Childrenswear Retail in Europe: Market Size, Retailer Strategies and Competitive Success—Aarkstore Enterprise
The childrenswear sector has not been immune to the impact of the recession, with EU expenditure tumbling 3.5% in 2009. However, its replacement-driven nature has kept sales comparatively resilient, outperforming other clothing categories. As a result, both value and high-end clothing retailers have expanded their childrenswear rangesn leading to intense competition in the sector.
*Key sector statistics including clothing and childrenswear expenditure, spend per child and growth from 2004 to 2009e in each of the EU27 markets.
*Analysis of emerging players and the sector’s most prominant competitors including ID Group, Mothercare, Orchestra, OVS industry and Zara Kids.
*Strategic recommendations surrounding issues such as in-store services, range diversification, multi-channel retail and global expansion.
*An assessment of the key opportunities and threats impacting the sector including socio-demographic trends and new forms of competiton.
Childrenswear is outperforming the overall clothing market despite consumers trading down. Furthermore, the sub sector is increasing its share of total EU clothing expenditure to 10.5%. Growth has been boosted by rising birthrates and increased expenditure per child.
Competition is growing amongst all the core competitor groups in the childrenswear sector. Grocers and department stores are increasing the amount of space allocated to this category while trend focused fashion multiples are tapping into the ‘mini-me’ sector with many opening stand alone childrenswear stores.
Childrenswear retailers that wish to broaden the presence of their own brand frequently do so by selling the brand at multibrand childrenswear stores or department stores. For example, Catimini operates 155 stores in eight countries, yet sells its branded clothing at 1,446 multibranded stores in 29 different countries.
Reasons to Purchase
*Make informed investment decisions by understanding the size of EU childrenswear retail markets and the nature of the competition within them.
*Understand the dynamics of the market and which categories and target segements will produce further market share gains.
*Develop innovative strategies to enhance your retail proposition in areas such as in-store services, loyalty programmes and design collaborations.
Table of Contents : Executive Summary 2 Struggling mid-market specialists are being squeezed out of the childrenswear market 2 Childrenswear in the EU has suffered a decline as consumers cut back and trade down 2 Replacement purchases have maintained the subsector’s resilience 2 Childrenswear share of the total market is rising 2 Cautious spending patterns have provided a boost for value operators 2 Intense competition at the value end has pushed childrenswear specialists upmarket 2 Polarisation has pushed the market in opposing directions 3 A broadening competitor mix has put pressure on child specialists 3 Diverging retail concepts have responded to different kinds of children and family needs 3 Specialists have implemented new initiatives to drive sales and remain competitive 3 Broadening their offer to target wider audiences is helping retailers maximise revenue 3 Developing a global network will boost revenues and broaden a brand’s reach 3 Increasing fashionability will help to improve the perception of a brand 4 Retailers are capitalising on their knowledge in the childcare arena 4 A multichannel strategy captures all sales opportunities 4 Table of Contents 5 Table of figures 6 Table of tables 7 EU Clothing Market Overview 8 The EU27 has suffered major falls in overall clothing expenditure since 2007 8 Newer member states are still lagging behind in per capita clothing expenditure 12 Specialist clothing retail sales have followed the downward trend of overall clothing spend 13 Childrenswear in the EU 17 Childrenswear expenditure has declined, but less sharply than the total clothing market 17 Necessity-driven purchasing makes childrenswear the more resilient clothing sector 17 A focus on value and more cautious spending patterns are evident across all EU markets 17 Core Childrenswear Markets 24 Childrenswear expenditure in France accounts for nearly a fifth of the EU total 24 The French childrenswear market remains large despite weak growth rates 26 Birth rates in France will continue to be higher than average 26 Key competitor mix – specialists form a very large part of France’s childrenswear market 28 Recent developments – rising competition is forcing childrenswear retailers to seek new growth avenues 32 Intense competition is forcing domestic retailers to focus across the border 32 Kiabi is consolidating its position through the acquisition of Vêti 32 ID Group moves away from clothing to differentiate its brand 33 Outlook – growing competition will result in a changing retail landscape 33 Falls in retail prices are not maintainable 33 Wholesale is a key strategy in the face of intense competition 