After a positive year in 2017, when industry experts appeared rather optimistic, the decline of household consumption in 2018 strongly affected sales of apparel and footwear specialist retailers. Tax rises on fuel and tobacco product taxes were detrimental to purchasing power in 2018, as oil price surges triggered inflation.
Apparel and footwear specialist retailers are facing intense competitive pressure from internet retailers, with second-hand markets creating additional pressure to lower retail selling prices. In this context, the industry’s profitability is weakened, forcing players to restructure or some even to go bankrupt.
Whilst women’s fashion, the traditional engine for the channel’s growth, suffers, children’s fashion is one of the rare growing segments. According to industry sources, this area of the market accounted for sales of EUR5 billion in 2018, bringing benefits to players like Kiabi and Zara Kids, which enjoyed a competitive advantage in being able to boost sales with promotions.
Strong competitive pressure in this retailing category is linked to the growing internationalisation of leading players, which have developed supply chains with low costs in emerging countries such as Bangladesh, putting pressure on domestic players in France. This is thus resulting in dynamic promotional activity.
In a difficult market, Zara recorded double-digit value growth in 2018 thanks to an economic model relying on a fast fashion brand that succeeded in attracting millennials by reproducing luxury apparel collections at affordable prices. Similarly, the historical success of H&M is based on making fashion and design accessible to many people.
Vivarte is focused on its brands La Halle, Besson, Caroll, Minelli, San Marina and Cosmoparis after a year of consolidation in 2017, notably marked by the recovery of its financial situation. Vivarte had been required to restructure the activities of La Halle aux Chaussures and Maroquineries and to sell its Pataugas, Kookai and Merkal brands.
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This industry report originates from Passport, our Retailing market research database.