Burberry has marched into the FTSE 100. Sir Philip Green has taken his Topshop chain to the United States. London Fashion Week has regained its lustre.
Recession or no recession, fashion remains one of our leading exports. But on home turf life has been tough.
Fashion, after all, is among the most obvious of discretionary purchases. So, while our retailers and big labels have not seen anything like the freefall in sales of their American cousins, they have struggled to coax customers into spending and to stem the flow of shoppers heading to value-led stores, such as Primark and Asda’s George.
Spending on clothing is expected to have fallen by 0.6 per cent this year, according to Verdict, the consultancy, yet, beneath the headline figure, the pattern of spending is changing. First, the rise of discount fashion has seen Primark and George become two of Britain’s three biggest sellers of clothing by volume, challenging Marks & Spencer. Tesco and Sainsbury both now sell more items of clothing than Topshop.
Britain is leading the way in this market. Primark, run from Dublin but owned by Associated British Foods (ABF), is entering Spain, where it hopes to introduce discount fashion under the nose of Intidex, the Spanish owner of Zara and the world’s biggest fashion company.
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Nevertheless, premium fashion retailers are showing remarkable resilience. According to research for The Times by OC&C, the consultancy, they improved their profits by 12.6 per cent, with their discount fashion rivals suffering a modest decline of 1.7 per cent (mainly because of the discount sportswear market). In the mid-market profits fell by 6.9 per cent.
So how can Britain be trading up to Burberry at the same time as it is trading down to Primark? Recent research by PricewaterhouseCoopers found that Britons are more willing to mix designer and discount. In a price-sensitive environment, it seems, it pays to be either cheapest or best.
Industry executives are divided on whether this trend will endure. George Weston, the chief executive of ABF, said that the company’s attractive stores and stronger fashion would mean that it continued to win share from the mid-market.
Sir Stuart Rose, the executive chairman of Marks & Spencer, said: “In earlier times people did two things — they either traded to quality, because that’s what they thought they should do in a recession, or they went for price. Those people who went for price — they come back.”
This splitting of the market appears to leave little middle ground. The exceptions are niche players with a brand that speaks to its audience. Boden, founded by Johnnie Boden, an Eton and Oxford contemporary of David Cameron, has unwittingly lent its name to the “Boden set” — shorthand for that affluent, conservative but liberal demographic epitomised by Mr Cameron. Analysts say that WhiteStuff — slogan: “nice clothes for nice people” — and Jack Wills also provide good examples.