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EU Retail Chains

Dhyana van der Pols

EU Retail chains

EU Retail distribution

We have talked about consumption in EU outerwear


Population per country
Formal-basic-sports spending
Segmentation: demographic, lifestyle, age
Dependability on accounts, distribution
Gross margin
Distribution structure
Needed Competences CMT/FOB/private label

EU Retail stores

I= Identify ( ICP process)


Some of the EU retail stores per country
UK

Holland

River Island, Topman, Burton,


Next, Topshop, Miss
Selfridges,New Look, Evans, JJB
Sports, Marks &Spencer

C&A, Vendex, Duthler, We


group,Promiss, Coltex Group, Steps,
Didi, Vet, Score, Perry

France
Kiabi, Auchan, Groupe Andre, Armand Thierry,
promod, Camaieu, Caroll, Xanaka, HAV, Etam,
Brice, Pimkie, Orsay
Spain
Zara, INditex, Massimo Duti,
Mango,
Stradivarius,Springfield,Induyco

Germany
C&A, P&C, K+L Ruppert,Takko, NKD, Adler,Jeans
Fritz,Bonita, New Yorker, Adessa
Italy
Pinko,Brums, Terranova,
Bennetton, Chicco
Austria
Schops, NKD,Adessa,
Takko, Vogele,Orsay

Belgium

Greece

JBC, E-5 Mode, Promo fashion,Cassis,


Etam, Pecotex,Primosports

Inditex,
Marks&Spencer,Spider,
Varda, Glou,

456,8 MLN

CONSUMERS

Market Potential & Size

Market Potential & Size: Facts & Figures


Value sales of outerwear in major EU countries in %
Womens outerwear

Mens outerwear

Childrens outerwear

Germany

57,0

29,7

13,3

UK

54,0

31,0

15,0

Italy

52,0

33,7

14,3

France

51,3

30,2

18,5

Spain

52,1

33,1

14,8

Netherlands

52,2

33,5

14,0

Belgium

55,2

30,9

13,9

Market Potential & Size: Fact & Figures


Imports

Developments in imports of outerwear varied strongly per EU country


during the period 2002-2004
China remained the leading outerwear supplier to the EU, followed by
Turkey, Germany, Italy and Bangladesh. In 2000, 9% of EU imports came
from China and in 2004 almost 13%.

Market Potential & Size


Market size
The EU market for outerwear amounted to 231 billion in 2005,
which was 84% of total clothing consumption. Consumption of
outerwear grew 4.5% during the period 2002-2005, of which 1.3%
in 2004-2005.

Germany is still the most important country in clothing consumption


in the EU, despite the continuing decrease. The difference between
Germany and United Kingdom has become smaller again. Five
countries (Germany, UK, Italy, France and Spain) account for 75%
of EU outerwear consumption.

Market Potential & Size RETAIL


Most EU countries have mainstream retail operations divided over:
Independent retailers
Clothing multiples: more labels/ brands
Variety stores
Department stores
Sports shops
Retail chain groups: own labels. Private label also brands
Home shopping companies: direct mail, internet, catalogue
Super-Hyper markets

Market Potential & Size RETAIL


EU demographic trends
Major EU countries birth rate figures are rather stable or drop; 1,21,8 kids per family
EU population is aging; the category below 20 years decrease, the
category over 40 years increase substantially
In 2010 a large part of EU population will be over 65 years old
Demographic development: increase of single households- one or
two persons. No family obligations
Stimulating consumption

EU retail stores per country: UK


Next PLC: 380 outlets
Monsoon: 300 outlets
Arcadia Group: Topman, Burton,
Dorothy Perkins, Evans, Wallis,
Topshop, Miss Selfridge: 2560
outlets
Etam chain: 213 outlets
JJB sports: 430 outlets
Marks & Spencer: 400 outlets
M&S: 150 outlets

EU retail stores per country: UK


The retail clothing trade structure of the UK is the most dense in the
world, with the Arcadia group as biggest player.
Other players are Marks& Spencer, Etam, M&S, Littlewoods, Next
Group.
Trade channels are dominated by importing wholesalers, they have
taken over the function of smaller retailers.

