S A M P L E

I n f o r m a t i o n

©©©©©

CobwebCobwebCobwebCobwebCobweb

Page 1 of 4

WOMEN'S CLOTHING RETAILERNo. 300May 2007

Introduction

This profile provides practical guidance on setting up a women'sclothing shop, supported by online sales or a mail-order catalogue.Training, start up costs and consumer legislation are considered,along with promotion, potential competitors, and sources of further information.Women's clothing retailers range from those selling second-handclothing, to high street retailers selling mainstream fashion, as well ashigh fashion outlets selling one-off designs. They may specialise invintage clothing or eveningwear, or may sell clothing for all occasionsand ages. Many also sell lingerie and hosiery, jewellery, accessoriessuch as handbags and hats, or shoes. Some also offer dress and hathire for formal occasions.The women's clothing sector is dominated by high street chains, butthere is sustained demand for independent boutiques offering tailor-made or designer clothing, appealing to affluent professionals seekinghigh quality and individuality. There are also opportunities for nichessuch as plus-size, Goth, ethnic and maternity clothing.

Are you suited to this type of business?

The impression you wish to convey should be reflected throughoutyour shop or website so customers can identify immediately whether your products are suitable for them. You will need creativity, an eyefor detail and colour, and ideally some knowledge of window designand dressing, and in-store displays.Customer service skills are essential, and you should be able to dealwith complaints and returns politely and professionally. One of your best selling points will be a friendly, helpful service, which willdistinguish you from larger competitors.A willingness to keep track of market changes throughout the year iscrucial. You should be aware of seasonality and when new stock willbe available. You should pay close attention to fashion magazines andevents like the twice-yearly London Fashion Week(www.londonfashionweek.co.uk).You need to be able to manage your stock levels according to theseason. Controlling stock ensures you have enough popular linesduring the busiest periods, but don't have too much unsold stock whentrade slackens or fashions change.If you source stock from abroad, you will need to deal with paperwork,suppliers, import regulations and deliveries. UK Fashion Exports(www.5portlandplace.org.uk) can offer advice on these issues. Youshould also be aware of tariffs associated with importing goods to theUK. See the Department for Business, Enterprise and RegulatoryReform's (BERR) website at www.berr.gov.uk/europeandtrade/importing-into-uk/import-tariffs/page11291.html for more details.If you are selling online and running an e-commerce website, you willneed to be well organised when processing and packing orders, aswell as dealing with customer queries.Some knowledge of bookkeeping and accounts will be necessary for the financial side of the business, including calculating stock levels,working out profit margins and negotiating prices.

What formal training do you need?

No formal qualifications are required to start up this type of business,but there are several courses that might prove useful.A number of bodies organise S/NVQs for beginners and those withsome experience (see www.city-and-guilds.co.uk andwww.accreditedqualifications.org.uk). The S/NVQ in Bookkeepingand Accounts takes a basic approach to business administration. TheS/NVQ in Business Start Up covers business proposals and planning.Relevant retail qualifications include:•The City and Guilds Higher Professional Diploma in RetailManagement is ideal for those running a shop, and coversconsumer behaviour and customer service, technology usedin shops and marketing.•The Retail Academy offers a Certificate in Retail Principles,which includes seven different qualifications covering visualmerchandising, security in a retail environment, servingcustomers in a retail environment, product range planning,marketing, legislation for the retail environment and monitor retail operations. See www.retailacademy.org/minisite/retailcert for further details.•The London College of Fashion offers short courses, includingStarting a Retail Fashion Business, Marketing Fashion for theSmall Business and Online Selling. Seewww.fashion.arts.ac.uk/shortcourses/LCF_shortcourses_ business_start_ups.htm for further details.If you intend to employ staff, consider courses offered by theconciliation service Acas covering issues such as employmentcontracts, terms and conditions, and employment law. Seewww.acas.org.uk/emsobs/acas_events_new.asp to view coursesin your area. Acas also offers several courses that can be studiedonline - see www.acas.org.uk/elearning to register for its e-learningfacility.If you are selling online, you may wish to undertake some IT training.Contact your local college of further education or adult educationcentre, or see www.learndirect-business.co.uk to find relevantcourses.

