8th International Conference      Retail Management   The Road Map to the New           EuropeFrom Catwalk to Coathanger  ...
Agenda1. Challenges for the Coathanger2. Retailing, post 20043. Responsive Retailing Challenges                Professor N...
The Catwalk• Influences high street trend as opposed to  purely for luxury brands• Democratisation  – Fashion for all     ...
Professor Neil Towers
Old Textile World     Professor Neil Towers
OLD TEXTILE WORLDQuota ConstraintsLarge Textile Capacity in US & EuropeDispersed Garment ManufacturingHuge Shipments of Se...
Typical call to arms:                    Can Turkey compete                      against China?Professor Neil Towers
Fashion Supply Channels• Significant power shift in past three  decades in the UK• Power move from manufacturer /  interme...
Fashion Retailing –          Market Structure• Distribution Fragmentation – dominated in  numerical terms by single-outlet...
New Textile World1. Challenges for the Coathanger             Professor Neil Towers
Fashion Retailing –     Market StructureMarket Concentration :-• Clothing specialist chains : account for  68% of clothing...
Fashion Retailing –          Market StructureConcentration – why and how?• Scale : number of outlets / national  coverage•...
Multi-Channel Distribution• Rapid change in perspective in past  decade with respect to viability and  potential• Current ...
New Entrants• Supermarket and discount retailers ; pure  internet players• Impact upon attitude but also participation  in...
Global Apparel Exporters      (Excludes EU, US and Canada)                                                                ...
Professor Neil Towers
Rise of ‘fast fashion’• Rapidly changing collections of high-fashion  garments – the speedy replication by high street  re...
2.. Retailing, post 2004  Responsive and Flexible    Retailer + Supplier:From Catwalk to Coathanger         „Bring on     ...
Fashion Supply, post 2004  Loss of quota protection  Supply chain concentration   Global sourcing but fewer producer coun...
Globalisation of the Supply           Chain• Move away from vertical integration of the textile-  apparel pipeline towards...
Lean & Agile Supply• Lean – for continuity products (26+ weeks)– elimination of waste, including time, to  enable a level ...
Lean & Agile          Mixed Mode Supply Model                       2004                       Fashion                    ...
Typical global fashion supply            chain          Seasonal (13 week) fashion Africa      India         China        ...
Supply Lines from S.E. Asia          Spinning          Mill Cotton Fields                3,500 km                        D...
Logistics & Infrastructure             Professor Neil Towers
International Shipping                                   8 RTW                                   vessels                  ...
Inaugural Lecture Series  From Catwalk to     Coathanger        Professor Neil Towers
Professor Neil Towers
Professor Neil Towers
Professor Neil Towers
Professor Neil Towers
Professor Neil Towers
But!!Professor Neil Towers
What Retailers Want  All Merchandise sold at full price  Less stock in store or in transit  Responsive Suppliers  Social &...
What Suppliers Want   Reliable Forecasts   Long Production Runs   No mid-batch changes   Good Buyer Relationships   No com...
3. Responsive Retailing      Challenges   33% of merchandise is discounted   Forecasts are often wildly wrong   Many custo...
Multi Channel Retailing•Selling across more than one channel•Examine goods in one channel, buy themin another and collect ...
Shirts: Retail Model                      Ex-China               Ex-Turkey(C) Cost : $/piece        15.1                 1...
Turkey can still compete•despite 5x Chinas labour cost•if the merchandise is a fashion product•and the delivery time to ma...
The Dynamic Research  Framework, 2010                                                  The Agile                          ...
I. Seasonal Product    SE Asia fashion supply chain        Seasonal (13 week) fashionChina        China        China      ...
Made in China      Professor Neil Towers
II. High Street Fashion    European supply chain     Short season (6 week) fashionWest China    India         Turkey      ...
Made in Turkey   Professor Neil Towers
III. Luxury fashion         UK supply chainLuxury fashion season (10 week)             fashionChina      Scotland         ...
V neck Cashmere            Fair IslePullover £159     Cashmere Scarf                       £95                Professor Ne...
Agile MerchandisingSupply Model, 2010  Fabrics                                         Catwalk               European     ...
Questions  andAnswers Professor Neil Towers
Upcoming SlideShare
Loading in …5
×