EU retail stores per country: UK


Opportunities/ potential trade channels for developing countries
exporters are:
Importing wholesalers
Importing manufacturers
Retail chain groups
Terms of payment& delivery in UK mostly are FOB( free on board)
or CIF ( Cost insurance freight) at payment on LC of 60 days

EU retail stores per country: France


Kiabi: 135 outlets
Kookai
HAV: 350 outlets Groupe Vivarte
Groupe Andre: 550 outelets
Armand Thiery: 250
Promod: 481
Etam: 206
Okaidi: 250
Decathlon
Homeshopping: La Redoute/ Trois Suisses/ Quelle
Hyper markets: Carrefour(7030 stores) Auchan(976)

EU retail stores per country: France


French markets is less concentrated then UK: more players and
more clothing multiples; more work- variety
Import prices under pressure due to price awareness and
manufacturing history: Morocco, Tunisia
Knitted market highly developed: babies, ladies dresses, T shirts
Casual market less developed; formal & sports market
Importing trading companies are main focus for exporters ,
importing manufacturers

Fairs: Premiere Vision, Texworld, Interselection


Terms of Payment & Delivery: FOB/ CIF; 60-90 days net

EU retail stores per country: Spain


Zara: Inditex Group 263 outlets
Pull & Bear: 276 outlets
Massimo Duti: 210
Bershka: 212
Mango: 228
Amitie: Induyco Group: 94
Springfield: 206
El Corte Ingles
Supercor
Supermercados
INtersport: 330
Sport 2000: 410

EU retail stores per country: Spain


Historically market dominated by small family owned business,
controlled 2/3 of clothing sales.
Changed due to development large shopping centers.
Vertically integrated groups controlling both production and
distribution - 4 integrated distribution groups: Inditex, Cortefiel,
Punto Group, Induyco
Specialized retailers dominate the retail chain clothing sector
Grow of clothing multiples and franchise concepts
Most retail chains expanded abroad

EU retail stores per country: Spain


Market is intensively competitive
Awareness high due to history of combination production/ distribution
Trading partners can be wholesalers, importing manufacturers,
clothing multiples, non specialized chains
Fairs: SIMM , Bread & Butter
Terms of delivery FOB or CIF at 60 days

EU retail stores per country: Belgium


JBC: 210
Damart: 55
Primo sports: 42
E 5 mode: 78
Promo Fashion: 44
We : 120 (dutch)
Cassis:45
Pecotex: 35
Delhaize: 43 ( 728 EU)
Colruyt: 170
Zeeman
Wibra
Hema

EU retail stores per country: Belgium


9200 clothing shops
Specialized retailers account for 70% clothing sales
Independent retailers 30%
Specialized chain groups; a lot form surrounding EU countries like: WE
group, Mango, Zara, Hema, Etam,
Belgium people are price- quality conscious
Less brand conscious over the years
More interest in private labels
Smart casuals wear is popular, jeans, suits and combinations
Hype of casual and leisure over the top
Baby and children's wear susceptible to fashion adult trends
Big outerwear consumption form China, Cambodia, Bangladesh,
Mauritius, Romania

EU retail stores per country: Belgium


Trade partners can best be found in retailers that import themselves:
JBC, Pecotex
Important Fairs: Brussel Fashion Fair, Kids Fashion/ Mode Enfantine
Wholesalers/ importers and agents
Belgium is smallest retail market in EU: however on sending amongst
the highest
Foreign groups dominated retail structure: Zara, Mango, Hema,
Zeeman,
Terms of delivery and payment FOB, CNF 60-90 days
CAD- open account- DLP

EU retail stores per country: Holland

C&A: 108
Duthler: 35
WE Men/ Women: 160
Shoeby Fashion: 100
Cool Cat: 77
The Sting
Didi: 101
Mexx
M&S Mode: 134 Vendex
Promiss: 59
Steps: 139
Vet: 45
Score: 101
Aktie Sport: 117
Bijenkorf, Hema, V&D
Maxeda

EU retail stores per country: Holland


Important buying groups/ brands are WE Fashion Groups, Secon
group, Coltex group: Didi, SPS,VET, Score Group, Vendex/ KBB
Discounters like Hans Textiel, Zeeman, Wibra, Scapino
Dutch market is casual, sports oriented at mid level pricing
Very fashionable
Mainly organized through central buying organizations ( 45%)
Euretco buying organization
Many Dutch retail operation also set abroad
About 3000 wholesalers of which 900 of considerable importance
active in imports: FTGB, www.nvg.nl or www.nvkt.nl