33 Meanwhile, international players continue to expand in the market 33 Childrenswear takes a marginal share of the sluggish German clothing market 34 We forecast that the childrenswear market will stabilise in 2010 34 Key competitor mix – the German clothing market is dominated by a large number of value players 37 Recent developments – as the value end becomes more saturated, retailers are eyeing the high-end market 40 Competition at the value end heats up as Primark enters the market 40 American Apparel is looking to capitalise on the upper tier of the market 41 Mothercare is extending its reach in Germany as an all-round child specialist 41 Struggling luxury retailer Escada is re-launching its childrenswear range 42 Outlook – the market will be tested by further polarisation and declining birth rates 42 The demise of the department store is leading to increased competition from specialists on the high street 42 Mid-market and upmarket players have launched standalone childrenswear stores 42 The market is set to polarise further 42 Differentiation is key to staying afloat 42 Declining birth rates will hit babywear specialists 43 While clothing sales are suffering, childrenswear is gaining ground in the market in Italy 44 Consumers in Italy are still maintaining their spend on their children 44 Key competitor mix – mid- to high-end players continue to grow in Italy’s childrenswear market 47 Recent developments – domestic and international mid-end players are increasingly entering the market 49 Abercrombie & Fitch is targeting Italian kids 49 Benetton is marketing its childrenswear range through a dedicated pop-up shop 49 Gruppo Coin boosts its presence of OVS Kids through the acquisition of Upim 50 Outlook – income per child through falling birth rates will boost revenues for high-end players in the future 50 Childrenswear is picking up the slack of falling clothing expenditure 50 Falling birth rates will keep mid- to high-end players outperforming the market 50 Sluggish economic recovery will fuel the growth of value players 50 Childrenswear has been resilient in the face of a declining Spanish clothing sector 51 Spanish parents are continuing to spend on childrenswear clothing 51 Key competitor mix – Spain has a variety of clothing players across the price spectrum 53 Recent developments – childrenswear specialists continue to gain ground in the market 56 International chains continue to target Spain 56 Child specialist chains are riding on the sector’s resilience to continue to expand 57 Prenatal invests in larger stores to become a department store for children 57 Custo Barcelona launches a full childrenswear line 57 Bóboli’s growth has been driven by the addition of new franchises 57 Children’s clothing brand Caribú closes down as it falls victim to the crisis 58 Charanga bolsters its low-cost offer through a factory outlet concept 58 Outlook – childrenswear specialists battle for alternative growth channels 59 Pressure from large chains has pushed childrenswear specialists to differentiate 59 Domestic players continue to look abroad for growth opportunities 59 Franchising presents growth opportunities for smaller childrenswear specialists 59 The childrenswear sector in the UK is outperforming the overall clothing market 60 Childrenswear outperformed the overall clothing market for the first time in 2008 60 Key competitor mix – only two major childrenswear players exist in the UK clothing market 63 Recent developments – childrenswear continues to struggle as multiples enter the subsector 65 Childrenswear specialists have to work hard to keep up with the rise of value retailers and grocers 65 Mothercare is increasing its brand exposure through a new contract with Boots 65 Mid-market specialist Adams calls in administrators for the third time 65 Mid-market fast fashion multiple River Island is launching a childrenswear range 66 Online is emerging as a vital channel for niche high-end specialists 66 Outlook – despite increased polarisation in the market, lower prices will soon start to rise 67 Grocers will continue to aggressively expand their childrenswear ranges 67 The polarisation of the market will squeeze out mid-market players 67 Tightening sales volumes in 2010 mean that exceptionally low prices are unsustainable 67 Rising demand will help to fuel competition 67 Strategic Issues 68 Changing demographics will greatly impact growth in the childrenswear market 68 Europe’s ageing population is resulting in fewer children 68 The child population in the EU is declining 69 Smaller family sizes and motherhood later in life will boost children’s spending power 71 Rising levels of obesity mean that children are resorting to larger clothing sizes 73 Competition is heating up in the childrenswear market as other retailers move in 75 Grocers, value players, fashion multiples and online retailers offering childrenswear are on the rise 75 High-end clothing retailers are extending their childrenswear ranges 76 Trend-focused mid-market retailers are branching out i