For fashion buyers, designers and fans around the world, September is one of the most important months of the year. This is when designers show off their collections for the following Spring/Summer. The September fashion shows kick off in New York followed by London, Milan and Paris. Fashion Week has a big direct economic impact on the host cities, the majority of which comes from visitor spending, with thousands of people arriving to attend the shows and the associated after-parties.
The UK fashion industry contributes £32 billion to the UK economy and employs more than 890,000 people, almost as much as the financial and insurance industry . During this year’s London Fashion Week, the discussion between the shows focussed on how Brexit would affect the British fashion industry. The high volatility of the pound and the uncertainty around tariffs and other trade barriers post-Brexit make it difficult for luxury and high street brands to plan ahead.
In the midst of Fashion Week, we are also reminded that the high street market is struggling in the face of changing consumer spending habits and preferences.The latest Cebr/Yougov consumer confidence index reached a new low of 104.0 in August, its lowest level since 2013. This indicates that consumers are getting more pessimistic about the state of the economy and will most likely cut back on spending as a result.
This is bad news for the wider retail sector and clothing stores in particular. Once a reliable sector, in-store clothing and footwear saw a sales decline of 0.9% in the three months to August compared to the preceding three-month period. Whereas in-store sales has suffered online sales of clothes and footwear has performed better experiencing an increase in sales of 9.4% year-on-year in August . The challenging trading conditions for bricks and mortar retailers are also underlined by lower numbers of shoppers coming into the stores. In August, footfall in the high street declined by 1.9% year-on-year. Cebr expects consumer spending to grow by 1.7% in 2020, down from 2.0% this year.
Retailers like John Lewis, Debenhams and Marks & Spencer are struggling to keep up with e-commerce companies that are infringing on the traditional retailers’ market share. Retailers closed 2,870 stores in the first half of 2019 and brands like H&M and Topshop have had to rethink their expansion strategy to accommodate for the growing demand for online shopping . In contrast, the Boohoo Group, an e-commerce clothing company and a direct competitor to ASOS, saw an increase of their profits from £43 million in 2018 to £60 million this year. In August, it was announced that the group had bought struggling high street brands Karen Millen and Coast.
Another issue facing retailers is the question of sustainability. London Fashion Week attendees had to share the spotlight with activists who highlighted the fashion industry’s big environmental footprint. Sustainability has become a top priority for many retailers around the world. For example, the Inditex Group has committed to using 100% sustainable fabric by 2025. The H&M Group has gone even further by aiming to become climate positive across their entire supply chain by 2040. UK retailers are following suit with Marks & Spencer committing to become a zero-waste company by 2025 and to ensure that at least 80% of the raw materials they use are sustainable.
With multiple challenges ahead, the retail sector needs to find new ways to attract customers into traditional stores by offering a smooth omni-channel experience and exclusive events that shoppers would not otherwise get online. One thing is certain though, as London Fashion Week comes to an end we can expect to find clothes inspired by the runway in most high street stores with the hope of motivating customers to spend money.
 ONS (2019) ‘Retail Sales, Great Britain: August 2019.’
 BBC (2019). ‘Retailers shut 2,870 stores in the first half of 2019.’
Contact: Charlotte Cervin firstname.lastname@example.org 0207 324 2879