As luxury online marketplace, Farfetch, debuts on the New York Stock Exchange, I ask, is it a worthy investment?
This isn’t particularly scientific, but, recently, I was looking for a particular AW18 Dries Van Noten jacket I’d seen, in store, in Selfridges. It wasn’t on their website, so I tried Mr Porter. Nothing. So, then I thought I’d search FarFetch. With over 600 boutiques said to be affiliated to their network, and 375 luxury brands, you’d expect a decent selection to come up. Nothing again.
Left - Is Farfetch high on the list of your luxury searches?
Dries Van Noten isn’t the most ubiquitous of fashion brands, but without a large network of own brand shops, it is usually sold wholesale to designer boutiques and is found in the majority of luxury department stores. It’s big enough. It felt strange nothing was on Farfetch. This isn’t the first time this has happened and the reason why it wasn’t my first place to search.
Farfetch just had its valuation lifted and is set to be valued at between $4.9bn and $5.5bn in its initial public offering in response to investor interest in technology stocks. The shares have a price range of $17 to $19, according to an updated regulatory filing published this week. The original range was $15 to $17.
Joseph Wong, an investor in luxury fashion stocks such as Burberry, ASOS, Bvlgari and Mulberry, says “Farfetch assimilates some of the best independent boutiques into a common platform. What’s valuable is the technology and the list of stores they represent. For that diehard enthusiast, he/she can do a quick search for that elusive Off-White piece or vintage Chanel piece, with a click to buy option.”
The majority of IPOs are often overpriced. They are filled with hot air to give healthy profits to the founders and early investors. Not to mention the fees to the money men to maximise the price and get the listing on its way. Farfetch, established in 2007, is being marketed as more of a tech company, where the prices are higher, rather than a retail marketplace model which takes a percentage from each transaction sold through its website.
The most recent Farfetch results show revenues of $267.5m in the six months to June 30, 2018, and losses before tax of $68.4m. Farfetch had total revenues of $910 million last year.
To put this in the context of the market, Yoox Net-a-Porter (YNAP), which was acquired by luxury conglomerate Richemont recently, valuing the business at €5.3 billion, and matchesfashion.com was sold to private equity firm Apax for over $1 billion last September. In the 12 months ending Dec. 31, YNAP saw year-end preliminary sales reach 2.1 billion euros ($2.5 billion). Matchesfashion.com recorded group revenue of £293 million ($393 million) to 31st Jan 2018.
“From our research of the luxury fashion market, FarFetch led in terms of traffic capture between 2015 and 2017, and maintains a good reputation. It has a sound business model, good commercials and no flagged operational or customer issues.” says Fleur Hicks, Managing Director of onefourzero, a data analytics and digital research agency based in London.
“It is an ambitious listing price, but in the context of the growing luxury fashion market, this could see returns within the next months and years, depending on how ambitious your investment strategy.” she says.
The global fashion industry is, according to a 2017 McKinsey report, valued at $2.4 trillion. If it were ranked, alongside individual countries’ GDP, it would represent the world’s second largest economy. From 2014 to 2018, the luxury fashion industry was expected to grow from 3% to 17% of the total fashion market. Annual online sales growth was expected to be 17% in the US, 18% in the UK, 12% in Germany and a whopping 70% in China, according to the report.
“It’s a good business model within a growing marketplace.” says Hicks. “The return risks of minimised stock and holding outlays look to outweigh the risks associated with reliance upon 3rd party operations, such as delivery. It averages a 30% mark up and thus a 50-odd% margin on operations. Incredible for the fashion industry. Also, the growth rate - 60% this year - is impressive.” she says.
Right - Is the value in Farfetch in its tech?
“Of the competitor set we analysed, Farfetch represented 3.8% of the captured online traffic market, representing the market lead. This competitor set only represented 17% of the potential traffic available (based on digital demand and traffic) and therefore the headroom for brand and revenue growth is huge.” says Hicks.
