Olympics may help clothing retailers

Tuesday 14th of February 2012 05:47:58 PM

After an upward spike in trading during December, the British Retail Consortium (BRC) reports a slip back into decline in January 2012, with like for like sales showing a .3% drop over the month. While overall sales rose 2.1% in the month, most of the growth seems to have come from deep discounting and post-Christmas promotions. It’s the weakest January report since the BRC/KPMG survey began publishing in 1995.

This makes new research from Key Note deeply encouraging, as it forecasts an increase in clothing retail sales of 4.2% across 2012 in large part as a result of the impact of the London Olympics. The clothing retail sector saw a decline in 2009, but moved into a growth position in 2010 and 2011 although not with the same level of market increase as before the recession started. Several trends are driving the increase in sales: the fashion for sport luxe, which is allowing a premium price hike for certain sports clothing trends such as platform trainers and metallic hoodies; the increase in raw cotton prices which has driven up basic manufacture costs and the niche positioning of certain brands within the Olympic promotional drive.

Broad based retailers, especially those in the High Street are not benefitting in the same way as the niche brands, and are struggling to maintain market share, let alone see a month on month increase in sales figures. For them, managing to get on the Olympic wagon may be a step too far, and with certain retailers closing stores in an attempt to control costs, and with others choosing to move into administration before their position becomes untenable, the situation is still volatile and subject to many conflicting economic pressures. A sporting summer may make all the difference – sunshine, a British win at Wimbledon and a good medal haul at the games could allow some currently marginalised retailers to turn the corner back into fiscal security, if they get their buying strategies right.

Amrita Malik

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