UK Childrenswear Retailers 2010

TABLE OF CONTENTS
CHAPTER 1 EXECUTIVE SUMMARY 27
Key findings 27
Main conclusions 28
Childrenswear resilient as consumers cut back 28
Falling volumes major factor in declining childrenswear sales 28
Mini baby boom to drive market growth 28
Online essential to defend market share 28
Woolworths demise creates opportunities 29
Adams and JJB other casualties 29
Clothing specialists gain – but midmarket cedes share to value players 29
Primark big winner 29
Matalan and Peacocks also do well 30
Grocers pick up Woolworths share 30
Midmarket loses grip of sector 30
Price deflation softening 31
CHAPTER 2 MARKET ANALYSIS 32
Market definition 32
Market trends 33
More resilient than market 33
Deflation slowing 34
Trends by sub categories 37
Infantswear benefits from baby boom & older mothers 38
Channels of distribution 39
Grocers biggest winners as specialists suffer 39
CHAPTER 3 COMPANY DATA ANALYSIS 43
Top childrenswear retailers 43
Next under pressure at top of table 43
Market shares 46
Woolworths share creates opportunity 46
Market shares – winners & losers 47
Primark moving ahead 47
Sales densities 49
Key operating statistics 51
Space allocation 53
Advertising expenditure 55
CHAPTER 4 OUTLOOK 58
Key issues 58
Recessionary factors have less effect on childrenswear than other catergories 58
Childrenswear prioritised as spending patterns change in recession 59
Changing patterns in motherhood and demographics 61
Price inflation delayed but due soon 65
Midmarket faces new wave of competition 67
CHAPTER 5 ASDA (GEORGE) 74
Benefits from consumer focus on low prices 74
Recent key events 75
Reacts to consumers changed view on value for money 75
Proposition 78
Every day value and convenience key 78
Financials 79
Sales growth accelerates during downturn 79
Space 83
Space expansion and rising densities both help growth 83
Sector performance – childrenswear 86
George sales beat market 86
Outlook 89
Under pressure from value clothing retailers 89
CHAPTER 6 BHS 91
Bhs cuts costs through Arcadia merger 91
Recent key events 92
Proposition 93
More investment needed to create new brand positioning 93
Financials 94
Turnover in gradual decline 94
Space 97
Bhs puts store growth on hold 97
Space allocation 97
Sector performance – childrenswear 99
Childrenswear sales fall back after small revival 99
Outlook 102
Needs to widen customer range, which Arcadia brands will do 102
CHAPTER 7 DEBENHAMS 104
Shows rivals how to segment childrenswear with sub brands 104
Recent key events 105
Developments in product offer 105
Proposition 107
Broad brand portfolio attracts a wide customer base 107
Financials 108
Trading performance positive 108
Space 113
Expansion has driven sales growth 113
Space allocation 114
Sector performance – childrenswear 116
Recovery continues after a dip in 2007 116
Outlook 119
Midmarket customers recognise value of better products 119
CHAPTER 8 GAP 121
Struggles to reverse sales losses in UK 121
Recent key events 122
Problems in core business yet to be tackled 122
Proposition 123
Midmarket positioning lacks differentiation 123
Financials 124
UK sales on the slide since 2005 124
Space 126
Expansion put on hold til now 126
Space allocation 127
Sector performance – childrenswear 128
Renewed decline after stabilisation in 2007/08 128
Outlook 131
UK business a prisoner of US corporate strategy 131
CHAPTER 9 H&M 133
Swedish giant continues UK success 133
Recent key events 134
UK remains top performing market for H&M 134
Proposition 135
Fashion proposition carefully geared to age groups 135
Financials 136
Fashion and value positioning enables H&M to ride out downturn 136
Space 139
More and larger stores for H&M 139
Space allocation 140
Sector performance – childrenswear 141
Space productivity takes a dip in 2009 141
Outlook 144