Farfetch’s future growth is potentially going to come from its ‘White Label’ service supporting brands such as Manolo Blahnik, Christopher Kane, DKNY and Thom Browne in their e-commerce offerings.
Farfetch have announced many strategic partnerships recently to further enhance the value of the company. These include Chanel, Chalhoub Group, one of the biggest distributors of fashion and luxury goods in the Middle East and the modesty luxury retailer, The Modist. They have also partnered with brands such as Harvey Nichols and Burberry. This is spreading their risk and also leveraging their technical expertise. It’s what Ocado has done in food.
Wong says, “You also need to consider what they will be using the cash raised from the flotation for. When Prada was listed, it was to relieve the billion Euro debt, open more stores and provide an exit plan for the founders.”
Farfetch are investing heavily in technology and this does explain some of the losses. They hope they will be able to charge other brands handsomely for this and the ever important 'big data'.
Are there any potential waves on the horizon? “Digital commercial disruptors are most likely to threaten large behemoths like Farfetch.” says Hicks. “This would most likely come from Amazon or AliExpress fashion lines and/or new ways to purchase fashion in a more interactive way. It’s unlikely that this will be a quick transition, so if FarFetch remain on pulse with technological change and consumer movements then they should be agile enough to move with the technical and operational trends as well as fashion trends.” she says.
Wong says, “Businesses are keen to connect directly to consumers, and cut the middlemen: think Kylie Cosmetics, Pat McGrath. This is happening to media industry too: Netflix originals instead of via Sky or Virgin Media. Not sure if Farfetch have addressed such concerns before.”
“There is also the downside for retailers: I once noted a £1500 price difference on a stunning new season McQueen coat: the result of a weak sterling and import taxes levied by a store from the Far East.” he says.
According to Bain & Company, the luxury goods market reached a record high of €262 billion in 2017. Online sales jumped by 24%, reaching an overall market share of 9%. Bain & Company predicts the market will be worth $446 billion market by 2025. Online’s share is expected to be its fastest-growing segment, rising from about 9% to 25% by 2025.
I think you need to look at Farfetch in the context of being a major player in a fast growing market. The valuation seems to be based upon its potential and the appetite for this type of technology stock.
I don’t think the name ‘Farfetch’ is particularly well known with general consumers. They need to work on the parent brand and getting its name into the luxury consumer’s head for that initial search. They also need to feel like the Amazon of luxury: all the choice on one site, which takes me back to my disappointing Dries Van Noten search. They could do better with packaging and more Instagrammable things to raise awareness of the consumer side of the brand.
There also have a lot of variables. They have different stores buying different things in different currencies and it loses something of that personal touch that other retailers seem to nurture and one of the reasons you go to a retailer.
Left - The online market is growing massively and is set to grow from 9% to 25% of the luxury market
As for selling the tech. to other brands, I think this is where the long-term value is, but they need to be careful not to overstretch themselves and have too many fingers in too many pies. It’s better to do fewer things well. It feels like they are still working out the direction they are going in. They could easily focus on either sides of this business and quietly reduce the other. They need to grow revenues while keeping the costs constant or reduced. They just don't want to lose the momentum.
The price seems, initially, far fetched, (soz), but the long term prospects for luxury online is looking good.
It wasn’t so long ago a ‘slider’ was something containing pulled pork and came in a mini brioche bun. Today, it’s one of the biggest categories in casual footwear.
It was our obsession with everything sportswear and retro that saw the return of Adidas’ ‘Adilette Slides’ which, arguably, started the whole mainstream trend. Teamed with white sports socks it became the default cool and comfortable warm weather shoe for fashionable geeks.
Slydes - 'Flint' AW18 - £25
Fast forward a couple of summers and ‘Sliders’ has become a footwear category in its own right. Much more ‘on-brand’ than flip-flops, luxury brands have piled into the market attracted by the volumes and margins. This is their cool entry shoe and shows no signs of going anywhere and will, no doubt, be one of their biggest selling footwear categories this year.
