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Clothing Retailing - Germany - October 2018

OVERVIEW
What you need to know
Areas covered in this report
EXECUTIVE SUMMARY
The market
Consumer spending
Figure 1: Germany: Consumer spending on clothing and footwear (incl. VAT), 2013-18
Sector size and forecast
Figure 2: Germany: Specialist clothing retailers’ sales growth, 2013-18
Inflation
Channels of distribution
Figure 3: Germany: estimated distribution of spending on clothing and footwear, 2017
Companies and brands
Leading specialists
Figure 4: Germany: Annual sales growth of the leading specialist clothing retailers, 2017
Market shares
Figure 5: Germany: Leading clothing retailers, sales as % of all spending on clothing and footwear, 2015-17
Online
Figure 6: Germany: Online sales of clothing, 2014-17
The consumer
Where they shop for clothes
Figure 7: Germany: Channels used for buying clothes in the last 12 months, July 2018
Figure 8: Germany: Retailers used for buying clothes in the last 12 months, July 2018
Figure 9: Germany: Non-specialists stores used for buying clothes, July 2018
Attitudes to shopping for clothes
Figure 10: Germany: Attitudes to shopping for clothes, July 2018
What we think
ISSUES AND INSIGHTS
Is the shift to online slowing?
The facts
The implications
Tackling environmental concerns to appeal to older shoppers
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Market for clothing grows 6.6%
Clothing specialists grow sales 8.2% in 2017
Inflation hits 1.7% in 2017
Specialists dominate the clothing sector
CONSUMER SPENDING
Figure 11: Germany: Consumer spending on clothing and footwear (incl. VAT), 2014-18
SECTOR SIZE AND FORECAST
Strong growth at the specialists in 2017
Figure 12: Germany: Specialist clothing retailers, sales (excl. VAT), 2014-18
Figure 13: Germany: Specialist clothing retailers, forecast sales (excl VAT), 2018-23
INFLATION
Inflation hits highest point in five years
Figure 14: Germany: Harmonised index of consumer prices, annual % change, 2013-17
Figure 15: Germany: Harmonised index of consumer prices, annual % change, Jan  2017–Aug 2018
CHANNELS OF DISTRIBUTION
Specialists continue to dominate sales
Figure 16: Germany: estimated distribution of spending on clothing and footwear, 2017
COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
A mixed year for specialists
Number of outlets declines
H&M, the leading specialist
Online share of clothing spending stalls
LEADING PLAYERS
2017 a mixed year for clothing specialists
Esprit’s sales slide continues
C&A brings in Alain Caparros
Zalando leads growth and dips its toe in the physical world
Figure 17: Zalando outlet, Cologne
Charles Vögele brand disappears from Germany
Figure 18: Germany: Leading specialist clothing retailers, sales (excl. VAT), 2015-17
Figure 19: Germany: Leading specialist clothing retailers, outlets, 2015-17
Sales per outlet
Figure 20: Germany: Leading clothing specialists, sales per outlet, 2015-17
MARKET SHARES
Figure 21: Germany: Leading specialist clothing retailers’ sales as % of all spending on clothing and footwear, 2015-17
ONLINE
Online activity
Shopping for clothing online
Figure 22: Germany: Online purchasing, 2008-17
Online share of clothing spending stalls
62% shop online
Figure 23: Germany: Channels used for buying clothes, July 2018
Leading online/catalogue sellers
Figure 24: Germany: Where online/catalogue buyers shopped, July 2018
H&M the most searched on Google
Figure 25: Germany: Search interest on Google, last 12 months, September 2017-August 2018
Otto Group the largest online retailer of clothing
31% are members of Amazon Prime
Zalando leads the specialists
Figure 26: Germany: Estimated online sales of clothing by major retailers, 2015-17
THE CONSUMER – WHAT YOU NEED TO KNOW
62% shopped online for clothing
C&A the most popular specialist
Amazon the dominant non-specialist
Environmental concerns influence choice of retailer
Young people made to feel self-conscious by fashion campaigns
WHERE THEY SHOP FOR CLOTHES
Two-thirds have shopped online for clothing
Figure 27: Germany: Channels used for buying clothes in the last 12 months, July 2018
Online buying reaches across the age groups
Figure 28: Germany: Channels used for buying clothes in the last 12 months, by age group, July 2018
C&A leads the pack
Online specialists becoming significant specialists