EU retail stores per country: Holland


Many multiple chains
Specialists have little competition
Wholesalers/ importers selling to retailers
Retailers that import themselves
Big price differences over various distribution types
Fairs: Amsterdam Fashion Week
NO kidding kids fair
Terms of delivery and payment: CNF, CAD, DAP, LC at sight or 30
days

EU retail stores per country: Germany


C&A: 247
P&C: 105
Esprit:800
Adessa: 450
Pimkie/ Orsay: 500
New Yorker: 360
Kaufhoff
Vogele: 300
Takko: 748
Ernstings family: 1100
Kik: 1900
Aldi/ Lidl
NKD: 850
Ulla Popken: 300
Bonita: 548
Karstadt

EU retail stores per country: Germany


Concentrated market in comparison to Holland fi.; 20 companies
dominate 50% of the market
A lot of foreign groups
40% of independent retailer part of buying organization: Katag,
Unitex,KMT
2nd ranked after Italy on imports
52% of outerwear bought from developing countries
China main supplier to Germany followed by Pakistan, India,
Bangladesh, Turkey
Import structure by buying groups and importing manufacturers

EU retail stores per country: Germany


Trade partners likely to be importing wholesalers of manufacturers,
retail chain groups direct are best options
High demanding customers with strong negotiation skills, business
ethics and accuracy of main importance
Fairs: CPD, Interjeans
Fixed mark ups and calculating standards
Terms of delivery and payment vary a lot; FOB, DDP, LC 90 days

EU retail stores per country: Italy


Benetton/ Sisley: 2200
Oviesse: gruppo Coin: 255
Pinko:300
Original Marines:400
Terranova: 407
Stefanel:400
Chicco:378
Brums:228
Giacomelli Sports:75
Burani Group

EU retail stores per country: Italy


Major group in Italy is Gruppo Coin; has many foreign buying houses
Terranova and Brums group are major players a well as Stefanel and
Gruppo Artsana
Italian clothing market is highly fragmented
Small independent players still play a big role; 68% of spending on
clothing through specialist channel
South Italy less developed; independents strong presence
Specialist account for 2/3 of total clothing sales
Wholesalers dominate 50-60% of purchases; importers and agents will
ask for exclusivity for Italy as a whole
Domestic manufacturers
Retailers import themselves as well

EU retail stores per country: Italy


Fairs: Pitti Bimbo/ Uomo
Milano fashion week
Pitti Filati
Selling is best through wholesalers importers as distributors
High demanding customers in terms of quality and delivery terms,
small series at high speed
Fashion collections and difficult items in trimmings/ accessories
Terms of delivery and payment: Rapporti bacari, CAD, open account

EU retail stores per country: Denmark


Vero Moda: Bestseller group: 214
Jack & Jones: 800
Only: 1200
IC Companys
Cottonfield
Part Two
Jackpot
InWear/ Matinique
Mr.:110
Dress Partners: 84
Barntex: 55 kis
Eksperto: 120
Noa Noa

EU retail stores per country: Denmark


Increasing internationalization: Danish clothing companies expand
their activities worldwide; all products are highly available at EU
markets
High degree of integration in the value chain: several producers
opened their own chains: IC Companys, Brandtex,
Increasing concentration: IC companys, Bestseller Group
Focus on causal and leisure wear
Danish fashion designers take a big role
Importers from China,Turkey, Sweden and EU countries Italy, Germany

EU retail stores per country: Denmark


Outerwear products should be well finished, pricely according to
importers/ buyer requirements
ILO standards under discussion continuously
CSR
Production capacity, keen pricing and fast delivery is key
Trading by contacting groups directly or through importers

EU retail stores per country: Sweden


Peak Performance
Melka
Oscar Jacobson
H&M: 140
KappAhl: 125
Carlings: 54
JC: 207
RNB retail and Brands: 104
INdiska: 72
Gina Tricot: 60
Varner gruppen:400

EU retail stores per country: Sweden


Leading supplier to Sweden has former been Denmark, now passed by
China
Other important suppliers are Turkey, Bangladesh, India, Pakistan,
Indonesia
54% of imports came from EU and 39% from developing countries
Experts forecast a growth of 11% in clothing expenditure in 2005-2007
Manufacturing companies strategies include further intensification of
outsourcing
Sweden customers are both demanding and aware!!!!!!

