Competition from one-stop-shop and online retailers will hamper industry growth
Los Angeles, CA (PRWEB) March 01, 2013
The performance of the Women's Clothing Stores industry relies on trends in consumer spending. According to IBISWorld industry analyst Nikoleta Panteva, “Over the five years to 2013, industry revenue has grown at an anemic 0.6% per year, on average, reflecting similar weak growth in per capita disposable income.” In 2009, when incomes declined 0.4% due to jumping unemployment, industry revenue fell 1.7%. In 2013, IBISWorld anticipates per capita disposable income to grow only 0.4%, resulting in a small 0.2% increase in industry revenue, to $5.3 billion.
Industry profit (i.e. earnings before interest and tax) also suffered during the five years since 2008. “Weak consumer incomes led to shoppers choosing lower priced, low margin items,” says Panteva. Profit remained slim during 2008 and 2009 as a result of consumers substituting cheaper items in light of declining confidence in their financial situations. The industry experienced constrained margins through 2010 and 2011 as well, due to the skyrocketing price of cotton. Floods in Pakistan and India in 2010 destroyed much of the world's supply of the commodity, causing its price to shoot up. The price of apparel jumped as well, increasing purchasing costs for the industry's players. Nevertheless, as consumers' budgets have bounced back and the world price of cotton has come down slightly, industry margins have recovered as well. IBISWorld estimates profit to account for 9.8% of revenue in 2013.
Market share concentration within the Women's Clothing Stores industry is low. The four largest industry players constitute 36.9% of the industry's market share. As such, the industry has a low market share concentration. While the industry's major companies each operate several hundred locations, there are many small-scale stores that run on a regional basis, serving only their local market. The average company is expected to account for only 0.03% of total industry revenue in 2013. Over the five years to 2013, market share concentration has remained relatively constant. While Reitmans has lost market share due to rising competition from lower-priced retailers, H&M has gained significant market share because of its competitive prices.
Revenue is also projected to continue on its upward trajectory. Per capita disposable income is anticipated to climb a healthy 2.1% in 2014, underpinning a 3.4% increase in revenue. Over the five-year period to 2018, revenue is projected to grow as unemployment abates, consumer confidence recovers and incomes grow. However, the Women's Clothing Stores industry is facing saturation. The number of participants is expected to continue increasing, limiting individual players' opportunities. External competition from alternative retailers is also anticipated to infringe on the industry's growth potential; time-poor consumers will favor one-stop-shop department stores and mass merchandisers, while ever-improving technology makes online shopping even more secure and convenient.
For more information, visit IBISWorld’s Women's Clothing Stores in Canada industry report page.
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IBISWorld industry Report Key Topics
Stores participating in this industry specialize in women's wear, including juniors' clothes, misses' clothes, plus-size fashion and maternity wear. Many retailers also undertake accessories retailing and other apparel retailing (such as men's and children's), activities that are traditionally undertaken by industries suchs as Men's Clothing Stores (44811) and Children's and Infants' Clothing Stores (44813).
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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