The British high street is a very different place for fashion than it was at the turn of the millennium.

Fashion retail high street

Once dominant players such as BHS, Littlewoods and C&A have disappeared and a new, more international mix of retailers have taken their place.

But what does this mean for both consumers and fashion retailers alike?

Jigsaw chief executive Peter Ruis believes UK consumers now have more choice: “People are overly nostalgic. When I started out as an M&S graduate there was limited competition. Department stores were a forgotten sector and there were no big international retailers.

“For many, the choice and quality [back then] wasn’t half what it is today.”

H&M now has almost 300 stores in the UK while Zara has around 70 shops, and retailers including Reserved, Victoria’s Secret and Michael Kors are vying to conquer the market.

WGSN head of retail and product analysis Francesca Muston says these international entrants have come in waves, from US preppy retailers such as Abercrombie & Fitch and J Crew, to premium French boutiques such as Maje, Sandro and The Kooples, to the Scandinavian mid-market such as Monki, Weekday and Vero Moda.

Muston says Polish brand Reserved, which opened a 32,000 sq ft store in the former BHS flagship on Oxford Street earlier this month, has shifted the dynamic once again.

Has the internationalisation of fashion retail brought a homogenised view of trends globally? Muston says to some extent it has.

“The next generation of designers and buyers need to be encouraged to genuinely innovate. To do this we need to seriously invest in newness and innovation. It is time to see the UK setting trends again, not following them”

Fat Face chief executive Anthony Thompson

“A teenager in Brazil has the same access to the trends on Instagram as a teenager in Australia, Denmark or Thailand,” she says.

“The internet changed consumer behaviour, from online and mobile shopping to the accessibility of trend information from magazine editorials to social media.”

Hobbs chief executive Meg Lustman says: “Trends are definitely more global. Customers are well informed not only about what they are but which brands will have strength in those trends.”

However, Fat Face chief executive Anthony Thompson believes more needs to be done to make product unique.

“Following trends is not about copycat product,” he insists. “The next generation of designers and buyers need to be encouraged to genuinely innovate. To do this we need to seriously invest in newness and innovation. It is time to see the UK setting trends again, not following them.”

The rise of international players such as Inditex and H&M has brought another trend: fast fashion. Muston says this has “fundamentally changed the trend cycle”.

“Consumers are demanding lots of choice, quickly. We know our customers have a three- to four-week attention span”

Jigsaw chief executive Peter Ruis

Inditex famously brings product to market – from the drawing board to the shopfloor – in just three weeks. Where Inditex has led, others have followed and now the entire high street offers quick-turnaround product and constant newness.tex famously brings product to market – from the drawing board to the shopfloor – in just three weeks. Where tex famously brings product to market – from the drawing board to the shopfloor – in just three weeks. Where Inditex has led, others have followed and now the entire high street offers quick-turnaround product and constant newness.

“Consumers are demanding lots of choice, quickly. We know our customers have a three- to four-week attention span,” says Ruis.

Jigsaw – like most retailers on the high street – strives to bring customers a swathe of new products to keep them coming back to stores and websites regularly.

Hollywood 11 highres

Hollywood 11 highres

The rise of international players such as H&M has ushered in the fast-fashion trend

Primark and the value sector

One of the biggest international success stories on the UK high street in recent times has come from just across the Irish channel.

Primark expanded rapidly in the UK in the mid-2000s and now has more than 170 stores here.

Primark’s on-trend clothing and bargain-basement prices have appealed to shoppers across all demographics, and it is now the UK’s biggest fashion retailer by market share, according to Kantar Worldpanel.

Its success has stimulated a rethink of the value fashion sector and made value for money front of mind across all parts of the industry.

“Primark helped to democratise fashion trends, they made them more accessible, and part of that process involved driving down prices”

Francesca Muston, WGSN

“Primark helped to democratise fashion trends, they made them more accessible, and part of that process involved driving down prices,” says Muston.

