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Clothing Retailing - Germany - October 2019

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), 2014-19
Sector size and forecast
Figure 2: Germany: Specialist clothing retailers, sales growth, 2014-19
Inflation
Channels of distribution
Figure 3: Germany: Estimated distribution of spending on clothing and footwear by channel, 2018
Companies and brands
Leading players
Figure 4: Germany: Annual sales growth of the leading specialist clothing retailers, 2018
Market shares
Figure 5: Germany: Leading specialist clothing retailers, sales as % of all spending on clothing and footwear, 2015 and 2018
Online
Figure 6: Germany: Online sales of clothing, 2014-19
The consumer
Where they shop for clothing
Figure 7: Germany: Channels used for buying clothes in the last 12 months, June 2019
Figure 8: Germany: Retailers used for buying clothing in the last 12 months, June 2019
Figure 9: Germany: Non-specialist stores used to shop for clothing, June 2019
Attitudes to shopping for clothing
Figure 10: Germany: Attitudes to shopping for clothing, June 2019
What we think
ISSUES AND INSIGHTS
Combining online and offline as a strategy for growth
The facts
The implications
Germans enjoy shopping for clothes and move away from ‘fast fashion’
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Market for clothing shrinks 0.5%
Clothing specialists’ sales drop by 1.8% in 2018
Inflation rises further to 1.9% in 2018
Specialists continue to dominate the clothing sector
CONSUMER SPENDING
Figure 11: Germany: Consumer spending on clothing and footwear (incl. VAT), 2014-19
SECTOR SIZE AND FORECAST
Sales decline for the specialists in 2018
Figure 12: Germany: Specialist clothing retailers, sales (excl. VAT), 2014-19
Figure 13: Germany: Specialist clothing retailers, forecast sales (excl VAT), 2019-24
INFLATION
Inflation hits its highest point in five years
Figure 14: Germany: Harmonised index of consumer prices, annual % change, 2013-18
Figure 15: Germany: Harmonised index of consumer prices, annual % change, January 2018 – August 2019
CHANNELS OF DISTRIBUTION
Specialists continue to dominate sales
Figure 16: Germany: estimated distribution of spending on clothing and footwear by channel, 2018
COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Signs of recovery from the past two years
Number of outlets declines further
H&M remains the leader in spite of decreasing sales
Online share of clothing spending resumes growth
LEADING PLAYERS
Signs of recovery from the past two years
Primark’s prices raise controversy in Germany
C&A undergoes change in management again and aims for sustainability
Zalando continues to combine online and offline
Esprit reduces portfolio but no turn-around yet
Miller & Monroe’s turn to leave the market
Figure 17: Germany: Leading specialist clothing retailers, sales (excl. VAT), 2014-18
Figure 18: Germany: Leading specialist clothing retailers, outlets, 2014-18
Figure 19: Germany: Leading clothing specialists, sales per outlet, 2014-18
MARKET SHARES
Figure 20: Germany: Leading specialist clothing retailers’ sales as % of all spending on clothing and footwear, 2015-18
ONLINE
Online activity
Shopping for clothing online
Figure 21: Germany: Online purchasing in the last 12 months, 2013-18
Clothing share of online sales
58% shop online
Figure 22: Germany: Customers who shopped online or by catalogue for clothing, by age group, June 2019
Online searches for clothing retailers
Figure 23: Germany: Search interest on Google, last 12 months, September 2018 – August 2019
Leading online retailers
Otto Group becomes the largest online marketplace for clothing
One-third of consumers have Amazon Prime membership
Zalando the leader online among specialists
Figure 24: Germany: Estimated online sales of clothing by major retailers, 2016-18
THE CONSUMER – WHAT YOU NEED TO KNOW
58% shopped online for clothing
C&A is still the most popular specialist in Germany
Amazon establishes itself as the dominant non-specialist
German consumers appear to be moving away from fast fashion
Enjoying the shopping experience is key
Price and convenience remain important factors
WHERE THEY SHOP FOR CLOTHES
58% have shopped online for clothing
Figure 25: Germany: Channels used for buying clothes in the last 12 months, June 2019
Online buying reaches across the age groups
Figure 26: Germany: Channels used for buying clothes in the last 12 months, by age group, June 2019
Store-based specialists remain dominant
