H&M Third Party Branded Goods selling

To be a retailer today you need many fingers in many pies. Think a centipede Paul Hollywood and you’re getting some idea. So, it was with interest to hear the latest announcement from the world’s second largest fashion retailer, H&M. They’ve decided to start a pilot selling products from external brands.

While they have sold third party brands in some of their more premium chains before, it’s a first for the mother brand. H&M’s main, eponymous brand has been neglected and struggled as the company’s strategy was to roll out retail chains such as Arket, Weekday and &Other Stories.

The bottom end of the market is tough with margins continually squeezed. H&M’s huge undersold inventory, an undeveloped online offering and falling profits - for the eighth quarter in a row the Swedish fashion chain reported a decreasing profit, despite having recently achieved turnover growth - has taken its toll on this retail behemoth.

Left - Swedish fast-fashion giant is piloting a new strategy

It needs a new strategy and has clearly been watching the likes of ASOS and Zalando be all things to all people and expand rapidly.

A company spokesman said “The H&M brand will now develop our offer of external brands. The purpose is to complement our offer with external brands to add excitement and energy and we see great opportunities for growth and to find new customers,”.

You can charge more for branded product without the need to hold large amounts of stock. It also widens you target market, especially amongst men who still like branded items. While it’s not clear which brands will be sold, it’s likely to be dominated by sportswear. This is an area that has seen huge growth with the likes of JD Sports smashing their earnings. JD Sports’ last half-year revenues jumped 47% to £2.7 billion on the back of a 10% surge in like-for-like sales. Sportswear has higher margins and appeals to more age demographics.

One of the more traditional high-street retailers to make this third party brand strategy work is Next. Its ‘LABEL’ concept is now turning over £350 million in yearly sales with huge growth seen over the last few years. Brands such as River Island, adidas, Boss, Superdry and Fat Face sit alongside beauty and home. It’s the contemporary department store.

In their latest financial statement, they say they “continue to develop the business through the addition of new brands, increasing the breadth of offer with existing brands and (from early this year) offering items stocked in our partners’ warehouses through Platform Plus"

"‘Platform Plus’ allows our customers to order un-stocked items directly from our partners’ warehouses to be delivered through our network.

“In March this year we started selling items in this way with three of our partner brands. These items are offered to customers on a 48-hour delivery promise. Items are injected into our warehouse and then delivered through our courier and store network. For example, a Platform Plus item ordered on a Monday, is transferred to our warehouse by Tuesday and delivered to the customer on Wednesday.” they say.

“When customers order Platform Plus items with other items stocked in a Next warehouse (available in 24 hours) they can choose to receive one consolidated delivery, offered in 48 hours. Alternatively, customers can choose to split their delivery and have stocked items delivered in 24 hours. There is no additional charge for the split delivery. Currently, 50% are choosing to consolidate their order.”

Next says Platform Plus is more than a marketplace. “Platform Plus differs from many marketplaces because, rather than despatching parcels directly to consumers from third-party warehouses, items are inducted into our distribution network. The advantages of operating in this way are: We can consolidate orders into one delivery which can materially reduce distribution costs. Items can be delivered through stores which currently receive 50% of all our Online orders and we have visibility and control of all orders through our own trusted networks and tracking systems. This allows us to ensure quality of service and in the event of any delivery issues or queries, customers have one point of contact.

It seems to be working for Next with full price LABEL sales in the first half of this year up +26% and total sales (including markdown sales) up +29%. They expect full price sales in the second half top 2019 to be up around +13%, more in line with their original full year estimate of +15%. The expected slowdown in growth in the second half is mainly due to errors and stock shortages in their Lipsy - owned by Next - ranges which they believe will slowly be corrected.

Next Label Branded Goods selling

For the full year, full price LABEL sales are forecast to be up +19%. Total sales (including markdown sales) are forecast to be up +21% with net margins, after central overheads, forecast to be around 15%. 

In this retail environment this is very impressive. Sales are a combination of wholesale and commission, and although they make lower net margins on commission sales, they encourage their partners to adopt this model because they believe it generates higher sales growth. In the first half of this year commission sales grew by +32% compared to wholesale which grew by +18.5%. It's also less risky.

