As retailers post trading updates for that all-important peak trading period large parts of the fashion sector have been washed out and hung up to dry.

Profit warnings from the likes of N Brown, Joules and Superdry and disappointing results from Quiz, Boux Avenue and Moss Bros to name but a few, have overshadowed impressive results from Boohoo and Next. Even perennial overperformer Primark was not immune as UK like-for-likes dipped 0.2%.

What are the factors driving the fashion sector’s festive failure, and how likely are they to linger in the year to come? 

Why has fashion fallen out of style?

Primark finance director John Bason believes that the feast of choice available for consumers to spend money on is driving subdued fashion spend, rather than shoppers’ choosing to keep their purse strings tightened over the festive period.

“People have got more money to spend so it’s not that they are restricted on spending,” he says.

“I think it’s the range of options and other things that are now so easily available and that they have knowledge of through their smart devices to spend their money on.”

Boohoo co-founder and executive director Carol Kane says this trend is giving online retailers the edge over those tied into bricks-and-mortar stores.

”Online players can offer consumers much more choice and for 24 hours a day on their mobiles. When a consumer gets used to a wide choice then goes in store they have quite a limited choice,” she says.

“It’s a trend of shopping habits and people wanting a service industry, wanting to shop out of hours, in the evening, on mobile phones and it’s just a natural shift.”

Sosandar joint chief executive Julie Lavington agrees consumer behaviour has “changed considerably over the last five years”.

“People are spending less time in shops but that doesn’t mean they have lost interest in clothes. What has changed is shopping behaviour, not the underlying demand,” she says.

ConsumerCast founder Robert Carruthers believes the fast fashion bubble has burst: “We’re struggling with that kind of stagnation where people are going ‘Actually, it’s not getting any cheaper and I’m not interested in buying any more stuff’.

“We’ve got the trend of people spending on leisure-related activities and experiences. There are environmental concerns and overall, it’s just very difficult to persuade people that fashion is something exciting and desirable.”

Quiz boss Gerry Sweeney concurs and admits shoppers are simply opting to buy other things. “People are spending their money on different things in terms of going out and at home spend. There has been a shift when you look at that overall basket spend,” he says.

Stalling stores

There were few tales of success on the high street this Christmas. M&S clothing and home sales slid 3.7%. Meanwhile, Theo Paphitis lamented the poor performance of lingerie retailer Boux Avenue’s shopping centre stores, which dragged down sales.

“As a greater proportion of fashion sales migrate online in the UK, it’s clear that the relevance of shopping centres to fashion retailing – and particularly Boux’s core demographic of 18- to 30-year-old females – is dramatically different from what it was when we launched the business in 2011,” says Paphitis.

“It is not a surprise, therefore, that trading has been most challenging in the majority of our 30 Boux Avenue shopping centre stores, which has contributed towards a double-digit decline in like-for-like sales in recent months.”

Carruthers says fashion retailers need to make sure they do not have too much exposure in terms of stores and need to “proactively manage” their portfolios.

He cites Next as a great example of a retailer that effectively manages its store estate.

“Next has been able to dodge the bullet of underperforming high streets and shopping centres by looking into the future and planning that withdrawal [of stores] rather than running at losses then being forced to close stores in crisis mode – which is what’s happened to the department stores.”

Bigging up brand

As shoppers are increasingly spoilt for choice on where to spend their cash and on what, ensuring brand equity remains high is essential for fashion sector success.

“Brand management is one of many disciplines that fashion retailers have to excel in,” Carruthers says.“Brands have an upwards curve peak and it’s very difficult once it’s passed that peak and your core audience has moved on or is older.

“It’s very difficult to refocus to a younger audience. That’s what Superdry is suffering from, and Boohoo is thinking very hard about that.”

Boohoo has extended its target demographic over the past year through its acquisitions of Karen Millen and Coast, which are aimed at a slightly older customer to its core brands.

Boohoo chief executive John Lyttle says, aside from Inditex brands Zara and Massimo Dutti, there were relatively few trend-led fashion retailers serving the 25-plus clothing market - and it is a gap the etailer plans to pounce on.

“Our customers were predominantly those who want younger fashion who might migrate after a period, so when Karen Millen and Coast went into administration we felt that those brands had a lot of fashion heritage and we could really do something with them in the future,” he says.

However, there is a fine line between expanding your brand’s remit and keeping true to its core principles – one that M&S failed to tread over Christmas as its menswear skinny jeans fell flat with shoppers.

“Unless your whole brand is refreshed no one is going to go to M&S for skinny jeans. They could have the best in the market, but nobody is going to buy them,” Carruthers says.

“It’s not that the product is wrong – it’s part of a wider brand strategy that wasn’t in place to support that,” he adds.

Boohoo – which just posted a 44% surge in sales - co-founder Kane says making sure its stock and brand is relevant is at the “core of their business” and it does that by keeping in touch with its customer’s interests and behaviour.

“We know where the customer is at, what they’re doing, what they’re consuming,” she says, adding that many of the brands “that have gone to the wall in recent years” had lost touch with their consumer.

Fashioning a fightback

As 2020 kicks off and political unrest eases and wages continue to rise, fashion retailers need to start standing out from the very crowded pack.

Sosandar boss Lavington says: ”For retailers to excel they must keep up with, and exceed, consumers’ expectations. For example, finding inspiration through great social media content is essential to maintaining customers’ interest.

“At Sosandar we see our social media as our always-on shop window and go to great lengths to ensure our content remains highly engaging and relevant.”

Boohoo also puts its might behind social.

Kane says: “We have strong fashion writing and content that surrounds [the clothes] that you don’t get in-store. You haven’t got the visual content stimulus that you have online.”

Bason suggests thinking outside the box if retailers want to survive and diversify their product to stimulate growth.

“Primark has built up an amazing health and beauty range within the store – we are known for the best price for personal care and makeup – something which wasn’t there five years ago,” he says. “It was an opportunity and we seized it.”

Bason also points to Primark’s partnerships with other brands and licensed product, such as Disney or Stranger Things, which have been lucrative.

Carruthers adds that the fashion retailers succeeding know which channels they do and don’t want to sell through.

“That’s what tripped up Quiz – they tried selling through other people’s sites and that wasn’t profitable for them,” he says.

Sweeney admits that is where a lot of Quiz’s troubles stemmed from.

“Just over half of our business last year was done through sub-parties. There were a couple we terminated because the scale of profitability of them wasn’t working for us.

“With the remaining ones, there was a conscious decision to pull back from them to put more emphasis on our own site.” 

As competition for fashion sales is fiercer than ever, retailers must not underestimate the savvy shopper who knows exactly what, when and how they want their fashion.