Increasingly powerful player but could high profitability be under threat? 144
CHAPTER 10 JJB SPORTS 146
Suffers from sports market downturn 146
Recent key events 147
New management aims to stabilise JJB financially 147
Proposition 149
Needs to revive authority as performance sportswear retailer 149
Financials 150
Slump in sales leads to losses 150
Sales hit by decline in like-for-likes and store disposals 152
Space 153
Major contraction as loss-making stores go 153
Space allocation 154
Sector performance – childrenswear 155
Childrenswear sales fall away as general performance deteriorates 155
Market share halves over five years 157
Outlook 158
Remains in a difficult situation 158
CHAPTER 11 JOHN LEWIS 160
Fashion growth an antidote to home market crisis 160
Recent key events 161
Fashion takes lead in the wake of a downturn in home 161
Proposition 162
A one stop shop for wealthy middle class customers 162
Financials 163
Margins take a tumble as the downturn bites 163
Space 166
Expansion plans held up by downturn in property market 166
Space allocation 167
Sector performance – childrenswear 169
Boosted by fashion success 169
Outlook 172
Growth in fashion will put pressure on midmarket rivals 172
CHAPTER 12 MARKS & SPENCER 174
Needs childrenswear boutique type environments with child appeal 174
Recent key events 175
Devises post-recession strategy 175
Proposition 179
Growth trend reverses as recession hits 179
Financials 180
Trading performance disappoints again 180
Space 186
Space expansion key factor behind growth 186
Space allocation 188
Sector performance – childrenswear 190
Sharp decline in sales and space productivity after three years of growth 190
Outlook 193
Needs to speed up execution of growth strategy 193
CHAPTER 13 MATALAN 196
Childrenswear needs new ranges to add excitement 196
Recent key events 197
Business improvements attract new customers 197
Proposition 202
Creates more interest in the OOT store environment 202
Financials 203
Like-for-like uplifts boost performance 203
Space 206
Expansion on agenda again 206
Space allocation 207
Sector performance – childrenswear 209
Sudden recovery after stagnation in 2008/09 209
Outlook 212
Strategy delivers growth, boosted further by recession 212
CHAPTER 14 MOTHERCARE 214
One stop shop in larger stores creates halo effect for clothing 214
Recent key events 215
Mothercare cuts costs and reinforces brand 215
Proposition 216
Creating a retail destination for parents 216
Financials 217
International operations drive profits growth 217
Space 222
High street stores cut back 222
Space allocation 223
Sector performance – childrenswear 224
Outlook 227
Product and brand authority in younger market a big strength 227
CHAPTER 15 NEW LOOK 229
More gender-neutral brand could raise sales of boyswear 229
Recent key events 230
Grows business 230
Proposition 232
Moves store image upmarket 232
Financials 233
Trading performance continues to impress 233
Space 237
Space expansion and online are the key factors behind UK growth 237
Space allocation 239
Sector performance – childrenswear 241
Sales take off in 2007/08 and 2008/09 241
Outlook 244
Competition with value retailers intensifies 244
CHAPTER 16 NEXT 246
Childrenswear sales stagnate despite raising space 246
Recent key events 247
Next revamps brand image while bearing down on costs 247
Proposition 249
Next creates more aspirational retail experience 249
Financials 250
Sales trend dips into decline 250
Space – growth slows but larger sites are targeted 254
Space allocation 255
Sector performance – childrenswear 256
Next’s childrenswear sales stagnate 256
Outlook 260
Highly profitable but circumstances not in its favour 260
CHAPTER 17 PEACOCKS 262
Benefits from downturn 262
Recent key events 263
Proposition 264
Basic stores allow for high fashion at value prices 264
