The retail sales are an indicator of the global economys progress and reflect the spending patterns, as well as highlight habits of the consumers. The people and companies involved in manufacturing, distributing, marketing and selling of goods can benefit when the economy moves forward. When consumers hold off the decision of buying something, the decision overall weighs on the economy and makes it slow down. In the case of textiles, the retail sector has seen its ups and downs throughout the globe.
The sales of luxury clothing brands and that of other brands have not been very consistent. Prior to the global economic crunch, the retail sector of textile and apparel was striving ahead in glory, but the economic slowdown resulted in the gradual decline in the overall sales of textile goods. While most of the parts of the world are still recovering from the crisis, the recovery is fairly slow paced in Europe, depicting the mindsets of the people who are still trying to sail through the lag.
The retail textile and fashion industry in Europe stands for the luxurious culture of the continent. The European economy hugely depends on the creative intellect of the retail textile industry for recovery. The multifaceted and versatile link between designers, manufacturers, retailers and consumers has made the textile retail sector an integral part of the overall strengthening process of economy. European fashion and high-end industries represent European cultural heritage and know-how. These industries are a significant part of the creative economy and form complex and strongly interlinked value chains from design and manufacturing to the distribution and retail of fashion goods.
The growth of the European clothing market has been limited to mere 3.1 percent since the last five years and it continues to remain almost at the same levels even in 2014. It has been observed that the growth rate has especially been slackened in the textile and apparel retail since the last two years, even though there were signs of gradual improvement in the European economy. The reasons for this are that among the twenty eight nations in the European Union, some are still struggling to recuperate from the financial bog.
Greece and Spain have reported decline in growth with regard to consumer market of clothing and textile, as there is high rate of unemployment and low disposable income. With the current scenario, it will take the European Union another three years (i.e. by 2017) to achieve the 2007 expenditure peak of 296.2 billion. This also indicates that the retail textile sector took almost a decade to get back on track after the economic turmoil and thus the recovery will be prolonged.
Despite of the slow recovery, there is still some opportunity for growth in the European Unions retail textile sector. Germany is among the leading European countries that have taken a global lead in the clothing sector. The economy of Germany is robust and this has attracted big brands to open their stores here. Germanys clothing sector has provided the consumers fashion-led ranges, reasonable prices and perfect commercial environment to the retail houses.
These factors have been important in differentiating Germany from the other European nations. Another market that has displayed maturity in dealing with economic crisis is the United Kingdom. The United Kingdoms retail clothing sector is going strong and it has also attracted attention of international brands. The growth in retail clothing has bolstered the overall economy of Germany and United Kingdom. Some international brands have also shown keen interest in expanding business in these two European countries.
According to data gathered from the EU trade statistics website, the five member states of the union with the largest populations also generated the most value added retail activities: Germany was the largest at 86.5 billion, the United Kingdom at 76.8 billion, Italy 50.1 billion, France 72.6 billion, and Spain 43.1 billion.
The smaller markets in Central and Eastern European region like Poland, the Czech Republic and Romania have also shown immense growth potential. These countries can play a promising role in helping retail clothing chain stores find new target audience. Also, the new retail space, ongoing development in infrastructure, investments in retail clothing by luxury brands and rising disposable income of consumers would ensure high growth rate of retail clothing in these smaller markets. With the current pace, these countries can expect growth rate of 19 percent in the next five years in retail clothing.
In the other European countries like Spain and Portugal, where the growth rate of retail clothing has been a little over 10 percent between 2009 and 2014, there are opportunities for value retailers and brands with fast fashion edge to find new customer base. These retail stores can easily attract the customers from local shops, as the disposable income is subsequently improving.
Nevertheless, the inclusive growth of the sector will take place only by 2015. The performance of the retail clothing market is predicted to speed up at an anticipated Compound Annual Growth Rate (CAGR) of 2.8 percent by the year 2017. This will push the retail clothing market to a value of $ 700.6 billion by the end of 2017. When compared to the 2013 data for the overall size of the textile and clothing industry in the European Union, the turnover was 166 billion, according to Euratex.
The mindset of the consumers is changing gradually and certain markets in the European Union will witness the retail clothing sector prosper. The markets that are experiencing slowdown will also recover in the next three to five years, but finding fresh investments in present state of affairs will be a Herculean task for these regions. The overall growth of the EUs retail textile and clothing sector will improve significantly, as the income rises and competition grows.