“I love how fashion works in mysterious ways and the pool slide is a great example - five years ago it would have been a faux-pas and, now, it’s a must have summer shoe, trending globally. Since this humble shoe’s luxury makeover, at the hands of brands such as Bottega Veneta, Gucci and Prada to name a few, it has grown in popularity becoming a style to not only wear on holiday, but in everyday city life too. It’s also been a great platform for brands embracing the logo mania trend to position their logo.” says David Morris, Senior Shoes Buyer at MR PORTER.
Ben Carr, Buyer at MATCHESFASHION.COM, says, “Sliders can be a great way to buy into a designer brand because of their competitive price point and with celebrities like A$AP Rocky and Justin Bieber often wearing these styles we’ve definitely noticed an uplift in their popularity.”
“Sliders and sandals have become one of our biggest growth areas, the biggest fashion houses have made it their focus on runways and within their collections. Prada champion the sandal and have reintroduced a range of sliders. The competitive price point enables increased accessibility for a wider audience.” says Carr.
Right - Balenciaga - Logo-debossed Leather Slides - £435 from matchesfashion.com
The slider is the cheapest shoe for many luxury brands. The margin on a pair of £435 Balenciaga logo-embossed leather slides would be significant. That’s an understatement, I know. Just imagine how many £225 sliders Gucci has sold this summer to the Love Island wannabes. This is big business.
On the more affordable spectrum, and founded in 2014, the footwear brand ‘Slydes’ specialises in, well, slides. Brand Owner, Juls Dawson, says, “Four years ago the founders spotted the trend as to was coming up over the horizon and jumped all over it. The rest, they say is history.”
He won’t reveal how many pairs of £16 sliders he is, now, selling, but says, “we can say sales are doubling year on year.”
Dawson highlights the versatility of the slider for its growth and popularity. “They are so versatile, worn from gym to pool and from beach to club, spanning not just most age groups and demographics, but the globe. They have been embraced across all genres of music, Influencers, clubbers, Millennials, keep fit fanatics, to name but a few,” he says.
The slider is part of the dominant sportswear trend and, of all the summer styles, the flip flop has probably taken the biggest hit from the slider. The slicker slider has managed to upstage the flimsy flip flop, which still looks somewhat underdressed, dirty and cheap.
“The flip flop, albeit a classic open toed sandal doesn’t have the scale of a slider. Limited to a narrow thong and a thin rubber outsole, where as the slider’s outsole can be raised, coloured, embellished and re-designed the upper of a slider. By its very definition, as long as you can slide you foot, it’s a slider, and, you can do pretty much anything with the silhouette.” says Dawson.
You also can’t wear flip flops with socks. So, what’s the future for the slider category?
“Every trend will reach a peak at some point, but Slydes have the capacity to move on and evolve as the uppers are like a blank canvas to add embellishment, print, texture, grahics, logos, materials…the possibilities are endless.” says Dawson.
“I think it will be less branded and graphic, moving into a more simple design. The rise of the logo focussed collections is down trending and we can see it already starting with footwear.” says Carr.
The slider looks set to become more subtle and lowkey. One brand introducing sliders for the first time is Grenson, which featured a couple of styles in their latest SS19 collection.
“I love looking at styles that are ‘on-trend’ and seeing if I can do a Grenson version, that makes sense. This was a challenge as most sliders are rubber with huge logos, but I found a way to do a leather version.” says Tim Little, Creative Director and Owner, Grenson.
“People needed a replacement for the flip flop for the summer, but also the ugly shoe trend made the slider the perfect choice. Added to that, of course, is comfort and convenience.” he says.
Explaining the attraction to many premium footwear brands, Little, says, “The flip flop is very basic and cheaply made, whereas the slider allows more opportunity to create a crafted version. I can’t see us doing a flip flop as there isn’t much that we can bring to the party.”
