How big retailers learned the tricks of high fashion

Fashions now take 90 days to reach Woolworths' shelves, according to chief executive Ian Moir

Related Stories

When Sir Stuart Rose says something on retail, it's worth listening. With a 40-year track record in the industry, the former chief executive and chairman of Marks and Spencer is famed for turning around struggling retailers.

Now an independent, non-executive director at South Africa's Woolworths Holdings, a chain of shops selling fashion, food, beauty and home ware, he says retail has changed.

"Where the customer used to be king before, the customer is now the master of the universe: and they want what they want, how they want it, when they want it."

For Woolworths, this shift has been felt most keenly in clothing - an area that along with beauty and home ware makes up 38% of its business in South Africa.

Escape from the boardroom 3-d letter logo
  • A five-part series on TV and online
  • Follow five high-ranking executives as they head to the front lines of their firms
  • Their aim is to understand their business better
  • Outside the UK you can watch each weekend on BBC World News on Saturdays at 02:10 and 15:10, and Sundays at 09:10 and 21:10 (all times GMT).

In response, over the past two to three years it has made a conscious effort to make its clothing more fashionable, which crucially has involved getting it from the design stage to the shop floor much more quickly.

"Previously it was 11-months-plus for all of our clothing products to the point now where we can turn [an item] around in 90 days," says Ian Moir, chief executive of Woolworths (which has no connection with the former British High Street chain of the same name).

The strategy appears to be working. The company's most recent results for the year to the end of June saw clothing sales grow by 13.7%.

"If we don't give the customer the trend, the colour, the fashion they're looking for, at the end of the day they're going to go somewhere else," says Mr Moir.

New shopping ethos

Neil Saunders, managing director at retail consultancy Conlumino, says the changes at Woolworths reflect a "sea change" in how supermarket groups sell clothing.

"They have become more like clothing retailers. Five years ago they used to merchandise it in the same way as, for example, baked beans. They piled it high and sold it cheap. But now they have become lifestyle rather than commodity-led."

Ian Moir

Ian Moir

Ian Moir, 53, has been chief executive of Woolworths Holdings since 2010.

He was previously head of its Australian retail chain Country Road, which sells clothing, accessories and home ware.

His performance there - he was credited with saving the chain from near-bankruptcy - led to him being offered the top job at Woolworths.

Since he joined Woolworths, Mr Moir says the group has tried to "become much more fashion relevant, to become faster to market. We really were behind the rest of the world".

Mr Saunders says the 2008 financial crisis and resulting recession is a key reason behind this change in approach, with a trend for people to choose quality items that they expect to last.

"Before the recession people bought lots of stuff... they even bought stuff they didn't wear. There was a disposable element because clothing was cheap and people felt affluent.

"People are more frugal now. They buy less stuff and follow the ethos of, 'If you buy it right you buy it once.'"

Mr Saunders says, however, that low prices can still lure in customers if they are combined with fashion, citing Primark as an example. "It's on trend and that makes people very interested. But if a retailer just chases value then they struggle," he adds.

Fashion focus

UK supermarket group Sainsbury's founded its clothing range Tu almost a decade ago.

James Brown, clothing business director at Sainsbury's, says when Tu began it was focused on core products such as leggings, jogging bottoms and T-shirts, with ranges changed every 12 weeks or longer. But in the past two years it has become more trend-led.

"Since our recent rebrand the new Tu range is refreshed every six weeks to keep up with the latest fashions, and offer new products to our customer," says Mr Brown.

Sainsbury has increased its focus on fashion since it founded its clothing range Tu Sainsbury's has increased its focus on fashion since it founded its clothing range Tu

"Over the last nine years we have learnt more about our broad customer base and have adapted the range to offer more High Street-style garments at supermarket prices to meet customer demand," he adds.

The approach seems to be working - at its recent trading update for the 16 weeks to 28 September it said its general merchandise and clothing business grew at more than twice the rate of its food business.

Mr Brown says new items are planned up to seven months in advance, but that it can react quickly to last-minute trends by turning around a style in just eight weeks, assuming it can get the necessary fabric and has the production capacity.

