Mintel report reveals menswear lull

FASHION retailers are still feeling the financial chill of 2003 but while the woes of some high-profile names in women's fashion have been making headlines, the menswear market is now starting to look more fragile.

According to a report by consumer analysis group Mintel, the British menswear retail market grew by only 1.2% to about £6.1bn last year. Mintel has now revised its forecasts, predicting that this figure will have only inched upwards towards £6.2bn by 2007.

To put this in context, sales of menswear grew by 5.7% in 2001 and 6.8% in 2002 and the value of the market rose by 20% in real terms between 1998 and 2002. While low inflation, high employment and low interest rates have kept consumer confidence buoyant, rising taxes have been eating into personal disposable income.

Mintel director of retail Richard Perks says: 'We have been very cautious in our latest menswear report because the economic outlook is so uncertain. But the clothing sector is particularly vulnerable to a drop in consumer confidence and menswear is one of the first areas of spending to be sacrificed if there is perceived to be a downturn.'

Perks also notes that men have historically cut back on clothes far more than women in periods of recession. Nevertheless, as the High Street menswear retailers are preparing for an uncertain year amid what the industry regards as the biggest saturation of the middle market for a decade, retailers catering for the more well-heeled consumer are continuing to press on with programmes involving revamps or international expansion.

Gieves & Hawkes embarked on its first wholesale operation at the end of last year, supplying a national network of small independent boutiques in a bid, in the words of creative director James Whishaw, to 'open up the brand' to a younger customer base and 'reinvigorate' it for existing ones.

Emboldened by 'very encouraging figures' for the initial rollout, Gieves & Hawkes is planning its first push into the US this year and is in negotiations with two middle-market New York department stores which are jostling to carry the Gieves label from the autumn.

Japan-owned DAKS Simpson, which has also launched a more casual menswear range and has started wholesaling to store chains such as House of Fraser, agrees that the US represents the next challenge. A DAKS spokesman confirmed that a flagship store in New York is on the agenda but added that it is too early to say whether the project will go ahead this year.

On Regent Street, Liberty recently completed the refurbishment of its menswear department. It has made a return to the 1990s practice of showcasing designer brands in a bid to lure customers who are largely immune to mortgage rate rises or council tax increases.

A company spokesman observed that in 2004 paying the same amount of attention to menswear as to womenswear makes fiscal sense. The international luxury goods conglomerates are also banking on top-end British men's fashion to bolster them through difficult trading times, exacerbated by falling profits among some of their women's labels.

Gucci revealed at the end of last year that Stella McCartney had posted £4.5m pre-tax losses and only £434,611 in sales. In the past couple of months, LVMH has tapped Savile Row's charismatic and unorthodox Ozwald Boateng to become creative director of menswear at Givenchy while sleepy old Hardy Amies has embarked on a global makeover following a major refinancing from Shanghai-based fashion and homeware conglomerate Aussino.

Both companies are eyeing significant expansion in the US and the Far East while Hardy Amies also plans to turn the ground floor of its historic Savile Row headquarters into a retail emporium and introduce a casual line. Tellingly, John Galliano recently unveiled his first major menswear collection since 1986.

Roger Tredre, editor-in-chief of Worth Global Style Network, says all the major fashion houses are now aggressively investing in menswear in a bid to emulate Dior, whose menswear profits have risen by more than 40% since Hedi Slimane became the division's creative director in 2001.

'A successful menswear operation is now the holy grail for these companies because the returns can be so huge,' says Tredre.

Menswear accounts for 35% of Givenchy's turnover although the division's activity has a relatively low profile. What remains to be seen is whether the current optimism at the top end of the menswear pyramid can trickle down to the High Street during the next few months.