As of August 2019, they have four clothing brands operating on Platform Plus and plan to add at least ten more later this year, with more to follow in 2020. 

Last month they also agreed a licensing deal with Ted Baker to create and sell Ted Baker children’s products. They intend to launch the first collection in Spring 2020.

Right - Next's Label sales over the last four years

Next, thanks to its Directory, has fine-tuned its delivery and database over many years and is trusted by its customers. H&M, on the other hand, doesn’t quite have the online reputation, but, being able to return to store could be a massive positive for consumers.

It will be interesting to see how fast and big they go with this concept and the brands they decide to stock. Third party branded goods allows for a faster turnover of brands and product, less risk, especially under this commission model, and the subsequent cool and elevation that can rub off on a tired umbrella brand.

Consumers are addicted to newness and H&M needs to try something new. This idea has the potential to work, though it is getting increasingly competitive, it just needs to judge when the sportswear trend will finally end, which brands connect with their customer and what the next big trend will be.

Published in Fashion

Ray Kelvin resigns Ted Baker bully allegationsTed Baker CEO and Founder, Ray Kelvin, has resigned from his position at the British company following an internal inquiry regarding alleged harassment of staff. Kelvin had been on an indefinite leave of absence since December, when the initial allegations were made, but won’t be returning to the business.

Left - Ted Baker, Founder & Former CEO, Ray Kelvin

Ted Baker was founded in Glasgow in 1988 by Kelvin, initially selling men’s shirts and later expanding into womenswear in 1995. Ted Baker’s huge success, a yearly turnover of £590m and nearly 500 stores worldwide, is undeniably down to Ray Kelvin’s individual hand. On his resignation, Kelvin said, “The past few months have been deeply distressing and I’ll now be taking time privately with my family to consider what my next adventure will be. Bye for now, Ray.”

Whether you like the brand or not, you can’t ignore its growth and consistency over the past 30 years. Kelvin’s hard work, attention to detail, quality control and quirky aesthetic has amassed a huge global fan club. While the majority of people wearing Ted Baker would never have heard of Ray Kelvin, they have definitely experienced his overriding vision and eye. It’ll be interesting how the brand maintains that momentum without him.

Founders are very important to fashion companies and they are seldom as exciting after the founder has left. Fashion businesses need strong people with personality and a determined vision of the direction they need to go in. Arguably, fashion needs these people even more than other industries because it is such an instinctive industry. It’s unpredictable and data often won’t help. You need to follow the leader’s instinct and feel for things if you are to react quickly and timely. Design and decisions by committee is often more conservative and slower and why many companies quickly flounder.

Kelvin’s long-running desire not to be photographed or uncover the fact he’s the real Ted Baker can be twisted to make him look like he was trying, or had something to hide. Ted Baker, up until recently, didn't advertise and had a distorted relationship with the press.

This is not to condone anybody’s negative actions and anything illegal should be prosecuted, but when does a dominating character become a bully? One person’s clash of personalities is another person’s intimidation. One person’s eccentric way of greeting people, or “banter”, can be another person’s sexual harassment or racist allegation. The line of unacceptability is subjective and often blurred.

Whether it’s Philip Green or another titan of industry, people are, rightly, responsible for their language and actions and companies have to be seen to take any allegations seriously. Nobody is untouchable anymore. Good. We live in an age where you can’t have any element of doubt. If in doubt, then you are automatically guilty. Which puts potentially innocent people into a indefensible grey area and they are shown the door. You shouldn’t or can't hold onto people at any cost, even if they are the founder, and it’s a verdict of guilty, instantly.

Ted Baker had a tsunami of allegations following a petition signed by 200 staff and it’s very hard to accuse somebody that doesn’t appear to have anybody to control their behaviour. Nobody should feel like they are being bullied or pressurised into anything they aren’t comfortable with. It creates a toxic environment and may explain a high turnover of staff. People make a business' culture, but it needs to come from the top down.