Figure 29: Germany: Retailers used for buying clothing in the last 12 months, July 2018
Customer profiles offer few surprises
Figure 30: Germany: Where they shop for clothing, by average age and household income, July 2018
Amazon is the dominant non-specialist
Troubles at the department stores
Supermarkets account for a small share of purchases
Figure 31: Germany: Non-specialist stores used to shop for clothing, July 2018
Store-based specialists continue to dominate the market
Figure 32: Germany: Stores used to shop for clothing, combined nets, July 2018
ATTITUDES TO SHOPPING FOR CLOTHES
Shoppers driven by environmental concerns
Figure 33: Germany: Selected attitudes to shopping for clothes, July 2018
A lack of loyalty
Figure 34: Germany: Selected attitudes to shopping for clothes, July 2018
Research and inspiration
Figure 35: Germany: Selected attitudes to shopping for clothes, July 2018
Over a third of 16-24 year olds made to feel self-conscious
Figure 36: Germany: “Fashion campaigns make me feel self-conscious about the way I look”, by age group, July 2018
Attitudes by specialist retailer used
Figure 37: Germany: Attitudes to shopping for clothes, by where they shopped in the last 12 months: specialists, July 2018
Attitudes by non-specialist used
Figure 38: Germany: Attitudes to shopping for clothes, by where they shopped in the last 12 months: non-specialists, July 2018
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Data sources
C&A
What we think
Playing the sustainability card
Digital presents best opportunity for growth
Store overhauls show potential
Company background
Company performance
Figure 39: C&A: Group financial performance, 2013/14-2017/18
Figure 40: C&A: Outlet data, 2013/14-2017/18
Retail offering
ESPRIT
What we think
Apparent failure of turnaround plan brings future of group into question
Downsizing process needs to continue but product and brand identity must improve
Online still not firing on all cylinders but product to blame?
Company background
Company performance
Figure 41: Esprit: Group financial performance, 2013/14-2017/18
Figure 42: Esprit: Outlet* data, 2013/14-2017/18
Retail offering
H&M HENNES & MAURITZ
What we think
A new fascia joins the stable
Technology enhancing the customer experience
A first in pet streetwear
Localisation
Making fashion circular
COS expansion into China
Company background
Company performance
Figure 43: H&M Hennes & Mauritz: group financial performance, 2012/13-2016/17
Figure 44: H&M Hennes & Mauritz: outlet data, 2012/13-2016/17
Retail offering
GRUPO INDITEX
What we think
Online
Where next
Company background
Company performance
Figure 45: Grupo Inditex, sales and outlets by format, 2017
Figure 46: Grupo Inditex, performance by brand, 2016-17
Figure 47: Grupo Inditex: group financial performance, 2013/14-2017/18
Figure 48: Grupo Inditex: outlet data, 2013/14-2017/18
Retail offering
KIK
What we think
KiK WhatsApp
Advance of KiK17 store concept
Halts US expansion plans to focus on Europe
Bolstering multichannel proposition
Corporate social responsibility commitment
Company background
Company performance
Figure 49: KiK: Group sales performance, 2013-17
Figure 50: KiK: Outlet data, 2013-17
Retail offering
PRIMARK
What we think
Europe to remain focus of expansion
Can Primark continue without an e-commerce presence?
Company background
Company performance
Figure 51: Primark/Penneys: group financial performance, 2013/14-2017/18
Figure 52: Primark/Penneys: outlet data, 2013/14-2017/18
Retail offering
TJX INTERNATIONAL (TK MAXX EUROPE)
What we think
Store openings pushing ahead
Threat from online competitors?
Company background
Company performance
Figure 53: TJX International (TK Maxx Europe): Group financial performance, 2013/14-2017/18
Figure 54: TJX International (TK Maxx Europe): Outlet data, 2013/14-2017/18
Retail offering
ZALANDO
What we think
Expanding brand partnership scheme
Driving out friction in delivery, returns and payments
Working towards delivering a truly personalised on-site experience
Head-to-toe fashion
Conversational commerce to tackle customer pain points
Dealing with excess and unwanted stock in a non-wasteful manner
Company background
Company performance
Figure 55: Zalando: group financial performance, 2013-17
Figure 56: Zalando: key metrics, 2016-H1 2018
Retail offering

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