Who are your customers likely to be?

Clothing is one of the most highly developed of all retail sectors, andwomen's clothing accounts for the most sales within the clothingsector. The best way to attract customers as an independent is tospecialise in a niche market, or to offer additional services not availablein chains. Potential customers include:•Fashion-conscious 18-30 year olds who appreciate unusualdesigns and labels. Word-of-mouth may spread your reputationand attract new customers.•Older customers. Women aged 30 and up represent anaffluent and discerning market. Many appreciate shops withpersonal service and you should match that with high-qualityclothes attractively displayed.

Price £5.99(Including VAT)

S A M P L E

I n f o r m a t i o n

©©©©©

CobwebCobwebCobwebCobwebCobweb

Page 2 of 4

WOMEN'S CLOTHING RETAILER No. 300 May 2007

•The maternity clothing market. This is a sizeable niche, withpregnant women requiring casual, work and occasion clothing.The first-time mother is often now more mature and has moredisposable income. You could also sell nearly-new clothes or have a hire service, as women can be reluctant to spend alot on clothes that will only be worn for a short period.•Customers who don't fit into standard high street sizes. Themarket for plus-size clothing is growing. Almost one in fiveBritish women are size 18 or above, according to Mintel,which also reported that £2.3 billion was spent on plus-sizeclothing in 2005, representing 17% of the UK women's wear market.•Women seeking special occasion wear. Clothes for weddings,balls and other parties are premium items, with a slower turnover but good profit margins.•Women seeking ethnic clothing such as saris, both for everyday wear and special events. The large market for ethnic clothing is often overlooked by the multiples. Youshould decide which fashions to specialise in and be awareof import regulations.•Ecologically aware customers who are keen to sourceclothing produced by ethical suppliers. Fair Trade and evenorganically produced clothing is a growing niche market.Women are increasingly interested in where items come from,and will pay more for clothing that can prove its provenance.•Cash-rich, time-poor women keen to order clothing online.Selling clothes to women via the web is a growth market, withresearch from Nielsen/NetRatings (www.nielsen-netratings.com) suggesting that women are more likely topurchase goods online than men.

Who will you be competing against?

Your competitors will be any other retailers offering women's clothingranges, whether they are independents, small chains like Browns(www.brownsfashion.com), larger chains like Monsoon(www.monsoon.co.uk), or the likes of Marks & Spencer (www.marksandspencer.com), which has considerable buyingpower, and can react quickly to trends and purchase in bulk. Larger stores have the space and resources to offer extensive choice, andcan offer low prices.You should be aware of the 'Primark effect'. Primark(www.primark.co.uk) and other budget fashion chains like Peacocks(www.peacocks.co.uk), which have a fast turnover of cheap items,are the real growth area of the fashion world. The stigma of buyingclothes from supermarkets has also disappeared and many womennow buy clothing with their groceries.Other small retailers and boutiques in your area may representcompetition with specific brands and labels. However, many clothingshops find it beneficial to locate in clusters away from the high street.In some cases co-operation can result in greater customer numbers.The eBay site (www.ebay.co.uk) now offers goods from hundredsof niche online shops, selling new and vintage items. Spin-off siteeBay Express (www.express.ebay.co.uk), which only offers new'buy it now' options, is another source of competition.There is a growing trend to swap items of clothing, both betweenfriends at informal swapping parties, and via dedicated swappingservices. Websites like www.clothes2swap.com provide a forum for people who wish to exchange unwanted clothing online.Swapping and loaning is also popular among pregnant friends.Antenatal groups often run informal maternity clothing swaps - seewww.nct.org.uk for details. Online retailers such as BloomingMarvellous (www.bloomingmarvellous.co.uk) also command a highproportion of the maternity clothing market.If you are running an e-commerce site you will face rivals selling similar clothing online. Overseas retailers also target UK online shoppers.You can find out about specific competitors locally via the YellowPages (www.yell.com) or Thomson directories(www.thomsonlocal.com).

