Tesco reveals plans for high street fashion onslaught

Supermarket giant Tesco unveiled plans today to take on the high street by expanding its clothing range.

The chain is to invest millions of pounds in offering a clothing and home catalogue, online sales and introducing a new “store-within-a-store” clothes outlet.

In an exclusive interview with City AM, London’s free daily business paper, Tesco’s fashion chief executive Terry Green said he expected to boost clothing sales to £1bn (€1bn) next year.

“We have a massive investment coming in and we are going to trial selling our clothing ranges online next year,” he said.

“We have sold 20% more clothing than last year and it is a huge growth area for us.”

Mr Green said he wanted Tesco to ultimately take on high street giants like Next and Top shop as well as Britain’s biggest clothing retailer, Marks & Spencer.

He said the company was “committed” to increasing the non-food side of its business and “closing the gap” with M&S.

Tesco is the fastest growing supermarket clothing retailer, with sales hitting £750m in the year to February 2006.

Competitor Asda leads the pack with a 17% stake of the value clothing market, followed by Tesco with 11%.

But Mr Green, who took over the reins from John Hoerner in September 2005 after stints at Top Shop, Debenhams, Bhs and Allders, said while the supermarket was considered a discount retailer, it was also looking to stock “upmarket” fashion labels to attract other customers.

He said: “With Tesco you think of price, but our quality is improving immeasurably. And we want to separate clothing from food. People do not want to feel like they are shopping for clothing in a supermarket. We are becoming a hybrid between logical shopping, which is groceries, and illogical, which is clothing.”

Tesco is planning to roll out a string of “quasi-department store outlets”, including dedicated clothing departments within existing stores.

It is also expected to sign up a series of high-profile fashion designers to mark the fresh move into clothing.