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How three fashion retail companies and brands are responding as sales move further online

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We report on how three IRUK Top500 fashion retailers and brands are responding as fashion sales move further online. Figures from the ONS today show that a record proportion of clothing, textiles and accessories sales were sold online in May.

Simply Be and Jacamo stores could close as mobile and online sales rise

N Brown Group is looking to a retail future that now lies online – and it’s consulting on the closure of its 20 Simply Be and Jacamo stores. The retailer, whose roots lie in catalogue selling, moved online first before then experimenting with selling via stores. The aim was to raise brand awareness via a physical presence, in a move that would have a halo effect on internet sales. Now the retailer has changed strategy and is looking to close those stores. 

Today it said in a first quarter trading update that 75% of its total revenue was now from online, a figure that stands at 84% for new customers. Smartphones accounted for 57% of all online sessions, with mobile as a whole accounting for 75%. In the 13 weeks to June 2, group revenue rose by 0.4%, while online revenue grew by 3% driven by 9% growth in online revenue from its power brands – Simply Be (+9.3%), Jacamo (+2%) and JD Williams (-2%). Revenue fell from secondary brands (-9.1%), its “traditional segment” (-9.8%) and overall from products (-2.8%), while income from financial services grew by 9%.

“In line with our online strategy and given continued weak high street footfall, we have today commerced a consultation process with colleagues over the future of our small store estate,” said chief executive Angela Spindler, in a first quarter trading update today. “This action has not been taken lightly and we will do all we can to support the colleagues affected during this process. We continue at pace our journey to become a global online retailer, uniquely delivering fashion that fits. This will underpin our future growth, both in the UK and internationally.”

Simply Be is a Top50 retailer in IRUK Top500 research, while Jacamo and JD Williams are Top100 retailers. 

Zara-owner Inditex sees record sales by integrating stores and online

Inditex chairman and chief executive Pablo Isla this week hailed “the strength of the integrated store and online model, bolstered by continued innovation” as the company, which owns IRUK Top150 retailer Zara and its sister brands, this week reported a 2% rise in sales to a record €5.7bn in the first quarter of the year. Net profits of €668m were 10% ahead in the quarter, to April 30.

During the quarter the retailer also launched online sales in Australia and New Zealand, and opened new stores in 36 markets, taking its total to 7,448 stores. They included flagship stores for all brands in all key geographies. Those stores included technological innovations including interactive fitting rooms and RFID mirrors at the Massimo Dutti brand, while Zara’s use of in-store technology was exemplified by a dedicated online-in-store section in its store at Stratford, London. Zara has also moved into augmented reality, bringing the technology to 130 flagship stores through its ZaraAR initiative. Inditex says its strategy is to grow retail space, while “differentiating, optimising and upgrading its store portfolio”.

The retailer also shared €42m among 88,000 employees in a profit-sharing exercise during the quarter. Zara is an Elite retailer in IREU Top500 research and a Top150 retailer in IRUK Top research, while Massimo Dutti is a Top500 retailer in IRUK Top500 research.

Mulberry focuses on selling to Asia

Mulberry has focused on international sales in its latest financial year, opening new subsidiaries and stores across Asia and growing overseas sales by a fifth.

The Somerset-based luxury leather brand, a Top350 retailer in IRUK Top500 research, this week reported revenue of £169.7m in the year to March 31 – up by 1% on the previous year. Retail sales of £132m were 3% up on last time, although UK sales were broadly flat at £106.3m and international sales were 20% ahead at £25.7m. Pre-tax profits from its existing business grew by 36% to £11.3m during the year, but startup costs relating to new Asian subsidiaries, including in China, Taiwan, Japan and Hong Kong, meant bottom-line pre-tax profits of £6.9m were down from £7.5m last time. Today it also announced a new partnership in the Korean market.

The retailer said that digital sales grew by 14% during the year, and accounted for 17% of group revenues. That’s up from 15% a year earlier. Omnichannel service improvements included enabling customers to buy store stock online, same day delivery and click and collect, and the launch of local language websites in China, South Korea, and local currency sites in Sweden and Denmark. During the year Mulberry also worked with partners including Toplife,’s luxury digital platform in China, to sell its products. 

Chief executive Thierry Andretta said: “We have made significant progress during the year on our international strategy, creating new Mulberry subsidiaries in China, Hong Kong, Taiwan and Japan. We are also pleased to announce today the formation of a new majority-owned venture to develop the business in South Korea. Our international business is growing and following the completion of this set up phase in Asia, we will focus on omnichannel, digital partnerships and marketing investment in the region.”

By the end of the year Mulberry sold from 69 directly operated stores, including in China, Hong Kong and Taiwan, online via and through wholesale and franchise partnerships.

Image courtesy of Zara

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