Home Business News Summer’s fashion fail: Is sales slump due to returns crackdown or have designers lost their flair?

Summer’s fashion fail: Is sales slump due to returns crackdown or have designers lost their flair?

by LLB Finance Reporter
31st Jul 23 1:26 pm

Retailers might be celebrating a successful June, with sales up 0.7% in both value and volume, but one sector conspicuously failed to follow the trend, says the home delivery expert ParcelHero.

Clothing store sales were down -5.9% online and -0.4% on the High Street as they became the summer’s fashion victims.

ParcelHero’s Head of Consumer Research, David Jinks M.I.L.T., says: ‘The Office for National Statistics (ONS) retail figures for June were encouraging, with overall sales on the up. The big exception was fashion. Normally, June sees a jump in clothing sales as everyone scrambles to get the latest summer look for their holidays. This June, sales fell. Clothing sales were even down -1.5% on the last pre-Covid results (February, 2020).

‘So what’s the cause of fashion’s jaded June? Does the fault lie with the retailers, or with the fashion designers who lead the industry? In terms of online clothing sales, Boohoo and ASOS’ woes are well known, with their latest figures showing a marked decline in revenues.

‘For both retailers, their problems largely lie in over-confident expansion during the Covid pandemic. It’s also worth speculating how much impact a tougher approach to returns has had on their sales. ASOS is now closing the accounts of its biggest serial returners and whenever it finds evidence of “wardrobing” – wearing items before returning them. Boohoo has started charging its customers for returns, usually a fee of £1.99 (though members of its loyalty scheme are exempted). Fashionistas may have been put off by these changes.

‘However, perhaps the root cause of the problem doesn’t lie with the retailers’ sales and returns policies. Perhaps fashion designers have failed to inspire shoppers with their catwalks this season. For example, one of this season’s big trends is ‘creige’ – the cream and beige look. Many people will already have items in these colours, which doesn’t incentivise new sales.

‘Likewise, the introduction of extra, larger pockets is unlikely to persuade those who bought their cargo pants last summer to purchase another pair. Even this summer’s supposed must-have colours, ‘Viva Magenta’ and ‘Digital Lavender’, have failed to create a real buzz. During the ongoing cost of living crisis, perhaps the trends need to be more radical to convince us to splash the cash.

‘Returning to returns, now that the Covid online sales bubble has, if not exactly burst, certainly deflated, online fashion stores’ free returns have again become too much for retailers to absorb. Our recent industry report shows that returns are costing UK sellers around £60bn a year. Ironically, just as online retailers are seeing profits fall, “wardrobing” is booming now that people are once again socialising.’

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