While the slider is still cool, it’s grown to a size which makes it bigger than a fashion trend. The slider category will continue to grow and become more permanent as more and more people buy and wear them. Attracted by the branding, comfort and the infinite designs and finishes, the slider category will continue to see more brands enter the market. Much like the designer trainer trend before it, we’ll see more brands put their own DNA onto this simple shoe and happily price it to match. Even Tom Ford has done a dressy velvet pair named ‘Churchill’.
Left - Tom Ford - Churchill Chain Trimmed Velvet Slides - £370 from MRPORTER.COM
David Morris, from MRPORTER says, “Slides have never been as relevant as they are now, especially as we’ve seen a shift in the market as men continue to embrace casualwear and sportswear as part of their everyday wardrobe. Luxury brands such as Prada and Balenciaga have seamlessly incorporated luxury slides into their collections giving credibility to the footwear style, so they are now an option to team with the ready-to-wear. This footwear category will continue to dominate over the summer seasons whilst this sportswear trend is still key.”
Right - Grenson's first sliders for SS19
David Morris, Senior Footwear Buyer, MRPORTER.COM
“Takahiromiyashita TheSoloist offers exceptional fits and expert attention to detail, and this cardigan is the perfect example. It’s been intarsia-knitted in Japan from smooth silk in a monochrome palette meaning it can be layered or worn with just a t-shirt - a versatile SS18 piece.”
Left - Takahiromiyashita TheSoloist - Slim-Fit Argyle Silk Zip-Up Cardigan - £1365
“Arc’teryx are specialists in performance clothing without the compromise in aesthetics and this shell coat from their ‘Veilance' line is the perfect lightweight spring addition. Made in Canada, it is water and wind-resistant to see you through spring’s tempestuous weather and if the sun does decide to appear you can simply fold it into its own internal pocket.”
Left - Arc’teryx - Veilance Monitor SL Packable Water-Resistant Shell Coat - £560
“Nothing gets you excited for summer more than a new pair of sunglasses and this handmade, round frame pair by Cutler And Gross are in my wish list. They have a timeless appeal which will leave you sipping pina coladas in style.”
Below - Cutler And Gross - Round-Frame Acetate Sunglasses - £310
“Sandals are key trend for SS18, these from Prada are amongst my favourites which we have to offer at MR PORTER. Made from durable black webbing on a contoured leather insole, these will look great with either a smart slim pair of trousers or a pair of well-fitting shorts.”
Left - Prada - Leather Trimmed Webbing Sandals - £415
“This Our Legacy silk yellow shirt has been dyed to give it a washed out, lived in feel, another key trend for SS18. It’s my top pick to master understated style for the warmer months ahead.”
Left - Our Legacy - New Silk Shirt - £190
Every man should be buying a silk shirt this season, read more why here
Launched in 2017, MARRAM Co offers a luxury, personalised natural shave with the finest of essential oiled infused foams and chrome hardware kits. Hoping to transform shaving into a pleasurable ritual, MARRAM Co believe that the preparation behind the shave is key and have created shaving creams to match your mood, all manufactured in the UK.
Left - MARRAM Co - "Power Up" - Metal tubes and quality fragrances makes this shaving to remember
Using organic essential oils sourced from 212 organic farms all over the world, the creams are therapeutic even for the man with the most sensitive of skin. Choose from “Wake Up Call”, “You’ve Got This”, “It’s Cold”, “Power Up”, “Night Out”, "The Morning After”, “Time Out” and “You Might Get Lucky”.
TheChicGeek says, “When you think about shaving products it’s interesting how, for something we literally put under our noses, quality fragrance hasn’t played a more dominant role.
Named after the grey-green tufts of Marram grass found on British coastal sand dunes, MARRAM, also a palindrome - the same forwards as backwards - is a collection of shaving creams offering distinctive and quality scents.
The brand centres on the traditional barbering routine of cream, bowl and brush. Most guys won’t be bothered with this faff on a daily basis, but it’s definitely for a time when you can enjoy the ritual.
The brushes, razor handle and bowls are really top quality and are priced to match. The razor takes a Gillette head and everything, including the shaving creams, is made in the UK.
