Swedish group Hennes & Mauritz is set to topple struggling Marks & Spencer as Europe’s biggest clothing retailer, experts predicted today.
Stockholm-based H&M could snatch the top spot from M&S next year if its recent strong sales growth continues, according to a study by market research group Mintel.
While H&M boosted its sales by more than 70% between 1999 and 2003, neither M&S – Europe’s largest clothing retailer in 2003/4 – nor second-placed C&A (in Europe) grew sales in that period, Mintel said.
H&M’s nimble supply lines and strong clothing ranges, such as its fast-selling Karl Lagerfeld women’s collection, have helped it outperform M&S and other retailers, Mintel said.
“With H&M performing that much stronger than both C&A and M&S, it will not be long before H&M is crowned king of clothing,” Mintel said.
Mintel said the two names that had far outperformed the sector in the past five years were H&M and Zara owners Inditex.
They were the most dynamic in terms of supply lines and number of collections per season, while M&S had “simply been left behind”, Mintel’s retail research director Richard Perks said.
While M&S had clothing sales of €5.258bn in 2003/4 and C&A’s sales reached €5bn, H&M was close behind with sales of €4.989bn.
The latter’s sales increases had outstripped growth in store numbers, suggesting it has generated like-for-like progress as well as growth from physical expansion.
Esprit and Matalan also stood out from their peers in terms of sales growth, Mintel said.
“What sets these chains apart is their flexibility and speed in terms of turnaround from design to product to shop floor, so they could alter the thrust of a store’s merchandise if it appeared to be striking the wrong chord with consumers,” Mr Perks said.
“Younger, fashion-conscious consumers have come to expect these dynamic, flexible techniques.”
The study showed that while clothing specialists still accounted for more than half of consumer spending in the sector in most European countries, they have faced competition in many countries from non-specialists such as supermarkets.
Asda and Tesco took almost 5% of the UK clothing market in 2003. Tesco is the number one clothing retailer in the Czech Republic and a major player in Hungary.
Mintel’s Clothing Retailing in Europe study consisted of a series of reports on specialist retailers in 19 European countries.