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Are Our Household Names Still the Status Quo?

January 14, 2022
Author: Jasmine Waters

In the world of retail, household brands names have been those to look to during uncertain times. Often an indicator of what’s to come, their successes and failures can be a helpful tool to guide small and independent brands through a rough patch. Surprisingly, all has not been as it seems. Brands that reported early growth are now starting to struggle, with unexpected players now swooping into get financial glory. Amidst the chaos, what are big businesses actually reporting?

Who’s succeeding?

A noticeable crop of early pandemic success stories are now starting to lose their grip, with profit prospering in unseen areas. Big name e-tailers like Asos and Boohoo a dampening in overall sales, with stock falling by around 50% over 2021. Capitalisation value has also rapid decreased, with the latter issuing two profit warning in quick succession. Unlike the homegrown names, international players like Shein have seen astronomical gains. Now the largest fashion brand in the US, they were previously off the radar within the fashion business world.

Why are we seeing such rapid changes? The answer initially came in the form of the pandemic but is now not a sole cause as many look to make long-term gains. There’s been a variety of strategies deployed to try and remain adaptable, from total restructuring to focussing on digital innovation. In efforts to boost pricing power, those with lower inventory levels have needed to reassess how they are positioned.

Notable case studies

A great case study in unexpected success is Next, who have raise their projected profit levels for a fifth time since the pandemic started. Admittedly, they were already in a good position beforehand, but were able to meet consumer demand by speeding up investments in their warehousing. It’s these kind of industry players that may find themselves in better shape than they were to begin with.

M&S has also seen the crisis as an opportunity. Initially struggling, they quickly closed the stores they needed to and have reported a healthy first quarter. It’s an impressive feat, given the wider UK landscape stands at 10% of the apparel market disappearing in the two years—many of which have been nationwide chains.

Retail as a whole will still be fighting against unseen challenges for some time to come. Online competition is at all-time high, while logistical problems continue to surge ahead. The industry is likely to see those bigger brands that didn’t capitalise on change struggle, feeling the impact of riding the environmental wave rather than using it for good.

Photo source: www.reward-strategy.com

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