The relationship between the Fashion Industry and Recession in the UK - Essay Example

UK Fashion and Recession UK FASHION AND RECESION It is struggle time, as any one would accept. Actually the economic gloom across the globe has caught most people unawares. It has been rather sudden and deadly. The situation was never predicted, nor was it ever thought about. The market and the economy were moving at a good pace and suddenly it saw the decline. And the speed at which it declined was never expected. The turmoil was felt across all industries. The US economy was the worst hit, with its subprime market taking the maximum hit. The fashion industry around the world is related to the business and the economy at large. Fashion itself is an industry covering various aspects of lifestyle of the people. It includes clothing, accessories and cosmetics and other related items which are required to make people look beautiful, affluent, sophisticated and elegant. But it has been seen in the past that the industry is very much interrelated to he overall picture of the economy. A dull economy or market will not encourage lot of fashionable choices. However, a bearish market will surely make the people to opt for the newest in fashion and make choices as they please. This economics is applicable irrespective of the type of industry. While we are discussing the effect of recession to the UK fashion industry, we must know the scenario that exists in this industry. UK itself is a country which is very much fashionable and is considered rich and vibrant when the fashion industry is considered per se. The fashion industry is worth about £ 44.5 billion in UK. As per the statistics of 1960, it is said that 10% of the household expenses is spent on clothing and footwear and other fashion related items. UK Fashion and Recession 2 However, the scenario had changed over a period of time. With cheaper imports coming form China and India the expenses have come down drastically. Presently only 6% of the household income is spent on such expenses. If we look at the past records we will find that from the year 2001 and 2005 the prices of clothing and apparel fell by 14.4% approximately while the cost of living increased by about 12.2%. This created a positive gap in the expense head; hence, the people had more options to spend on fashion wear. Marks & Spencer remains the market leader in the fashion market, but has faced competition from the low cost fashion experts, like TK Maxx and Primark. At the same time with more money in hand the young and affluent are spending on the top brands like Prada, Hugo Boss, Donna Karan and Chole. Hence the fashion world of UK is not restricted to the local brands only but has spread its wing to the major brands of Europe. However, manufacturing of fashion apparels in UK has come to a stand still as most of it is manufactured from the other developing countries. The top retailers like Next, Arcadia, and Marks & Spencer are still manufacturing and at the same time retailing their own products from their branded stores. But the scenario is not the same for the brands like Reebok, Adidas and Nike. These companies prefer to retail their product from the retailers who specialize in this segment. There will be difference between the fashion houses which believe in discounted products, and those who prefer to charge the full amount. The later group primarily depends on rapid change in fashion styles and keeps only limited edition products in their showrooms and boutiques. The forecast for UK fashion industry was that by 2010 the market will grow at least 23%. Glyn Bralow, Changing Fashions. UK Fashion and Recession 3 But the situation is no longer the same. Yet it is not very widely visible in the shows that occur each night in the high streets of fashion in UK. The London Fashion Week is still going strong with the big names like Swarovski and Giles Deacon. The situation is however much different for the city across the ocean. New York had faced a major economic slowdown and hence the fashion industry there had seen a huge setback. It is no word of triumph, because the same has yet to hit the UK market. And as per the economists UK is not in a big trouble as he US. In UK, people are facing a minor setback and have taken steps to take care of it. The economy has become more of a no frills and less flashy situation. People are saving money and are curtailing expenditure whenever and wherever they can. What the fashion industry in UK is now facing is more of a selected purchase. The people are more concerned about keeping their oil bill moving rather than flooding their wardrobes. At the same time, being a fashionable society, they are still buying fashionable clothes and accessories, but in a calculated manner. A little indulgence is not hurting them much. The buyers are making these purchases keeping in mind that they can wear them more than once and can use across all seasons. Hence, the fashion world of UK is looking towards a way to offer sustainable comfort to the buyers. Longevity and delicate designs is the in thing now. Even the consumers who had indulged in lavish fashion now prefer products which are durable. Moreover, price is an important factor that is kept in mind. Previously money was not the factor; anything worth your musings can be bought. But with a hint of recession competitive pricing is what the fashion houses are looking forward to. UK Fashion and Recession 4 Another aspect of marketing that has taken the front is that of online purchasing. Consumers are keener in purchasing the products online rather than going to the shop while spending precious fuel. Even if a few products are priced on a higher side, the customer service will make all the difference. Competition has increased manifolds. UK is going through a tough time and is heading for the recession is well acknowledged by the Prime Minister. As per the Prime Minister and the Governor of Bank of England, the country is about to see a recession for considerable period of time. The reason however, was mostly based on the global scenario. Steps will be taken to safeguard the interest of the people and the business but it will be quite an uphill task for the government, as no country can be protected from the effect of a global downturn. The Euro had also collapsed against the Dollar and it is said that the country is about to face a situation which is similar to the fate after the First World War. Times Online, October 22, 2008. The major areas that the retailers of fashion materials need to focus are:- 1. Customer service – The buyers will now look for the best customer service where they can be assured of the value of the product 2. Online purchase – Since most customers now prefer to stay at home and buy the products, online shopping is the best alternative. Taking the cue retailers like Zapos and J. Crew offer online purchase options to their customers and at the same time allow the buyers to return the items if they are not satisfied. UK Fashion and Recession 5 3. Custom stores – The essence and feel of fashion is applicable for all ages. But the teenagers and youngsters prefer a better experience all the time. If the shop or store can provide them with a god retail experience, they will be hooked. Thus lot of theme based shopping and customization in product purchase is included. It has also been noted that if such shopping experience is provided a higher price can always be charged. 