Fast Fashion Finds Success in Europe

A new report from Mintel on clothing retailing in Europe shows catwalk designs at high street prices, so-called fast fashion, is driving the European clothing market. Companies such as Hennes and Mauritz, Zara and Mango, the leaders in fast fashion, have all experienced fantastic growth since 1998.

"There is no denying that H&M, Mango and Zara have been very successful of late and that they have upped the stakes in clothing retailing. They have combined up to the minute fashionability and low prices in stores, which are clearly focussed on one particular market. This has opened up a huge lead over the traditional high street clothing retailers, particularly those who still think they can be all things to all shoppers', explains Richard Perks.

Zara, owned by the Spanish company Gruppo Inditex, has seen the most impressive growth of these three companies, having grown by a massive 146% between 1998 and 2002, with sales worth some 3.2 billion Euros in 2002. Although considerably smaller, Mango has also more than doubled its sales since 1998, growing some 103% to 950 million Euros in 2002. But it is the Swedish company Hennes & Mauritz, which is the true winner of European fast fashion. As a much bigger company than Mango or Zara, H&M still managed to almost double its sales between 1998 and 2002, growing some 91%. With sales of around 4.7 billion Euros in 2002, H&M is now the third largest clothing retailer in the Europe. 'H&M is hot on the heels of C&A, Europe's number two. The battle encapsulates the contrast of the new style fast fashion, and the older more conservative retailers and it is now more likely than ever that H&M will overtake C&A this year', comments Richard Perks.

New consumer research shows that across Europe attitudes towards fashion and style vary dramatically. The British are the least fashion conscious in Europe as just one in four (23%) agree with the statement 'I like to keep up with the latest fashions'. This is compared to almost two in five (38%) French, who are the most fashion conscious. Not only are the French the most fashion conscious, they are also the best dressed. An impressive three in five (62%) feel it is important for them to look well dressed and they are also the most stylish as almost three in five (57%) feel that they have a very good sense of style.

Germans are the least stylish as just two in five (39%) claim that they have a very good sense of style. On the other hand the Germans are the most individualistic as one in four (25%) like to stand out in a crowd.

Marks and Spencer (not including food and homewares) is still clinging on to the number one position in the clothing retail market in Europe. In 2002 clothing sales at M&S were worth some 5.9 billion Euros, which is almost 1 billion Euros above C&A, Europe's number two clothing retailer.These two retailers may be at the top of the table but they have had considerable problems of over the past few years and are clearly coming under increasing pressure from H&M. C&A experienced a small decrease in sales of 5% between 1998 and 2002 and recently pulled out of the UK and Republic of Ireland altogether to concentrate on continental Europe. M&S on the other hand decided to concentrate on the UK by closing its stores in continental Europe. 'Although M&S has staged an impressive recovery, reconfiguring itself for the 2000s, Mintel questions whether C&A has shown the same degree of drive and innovation', comments Richard Perks.

Over the past few years the clothing sector has been falling as a percentage of non-food retailing in most European countries, as we have seen in Germany. On the whole this trend is set to continue, however there are a few exceptions. It is likely that France and Italy's clothing sectors will hold onto their share of non-food retailing and that Austria, Belgium, Hungary, and the UK will see their clothing sector actually gaining relative importance.

'While the prospects for certain individual companies are encouraging in Europe, competition in the sector is intense. The rewards for success are huge, but the cost of failure gets greater every year. There is little customer loyalty in clothing, consumers, especially the young, are quick to move to the shop which serves them best. H&M and Zara have raised the stakes on the high street, but hypermarkets (such as ASDA) are doing much the same at highly competitive prices out of town', comments Richard Perks. 'Out-of-town specialists, such as Matalan in the UK, are having a big impact on the broad range, large store retailers on the high street. The clothing retailing sector is becoming much more fluid as retailers fight for their share of the spending of an ever more demanding consumer'.

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas unless otherwise stated.

• MINTEL
• All news
• MrWeb info