The shift in society is, rightly, now, controlling these people and losing their positions of power is what will be their biggest loss. This isn’t a gender issue. This isn’t about men. It’s about people in positions of power abusing those positions. It’s that feeling of knowing people have to do what you say and pushing that into a different and negative dynamic. This abuse is what is a shame, as it’s the same energy, when positive, which makes these companies great. It’s the energy of trying something new, sticking your neck out or pushing a few different buttons. Again, particularly important in the fashion and creative industries.

Whether it’s Ted Baker or Arcadia, you wonder whether these companies’ successes could be replicated as big and as quickly in the #metoo era. You have to break a few eggs to get ahead and often upset and disagree with a few people on the way. Fashion businesses need strong and successful characters to make things happen, but it doesn’t mean they can do whatever they like. 

Published in Fashion
Wednesday, 17 October 2018 09:37

ChicGeek Comment The Mass Male Sneakerheads

Male consumers are biggest footwear buyers sneakerheads trainers sneakersYoung men are officially the biggest consumers of footwear in the UK. Move over Carrie Bradshaw, or is that reference way too old when you consider many of these 16-24 year old men weren’t even born when she started shopping for her Manolos.

According to the latest research from Mintel on footwear retailing, 95% of British males aged 16-24 bought shoes last year, making them Britain’s number one footwear buyers.

There’s been a revolution in men buying shoes and while women (86%) are still more likely to purchase footwear than men (78%), females aged 16-24 (10%) are twice as likely to have not purchased footwear in the last year compared to their male counterparts (5%), as the continuation of the casual and ‘athleisure’ trends drive men’s footwear sales.

Male shoe addicts are fast catching up on women. Men’s footwear accounted for 37% of all footwear sales in 2017, up from 34% in 2015. Valued at £4.38 billion in 2017, sales of men’s shoes increased an impressive 31% between 2015 and 2017. In comparison, sales of women’s shoes grew by only 10% over the same period to reach £5.48 billion in 2017.

“Men’s footwear, particularly among younger age groups, is really fuelling growth in the footwear sector.” says Chana Baram, Retail Analyst at Mintel. “In fact, our research shows that men aged 16-24 are more likely to be swayed by big brand names than women of the same age.” says Baram. “With trainers such a popular category for men as a whole, young men in particular are likely to respond positively to advertising campaigns by the big sports brands that feature their favourite male sports personalities.” she says.

This footwear sales growth is being fuelled by trainers, trainers and more trainers. Casual shoes and trainers are now the most popular shoe styles purchased by men.

“These are not just essential buys, but, got-to-have-it buys,” says Richard Wharton, footwear veteran and founder of Office & Offspring. “It’s all about the latest sneaker, there are millions version of that: the luxe trend, the Balenciaga Triple S, Off-White, Converse or Vans or whatever.” says Wharton. “These young guys have never worn formal shoes or been forced into wearing them at school. They buy what they want,” he says.

“Sneaker culture has really grown, from being a niche market to having mass appeal,” says Pamela Dunn, Senior Buyer, Schuh. “The rise of exclusive collabs and hard-to-get releases from brands like Nike/Adidas has fuelled the sneaker market.” she says.

In our age of sportswear and dress-down, our footwear choices have mirrored this and what was once unacceptable in certain social situations has now become mainstream and mass. Comfort is key.

“In modern offices nobody wears any other formal attire anymore so it’s acceptable to wear sneakers,” says Wharton. “Hype’s there. Before you didn’t have trainers for different occasions,” says Wharton. “Where you had that in formal wear, you, now, have that in sneakers: all black sneaker for work, weekend, something casual, or a club, maybe Dior or Louboutin,” he says.

The trainer market has grown to such as size that there is now multiple categories within this market and men are buying a full wardrobe of trainers for every social occasion. Designer brands have piled into this market seeing big margins and huge volumes. But what are these guys buying into? 

“Big brands at a more mass market level like Nike/Adidas or more top level brands include Off-White / Gucci / LV etc.” says Dunn.

“It’s so broad. They are buying high-end street couture to basic Vans or Converse,” says Wharton. “Nike rules with guys buy into their new technology. There are huge queues waiting for the next thing and Nike limit it, so they drip feed it in.” he says.