From Catwalk to Coathanger, Professor Neil Towers

1,396 views

Published on

Published in: Business, Technology
0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
1,396
On SlideShare
0
From Embeds
0
Number of Embeds
179
Actions
Shares
0
Downloads
21
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide

From Catwalk to Coathanger, Professor Neil Towers

  1. 1. 8th International Conference Retail Management The Road Map to the New EuropeFrom Catwalk to Coathanger Professor Neil Towers
  2. 2. Agenda1. Challenges for the Coathanger2. Retailing, post 20043. Responsive Retailing Challenges Professor Neil Towers
  3. 3. The Catwalk• Influences high street trend as opposed to purely for luxury brands• Democratisation – Fashion for all Professor Neil Towers
  4. 4. Professor Neil Towers
  5. 5. Old Textile World Professor Neil Towers
  6. 6. OLD TEXTILE WORLDQuota ConstraintsLarge Textile Capacity in US & EuropeDispersed Garment ManufacturingHuge Shipments of Semi-Finished GoodsInefficient Supply ChainsOvercapacity & CyclicalityDemand Growth Mainly US & Europe Professor Neil Towers
  7. 7. Typical call to arms: Can Turkey compete against China?Professor Neil Towers
  8. 8. Fashion Supply Channels• Significant power shift in past three decades in the UK• Power move from manufacturer / intermediary domination• Channel domination in favour of retailer : power in distribution (Hines, 2007)
  9. 9. Fashion Retailing – Market Structure• Distribution Fragmentation – dominated in numerical terms by single-outlet, family owned businesses• Significant decline in numbers in past 10 years – by 40%• Significant in volume, not however in terms of market share levels
  10. 10. New Textile World1. Challenges for the Coathanger Professor Neil Towers
  11. 11. Fashion Retailing – Market StructureMarket Concentration :-• Clothing specialist chains : account for 68% of clothing spend• Remainder – department stores, mail order and food retailers• Concentration of power : top 5 retailers have a combined share of 43% in 2006 (Mintel, 2006)• M&S : 15% market share
  12. 12. Fashion Retailing – Market StructureConcentration – why and how?• Scale : number of outlets / national coverage• Customer patronage volume• Own-brand domination• Multi-segment coverage / diversification• Multi-channel participation• Adoption of a strategic management approach
  13. 13. Multi-Channel Distribution• Rapid change in perspective in past decade with respect to viability and potential• Current challenge relates to multi-channel integration• Strategic advantage will emerge through high brand / service delivery in a cost- efficient manner• Basis for international brand development and expansion
  14. 14. New Entrants• Supermarket and discount retailers ; pure internet players• Impact upon attitude but also participation in clothing consumption• Emergence of consumption polarisation : Prada-Primark effect• Price deflation• Increase in clothing sales volume – but decrease in value terms
  15. 15. Global Apparel Exporters (Excludes EU, US and Canada) 45.7% Source: World Bank 2005 Professor Neil Towers
  16. 16. Professor Neil Towers
  17. 17. Rise of ‘fast fashion’• Rapidly changing collections of high-fashion garments – the speedy replication by high street retailers of the latest fashion (catwalk) inspired ranges – up to 20 collections per year• Dependent upon short lead times and limited availability• Ability to refresh ranges in store is dependent upon supply chain flexibility Professor Neil Towers
  18. 18. 2.. Retailing, post 2004 Responsive and Flexible Retailer + Supplier:From Catwalk to Coathanger „Bring on Sheila and Fred‟ Professor Neil Towers
  19. 19. Fashion Supply, post 2004 Loss of quota protection Supply chain concentration  Global sourcing but fewer producer countries  Number of suppliers will continue to fall Logistics factors Social & labour Issues Non-competitive producers will suffer Prices drop, volumes rise Professor Neil Towers
  20. 20. Globalisation of the Supply Chain• Move away from vertical integration of the textile- apparel pipeline towards use of flexible global subcontracting relationships e.g. Nike, Zara,• The large-scale shift of labour-intensive garment manufacturing operations of Western retailers to developing countries with lower labour costs e.g. China, Cambodia, Vietnam e.g. Top Shop, H&M• Fashion products sourced from responsive UK/EU/Asia suppliers with high customer service capability eg. Benetton, Paul Smith Professor Neil Towers
