overview 2010 181
Table 63: Tesco retail proposition 2010 184
Table 64: Tesco clothing sub brands November 2010 185
Table 65: Tesco key operating statistics 2005'10 186
Table 66: Tesco UK trading record 2000'2010 189
Table 67: Tesco UK store portfolio 2000'10 190
Table 68: Tesco clothing space allocation 2010 195
Table 69: TJ Hughes overview 2010 202
Table 70: TJ Hughes retail proposition 2010 205
Table 71: TJ Hughes key operating statistics 2006'11e 206
Table 72: TJ Hughes trading record 2001'11e 209
Table 73: TJ Hughes UK store portfolio 2000'10 210
Table 74: TJ Hughes additions to UK store portfolio 2009/10 and 2010/11e 211
Table 75: TJ Hughes space allocation 2010 213
Table 76: TK Maxx overview 2010 218
Table 77: TK Maxx retail proposition 2010 222
Table 78: TK Maxx key operating statistics 2006'11e 223
Table 79: TK Maxx trading record 2001'2011e 226
Table 80: TK Maxx UK store portfolio 2001'11e 227
Table 81: UK TK Maxx and Home Sense Stores 227
Table 82: TK Maxx space allocation 2010 231




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