Financials 265
Growth in sales remains consistently strong 265
Space 267
Peacocks pace of expansion slows after bumper 2007/08 267
Space allocation 268
Sector performance – childrenswear 270
Childrenswear sales growth accelerates 270
Outlook 273
Peacocks wins from consumer downturn 273
CHAPTER 18 PRIMARK 274
Primark continues in its success 274
Recent key events 275
Proposition 277
Basic stores allow for high fashion at value prices 277
Financials 278
Sales growth slows, but stays over 10.0% in UK 278
Space 281
Aggressive expansion switches overseas 281
Space allocation 282
Sector performance – childrenswear 283
Childrenswear sales increase slows 283
Outlook 286
Brand evolving as it expands 286
CHAPTER 19 TESCO 288
Market leader threatened from all angles 288
Recent key events 289
Continuous initiatives to ride out recession on top 289
Proposition 291
Growth trend reverses as recession hits 291
Financials 292
Trading performance shows ability to defy recession 292
Space 297
Sustains space growth despite recession 297
Space allocation 297
Sector performance – childrenswear 299
Sales revive after dip 299
Outlook 302
Needs sales drivers beyond adding space 302
CHAPTER 20 GLOSSARY 303
` Financial Statistics – VAT 303
Trading Profile 303
Key Operating Ratios 303
Physical Development 304
Abbreviations 304
LIST OF TABLES
Table 1: Childrenswear market definition 2009 32
Table 2: Childrenswear and total clothing market trends 1999-2009e 33
Table 3: Childrenswear market trends by sub category 1999-2009e 37
Table 4: Childrenswear channels of distribution by value 2004-2009e 39
Table 5: Childrenswear channels of distribution breakdown 2004-2009e 39
Table 6: Childrenswear channels of distribution breakdown 2004-2009e 40
Table 7: Childrenswear market shares 2004-2009e 46
Table 8: Clothing retailers key UK operating statistics 2008/09 51
Table 9: Childrenswear retailers space allocation 2009 53
Table 10: Leading childrenswear retailers advertising spend 2003-2008 55
Table 11: Childrenswear retailers advertising spend by media type 2008 56
Table 12: Percentage of births to foreign born women 2007 on 2001 62
Table 13: Niche specialist childrenswear retailers 2009 68
Table 14: Smaller non-specialist childrenswear retailers 2009 70
Table 15: Major online developments in childrenswear 2009 72
Table 16: Asda company overview 2010 74
Table 17: Asda retail proposition 2010 78
Table 18: Asda UK key operating statistics summary 2004-2009e 79
Table 19: Asda trading record 1999-2009e 81
Table 20: Asda store portfolio 1999-2009e 83
Table 21: Asda childrenswear space allocation vs market average 2009 85
Table 22: Bhs company overview 2010 91
Table 23: Bhs retail proposition 2010 93
Table 24: Bhs UK key operating statistics summary 2004-2009e 94
Table 25: Bhs trading record 1999-2009e 96
Table 26: Bhs store portfolio 1999-2009e 97
Table 27: Bhs childrenswear space allocation vs market average 2009 98
Table 28: Debenhams company overview 2010 104
Table 29: Debenhams retail proposition 2010 107
Table 30: Debenhams UK key operating statistics summary 2004-2009 108
Table 31: Debenhams group trading record 1999-2009 111
Table 32: Debenhams group store portfolio 1999-2009e 113
Table 33: Debenhams childrenswear space allocation v market av 2009 115
Table 34: Gap company overview 2010 121
Table 35: Gap retail proposition 2010 123
Table 36: Gap UK key operating statistics summary 2005-2010e 124
Table 37: Gap trading record 2000e-2010e 125
Table 38: Gap UK store portfolio 1999-2009e 126
Table 39: Gap childrenswear space allocation vs market average 2009 128
Table 40: H&M company overview 2010 133
Table 41: H&M retail proposition 2010 135
Table 42: H&M UK key operating statistics summary 2004-2009e 136
Table 43: H&M UK trading record 1999-2009e 138
