Executive Summary

The UK clothing and footwear market was worth £25.8bn in 1995. The market will experience solid growth in 1996 and 1997, with slower growth following in the subsequent years to the year 2000.

Clothing and footwear has been slowly declining over the long term as a proportion of total consumer expenditure. It has fallen from 6.9% in 1985 to 5.8% in 1995. Whilst fashion can cause particular products to experience surging sales, overall the sector is mature and growth as a proportion of total consumer expenditure is not to be expected.

Clothing accounts for 83% of the total market and footwear for the remaining 17%. The women's clothing category includes womenswear, girls' clothing and babywear, and also accessories. This important category was worth £14.56bn in 1995, representing 68% of the total clothing market. Men's clothing is a more limited market, constituting only 32% of the total (including boys' clothing). Women's spending patterns are important here, too, since a significant number of women buy clothing on behalf of men.

The footwear market was worth £4.4bn in 1995. Shares of the market were more even here, with women representing 44% of the total, men 32% and children 24%.

An increasing trend is the spread of sports and leisure wear into the wider clothing and footwear markets. These sports and activity-oriented products are no longer used solely for sporting pursuits; they now infiltrate most leisure wear, even gaining acceptance as fashion suitable for the teenage market. Trainers have long been accepted as general purpose footwear, but as the growth of sports wear continues, clothing from manufacturers such as Nike and Adidas also gain acceptance as general purpose clothing. The so-called `summer of sport' in the UK in 1996 has supported this trend.

Sports clothing itself was valued at £1.76bn in 1995, but Key Note has commented on the difficulty of measuring it separately due to extensive overlap with the general clothing sector. In the footwear sector, sports shoes have, however, given way to boots and heavier soled shoes for fashion wear.

Branding of clothing and footwear has increased in importance, with the consequence of diminishing the importance of retailer names in consumer awareness as consumers increasingly seek out particular branded merchandise rather than exercise loyalty to retailers. Adidas has been particularly successful during 1996 in this regard, but companies such as Timberland, Barbour, Benetton, Reebok and The Sweater Shop have all exploited this trend.

Retailers who have maintained their strong positionings in the market include Marks and Spencer and the Burton Group. The rest of the market is highly fragmented, although complex linkages are emerging as manufacturers develop distribution outlets -- including in-store concessions and their own mail order distribution channels.

Manufacturing in the UK is diminishing. Even traditional support from `patriotic' chains like Marks and Spencer is reducing as increasing proportions of their supply is sourced from overseas. The pressure of imports, particularly due to lower cost bases and rapid response to changing fashions, is great. Domestic manufacturers are themselves moving production to overseas locations in order to remain competitive. Whilst Hong Kong is by far the dominant source country for clothing products, other countries, notably Indonesia, Malaysia, India, Bangladesh and Turkey are all developing their production capabilities. In the footwear sector, the top three importers are European.

Overall, the sector will continue to be broadly stable as a proportion of consumer expenditure, but changing fashions, distribution and retail patterns will continue to produce volatility within the overall maturity of the sector. Imports will continue to put pressure on domestic manufacturers, particularly as regards cost. The cost consciousness of the British shopper will remain and growth in the market will be derived predominantly from gains in volume rather than in value. UK manufacturers will have most success in the tailored and knitwear sectors, particularly where strong brand names, like Barbour and Pringle, can attract premium pricing.

The general retailers will continue to be under threat from specialists. The opportunity of distributing by mail order -- as well as through High Street outlets -- will be seized by an increasing number of retailers, and in particular, some of the major names in British retailing will experiment in this area.

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