Figure 27: Germany: Stores used to shop for clothing, combined nets, June 2019
Clothing specialists
Online specialists establish themselves in the market
Figure 28: Germany: Specialist retailers used for buying clothing in the last 12 months, June 2019
Customer profiles
Figure 29: Germany: Where they shop for clothing, by average age and household income, clothing specialists, June 2019
Non-specialists
Amazon continues to operate as the dominant non-specialist
Merger of Galeria Kaufhof and Karstadt
Small share of purchases in supermarkets and hypermarkets
Figure 30: Germany: Non-specialist stores used to shop for clothing, June 2019
ATTITUDES TO SHOPPING FOR CLOTHES
German consumers appear to be moving away from ‘fast fashion’
Figure 31: Germany: Selected attitudes to shopping for clothing, June 2019
Enjoying the shopping experience is key
Figure 32: Germany: Selected attitudes to shopping for clothing, June 2019
Price and convenience remain important factors
Figure 33: Germany: Selected attitudes to shopping for clothing, June 2019
Attitudes by specialist retailer used
Figure 34: Germany: Attitudes to shopping for clothing, by where they shopped in the last 12 months: Specialists, June 2019
Attitudes by non-specialist used
Figure 35: Germany: Attitudes to shopping for clothing, by where they shopped in the last 12 months: Non-specialists, June 2019
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Data sources
C&A
What we think
Making up for lost time online
Partnering with other brands
Changes in management
C&A continues to focus on sustainability
Company background
Company performance
Figure 36: C&A: Group financial performance, 2013/14 – 2018/19
Figure 37: C&A: Outlet data, 2013/14 – 2018/19
Retail offering
ESPRIT
What we think
Esprit goes green and commits to improve workers’ rights
Pursuing an “ambitious but realistic plan”
Esprit resumes expansion in Europe
Company background
Company performance
Figure 38: Esprit: Group financial performance, 2013/14-2018/19
Figure 39: Esprit: Outlet* data, 2013/14-2018/19
Retail offering
H&M HENNES & MAURITZ
What we think
Digital
Store development
Company background
Company performance
Figure 42: H&M Hennes & Mauritz: group financial performance, 2013/14-2017/18
Figure 43: H&M Hennes & Mauritz: outlet data, 2013/14-2017/18
Retail offering
GRUPO INDITEX
What we think
Growth from a combination of online and offline channels
Diversification and dedicated content on social channels
Inditex’s new strategy focuses on sustainability
Company background
Company performance
Figure 44: Grupo Inditex: sales and outlets by format, 2018/19
Figure 45: Grupo Inditex, performance by brand, 2017-19
Figure 46: Grupo Inditex: group financial performance, 2013/14-2018/19
Figure 47: Grupo Inditex: outlet data, 2013/14-2018/19
Retail offering
KIK
What we think
Bricks-and-mortar makeover now almost complete
Eastern Europe markets driving sales growth
Online sales and website visitors up
Company background
Company performance
Figure 48: KiK: Group financial performance, 2014-18
Figure 49: KiK: Outlet data, 2014-18
Retail offering
PRIMARK/PENNEYS
What we think
European expansion continues
Offline business model could hold back growth
Greater focus on experience could point the way forward
Growing sentiment against fast fashion is forcing change on the business
Where now?
Company background
Company performance
Figure 50: Primark/Penneys: group financial performance, 2014/15-2018/19
Figure 51: Primark/Penneys: outlet data, 2014/15-2018/19
Retail offering
TJX INTERNATIONAL (TK MAXX EUROPE)
What we think
A shift in focus?
A need to push the digital side of the business
Where now?
Company background
Company performance
Figure 52: TJX International (TK Maxx Europe): Group financial performance, 2014/15-2018/19
Figure 53: TJX International (TK Maxx Europe): Outlet data, 2014/15-2018/19
Retail offering
ZALANDO
What we think
Selling more products, slower revenue growth
Zalando continues to succeed by combining online and offline
Zalando’s circular fashion joins the physical world
Zalando expands beauty range to five new markets
Average basket size is still decreasing
Zalando Plus loyalty scheme expanded
Zalando trials robots for customer orders
Moving away from own brands
What next?
Company background
Company performance
Figure 54: Zalando: group financial performance, 2013-18
Figure 55: Zalando: key metrics, 2016-H1 2019
Retail offering

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