Boys are buying brands and this may go someway to explain the latest movements within the men’s footwear market. Ted Baker recently bought back its shoe license for £21 million. The fashion brand bought ‘No Ordinary Shoes’, the worldwide licensee, from the Pentland Group. “This is an exciting opportunity to drive further growth in our footwear business by leveraging our global footprint and infrastructure, in line with our strategy to further develop Ted Baker as a global lifestyle brand,” said Ted Baker founder Ray Kelvin. 

As Pentland lost Ted Baker, it appointed Marc Hare as the new ‘Product Director of the Lacoste Footwear Joint Venture’. He will be leading the new ‘Mainline’ and ‘Future Concepts’ product teams and working with Lacoste JV CEO, Gianni Georgiades, to support the company's vision for the brand. Marc Hare is known for his luxury evening styles and his, now, defunct Mr Hare footwear label. It’ll be interesting to see whether Pentland want to grow Lacoste further out from its sporty origins or use Hare’s skill by giving those sports shoes an elevation to compete within the luxury sneaker market.

What these brands see is growth, but is there further room for expansion or is the market becoming saturated?

“I think males will increasingly buy into footwear in the future, but the market will change,” says Dunn. “I think exclusive products may become less desirable, but brands that are big now will become even more dominant e.g. nike/adidas.” she says.

“It depends when it becomes saturation point,” says Wharton. “So many people want comfort that looks cool and there are multiple sub-genres such as Japanese sneakers, and Palace/Supreme collabs,” he says.

While the sports brands continue to offer newness, limit 'exclusive' product and raid their archives for classic styles, the trainer market seems healthy and will sustain the desire of men to keep adding to their collections. But, this rise of young men becoming the largest consumers of footwear is skewed towards one category and it will be interesting to see how the footwear industry gets this entire generation off their sport wears addiction and into a pair of leather lace-ups. 

Published in Fashion
Thursday, 03 May 2018 13:30

Get The Look Wild Wild Country

Get The Look Menswear Wild Wild Country Netflix'

Rolls Royce’s best customer, the Indian guru Bhagwan Shree Rajneesh was the compelling, albeit fairly silent, star of the recent Netflix documentary, Wild Wild Country.

Dressed in his long-flowing finery he was surrounded by his adoring followers all wearing a spectrum of reds. 

Left - The cult's followers wearing their red colour palette

Get The Look Menswear Wild Wild Country Bhagwan Shree Rajneesh'

Also known as Osho, the story followers the Bhagwan, his one-time personal assistant Ma Anand Sheela and their community of followers in Rajneeshpuram, aka Antelope, located in Wasco County, Oregon during the 1980s. 

Right - The Bhagwan

This commune was a place of free love and followed the teachings of the Bhagwan. His taste for the finer things in life - 93 Roll Royces! - is part of the madness of it all.

Get The Look Menswear Wild Wild Country Uniqlo red T-shirt'Left - Uniqlo - Men Supima Cotton Crew Neck Short Sleeve T-Shirt - £9.90

The reason they wore reds was to represent “the colours of the rising or setting sun”, as well as beaded necklaces with a locket containing a picture of the Bhagwan's face. It’s fascinating how everybody is wearing something different while conforming to the same colour chart.

I’m expecting Pantone to release a ‘Bhagwan Red’ next year, which would be a crimson/berry red. But you can get in early by buying anything on this colour chart with no logos or branding.

Get The Look Menswear Wild Wild Country Bershka red bomber jacket'Left - Berska - Bomber Jacket - £19.99

The community imploded, but I won’t spoil it. Let’s just say it makes me rethink about eating from the salad cart at the local Harvester!