Right - MARRAM Co - Brush & Bowl Set - £250
While the hardware is expensive, I like the way they’ve made the shaving cream realistic in pricing - in two sizes, £8 for 20ml and £20 for 100ml - it also means you can play with the fragrances and try a few.
There are 9 different scents, all with fun names, 7 are permanent and a couple are limited-editions. It’s light and foams up nicely and easy to apply with your hands.
I think people are willing to pay more for products with quality scents. I feel £20 is good for 100ml, here, and those essentials oils are the things that transport you, for a few seconds at least, to another place and makes shaving less of a chore and more of a pleasure. The heat and steam of shaving is ideal for these essential oils to really do their best work.
This reminds me of the shaving cream from Buly that smells like marzipan that I like - read more here - and my favourite is “Wake Up Call” with its earthy vetiver fragrance.
I think MARRAM & Co are onto something here. I like the branding, I like the metal tubes and I like the fragrances. I just need to shave more!”
Below - MARRAM Co - Shaving Cream - 20ml - £8 100ml - £20
Exclusive to MRPORTER.COM
Annoyingly, when practicality rears its head, design is often compromised. But not this time. I first noticed the ‘McCaffrey’ brand, very recently, in Paris at the men’s trade shows. What looked like a selection of beautifully made shoes was quickly shown to offer an extra, simple and effective detail for cyclists.
At the back of each shoe is a reflective tab you can simply flip up when on your bike. It would even work when worn as a pedestrian during the darker evenings.
Left & Right - McCaffrey - Suede Derby Shoes - £370 from MRPORTER.COM
Founded by Robert McCaffrey, and available exclusively at MRPORTER.COM, the concept arose on Robert’s first day as a design lecturer at Glasgow School of Art. His formal shoes were unsuitable for even the short journey by bicycle so development began on enhancing traditional shoes to become suitable for city cycling.
Robert's background includes roles as Design Chief for Belgian fashion designer Dirk Bikkembergs and senior footwear consultant for LVMH and Adidas Y-3.
McCaffrey footwear combines technical innovation with world-class craftsmanship - they are made in Portugal, near Porto, in the historic shoe making district, by a 3-generation, family run company - to provide performance and elegance for today’s smart city traveller. Said to be inspired by today’s zeitgeist movement of ‘active-travel’ which encourages walking and cycling, McCaffrey has developed and patented an exclusive range of features for pavement and pedal.
Left - McCaffrey - Leather-Panelled Suede Slip-On Sneakers - £275 from MRPORTER.COM
Right - McCaffrey - Leather Boots - £440 from MRPORTER.COM
Anti-slip soles and handy side zips increase their practicality and showcase Robert’s 20 years’ design experience in the fashion, luxury and sports industries.
It's not often safety looks this good. I don’t even own a bike and I want these.
When wholesaling multiple brands you’re as strong as the market. You can’t sell what isn’t available. Obvs. Often there is a demand from your customers with nobody fulfilling the supply.
I’ve spoken to buyers at large designer websites, in the past, who have said that many brands have forgotten about the basics and instead only offer key, statement pieces of the season. Tiger, anybody?!
Left - RAEY - AW17
They’ve picked up lesser known brands to fill these gaps - sometimes a guy just wants a plain white shirt without a snake on it - but, ultimately, they know what they need and often the only way to find it is to create your own “house” label.
Matchesfashion.com launched “Raey” a few years ago and, Mr Porter is launching a “Mr P” own label, today. Own labels used to be looked down upon as the lower/entry end of the retailer’s offering, but, now, they are offering something you can’t get from the other brands or give the retailers some consistency and reliability, whether that be black trousers, simple grey v-necks, or something more directional like Sta-press denim.
There’s obviously a demand. Since its inception, in 2015, Raey, matchesfashion.com's in-house brand, has seen 85% growth year-on-year with strong growth across knits and jersey, in particular. A standalone store opened in April 2017 in Notting Hill, in a former franchise store owned by matchesfashion.com.
