TOUGH TIMES FOR RETAILERS
Members of The Industry will not have failed to notice that the high street has had a gloomy start to 2012, with clothing stores La Senza, Peacocks and Barratts Priceless all entering administration.
An independent review by Mary Portas on the revival of the high street (published in December 2011) has warned of the decline of the high street and experts predict a tough outlook for 2012, with little or no sales growth for retailers.
With competition from clothing e-tailers and supermarket clothing lines, it looks inevitable that other stores will follow La Senza and Peacocks.
While high street stores may be struggling, luxury brands such as Prada and Burberry are bucking the trend and reporting a healthy growth in profits. In the final quarter of 2011, Burberry’s total revenue rose by 21%, which CEO Angela Arendts puts down to a clear strategy of strengthening brand momentum. Burberry, along with other luxury brands, has also capitalised on recent increases in tourists visiting the UK from the far east, and has reaped dividends from the so-called “Peking Pound”, with Chinese customers eager to buy into the prestige associated with iconic brands.
It is clear that even in troubled economic times, where a brand is strong, the public remains willing to pay the price to buy into the brand. And strong branding is not limited to the names of the designer or design houses, branding can also be specific to products. The following “it” bags have all become successful brands in their own right: Birkin (Hermès), Paddington (Chloé) and Muse (YSL).
Branding is only part of the story though. Investing creative talent in a brand (like Emma Hill for Mulberry), having a dynamic supply chain which can react quickly to demand and using the internet to advertise and sell goods have also been seen to be important ingredients to profitable brands’ success.
If mid-range retailers are to survive such challenging trading conditions without dramatically slashing prices and thereby slashing profits, Industry member Tamar Nathan suggests that they will need to put in place a strategy of brand promotion and protection which consumers will want to buy into - regardless of the fact that those products may be pricier than other competing products.
For more information on how IP rights can be used to protect businesses operating in the fashion sector please contact Tamar Nathan at [email protected]
Industry member Tamar Nathan is an Associate at City law firm Fox Williams LLP, and a member of the Fox Williams Fashion Law Group which has extensive industry knowledge.
More information about the Fox Williams Fashion Law Group can be found on its dedicated fashion law website at www.fashionlaw.co.uk.