EU retail stores per country: Sweden


Knowledge of materials, care and the environment impact as well as
social requirements are extremely good
Sweden is in the forefront of debates concerning environmental and
social aspects on clothing products
Also see the code of conduct H&M and the corporate report on CSR in
production
Intending to export to Sweden means full compliance!!!!
Sweden is world most stringent in requirements regarding care and
finish of garments
Sweden climate changes a lot and people spend a lot of time outdoors;
sports and leisure wear, active and comfortable sports wear are f
high importance
Quality sports clothes

Segmentation:
Type of product, lifestyle

Formal
Casual
Leisure
Active Sports

Casual

Leisure

Sports

EU Retail trends
High demanding fragmented market with different focus points
Importing wholesalers and manufacturing importers are important
Import prices under pressure
Great knowledge on outsourcing abroad
Fast changing demand a significant factor
Higher dynamics in clothing market in terms of quicker changing
consumer preferences and more seasons per year
General tendency to demand shorter delivery terms and smaller
volumes of series and orders
Opportunity if you can respond, a threat if you cannot
Fast deciders once convinced: be aware!!!!!!!!!!!!!!

EU Retail trends
High standards on product safety, consumer safety
High standards on environmental issues and social aspects
ILO compliance/ access requirements
Small series, fast track deliveries
Up to 8 seasons per year
OTB budgets and in season planning's
Division in causal, sports, formal, leisure depending on country and
history
Aging population
High awareness of international sourcing potential

EU Retail trends
The focus on casual and leisurewear will be continued for the coming
years
Trend: there is a tendency to use more natural fibres, mainly cotton
and blends with cotton
Caused by economic developments, many consumers on lower
incomes will continue to seek low priced clothes.
Exporters in developing countries will be faced with demands for high
quality and environmentally friendly products

EU Trade Structure Model:


Distribution channels
Exporting manufacturers
Importing Wholesalers

Importing Manufacturers

Importing Retailers
Department
Stores

Clothing
multiples

Home
Shopping
companies

Selling
and/or
buying
houses

Non importing retailers

Other
retailers

Agents

Distribution structure:
Direct- indirect
In direct sales no third parties are involved
The exporting company is in full control of entering the target markets
Methods:
buyer
Own sales force- person/ representativemanufacturer
Sales office in target country
Foreign sales office
Fair participation

manufacturer

Distribution structure:
Direct- indirect

buyer

Asia Invest: Buyer seller mission:


Direct customer contact: importing manufacturers, retail chain groups,
wholesalers- Modint- consultants
Showroom presentations on tree locations in Europe

Where are you placed?


Which transition can be made?
Most common choices in trading partners

Possible Trading
partner
Exporting
company

Manufacturer

Import
trading
company

Retail
organisation

Agent

CMT producer

FOB producer

Private label producer

Own design producer

Needed Competences
CMT producer

FOB producer

Private label
producer

Own brand producer

manufacturing

high

high

high

high

materials

low

medium

high

high

logistics

low

medium

medium

high

design

low

low

medium

high

marketing/sales

low

low

low

high

financing

low

medium

medium

high

capabilities

low

medium

medium

high

Trade Channels: mark up


Own agent: salesperson: base salary+ bonus on sales- 10-15 %
Independent agent: 5-10%
Importing manufacturer: 1,4-1,7 x
Importing wholesaler:1,7x
Wholesaler: mark up 3-5 x
Importing retailers: maximum price elasticity: depends on positioning in store:
2-5 x

Retail trade:
Volumes and order sequence in EU markets
Discounters: 3000- 5000 pcs per style. Branches: + 150
Private Labels: 800-1500 pieces per style; Branches: 50-100
Retail chain group: 1000 pieces per style, Branches: +50
Retail fashion groups: multiples: 1000-3000 per style, Branches: + 200
Brands; best performing styles: 2000 pcs; selling in seasons

Retail trade:
Volumes and order sequence in EU markets
Most private labels and retailers have at least 4 buying periods a year
Retail chain groups need constant merchandise flow; one concept
Multiple chain groups buy mostly 2-3 seasons and are good NOS
potential

Distribution channel assessment : Distribution Split


How is your current sales organized?

agents
importers
retail chain
groups direct
domestic
importing
manufacturers
importing
wholesalers

Assignment
What will be your first new distribution steps?