Yet another fashion retailer is set to join the fashion fray. But is there enough room for new entrants such as FG4 and Pep & Co?

FG4

Fashion legend George Davies this week revealed his plans to launch a new fashion proposition in the UK market – FG4 – which launches online this month with plans to hit market towns in the coming year.

The fashion entrepreneur is held in high regard, having helped to create Next, launched George at Asda, and turned around Marks & Spencers’ clothing business thanks to Per Una. But he’s also had failures, including Give, which launched in the UK in 2009 targeting the more affluent 30+ year old female, but didn’t see out the recession.

The industry will be watching closely to see how Davies’ new venture progresses, but is now the right time to step into the ring?

It’s not just FG4 which is hoping to make it big in UK fashion this year, soon shoppers will see Pep & Co’s new branding in market towns around the UK, as the retailer plans a 50-store launch this summer.

Backed by former Asda boss Andy Bond and South African retail tycoon Christo Wiese, Pep & Co intends to carve out its niche as a discount channel for fashion and families, selling womenswear, kidswear and also homeware.

Softly, softly

But while Pep & Co is going in big with ambitions to trade in 500 UK towns in the next five to 10 years, FG4 is going for the more “softly, softly” approach, according to group research director of global retail at Conlumino, Maureen Hinton.

FG4’s proposition is to launch through online and direct-selling channels this month before aiming to open physical stores within the next year.

As part of its direct-selling ‘party planning’ model, FG4 is planning a series of fashion show fundraising events in schools that will see consumers pay £5 entry in order to browse clothing with a 20% discount. The proceeds from the entry fees will go to the school.

Hinton points out that Davies has a very strong background in selling kidswear that has always been core to the George at Asda and Next range. “And that seems to be a very large element of the offer he’s promoting, the fact he’s going in through schools, kids and their mothers,” she says.

“It strikes me there’s a bit less risk in what he’s doing, rather than Pep & Co, FG4 is softly, softly testing the market before it commits to stores.”

She says the combination of online and direct selling is fairly risk free and allows him to “really test the water.” Direct selling is also not a new venture for Davies, who, early on in his career, worked for Pippa Dee which traded similarly to Tupperware, Avon and Body Shop, which was popular towards the end of the last century.

“Davies says himself womenswear is a tough market in the UK,” Hinton adds. “But he’s aiming at young mums through direct selling, social media and online, and a lot of those mums would appreciate some kind of social activity through fundraising for schools in the local community.”

Jessica Fioriti, associate analyst at Verdict, agrees that the school activity will give the new brand a buzz before it launches on the high street. “But I don’t know whether it will drive footfall like they expect, these fashion shows are quite gimmicky and I’m not sure whether us as consumers would see past that.”

The grocers’ competitive edge

Fioriti goes on to say both FG4 and Pep & Co are going to struggle to compete with the grocers with their target offering. “As consumers and parents, we tend to go to the grocers in the UK and it’s hard to compete with convenience, not just on price, when buying our kidswear,” says Fioriti.

Verdict statistics claim that in 2014, grocers had a 23.4% share of all kidswear spend, while specialists like Mothercare only held 5.4%. These brands will also have to compete with Next, which held a 10.1% share of kidswear, and Primark with 9.7%.

But on looking at FG4’s website, Fioriti thinks its womenswear range could be quite appealing. “It looks quite Next-centric, and quite occasion-led and I was surprised it wasn’t mumsy, it’s quite young fashion which also reminded me of George at Asda. But it will be hard to turn out heads if its next to a Primark on the high street,” she says.

“Primark and Matalan are low-cost brands, but they’re investing in value – wider-fit footwear, leather shoes, great embellishment. So coming in with basics at low prices isn’t really going to match up.”

So the two new entries will have to tick the boxes of value, price and convenience to stand a chance in the UK fashion arena.

“It will be tough for both Pep & Co and FG4, as there are a lot of players we’re already comfortable with who are improving constantly with range and services. Each will have quite a small share to fight for,” she added.

Let battle commence.