Introduction

 UK Value Clothing Retailers 2009 examines the top 10 value clothing retailers, providing key operating statistics, clothing and value clothing market share data and individual retailer outlooks. It analyses the key issues that value clothing retailers face, both now and in the future and also includes forecasts for sector growth in 2010.

Scope

*Comprehensive profiles and outlooks for the 10 largest operators in value clothing including key operating statistics and store and space data

*Size of the UK value clothing market 1999-2009e, distribution channels, category share, store numbers and space.

*Clothing and value clothing market forecasts for 2010.

*Key issues and outlook for the sector including online, market growth by value, mid market and premium and international opportunities.

Highlights

The value clothing sector has been one of the main beneficiaries of the recession as consumers have approached spending on discretionary items with increased caution. Though Verdict forecasts a 0.6% decline in overall UK clothing spend in 2009, we estimate that value clothing sales will grow by 5.0%.

We expect grocers to make further gains in 2009, increasing their share of the value clothing market to 34.2%. Long term we believe grocers will prove a further threat to value clothing specialists with gains to be made by improving store environments and fully exploiting multichannel capabilities.

Primark has held on to the top position as the retailer with the highest value clothing market share in 2009 of 18.2%, up 0.5 percentage points from 2008. As well as benefitting from trading down, it enjoys a relatively young customer base which has been least impacted by the economic downturn because of fewer financial responsibilities.

Reasons to Purchase

*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 10 leading value clothing retailers' key operating statistics and growth plans.