According to the blurb, the creation of MR PORTER’s “MR P.” brand has been informed by seven years' of customer insight - more than 600,000 shoppers to date - and the invaluable feedback and shopping patterns they’ve observed since launching in February 2011.
The MR P. launch collection has 53 items across ready-to-wear, including 24 “Essential" styles, available year-round, and 29 seasonal styles within the debut capsule. The majority of the collection is made in Italy, with select items made in Portugal, and the denim in Japan. Pricing ranges from £55 for the core T-shirts, through to £875 for the capsule’s leather aviator jacket.
Right - MR P. - the new own label by MRPORTER
The chosen muse for this launch capsule is 20th-century British painter and portraitist Lucian Freud, during his prime in 1950s London.
“At MR PORTER, we are – first and foremost – product people. This passion for quality, uniqueness, style and versatility has been the backbone to developing our business for the past seven years. The launch of MR P. has therefore been quite organic for us; we felt there was a space in our mix of 400-plus brands for something that could present a unique take on wardrobe classics and also present regular capsules of more trend- and seasonal-driven pieces throughout the year. We like to think we have an unparalleled view of the male wardrobe, garnering the combined knowledge of our buyers and editors, and MR P. is ultimately the result of that: smart details, easy pieces and enduring style.” says Toby Bateman, Managing Director, MR PORTER.
The second limited-edition MR P. capsule will launch in February, followed by a third in April. MR P. will introduce shoes and accessories for AW18.
This is a case of these retailers trying to fill the gaps and offer pieces that are consistently available. As these businesses get bigger and bigger then can afford to offer more and also a point of difference that makes them a destination rather than just another retail site selling the same designers.
It’s also important to note that wholesale is so difficult, now, that many brands are moving away from it or closing altogether. Smaller brands can’t afford to tie all their money up in stock, which they won’t get money from until the end of the season or, could, at worst, be sent back to them. This cashflow problem is what has killed off many small brands and also deters many from the wholesale model.
Plus, many people are happy with affordable basics so look to designers for something different or recognisable which has driven designers to only offer these styles. Matchesfashion.com and MRPORTER are so big now they can offer these own-label collections. What they have to remember is, these “Essentials” are the workhorses of a man’s wardrobe and as such need to be good quality in order to satisfy the customer.
Left - Unbranded "Essentials" mixed with a few capsule pieces is part of the new MR P. ethos
Daniel Todd, Buyer at MRPORTER.COM
“I am a huge fan of Prada’s knitwear for this fall with my favourite being this Shetland Wool Sweater; it's bang on trend as graphic knitwear is key for the season. Made entirely by hand in Italy, this loud and chunky piece is as much an art form as it is knitwear. An eye-catching jumper not for the faint hearted, I’ll be wearing mine with jeans or corduroy trousers.”
Left - Prada - Shetland Wool Sweater - £1375
“Wanting to purchase a plush pair of feel-good corduroy trousers immediately indicates that autumn is here, time for the shorts to be packed away! My choice is this black number from Our Legacy, made from exceptional fabrication of soft and durable cotton-corduroy, its minimal design is versatile enabling it to be worn with simple knitwear and shirting.”
Left - Our Legacy - Wide-Leg Cotton-Corduory Trousers - £225
“Slogan t-shirts and jerseys have been huge for a few seasons now and continuing into this winter. Featuring a quote from Mr Benjamin Franklin, “Lost time is never found again”, I’ll be sporting this jersey on cold winter days when needing that little extra motivation to get things done.”
Left - Takahiromiyashita Thesoloist. - Printed Cotton-Jersey T-Shirt - £270
“A padded overshirt is a genius alternative to a jacket this autumn from Balenciaga's Creative Director Mr Demna Gvasalia. Quilted and padded for insulation and volume, this piece has to be my favourite must have. Ticking the 90s sportswear trend box, I’ll be wearing mine layered over knitwear with retro sneakers.”