Turnaround time

In contrast, for High Street chain Zara, production capacity is rarely an issue because unusually its owner Inditex has its own factories.

These manufacture what it says is a "significant share" of its clothing for its eight brands, which include upmarket Massimo Dutti and teen label Bershka, but primarily the most fashionable garments.

Hot fashion items at Zara can be designed and on the shelves in just two weeks Hot fashion items at Zara can be designed and on the shelves in just two weeks

For those items the clothes can be produced and in store in a rapid two to three weeks.

"Customer expectations are higher than ever so our capability to adapt and react to their demands is one of our key strengths," says an Inditex source.

For Ian Moir, this is the key to Woolworths' future.

"The importance of fashion is becoming greater and greater and customer awareness is getting better and better.

"They're very fashion aware and they want it now. That's the way the world is going, it's the way it's changing and it's the way we've got to change as a business."

Escape from the Boardroom is a five-part series broadcast on BBC World News on Saturdays at 02:10 and 15:10, and Sundays at 09:10 and 21:10 (all times GMT).

More on This Story

Related Stories

The BBC is not responsible for the content of external Internet sites

More Business stories

RSS

Business Live

  1.  
    10:59: Nigeria trading crackdown
    Naira notes

    Nigeria has announced further measures to limit currency speculation, according to AFP. The government is trying to defend the naira which has been undermined by the falling oil price. The new measures are designed to hamper professional traders. Those who purchase foreign currency must use the funds with 48 hours or they will be forced to sell the money back to the central bank at a price dictated by the bank, the news agency reports.

     
  2.  
    10:45: Club Med takeover battle
    ClubMed advert

    The stakes have been raised in the game to buy French holiday group Club Med. China's Fosun has raised its offer to €24.60 per share, which values Club Med at €939m. It trumps an offer from Global Resorts, which is controlled by Italian businessman Andrea Bonomi. His bid valued Club Med at €915m. Fosun wants to expand the firm in China and Brazil.

     
  3.  
    Via Twitter Douglas Fraser Business and economy editor, Scotland

    "Standard Life Investm'ts expands to new-build on sth St Andrew Sq Edinburgh: 10 new offices from Tokyo to Stockholm, expanding existing ones"

     
  4.  
    10:26: Air France shares slump
    Striking Air France pilots

    Shares in Air-France KLM have slumped 6% after the airline issued its third profit warning of the year late on Thursday. It blamed continued costs from a strike by pilots earlier this year. Sales, particularly of long-haul tickets, are weak, according to the airline. It also said that it was not yet seeing the benefit of falling oil prices.

     
  5.  
    10:13: Russia crisis
    A board showing currency exchange rates

    The Russian rouble has steadied gaining almost 3% and at one point it traded below 60 to the dollar. It comes after Russian finance minister Anton Siluanov said the rouble would definitely hold firm at the beginning of next year. He also said the ministry had been selling foreign currency.

     
  6.  
    10:00: Government borrowing falls

    Borrowing was also revised down for the first half of the year. Overall, year-to-date borrowing was £2.4bn less than first thought, mostly reflecting lower estimates of central government spending and higher assessments of receipts. The borrowing figure for November also came in £1bn less than the City expected.

     
  7.  
    09:49: Oil prices
    Brent crude price

    Oil prices have strengthened a bit this morning. North Sea Brent Crude is up 1% at $59.87 a barrel. You can see what a volatile week it has been from the chart above, with oil trading in a near $5 range and this week and breaking well below the $60 a barrel mark.

     
  8.  
    09:37: Government borrowing falls

    Government borrowing in November was £14.1bn, that's down £1.6bn compared with a year earlier, the Office for National Statistics (ONS) says.

     
  9.  
    Government borrowing falls 09:33: Breaking News

    Public sector borrowing from April to November 2014 was £75.8bn, a fall of £0.5 billion compared with the same period in a year earlier, official figures show.

     
  10.  
    09:20: Market update

    The FTSE 100 is stronger in early trading following that big jump for US shares on Thursday. Oil services firms have been hit this morning, Petrofac leads the FTSE 100 lower with a 4.5% loss.