Table 44: H&M UK store portfolio 1999-2009e 139
Table 45: H&M childrenswear space allocation vs market average 2009 140
Table 46: JJB Sports company overview 2010 146
Table 47: JJB Sports retail proposition 2010 149
Table 48: JJB Sports key operating statistics summary 2004-2009 150
Table 49: JJB Sports trading record 1998-2010e 152
Table 50: JJB Sports store portfolio 1999-2010e 153
Table 51: JJB Sports childrenswear space allocation vs market av 2009 154
Table 52: John Lewis company overview 2010 160
Table 53: John Lewis retail proposition 2010 162
Table 54: John Lewis UK key operating statistics summary 2005-2010e 163
Table 55: John Lewis trading record 2000-2010e 165
Table 56: John Lewis store portfolio 2000-2010e 166
Table 57: John Lewis childrenswear space allocation vs market av 2009 168
Table 58: Marks & Spencer company overview 2010 174
Table 59: Marks & Spencer retail proposition 2010 179
Table 60: Marks & Spencer UK key operating statistics 2004-2009 180
Table 61: Marks & Spencer UK trading record 1999-2009 184
Table 62: M&S store portfolio 1999-2009 186
Table 63: M&S store portfolio 1999-2009 188
Table 64: M&S childrenswear space allocation vs market average 2009 189
Table 65: Matalan company overview 2010 196
Table 66: Matalan retail proposition 2010 202
Table 67: Matalan UK key operating statistics summary 2005-2010e 203
Table 68: Matalan trading record 1999-2010e 205
Table 69: Matalan store portfolio 1999-2010e 206
Table 70: Matalan childrenswear space allocation vs market average 2009 208
Table 71: Mothercare company overview 2010 214
Table 72: Mothercare retail proposition 2010 216
Table 73: Mothercare UK key operating statistics summary 2004-2009 217
Table 74: Mothercare UK trading record 1998-2009 220
Table 75: Mothercare store portfolio 1999-2009 222
Table 76: Mothercare childrenswear space allocation vs market av 2009 223
Table 77: New Look company overview 2010 229
Table 78: New Look retail proposition 2010 232
Table 79: New Look UK key operating statistics summary 2004-2009e 233
Table 80: New Look trading record 1999-2009e 235
Table 81: New Look UK store portfolio 1999-2009 237
Table 82: New Look store portfolio 2008-2009 238
Table 83: New Look space allocation vs market average 2009 240
Table 84: New Look kids space allocation vs market average 2009 240
Table 85: Next company overview 2010 246
Table 86: Next retail proposition 2010 249
Table 87: Next Brand key operating statistics summary 2005-2010e 250
Table 88: Next Brand trading record 2000-2010e 252
Table 89: Next Brand turnover and profits 2005-2010e 253
Table 90: Next UK store portfolio 1999-2009 254
Table 91: Next childrenswear space allocation vs market average 2009 255
Table 92: Peacocks company overview 2010 262
Table 93: Peacocks retail proposition 2010 264
Table 94: Peacocks UK key operating statistics summary 2004-2009e 265
Table 95: Peacocks UK trading record 1999-2009e 267
Table 96: Peacocks store portfolio 1999-2009 267
Table 97: Peacocks childrenswear space allocation vs market av 2009 269
Table 98: Primark company overview 2010 274
Table 99: Primark retail proposition 2010 277
Table 100: Primark UK key operating statistics summary 2004-2009e 278
Table 101: Primark trading record 1999-2009e 280
Table 102: Primark store portfolio 1999-2009 281
Table 103: Primark childrenswear space allocation vs market average 2009 282
Table 104: Tesco company overview 2010 288
Table 105: Tesco retail proposition 2010 291
Table 106: Tesco UK key operating statistics summary 2004-2009 292
Table 107: Tesco UK trading record 1998-2009e 295
Table 108: Tesco store portfolio 1999-2009 297
Table 109: Tesco childrenswear space allocation vs market average 2009 298


LIST OF FIGURES
Figure 1: Childrenswear and clothing sales index (1999 = 100) to 2009e 34