Get The Look Menswear Wild Wild Country American Apparel'Left - American Apparel - Cranberry Hoodie - £34

Get The Look Menswear Wild Wild Country Spoke coral trousers'Left - Spoke - Coral - £89

 

 

 

 

 

 

 

  

 

Get The Look Menswear Wild Wild Country Netflix'Get The Look Menswear Wild Wild Country ASOS red trousers'Left - ASOS - Skinny Smart Trousers In Strawberry Red - £20

 

 

 

 

 

 

 

 

 

 

 

Get The Look Menswear Wild Wild Country Your Turn ASOSLeft - YOURTURN - Dip Dye T-Shirt In Red - £12 from ASOS

Get The Look Menswear Wild Wild Country Ted Baker red shorts'Left - Ted Baker - Proshor Chino Short - £69 from House of Fraser

Get The Look Menswear Wild Wild Country Rivieras red espadrilles'
Left - Rivieras - Classic 10 Canvas Loafers - £50 from matchesfashion.com

 

 

 

 

 

 

Get The Look Menswear Wild Wild Country Buscemi trainers Harvey Nichols'Left - Buscemi - 100mm Guts Red Leather Hi-Top Trainers -£670 from Harvey Nichols

More Get The Looks - The Assassination of Gianni Versace - hereGet The Look Menswear Wild Wild Country Netflix'

Published in Fashion

You can thank me after, but I just may have found the prom outfit to beat all other prom outfits!!!!! Be the king of the prom by taking inspiration from the king, Elvis himself, and Harry Styles with a combination of black and pink. A pink suit with a black shirt, no tie, says 'dressy cool' and is as timeless as rock itself.

The classic 50s colour combo of pink and black brings to mind Teddy Boys and rock 'n' roll. You want a black shirt with black buttons, plain. No contrasting. You can do black trousers if you don't want to buy the whole suit, but add white socks classic penny loafers and you'll be the beau of the ball!

Left - Harry Styles giving good Elvis in an bespoke Edward Sexton suit

Left - River Island - Pink Slim Fit Suit Jacket - £85

Left Below - River Island - Pink Slim Fit Suit Trousers - £40

Below - Hugo - Ebros Stretch Cotton Shirt - £100 from HarveyNichols.com

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Left - ASOS - Super Skinny Suit In Mid Pink - £85

Left - Topman - Rose Pink Ultra Skinny Fit Suit - £130

Below - Ted Baker - Rosest Tailored Fit Shirt - £65 from John Lewis

 

 

 

 

 

 

 

Left - Opposuits - Mr Pink - £64.95

Below - The original, Elvis Presley

Left - Zara - Sartorial Suit Blazer - £99.99, Trousers - £49.99 

 

 

 

 

 

 

 

 

 

 

Left - Zara - Basic Blazer - £39.99

Left - Giorgio Armani - Single Cuff Cotton Poplin Shirt - £300 from matchesfashion.com

Right - AMI - Twill Shirt - £155 from MRPORTER.COM


 

 

 

 

Left - Actor Aidan Alexander at the Billboard Awards

Left - Marks & Spencer - Autograph - Pure Cotton Tailored Fit Shirt - £35

Left - Moss Bros - Moss Esq. - Regular Fit Black Single Cuff Non Iron Shirt - £25

 

 

 

 

 

 

 

 

 

Left - 1950s Cliff Richard

Below - New Look - Deep Pink Suit Jacket - £64.99, Deep Pink Suit Trousers - £29.99

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Below - Be the king, this prom season

Published in The Fashion Archives
Friday, 04 November 2016 15:10

Hot List The Cycle Jumper

cycle jumper Ted Baker House of Fraser Chic GeekAs menswear has become more streamlined, fitted and influenced by sports it was inevitable, particularly with its rise in popularity, that cycling would start to play its part off the track.

Designer, Paul Smith, is a renowned cycling fan and references always appear on his catwalk or collections. The zipped funnel neck, fitted cycle-inspired knit is a key piece this season and has been appearing all over menswear, both designer and the high-street.

Paul Smith cycle top AW16 menswearLeft - Paul Smith AW16

This example by Ted Baker from House of Fraser is the perfect thickness for winter and can be worn easily under tailored jackets or coats. A rich, deep grey, it will dress down a suit or dress up a pair of jeans or tailored sports trousers. Comfortable, sporty and always a winner, it's the Bradley Wiggins of knitwear!

Far Left & Below -  Ted Baker 'Pinball' Funnel Neck Jumper - £109 from House of Fraser funnel neck grey jumper Ted Baker

Published in The Fashion Archives

Advertisement