     
  11.  
    09:02: Cyprus denied bailout cash

    The Cypriot parliament says it wants more time to draft a new law to protect people from losing their homes as a result of last year's banking crisis. The IMF says it will discuss the next steps with Cypriot authorities. The European Union had released a €350m instalment before the vote, bringing the amount of bailout cash given to Cyprus so far to €5.7bn.

     
  12.  
    Via Twitter Douglas Fraser Business and economy editor, Scotland

    "Big contract win for Schlumberger, providing drilling + well services for Statoil, in big new Mariner heavy oilfield, east of Shetland"

     
  13.  
    08:45: Cyprus denied bailout cash
    A  man walk outside a branch of Bank of Cyprus in Nicosia

    Remember last year's bank crisis in Cyprus? Well, the island nation may be in trouble again. The International Monetary Fund (IMF) is refusing to give Cyprus an €86m tranche of rescue money after the Cypriot parliament voted to suspend an insolvency law - due to take effect at the end of the month - that would have made it easier for banks to start to collect on bad loans.

     
  14.  
    08:40: North sea oil outlook BBC Breakfast
    Dominic Laurie, BBC Breakfast

    Around 375,000 people work in the UK oil industry and half of those are in north east Scotland says a cold looking Dominic Laurie from Aberdeen docks on BBC Breakfast. He speaks to the chief executive of Wood Group Bob Keiller. He says the industry has been through this kind of challenge before when the oil price collapsed in 1986 and 1998. He says the oil industry came out stronger.

     
  15.  
    08:25: North Sea oil outlook Radio 5 live

    More from Sir Ian Wood. He thinks that oil prices will be around $60 to $65 a barrel over the next 18 months and then will recover. That could prompt job losses of up to 10% in the UK oil industry, although he thinks it is more likely to be 5%. He says that investment plans are made 2-3 years in advance, so the impact is not immediate.

     
  16.  
    08:18: North Sea oil outlook Radio 5 live

    "Well over the top and far too dramatic," is how Sir Ian Wood describes a warning that the North Sea oil exploration business is close to collapse. Sir Ian is the Scottish billionaire who was commissioned by the government to carry out a review of the UK's oil industry.

     
  17.  
    08:09: Newspaper review
    Business pages

    The bid by IAG for Aer Lingus dominates today's business pages. Times Chief Business Commentator, Alistair Osborne says IAG's timing is not great as Aer Lingus shares are up 54% over the past year. Away from that, in the Financial Times Gillian Tett warns about the amount of dollar-denominated debt held offshore by companies from emerging markets. Graham Ruddick of the Telegraph warns that next year could be even worse than this year for the big supermarkets chains.

     
  18.  
    07:59: North Sea oil outlook BBC Radio 4

    Ian Theophilus an oil and gas consultant tells Today he expects a number of North Sea oil projects - planned with a higher oil price in mind - may be reduced or cut altogether. He says he is very worried about the prospect for North Sea oil in 2015. He says he and colleagues "remember the late 1980s and 1990s" when the oil price was between $9 and $11 per barrel and "everything was stuck". "The chances are that could happen again," he adds.

     
  19.  
    07:51: Keeping the lights on

    Reacting to the completion of the energy auction Energy Secretary Ed Davey, said: "This is fantastic news for bill-payers and businesses. We are guaranteeing security at the lowest cost for consumers. We've done this by ensuring that we get the best out of our existing power stations and unlocking new investment in flexible plant."

     
  20.  
    07:41: Keeping the lights on

    Companies will be paid £19.40 per kilowatt by the government to provide backup power following an auction process that has been going on all week. The new scheme is designed to ensure the nation has a sufficient energy buffer to cope with peak demand - usually over the winter.

     
  21.  
    07:32: Premier League TV review
    Premier League logo on a football

    Ofcom has launched a consultation on its view that the current division of Premier League and Champions League football between Sky and BT harms competition between pay TV retailers. Back in 2010 Ofcom ordered Sky to offer its sports channels to rivals at a price set by the regulator. It is now reviewing whether that has helped competition and "remains appropriate". There will be a second phase of the review in 2015.

