UK Outdoor Report offers inside glimpse at evolving market

Outdoor i, our United Kingdom-based media partner, has just issued the results of its comprehensive market analysis dubbed, The UK Outdoor Report 2004. Publisher Peter Luscombe shared key insights with us to offer an inside peek at an evolving market affected by falling prices, overcrowding and a highly competitive trading market.
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Outdoor i, our United Kingdom-based media partner, has just issued the results of its comprehensive market analysis dubbed, The UK Outdoor Report 2004. Publisher Peter Luscombe shared key insights with us to offer an inside peek at an evolving market affected by falling prices, overcrowding and a highly competitive trading market. What follows are brief summaries into various market segments:

  • The waterproof clothing market has been valued at USD $298 million and is broken down into four price segments: $0 to $130, $131 to $260, $261 to $372, and $373 and up. It is the $131 to $260 segment that accounts for the largest volume of sales at 52 percent. A survey of UK retailers indicates that Berghaus and The North Face have shown the biggest increases in sales. And Gore-Tex dominates! Gore-Tex clothing sales remained static for many years, until the launch of XCR, Paclite and a re-pricing program. Gore's market share of product priced over $260 has escalated to the point where, “if it's not Gore-Tex it doesn't sell.” Gore-Tex clothing sales have grown considerably in terms of both volume and value as non Gore-Tex brands continue to lose market share. The announcement that Lowe Alpine had signed with Gore completed the exodus.
  • Travel clothing has become a more important part of the retailer's product mix, with 95 percent of the retailers responding to the survey saying the category was growing. Berghaus and The North Face were singled out as demonstrating the largest increases in sales.
  • As for footwear, Brasher was reported as the most widely stocked brand, followed by Scarpa, Meindl, Salomon, Berghaus, Karrimor, Merrell, and Zamberlan.
  • A look at public records (known in the UK as the Company's House) indicates that just seven companies currently have sales in excess of $37.2 million. The largest is Regatta, a UK clothing brand, followed by The North Face, Trespass, Hi-Tec Sports UK, Burton McCall, Lowe Alpine Holdings, and Berghaus.
  • U.S. brands such as TNF, Mountain Hardwear and Marmot are definitely becoming stronger in the United Kingdom -- next will be Patagonia and Arc'Teryx. They are taking over the specialist high ground, while domestic brands appear to be shifting to favor the upper-middle mass market and the mass market.
  • In terms of market size, Luscombe reports that there are currently 1250 retail outlets
    consisting of publicly owned companies, chain stores, and family-run independents.

Future Speak

We asked Luscombe to peer into his Crystal Ball and offer up his take on the short-term the future for the UK market.

"Crystal ball predictions are just that, but most in the trade would agree that tomorrow's challenges start today. Far from becoming complacent, retailers and suppliers are already predicting tougher times ahead.

For major suppliers the challenge is to keep their focus on current operations while also working out their response to longer-term challenges and outlining a distinctive strategic vision of the Pan European and global marketplace. They know from their own individual histories that each of the majors has, at some time, taken their eye off the ball, and each has paid the penalty, usually for quite a few years, in below-par results.

Changing consumer trends are creating shorter product lifecycles thereby forcing suppliers to continuously update product, a process that calls for better management, tighter forecasting and ultimately better house-keeping in terms of stock control.

Market consolidation is set to continue strengthening the majors while increasing pressure on peripheral brands. Pressure may come from the domestic marketplace, but today we operate in a global village, and at the leading edge size is all-important. Growth can be achieved through the acquisition of rival companies, either by acquiring strong players in a specific market category or country or through acquiring technology needed to develop new products and broaden distribution. The other way is through a multi-product offering, which is a common strategy with European and some North American brands.

VF Corp continues to add new companies to its outdoor division, which now includes The North Face, Eastpak, Jansport, Napapijri and Vans. Asolo's acquisition of Lowe Alpine should start reaping benefits for both brands within the next 18 months, while Lafuma's rapid rise was significantly helped by acquiring Millet and Big Pack. The Swiss company Mammut is yet another that has gained share through acquisition, namely that of Ajungilak and Raichle. Other major acquisitions that are about to bear fruit include Columbia and Mountain Hardwear and adidas-Salomon and Arc'Teryx. One thing is for sure, there are more changes to come.

For retailers the short-term challenge revolves around the fundamental operational skill of maximum return on space, squeezing costs while maintaining availability, improving quality while preserving margins at attractive prices, and providing innovation in both product and services.

Consolidation is also endemic within the retail sector. The real pressure will be on independent retailers who strive to differentiate themselves from their larger rivals, with some sources predicting that 10 percent to 12 percent of independent retailers could disappear within the next 12 months."
 
For a complete copy of the report, send an email to: profileconsultancy@btinternet.com. Price is £350.00 plus £10.00 for postage within Europe and £15.00 for North America –Visa and MasterCard are accepted.

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