Left - Balenciaga - Oversized Padded Checked Cotton-Flannel Overshirt - £815
“A great coat is essential for winter, after all it’s the item of clothing that you will be seen most in the coming months. My pick of statement outerwear is this double breasted overcoat from Gucci. Crafted from pure cashmere in a timeless shade of tan, this really is one exceptional coat.”
Left - Gucci - Slim-Fit Double-Breasted Cashmere Overcoat - £2840
Not all logos are created equal and one that is hot one minute, can quickly, for various reasons, become fashion deadly nightshade. Fashion goes through waves of logomania and then decides it's over, done that and goes subtle and that usually lasts about two minutes with most brands when they see sales falling.
Anyway, the hot logo for AW17 and SS18 is the full name running diagonally across. Think of a branded piece of tissue paper and you get the idea.
When Balenciaga relaunched under new designer Demna Gvasalia the website was given a tasteful tasteless makeover with the name 'Balenciaga Paris' running diagonally across. It then made its way onto clothes and accessories.
I'm not sure how long this is going to last, but, right now, it's cool.
Far Left - Bally SS18
Left - Palm Angels SS18
Below - Balenciaga SS18
Left - MSGM SS18
Below - Balenciaga - Intarsia Wool-Blend Scarf - £365 from MRPORTER.COM
Put yellow and red together and you don't get orange, but Baywatch. This colour combo always says ‘Lifeguard’, even though on the new film, strangely, they’re using red and blue. Must be a copyright issue!
Anyway, make like Zac and Dwayne down on the beach and go for T-shirts and swim shorts in primary red and yellow. Take the hassle out of Hasselhoff and keep it simple. A strong yellow T-Shirt has always been a difficult one to blend into the wardrobe, but add a red swim short and you get a perfect combo.
Left - An oldie, but a goodie - Original Baywatch
Even if the film’s a load of rubbish, which it probably will be, you can’t get away from the attraction of the sea and surf. Forever and always, I'm always here!
Below - St. Moriz, the no.1 volume self tan brand in the UK, is making a big splash this summer by partnering with the new Baywatch movie which hit screens from 29th May
Left - Orlebar Brown - OB-V - Sunshine Tailored-Fit V-Neck T-Shirt - £65, BULLDOG - Raspberry Mid-Length Swim Shorts - £145
Left - Whistles - Crumple Everyday T-Shirt - £35
Below - Topman - Red Embroidery Swim Shorts - £16
Left - Orlebar Brown SS17
Left - ASOS - Longline Knitted T-Shirt With Curved Hem In Yellow - £18
Below - Thom Browne - Slim-Fit Short-Length Stripe-Trimmed Swim Shorts - £290 from MRPORTER
Below - Topman - Mustard Reality Print T-Shirt - £15
Left - River Island - Yellow Rolled Sleeve Pocket T-Shirt - £8
Left - Patagonia - Nine Trails Jersey T-Shirt - £35 from MRPORTER
Below - Speedo - Solid Leisure 16” Swim Shorts - £15]
To call it a recession is maybe a little extreme, but let’s call it a contraction. Menswear is struggling. Some are mouthing the word #brexit but this was coming way before that and affecting international markets too, most notably America.
Like everything that goes in cycles, you have your ups and you have your downs. We’re definitely in a down cycle as brands merge their men’s and women’s and reduce the amount of labels within their brands.
Left - Inside menswear is screaming
Many are private companies so they don’t disclose profits, but when you have menswear giants like Armani and Ralph Lauren losing labels - Collezioni and Armani Jeans in the case of Armani and store closures - in the case of Ralph Lauren - then things are clearly unsustainable.
Why is this happening? The first big answer is a saturated market. Do we need much more ‘stuff’? When Ikea’s head of sustainability, Steve Howard, said we’d reached “peak stuff”, he hit the nail on the head. We’ve seen expansion online and offline and our wardrobes are bursting with clothes at every price point.