Figure 2: Childrenswear as % of total clothing sales 1999-2009e 35
Figure 3: Deflation in childrenswear 2004-2009e 36
Figure 4: Sales split in childrenswear 1999 and 2009e 38
Figure 5: Change in channel share 2009e on 2004 41
Figure 6: Top childrenswear retailers market shares 2004 and 2009e 43
Figure 7: Winners & losers in the childrenswear market 2009e on 2008 47
Figure 8: Estimated childrenswear sales densities year end 2008/2009 49
Figure 9: Childrenswear market issues 2010 58
Figure 10: Percentage change in consumer expenditure, current prices seasonally adjusted, 2009 Q1 vs 2008 Q1 59
Figure 11: Thousands of UK live births 1998-2008 61
Figure 12: 000s of UK live births by age of mother 1998 and 2008 63
Figure 13: Forecast of child population by age group 2009-2014 64
Figure 14: Price index for clothing imports (2005=100) and value of the pound against the US dollar and euro Q2 2007 to Q2 2009 66
Figure 15: Asda sales growth to December 2004-2009e 79
Figure 16: Asda UK retail operating profit to December 2003-2007 80
Figure 17: Asda UK clothing sales per sq ft (est) to December 2004-2009e 84
Figure 18: Asda clothing space breakdown 2005-2009 85
Figure 19: Asda childrenswear sales to December 2004e-2009e 86
Figure 20: Asda childrenswear sales per sq ft to December 2004e-2009e 87
Figure 21: Asda childrenswear market share 2004e-2009e 88
Figure 22: Bhs UK retail sales and growth, year end March 2004-2009e 94
Figure 23: Bhs group operating profit year end March 2004-2009e 95
Figure 24: Bhs clothing space allocation 2005-2009 98
Figure 25: Bhs Childrenswear sales to year end 2004e-2009e 99
Figure 26: Bhs childrenswear sales per sq ft to end March 2004e-2009e 100
Figure 27: Bhs childrenswear market share 2004-2009e 101
Figure 28: Debenhams UK retail sales and growth to August 2004-2009 109
Figure 29: Debenhams Group operating profit to August 2004-2009 109
Figure 30: Debenhams online sales to August 2005-2009e 112
Figure 31: Debenhams clothing space breakdown 2005-2009 114
Figure 32: Debenhams childrenswear sales to August 2004e-2009e 116
Figure 33: Debenhams childrenswear sales/sq ft to August 2004e-2009e 117
Figure 34: Debenhams childrenswear market shares 2004-2009e 118
Figure 35: Gap UK sales and growth, year to January 2005-2010e 124
Figure 36: Gap clothing space breakdown 2005-2009 127
Figure 37: Gap childrenswear sales growth, year to January 2002-2010e 128
Figure 38: Gap childrenswear sales/sq ft, year to January 2005e-2010e 129
Figure 39: Gap childrenswear market share 2004-2009e 130
Figure 40: H&M UK sales and growth, year to November 2004-2009e 136
Figure 41: H&M UK operating profit year to November 2004-2009e 137
Figure 42: H&M clothing space breakdown 2005-2009 140
Figure 43: H&M childrenswear sales year to November 2004e-2009e 141
Figure 44: H&M childrenswear sales per sq ft to November 2004e-2009e 142
Figure 45: H&M childrenswear market share 2004-2009e 143
Figure 46: JJB Sports UK sales and growth, year to January 2004-2009e 150
Figure 47: JJB Sports Group operating profit year to January 2004-2009e 151
Figure 48: JJB Sports clothing space breakdown 2005-2009 154
Figure 49: JJB Sports childrenswear sales year to January 2005-2010e 155
Figure 50: JJB Sports childrenswear sales/ sq ft to January 2005e-2010e 156
Figure 51: JJB Sports childrenswear market share 2004-2009e 157
Figure 52: John Lewis UK sales and growth, year to January 2005-2010e 164
Figure 53: John Lewis operating profit, year to January 2004-2009e 164
Figure 54: John Lewis clothing space breakdown 2005-2009 167
Figure 55: John Lewis childrenswear sales and growth to Jan 2004-2009 169
Figure 56: John Lewis childrenswear sales/sq ft to January 2004-2009e 170
Figure 57: John Lewis childrenswear market share 2004-2009e 171
Figure 58: Marks & Spencer UK sales and growth year to March 2004-2009 180
