Key Note, the leading provider of market intelligence in the UK, has released its latest market update on clothing retailing and is forecasting that the industry will increase by 4.2 per cent in 2012, with year-on-year growth forecast to 2016.
The initial growth will be largely attributable to the London Olympics 2012, with the event giving the industry a ‘boost’ in sales, notably through merchandise, while the recovering economy will continue to help the industry thereafter.
The report continues to be positive for the future of the clothing retailing industry, which over recent years has been put under strain due to the recession. The tough economic conditions led to a decline in sales in; however, growth has been achieved between 2010 and 2011, although the market is not believed to be reaching its full potential.
The UK clothing retailing market, which includes women’s, men’s and children’s clothes, as well as clothing accessories, was estimated by Key Note to have increased by 3.3 per cent in 2011, with sales reaching £43.1bn. Women’s garments accounted for the largest sector in terms of value, followed by men’s and children’s clothing.
Changes to the price of clothing are also believed to have boosted the total market's value, as higher prices have been evident among most retailers and brands. ‘This increase in prices is attributable to many factors, including the global hike in the cost of cotton, a rise in the price of transportation and imports and the implementation of new laws in Asia, where the cost of labour in the region has risen’ noted Key Note in the report. All of these factors have particularly affected prices, due to the high level of clothing imports distributed within the UK.
Not all retailers are experiencing the same growth, in 2012 a number of companies including the Peacocks group and childrenswear retailer Pumpkin Patch facing an ‘uncertain future’, while many more have reported they have also fallen into administration.
The report concluded that while these losses will affect the industry and the high street in terms of the number of retailers, other groups are expected to gain from the administrations, while an overall boost in consumer confidence will help the industry maintain growth. It added that when analysing the future of the clothing retailing market, sales are estimated to reach £51.83bn in 2016.
Image: Next Team GB