  21. 21. Lean & Agile Supply• Lean – for continuity products (26+ weeks)– elimination of waste, including time, to enable a level schedule and achieve cost- efficiency• Agile – for fashion products (13 weeks or less)– prioritising speed & flexibility to reduce lead time & match supply to demand Professor Neil Towers
  22. 22. Lean & Agile Mixed Mode Supply Model 2004 Fashion Agile Route TrendFabrics European Forecast manufacturersYarns Regional Consumer Distribution CentreFabrics Overseas manufacturers Retailer CommodityYarns Lean Route Professor Neil Towers
  23. 23. Typical global fashion supply chain Seasonal (13 week) fashion Africa India China UK UK • Example of cotton knitted product for DKNY Professor Neil Towers
  24. 24. Supply Lines from S.E. Asia Spinning Mill Cotton Fields 3,500 km Dyeing, Weaving & Knitting Shipment to UK 6 – 8 Weeks Professor Neil Towers
  25. 25. Logistics & Infrastructure Professor Neil Towers
  26. 26. International Shipping 8 RTW vessels Emma Maersk: 11,000 TEU Professor Neil Towers
  27. 27. Inaugural Lecture Series From Catwalk to Coathanger Professor Neil Towers
  28. 28. Professor Neil Towers
  29. 29. Professor Neil Towers
  30. 30. Professor Neil Towers
  31. 31. Professor Neil Towers
  32. 32. Professor Neil Towers
  33. 33. But!!Professor Neil Towers
  34. 34. What Retailers Want All Merchandise sold at full price Less stock in store or in transit Responsive Suppliers Social & Environmental Compliance Fast & “On Time” Deliveries Good Margins & Profits Professor Neil Towers
  35. 35. What Suppliers Want Reliable Forecasts Long Production Runs No mid-batch changes Good Buyer Relationships No competition Acceptable Margins & Profits Professor Neil Towers
  36. 36. 3. Responsive Retailing Challenges 33% of merchandise is discounted Forecasts are often wildly wrong Many customers leave without buying Distance adds cost Logistics cost are rising Hunt for Margin leads to longer lead time, more errors, less reaction time, markdowns etc. Professor Neil Towers
  37. 37. Multi Channel Retailing•Selling across more than one channel•Examine goods in one channel, buy themin another and collect them from a thirdchannel, linked by a process of productdistribution•Online UK Clothing Sales2009: 26%2010: 35%2013: +50% Professor Neil Towers
  38. 38. Shirts: Retail Model Ex-China Ex-Turkey(C) Cost : $/piece 15.1 18.6 +3.5(P) Price Point: $ 120 120(S) Sell Through % 65 80(m) Markdown ratio 0.35 0.20(D) Discount rate 0.5 0.5(G) Gross Margin 83.9 89.4 +5.5 Professor Neil Towers
  39. 39. Turkey can still compete•despite 5x Chinas labour cost•if the merchandise is a fashion product•and the delivery time to market is critical RETAIL MANAGEMENT CHALLENGE !!!INTEGRATEDSEGMENTATION, TARGETING &POSITIONING Professor Neil Towers
  40. 40. The Dynamic Research Framework, 2010 The Agile Supply Chain Demand Chain Management Customer Integration Management Components Process Integration Agile ValueMerchandising Chain Supply Chain Management Virtual Integration Supply Chain Structure Network Integration Professor Neil Towers
  41. 41. I. Seasonal Product SE Asia fashion supply chain Seasonal (13 week) fashionChina China China UK UK Thomas Nash Woven Jacket at Debenhams Professor Neil Towers
  42. 42. Made in China Professor Neil Towers
  43. 43. II. High Street Fashion European supply chain Short season (6 week) fashionWest China India Turkey UK UK Example of Per Una (M&S) Professor Neil Towers
  44. 44. Made in Turkey Professor Neil Towers
  45. 45. III. Luxury fashion UK supply chainLuxury fashion season (10 week) fashionChina Scotland Scotland UK Edinburgh, U K Professor Neil Towers
  46. 46. V neck Cashmere Fair IslePullover £159 Cashmere Scarf £95 Professor Neil Towers
  47. 47. Agile MerchandisingSupply Model, 2010 Fabrics Catwalk European manufacturers Yarns Regional Retail Supply Distribution Experience Attributes Centre Fabrics Overseas manufacturers Coathanger Yarns Professor Neil Towers
  48. 48. Questions andAnswers Professor Neil Towers

×