What are the key issues affecting the market?

Large retailers generally believe the traditional seasonal fashion cyclehas broken down over recent years, as purchasing managers andmanufacturers respond more quickly to changing demand. This isdemonstrated by the ability of Primark and ASDA's George label tochange ranges every few weeks.The fashion sector has come under the media spotlight for notrecognising that the size of the models it uses does not reflect modernBritish women and their body shapes. Retailer ASDA faced heavycriticism from health professionals after it announced it would stocksize 0/UK size 4 clothing in a mainstream collection.Globalisation and low costs in developing countries have driven themanufacture of much of the clothing formerly made in the UK tooverseas suppliers. China is now one of the key exporters of clothesto the UK, along with Hong Kong, India, Bangladesh, Turkey, Greeceand Portugal.Branding and marketing are vital as fashion businesses try to predictand influence consumer demand. Branding is also used to encouragecustomer loyalty, and large retailers use this to their advantage.

How can you promote this enterprise?

Location is crucial in the success of any traditional high street shop.You should consider the volume of passing trade, known as the'pavement count', as well as the location of nearby competitors andlarge stores. However, it may be worthwhile setting up near relatedshops appealing to your clientele.You should also consider your customers' requirements. If you areselling maternity clothing, for example, customers should not have towalk far from their car or the nearest public transport interchange.Some promotional methods might include the following:•The appearance of your shop will be important as fashion isall about image. Think about how you display your goods,whether you play music, how to arrange your lighting, andhow the décor will affect the atmosphere. You should changeyour window display frequently to draw in passing trade.•Seasonal sales are a good way of getting rid of old stock.Prominently displayed posters attract bargain hunters, whomay become regular customers.•Fashion shows of new season stock or for charity are goodpromotional tools. You should send press releases to your local newspaper about such events. See www.press-release-writing.com for tips on writing press releases.•A series of regular advertisements in local newspapers or magazines may also produce good results. You shouldresearch readership and circulation before choosing themost suitable forum. See www.mediauk.com for potentialoutlets.•Consider selling by catalogue in addition to a website. Aprinted catalogue demands investment in a permanent stock,but may appeal to older customers or those in rural areas.•If you are selling online, you should update your virtual 'shopfront' frequently so visitors are encouraged to return to your website to check what's new. Also consider simple ways tokeep your site looking fresh, such as blogs and news items.•Generic advertising in Yellow Pages and Thomson Directoriesis also useful (see www.yelldirect.com or www.thomsonlocal.com for details about advertising in their online equivalents).

S A M P L E

I n f o r m a t i o n

©©©©©

CobwebCobwebCobwebCobwebCobweb

Page 3 of 4

WOMEN'S CLOTHING RETAILER No. 300 May 2007

What start up costs can you expect?

Your principal start up cost will be your premises, the cost of whichwill depend on their size and location. A number of factors will affectthe cost of your rent, including passing trade, proximity to parking or public transport, other shops nearby attracting potential customers,and the level of business rates.You will need storage space, display rails, shelves, chairs, mirrorsand changing facilities. Many of these can be bought second-hand,but be cautious of cheap-looking fixtures as this will affect the imageyou are trying to project.You will need to buy stock outright in many cases, as suppliers mayrefuse to give credit to a new business.You will need a till - from £150 for a basic standalone machine to £2,000for an electronic point of sale (EPOS) system and software, whichrecords every item that is sold and calculates what stock is left. Youcan hire a chip and PIN machine from your bank for about £15 per month.If you plan to sell goods online, you will need to set up an e-commercewebsite. Basic online shops, hosted by third parties or by your InternetService Provider (ISP), can be very economical. Costs to build the sitewill vary, but you can expect to pay a professional web designer atleast £150 for the initial design and will then need to take into accountsupport charges and maintenance.The price of producing a mail order catalogue will vary depending onthe size, the paper stock you use, whether you take a DIY approachor employ a commercial printer to publish it. Contact local printers for quotes or search the web. Firms offering this service includewww.trade-print.com/brochures.html, www.printprice.net andwww.printhouse.co.uk.A computer (from £400), printer and accountancy software to dealwith business administration will also be required.You may consider investing in CCTV and a security tagging system.Adequate insurance is also essential; you need public liability cover,protection for your building and its contents, and if you hire staff, youneed employers' liability insurance.