CHAPTER 1 EXECUTIVE SUMMARY 6
Key findings 6
Main conclusions 7
Value sector grows despite overall clothing declining 7
After several high profile casualties the market begins to stablilise 7
Larger retailers have gained scale through space expansion 7
However it is not just about price 7
Value clothing now accounts for over a third of childrenswear sales 8
Grocers quickly gain headway ... 8
... and will prove an even bigger threat 8
Primark outperforms - and holds on to number one position 8
Younger consumers look a lucrative target, but competition is intense 9
Online developments boost value clothing retailers' sales 9
2010 should be another good year for value players ... 9
... but long term the market will be more challenging 9
Therefore value retailers will need post-recession strategies 10
As UK growth opportunities lessen - international will be a target 10
CHAPTER 2 MARKET ANALYSIS 11
Clothing market trends 11
Value clothing definition & market trends 14
Value market channels of distribution and sales mix 19
Space and store numbers 22
CHAPTER 3 COMPANY DATA ANALYSIS 24
Clothing market shares 24
Grocers continue to grow share 24
Value clothing market shares 26
Sainsbury new biggest gainer of value clothing market share 26
Winners and losers 26
Larger players gain the most share in the value clothing market 26
Key operating statistics 31
Operating margins 32
Clothing sales densities 34
Space allocation 35
Advertising media expenditure 39
CHAPTER 4 OUTLOOK 41
Changing spending patterns 41
Value clothing market benefits from recession ... 41
Signs that consumers were favouring premium retailers pre-recession 41
But recession has forced consumers to trade down 42
Loss of capacity in the market 42
Inflation returns in 2009 and will become more prevalent in 2010 43
Perception of value changes with premium re-emerging 43
Impact on value retailers 43
... but shopping habits vary by age 44
Desire for value clothing fades ... 44
... though appeal remains for young 44
Value retailers head in the same direction 47
Value fashion market increasingly saturated 47
Value clothing share rises ... 49
... at the expense of midmarket ... 49
... and - for the past three years - premium 50
Changing price architectures 52
Online presence is vital 54
Services and funtionality to improve online presence 54
Returns a major deterrent of online shopping 56
Free deliveries and returns - double edged sword for value retailers 56
International deliveries are not widely available from value clothing retailers 56
Value retailers slow on the uptake of mobile phone technology 56
Importance of social media 57
Opportunity for absent value clothing players to come online still 58
High online sales volumes essential 60
Standing out from the crowd 61
Differentiation in the market 61
Small changes to make a difference 61
International expansion 64
As UK opportunities lessen - potential for expansion abroad 64
Building an international presence 64
Franchises allow for international expansion without high initial costs 65
Expanding internationally is highly challenging ... 65
... but still provides many opportunities 65
Competitors in Europe: C&A 66
Competitors in Europe: H&M 67
Competitors in Europe: Kiabi 69
Future of grocers 70
Grocers: where are they now and where will they be? 70
The economy - looking ahead to 2010 72
Outlook for UK economy remains challenging 72
GDP recovery will be slow 72
Unemployment worst to come 72
Government spending cuts on the cards 72
Consumer confidence improves but remains fragile 73
Forecasts for 2010 73
Value clothing growth slows, but continues to outperform 73
Strategic summary 74
Value retailers will continue to benefit from trading down 74
However, young people are central to the value proposition 74
Midmarket retailers focus less on entry price point product 75
Value retailers cannot rely on price alone 75
Online uptake increases 75
As UK growth opportunities lessen - international will be a target 75
Grocers continue to threaten 76
A weak economy wil continue to support growth in 2010 76
CHAPTER 5 ASDA 77
Benefits from consumer focus on low prices 77
Recent key events 78
New initiatives support growth 78
George launches online 78
Coleen cut 78
Launches Asian range 78
Schemes to drive clothing sales 78
£30m to upgrade in line with M&S and Next 78
Opens George HQ and refreshes image 79
Social networking aims to improve business transparency 79
Store innovations will increase competitiveness 79
New CEO for Wal-Mart 79
Asda reshuffles with new COO 79
Comprehensive George team 80
Proposition 81
Every day value and convenience key 81
Financials 83
Sales growth accelerates during downturn 83
Growth picks up after slowing in mid decade 85
Space 87
Space expansion and rising densities both help growth 87
Sales densities start to recover 88
Space allocation 89
Sector performance - clothing 92
Sales performance slows but provides encouragement for 2009 92
Clothing market share continues to increase 95
Outlook 96
Further developments will improve George's value fashion credibility 96
Investment in product quality was overdue 96
George faces growing value clothing threat ... 96
... however George will continue to do well out of the downturn 96
Improvements still to be made to clothing shopfits 96
Online offer needs to stay one step ahead 97
Asda Living stores will benefit George sales 97
Enjoyable experience 97
Moda and Boston Crew launches were wise moves 97
CHAPTER 6 ETHEL AUSTIN 99
Driving the business forward in a challenging time 99
Recent key events 100
Increasing presence 100
Retailer enters administration 100
Au Naturale attracts new customers 100
Improved merchandising 100
Space expansion 100
Advertising spend cut 100
Proposition 101
Continues to focus on childrenswear 101
Financials 102
Sales continue to fall 102
Store closures affect sales growth 103
Space 104
Expansion on hold in 2009 104
Space allocation 105
Sector performance -clothing 107
Childrenswear drives growth 107
Market share drops 109
Outlook 110
Neighbourhood advantage? 110
Sales densities remain low 110
Competition in value is fierce 110
Brand image is confusing 110
Its location may be an advantage 111
CHAPTER 7 MATALAN 112
Renaissance for value pioneer 112
Recent key events 113
Business improvements attract new customers 113
Online attracts new customers as well as higher average spend 113
Extending sub brands widens target market 113
Home department attracts clothing shoppers 113
Advertising more low key 113
Improved store experience reaps rewards 114
Interesting visual experience 115
Improves customer service 115
Middle East offers low risk expansion opportunity 115
Reported £1.5bn sale in 2010 116
Proposition 117
Financials 118
Like-for-like uplifts boost performance 118
Current trading highly encouraging 119
Higher sales, better margin 120
Space 122
Expansion on agenda once more 122
Space allocation 123
Sector performance - clothing 126
Sudden recovery in 2008/09 after stagnation 126
Constant need to drive footfall to stores 127
Gains market share once more 128
Outlook 129
Strategy delivers growth - boosted further by recession 129
Matalan profits from recession - and its own strategy 129
Womenswear will benefit from holistic improvements 129
Online offers further growth opportunities ... 129
... it needs more launches - in childrenswear for example - to add excitement instore 129
Fashionable ran