The UK designer clothing market grew by 2.5% in 2007, to reach a total of £2 billion. Womenswear was the star performer at 3.2% growth, driven especially by strong sales of top-end ranges where consumers look for differentiation, newness, quality and exclusivity. Menswear was solid, whilst children’s designerwear is declining.

The designer market is not insulated from the economic downturn: some companies admit weaker sales growth in 2008 H1, and aggressive markdowns in the June sales showed there was a lot of stock to be cleared. There is a ‘material change in sentiment’ and while top-end is still strong, many feel this is not the time for ostentation. Creating the luxury experience in-store is crucial, and new trends see more stores offering more product areas and services to attract customers and keep them in longer.

Counterfeiting and eBay have been much in the news. While it affects accessories and perfume, more than clothing, the successful legal action by LVMH may result in more clamping down.

E-commerce is in its infancy in the luxury/designer market, and the main challenge for brands is in recreating the luxury experience and service into the online environment.