“It categorically shifted the price architecture across both value and mid-market fashion and also changed the perception of the value market, reframing it as a source of trend-led fashion.”

Thompson believes the move to the value sector away from the mid-market, combined with increased discounting, has caused a “seismic shift” in fashion retail.

“The race to the bottom on price and the need to protect margin has almost killed the focus on quality and innovation,” he says.

“There is less real investment in product today and less real choice than 20 years ago. Do not confuse the proliferation of ‘me too’ product and real choice. Put simply, in many brands, differentiation is dead”

Fat Face chief executive Anthony Thompson

“There is less real investment in product today and less real choice than 20 years ago. Do not confuse the proliferation of ‘me too’ product and real choice. Put simply, in many brands, differentiation is dead.”

Discounting has been an unwelcome trend on the UK high street. Data from WGSN INStock shows that the percentage of markdown stock in the UK clothing, footwear and accessories market increased from 46% in 2015 to 48% in 2016.

Both Jigsaw and Fat Face have vowed to cut down on discounting. Fat Face launched a price promise ahead of peak last year to guarantee to shoppers it would not slash prices in the run-up to Christmas, while Jigsaw now operates just two Sales a year.

Ruis says he believes the UK high street has hit “peak discounting” and it is beginning to decline.

“It might be the Brexit effect, but it just doesn’t stack up any more,” he says. “Consumers are bored of it. Put simply, really good brands don’t discount, and I include Primark in that.”

Primark oxfrod street

Primark oxfrod street

Primark has changed perceptions of the value market

The economics of the UK high street

Trading on the UK high street is getting tougher, says Ruis.

“The economics are becoming unsustainable. Rents, rates and currency fluctuation are creating the perfect storm for fashion retailers. It’s going to decimate some high streets”

Jigsaw chief executive Peter Ruis

“The economics are becoming unsustainable,” he says. “Rents, rates and currency fluctuation are creating the perfect storm for fashion retailers. It’s going to decimate some high streets.”

Even some of the big international players destined for big things in the UK such as Gap-owned Banana Republic and US giant American Eagle have shut up shop.

“I don’t think these brands have particularly fallen out of favour,” says Thompson. “In most cases, international brands that ‘fail’ in the UK fail because they miscalculated the challenging property economics of physical retailing in prime locations.”

Lustman believes that despite the growing popularity of online shopping, stores are important for fashion retailers. “Stores inspire customers in a way that is more special than online. They are crucial for brand-building.”

However, Ruis thinks the growing popularity of online will act as a catalyst to force landlords to rethink real-estate rents.

“I always believe that shops have the tenets of affordability if they are in the right place, but rents and rates are out of control. It needs to change and I think it will in the next 10 years,” he says.

Differentiation

With more competition and challenging economics, it may look fairly gloomy for fashion on UK high streets. However, Muston says brand and product differentiation can bring success.

“Retailers are really leveraging all the new technology and data available to them to drive efficiencies, but that alone will create something which at best could be described as predictable.

“The left-field stylists, designers and social influencers will still need to drive newness. The ability to effectively contextualise that information and offer a differentiator will be the key to success”

Francesca Muston, WGSN

“The left-field stylists, designers and social influencers will still need to drive newness. The ability to effectively contextualise that information and offer a differentiator will be the key to success.

“Consumers will buy into stories, lifestyles and craft and the discovery of something new and exclusive.

“It’s an aggressively competitive market and each retailer needs to identify what it is they stand for, then get their elbows out and make sure they are well-placed to deliver it.”

Thompson agrees, but sounds a warning for those that do not stand out.

“Good product will always have a place on the UK high street. However, the UK market has too much space that looks too similar,” he says.

“Going forward, only the most creative and flexible propositions will be able to survive in such a competitive market. The polarisation of winners and losers is about to get more pronounced.”

The ever-changing tapestry of high street fashion could look drastically different in the coming years.