What are the legal issues to consider?

This section is intended as a starting point only. You should seekprofessional advice before making any business decisions that mayhave legal implications.A range of regulations regulate the sale of clothing, including:•The Textile Products (Indications of Fibre Content) Regulations1986, as amended in 1994, govern the labelling of productscontaining textile fibres. It is an offence to supply textileproducts which do not comply with this legislation.•Any footwear sold in England, Wales, and Northern Irelandmust comply with the Footwear (Indication of Composition)Labelling Regulations 1995.You will also be subject to the following:•The Trade Descriptions Act 1968 prohibits a business fromadvertising a product it cannot supply.•The Supply of Goods and Services Act 1982 ensures goodsand services are priced correctly.•The Consumer Protection Act 1987 prohibits the supply of goods if they are unsafe. In the case of imported products,or those for which the supplier is unable to identify a source,the importer or supplier is liable for any damages.•The General Product Safety Regulations 2005 require productsto comply with the health and safety requirements of UK law.•The Price Marking Order 2004 places a duty on retailers toensure prices are unambiguous, identifiable and legible.•The Sunday Trading Act 1994 restricts shops with a floor areaover 280 sq m or 3,000 sq ft to opening for six continuoushours only on Sundays, between 10am and 6pm. In Scotland,see the Sunday Working (Scotland) Act 2003.•Under the terms of the Consumer Transactions (Restrictionson Statements) Order 1976, misleading notices such as 'Norefunds' are prohibited.See www.tradingstandards.gov.uk for further details of relevanttrading legislation.Products sold online are covered by various regulations, including theConsumer Protection (Distance Selling) Regulations 2000 and theElectronic Commerce (EC Directive) Regulations 2002. Consumersmust receive clear information about the goods offered for sale, andmust receive confirmation of their purchases. Information, such asbusiness particulars, returns policies and pricing information, must bespecified on your website. See the Trading Standards leaflet atwww.tradingstandards.gov.uk/cgi-bin/bglitem.cgi?file=BADV065-1011.txt for details.The Data Protection Act 1998 is relevant if you plan to keep customer details on a database for a mailing list or newsletter. Seewww.ico.gov.uk for details.You should be aware of the Disability Discrimination Act 1995 whichgives disabled individuals rights of access when purchasing goodsand services. Businesses have to make reasonable adjustments totheir premises to minimise barriers to access by customers withdisabilities. See www.direct.gov.uk/en/DisabledPeople/index.htm,www.equalityhumanrights.com/en/forbusinessesandorganisation/serviceproviders and www.equalityhumanrights.com/en/forbusinessesandorganisation/employers for further guidance.If you are employing staff, you must ensure they are paid the NationalMinimum Wage (NMW). See www.berr.gov.uk/employment/pay/national-minimum-wage for full details.Finally, you must be aware of health and safety legislation, includingthe:•Health and Safety at Work etc. Act 1974.•Management of Health and Safety at Work Regulations 1999.See www.hse.gov.uk for more information.Further information on relevant legislation is available from the:•Office of Public Sector Information - www.opsi.gov.uk.•Scottish Executive - www.scotland.gov.uk.•Welsh Assembly Government - www.wales.gov.uk.•Northern Ireland Executive - www.northernireland.gov.uk.

Further information

For practical start up and small business tips, ideas, know-how andnews, go to:Website: www.enterprisequest.comTo access hundreds of practical factsheets, market reports and smallbusiness guides, go to:Website: www.scavenger.netUK Market Synopsis 41Clothing and FashionBOP 3Fashion Designer BOP 106Jewellery Retailer BOP 107Dressmaker