4. Competitive pricing – Value for money is the buzz word in the present scenario. Most retailers are now offering clothing and apparels at a lower price which are durable and affordable. 5. Apparels and clothing without logo – The days of logo are almost over. It is no longer that the logo or brand will sell. The important aspect is the quality and price of the product. If you consider Bottega Veneta, it has transformed itself into a sustainable luxury brand. Keeping the above factors in mind the fashion industry need to gear up for the tough times ahead. It will no longer be a sellers market, where a branded product can be sold at a higher price range. The buyer will now have many options and will choose the best that fits their budget and choice. Another transformation that can be seen in the fashion industry is the style of design. Considering the global recession and the impact on social and ecological factors, the fashion in UK has made ground breaking achievements to offer designs which are ethical and at the same time unique. The word ‘eco-fashion’ is widely used. The future generation is quite keen to experience such designs and brands. The major fashion companies which have made breakthroughs in this field are:- UK Fashion and Recession 6 1. Jen Ruppert – The founder of Revamp, which designs eco-friendly fashion apparels and have made clothes which are durable, sustainable and are environment friendly. 2. Ed Gillespie – He has been the involved with Futerra, the communications agency and focuses mainly on sustainable environment. 3. Safia Minney – The founder of People Tree which deals with environmental fashion and has been associated with social and environmental causes for a long time. One thing is certain that the economic recession in UK has brought a sea change in the mindset of the people involved with the fashion world. They are now closer to the common people. What was once the luxury items for the affluent; can now be bought by the mass. Luxury Outlook. 17September, 2008. It is quite evident from the present situation of the fashion world that the commodity is no longer the part and parcel of the rich only. Though Europe remains the hotbed for fashion industry, but several countries, especially in Asia have shown major change in this sector. They are competing with the biggest names of the fashion world, like Giorgio Armani, Gucci, Miuccia Prada and other stalwarts of this business. Thus a fresh set of competition is also faced by the UK fashion industry. Since the products from the Asian countries are priced at a lower range, the UK companies are not able to keep up with the same price line. For long it has been considered that Milan is the heart of the fashion world. The way it reacts to the market shows the change in trends, lifestyle and price. For some brands like Versace, the UK Fashion and Recession 7 effect of recession is not felt by their clients. The niche clientele that they cater to is mostly unaffected by this downturn in the economy. However, it does not measure the impact. The need of unique designs has indeed made the designers look beyond their imagination. They have paired together other designers and even architectures to style unique concepts on their clothing range. Other brands like Salvatore and Prada are confident that in spite of the economic slowdown they can do well. It is reflected by their decision to go public. The feeling is quite mixed. Some designers are feeling the need to grow in the emerging markets like Russia, China and Middle East, while others have concentrated more on their own backyard. Some industry experts have said that many a brands have lost their value by one third, but some insiders’ mention that the situation is not that worse. There is lot more innovations and inventions in the world of fashion. For Bridget Cosgrave, the director of Mathces, uniqueness is the word. In her own words “Often when we get into a recession things get more embellished. We have been buying jewelled belts and really amazing statement shoes. My view is to keep it as special as possible. I dont think people shop that sensibly in a recession.” It is not the time to e hugely experimental. One needs to stick to the basics and think of more unique ways to sell their products. The designers can not now afford to have too much of elegance in their designs. One must be able to keep their designs simple yet elegant. Variations are always welcome but such changes must be backed up by competitive pricing and durable materials. Not all designers have the same fate. Like for Dolce and Gabbana, the situation is not so upbeat. In spite of their newest trends in fashion, the brand has not seen much enthusiasm in UK Fashion and Recession 8 their products. Hence, as mentioned before the brands have now concentrated on the emerging markets where they can keep their cash registers tingling. Over the years, UK has seen recessions in various ways and sizes. Some have been quite devastating, while some have passed away without much turmoil. Thus the fashion industry of UK has also faced the similar situation. And every time they have triumphed over the same. The buyers as well as the sellers have understood the true meaning of shopping smart. The essentials are taken care of first, and then the more luxury items are purchased. The mixed feeling in the market has kept the economy moving. The essential clothing has seen the touch of the most coveted brands, with simple and basic designs. The market for the other accessory fashion brands has seen the similar fate. They have changed their outlook over the years and have learnt to combat the economic downturn in their own way. Clare Coulson, February 24, 2008. That said we can conclude that the economy and the fashion industry of UK has made life a bit easier. What has been most important is that the industry at large has evolved in accordance to the various strata of population. Be it the rich or the middle income group or the low income group consumers, the fashion industry has responded well to the group. At times it has become a nail biting situation, and at times it has been the most prestigious time for such brands. In either way the fashion industry has triumphed over the economics of the country. They have paved their own way and have shown the finesse whenever and wherever necessary. At the same time the market has responded quite well. Irrespective of the market scenario the consumers have shown trust on hose brands and have purchased their needful luxury items. The niche brands which catered only to the rich clientele at one point of time have spread their wings to the mass. UK Fashion and Recession 9 This was necessary because the brands themselves needed to survive in the time of recession. The economy will continue to go up and down based on the global economy at large, and the fashion industry will constantly change their methods and trends of marketing. UK Fashion and Recession 10 Reference: 1. Changing Fashions: A Look at the UK Fashion Industry, Glyn Barlow. < http://ezinearticles.com/?Changing-Fashions:-A-Look-at-the-UK-Fashion-Industry&id=274334> 2. Gordon Brown admits UK recession is likely, Christine Seib, Gary Duncan, Rosie Lavan. Times Online. October 22, 2008. 3. Milan style undimmed by recession. Clare Coulson. The Observer, February 24 2008. 4. Faith Popcorn on the Recession Culture. The Business of Fashion. 17 September, 2008. Read More