Polish group LPP is poised to bring Reserved to the UK, becoming the next global fashion retailer to try and make it on the British high street.
Fast fashion retailer Reserved, which has new lines every three weeks, caters for men, women and children. It bills its collections as “inspired by global trends [with] simple and classic designs, stylish cuts and original patterns for brave customers”.
As it prepares to launch after agreeing a lease with BHS at its flagship store on Oxford Street, Retail Week takes a look back at some of the past decades’ most memorable winners and losers in the international fashion arena.
Zara
The most well-known brand of Spanish giant Inditex, Zara launched in Spain in 1974. It came to the UK in 1998 and is one of the biggest foreign entrant success stories. Its UK sales now total nearly £500m annually.
The fast fashion model that Inditex has pioneered has been pivotal to its phenomenal growth. Chief executive and chairman Pablo Isla went so far as to call its supply chain approach “the essence” of its business model. He cited its ability to make decisions during seasons, rather than ordering all stock at the start of a season, as key to its success.
The retailer, which is one of eight Inditex brands including Bershka, Massimo Dutti and Pull & Bear, now has more than 2,000 stores in 88 countries. One third of Inditex stores bear a Zara fascia.
Its UK presence amounts to just 67 stores but in the year ending January 31, 2015 its sales increased 8.1% to £494.8m while pre-tax profits surged 31% to £49.1m. This came after a focus on sales growth and tightening operating expenses paid off.
It grew throughout the financial crisis, with UK sales increasing 36% from 2007 to 2009. Since 2007 its revenue has soared 145% from £202m to £494m in January 2015.
H&M
The second-largest fashion retailer in the world, the H&M group has a strong hold on the UK market, trading through fascias including the eponymous H&M, newer entrants & Other Stories and Cos, and brands such as Cheap Monday and Monki.
The UK is its third-biggest market and continues to deliver healthy profits for the group, with UK sales growing 41% to £917m in the four years 2014. The group is on a global expansion drive, focusing its key efforts on the US and China.
In contrast to Zara’s 67 stores, the Swedish giant has 253, the vast majority of which bear the H&M fascia.
Since 2007, the group has taken a segmented approach to potential markets, launching and buying new brands to service potential new customers. Its strategy has worked with in-house creations Cos and & Other Stories serving a more mature, high-end demographic than H&M.
In 2010 it bought fashion group Fabric Scandinavien and so acquired brands such as Cheap Monday, Monki and Weekday, geared towards younger consumers.
Uniqlo
Uniqlo’s parent company Fast Retailing is the fourth-biggest fashion retailer globally. It originally deployed an ambitious strategy when it arrived in the UK. From its arrival in 2000 to the height of its growth in 2003 it opened 23 stores.
However, as losses mounted the Japanese group cut the network to just three UK shops in 2004. Store numbers began to steadily rise again until 2010, reaching 14, when they once again began to drop. Today, they number 10 and are mainly dotted around the Southeast.
UK sales were flat at £63m for three years until 2012/13 when they rose to £74m. In 2013/14 they rocketed to £167m while store numbers remained static.
This success hinges on Uniqlo’s strategy of marketing itself on innovation, rather than fashion. Capitalising on its USP with ranges such as its Heattech thermal clothing, the retailer has few competitors in this field in the UK’s fashion sector.
Forever 21
Forever 21 revealed its intention to enter the UK market in 2008 and two years later established its first store in Birmingham’s Bullring shopping centre. Former chief executive Larry Meyer vowed at the time that the US fast-fashion retailer would have stores in “every major city, every mall and every major high street” within the following five years.
The retailer was expected to have a significant impact on par with the likes of H&M and Primark but fast-forward a few years and the pair are still going from strength to strength while Forever 21 has stalled.
Just 18 months after its initial launch the retailer downsized its stores. While revenues have grown each year, reaching £48m in 2013/14, its losses ballooned in 2011/12. Despite decreasing 72% the following year they are still substantial at £18.4m.
Gap
Gap chose London as the destination for its first store outside of US, opening a flagship in 1987. While its popularity soared during the next decade, the brand’s current lack of identity has hit revenues hard.
The Gap Group, which also owns Banana Republic and US retailer Old Navy, is the third largest fashion retailer in the world, after Inditex and H&M.
While global group revenues have risen marginally, that story is not mirrored on the British high street: UK sales fell 2.5% in the year to January 2015.
Store numbers have fallen from 151 to 128 over the last three years with the retailer planning to close a ‘limited number’ of further loss-making stores.
New group chief executive Art Peck arrived in early 2015 and has said that product improvement is key for Gap’s recovery, naming “optimistic and elevated American style” as its touchstone.
Esprit
Esprit exited UK retail in 2014 after a torturous couple of years. The brand, established in San Francisco in 1968, retains an online presence via its ecommerce platform, and through fashion etailer Asos and online giant Amazon.
Esprit had brought in various Inditex executives to try and buoy the brand, including former distribution and operations director Jose Martínez, who was drafted in as chief executive in September 2012.
At the time analysts blamed Esprit’s fortunes on a weak European market and its non-vertically integrated model.
The chain is still struggling elsewhere in the world, recording substantial losses in the year to June 30 2014. In the same time period, revenue decreased 16% while sales plummeted 25%.
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