Designer fashion isn’t coming up with many new ideas and this has lead to the high-street bringing the new ideas and offering improved quality that many men are happy with. I think companies like ASOS are doing well because people are trading down to cheaper and more fun fashion and don't really wear it long enough to care about the quality.
Brands like Topman have got more and more expensive and are not reactive enough to trends and the latest gimmicks and fashions. They’ve believed in their own ‘cool’ which is dangerous for any brand. Arcadia, Topman’s parent company, has seen many high profile departures lately. Craig McGregor left his role as retail director at Topshop/Topman, after eight years, and Topshop/Topman global commercial director Matt Brewster is leaving the company. Wesley Taylor left his role as managing director of Burton and Yasmin Yusuf left as creative director of Miss Selfridge, both after more than 10 years at the business. Which all suggests the epic growth Arcadia has experienced over the last few decades has now ground to a halt. They are no longer the darling of the British high-street.
Another reason for the men’s downturn is competition is fierce and this had lead to a discount environment. People know they can wait for the sale or search the internet for a discount code. This makes margins smaller for companies which then need to sell even larger volumes. We’ve also seen growth in companies like TK Maxx that offer people the brands they want, but with heavy discounts.
Fashion has changed too. It’s very sportswear/dress down driven. These are cheap or old clothes. Looking ‘expensive’ has gone out of fashion. Brands like Balenciaga and Gosha Rubchinskiy have pioneered this style of fugly fashion and while not cheap they have prices that are more realistic and attainable.
Millennials are all about ‘experiences’ and are less materialistic, or so we’re are told. All those selfies tell a different story, but I think they want to eat out and wear something new, which ultimately means spending less. This big group of young consumers is squeezed by rents, student loans and low wages and this isn’t going to change for the foreseeable future.
In the Evening Standard on Monday, Net-a-Porter/Mr Porter boss, Alison Loehnis, said when they measured “zeitgeist buying” in the Mr Porter team they discovered the number one item was socks. “Followed by Ray-Bans and trainers.” Socks?!! Now, that is worrying. Unless Mr Porter is selling hundreds of millions of dollars worth of socks, which I doubt, then it’s a signifier of the market. It’s too expensive and they are the cheapest things they sell. It’s also one of the main gifting items and something you don’t need to try on.
Online is still only 10% of the retail market so has huge potential, but that still means 9 in every 10 pounds is spent on the high street.
Net-a-Porter/Mr Porter call their top customers ‘EIPs’, (EXTREMELY IMPORTANT PERSON) and these EIPs are the two per cent of customers who account for 40 per cent of NAP revenue. It’s dangerous to have all your eggs in a few baskets, particularly a fickle customer which many others are chasing. They’re now offering a service where the driver waits while these EIPs try things on. It’s a gimmick, but at least it shows they’re trying. These EIPS are the people shopping in Selfridges and Harrods too, while the rest of us have seen our wage packets shrink or not go as far and designer prices continue to rise. #Brexit will make imports to the UK more expensive, temporarily, but fashion will just find somewhere cheaper to make it, but it’s true the weakest wont survive this price hike or margin cut.
Brands have been trimming the fat over the last few years and many are down to the bare bones. The recent christmas was good for retailers and I think that kept many afloat, for now.
Jaeger just announced its bankruptcy. I don’t think there’s much hope for it to survive as it is, but it’ll become a brand within Edinburgh Woollen Mill or the like. It’s the sign of the times and also the cycle of brands. There are times when a brand runs its course and no matter how much investment or time, it’s just time to let it go.
Okay, enough doom and gloom. On a positive note from a down you have an up and when a gap appears something new will come into fill it. But, our addiction to cheap clothes isn’t going anywhere which will make it very difficult for new, smaller brands or labels to compete. I think short term we’ll see more closures and less choice or a choice masked by the fact it’s a sub brand from a big retailer. H&M is just about to launch Arket.
One thing is for sure, fashion is unpredictable and that’s why I love it.