     
  22.  
    07:20: North Sea oil outlook Radio 5 live
    North Sea oil platform

    It's extremely difficult to tell if the North Sea oil business is heading into the same kind of crisis that it saw in 1986, says Aberdeen businessman Charles Skene on Radio 5 live. Kenny Anderson the boss of an Aberdeen construction firm remembers the "strife" caused in 1986 when oil fell to $36 per barrel. But predicting oil prices is an "impossible game" he points out.

     
  23.  
    07:10: Samsung shareholder payout

    Samsung Electronics is considering increasing its dividend payout this year by between 30% and 50% compared to 2013.

     
  24.  
    06:56: Nigerian currency crisis BBC Radio 4

    Phillip Walker of the Economist Intelligence Unit, tells Today the crisis facing Nigeria is far bigger than the one facing Russia. Nigeria's currency the naira has fallen 15% against the US dollar this year forcing the country's central bank to impose foreign currency trading controls. "Nigeria has a bigger population than Russia, its economy relies on oil exports more than Russia, so it's a big problem," Mr Walker says.

     
  25.  
    06:48: Gas prices BBC Radio 4

    Professor Green says energy suppliers have an eye on politics at the moment. He says Labour leader Ed Miliband's promise to freeze energy prices for 20 months if his party wins next year's election may mean suppliers will keep prices artificially high despite currently benefitting from lower gas costs.

     
  26.  
    06:34: Gas prices BBC Radio 4

    While falling oil prices have recently caught the attention of many, the cost of gas has also been coming down. That's because demand in Europe has been falling due to a relatively warm winter so far. Richard Green professor of sustainable energy business at Imperial College London tells Today we shouldn't expect lower energy bills are a result. That's because energy suppliers are selling us gas they bought at last year's prices.

     
  27.  
    06:32: Asian markets

    Asian stock markets have had a mixed session. They Nikkei 225 is up more than 2%. Hong Kong's Hang Seng is up 1.4%. Shares in Shanghai have fallen back after hitting a four-year high in early trading. The Shanghai composite is down 0.1%.

     
  28.  
    06:21: China recalculates growth
    Chinese flag

    China's economy is bigger than originally thought. The government has revised up the size of the economy in 2013 by 3.4% to 58.8 trillion yuan ($9.5 trillion). The increase was mainly accounted for by a greater contribution from the services sector. In comparison, the US economy was worth almost $17 trillion in 2013.

     
  29.  
    06:14: IAG bid for Aer Lingus Radio 5 live
    Dublin Airport

    British Airways owner, IAG is "good at integrating new airlines" says Richard Hunter, head of equities at Hargreaves Lansdown. He is explaining why IAG made a bid for Aer Lingus. The Irish airline is attractive because it has lots of landing slots at Heathrow, says Mr Hunter. IAG may also have a bit more spending power because of the lower oil price, he adds.

     
  30.  
    06:06: North Sea oil jobs Radio 5 live
    Oil worker

    North Sea oil companies are cutting wages, rather than jobs at the moment, says Alan Savage chairman of recruitment company Orion Group on Radio 5 live. For agency workers wages have already been cut by up to 20%. He says that the British oil industry is highly taxed and the "government has a lot to answer for".

     
  31.  
    06:02: Russian crisis Radio 5 live
    Russian President, Vladimir Putin

    Next year is going to be grim for the Russian economy, says Craig Botham, emerging markets economist at Schroders on Radio 5 live. The economy is likely to contract 4.5%, inflation is forecast to be betweem 11% and 12%. The rouble could keep on weakening, "it's hard to see a particular floor for the currency" Mr Botham says.

     
  32.  
    05:59: Ben Morris Business Reporter

    Do get in touch. Email bizlivepage@bbc.co.uk or tweet @bbcbusiness.

     
  33.  
    05:59: Matthew West Business Reporter

    Morning folks. The news the US Federal Reserve is in no hurry to raise interest rates boosted shares on Wall Street and in Asia to new highs. Meanwhile the Bank of Japan maintained its commitment to government bond buying at its last meeting of the year. And we'll be keeping an eye on the Russia rouble and oil price again today and there may be more on IAG's bid for Aer Lingus. Stay with us.

     

Features

From BBC Capital

Programmes

  • A prosthetic legClick Watch

    How motion capture technology is being used to design bespoke prosthetics

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.