Figure 59: Marks & Spencer UK operating profit year to March 2004-2009 181
Figure 60: Y-o-Y change % in M&S quarterly divisional sales in UK Q1 2008/09-Q1 2009/10 182
Figure 61: M&S UK divisional l-f-l performance year to March 2008/09 183
Figure 62: Marks & Spencer online sales year to March 2008-2011e 185
Figure 63: M&S est sales/sq ft in food and non-food to March 2005-2009 187
Figure 64: M&S clothing space breakdown 2005-2009 188
Figure 65: M&S childrenswear sales year to March 2004-2009 190
Figure 66: M&S childrenswear sales per sq ft to end March 2004-2009 191
Figure 67: M&S childrenswear market share 2004-2009 192
Figure 68: Matalan store interior Longton 2009 199
Figure 69: Matalan Amman store entrance 2009 200
Figure 70: Matalan UK sales and growth, year to February 2005-2010e 203
Figure 71: Matalan operating profit year to February 2005-2010e 204
Figure 72: Matalan clothing space breakdown 2005-2009 207
Figure 73: Matalan childrenswear sales growth year to February 2005-2010 209
Figure 74: Matalan childrenswear sales per sq ft to February 2005-2010e 210
Figure 75: Matalan childrenswear market share 2004-2009e 211
Figure 76: Mothercare UK sales and growth, year to March 2004-2009 218
Figure 77: Mothercare UK operating profit year to March 2004-2009 219
Figure 78: Mothercare direct sales year to March 2004-2009 221
Figure 79: Mothercare childrenswear sales year to March 2004-2009e 224
Figure 80: Mothercare childrenswear sales per sq ft to March 2004-2009 225
Figure 81: Mothercare childrenswear market share 2004-2009e 226
Figure 82: New Look UK retail sales and growth, year to March 2004-2009 233
Figure 83: New Look group operating profit year to March 2004-2009 234
Figure 84: New Look online visitors year to March 2008 and 2009 236
Figure 85: New Look clothing space breakdown 2005-2009 239
Figure 86: New Look childrenswear sales year end March 2004-2009 241
Figure 87: New Look childrenswear sales per sq ft to March 2004-2009 242
Figure 88: New Look childrenswear market share 2004-2009e 243
Figure 89: Next Brand sales and growth, year to January 2005-2010e 250
Figure 90: Next Brand operating profit, year to January 2005-2010e 251
Figure 91: Next clothing space breakdown 2005-2009 255
Figure 92: Next UK childrenswear sales, year to January 2005-2010e 256
Figure 93: Next UK childrenswear sales, year to January 2005-2010e 257
Figure 94: Next childrenswear market share 2004-2009e 258
Figure 95: Peacocks UK retail sales and growth, year to March 2004-2009 265
Figure 96: Peacocks group operating profit year to March 2004-2009 266
Figure 97: Peacocks clothing space breakdown 2005-2009 268
Figure 98: Peacocks childrenswear sales year to March 2004e-2009e 270
Figure 99: Peacocks childrenswear sales per sq ft to March 2004-2009 271
Figure 100: Peacocks childrenswear market share 2004-2009e 272
Figure 101: Primark UK retail sales and growth to September 2004-2009e 278
Figure 102: Primark group operating profit year to September 2003-2008 279
Figure 103: Primark clothing space breakdown 2005-2009 282
Figure 104: Primark childrenswear sales year to September 2004-2009e 283
Figure 105: Primark childrenswear sales per sq ft to September 2004-2009e 284
Figure 106: Primark childrenswear market share 2004-2009 285
Figure 107: Tesco UK sales and growth, year to February 2004-2009 292
Figure 108: Tesco UK operating profit year to February 2004-2009 293
Figure 109: Tesco UK non-food sales growth, year to February 2006-2009 294
Figure 110: Tesco.com online sales year to February 2005-2009 296
Figure 111: Tesco clothing space breakdown 2005-2009 298
Figure 112: Tesco childrenswear sales year to February 2004-2009 299
Figure 112: Tesco childrenswear sales per sq ft to February 2004-2009 300
Figure 113: Tesco childrenswear market share 2004-2009e 301