MISS SELFRIDGE WORKS TO STAY HIP

Byline: James Fallon

LONDON--Miss Selfridge has been the U.K.'s hottest junior retailer since it was founded during the "Swinging Sixties." Now it's fine-tuning its operations to make sure it stays that way.
The 139-unit chain, a subsidiary of department and specialty store retailer Sears PLC, recognizes that demographics are working against it.
With the number of 15-to-25-year-olds expected to decline in the U.K. over the next decade, Miss Selfridge will have to work harder to continue its sales growth, which analysts estimate at about $160.7 million (105 million pounds) a year. Profits average about $7.7 million to $10.7 million (5 million to 7 million pounds) annually.
"Many companies have moved out of the junior market because of the demographic shift," said managing director Derek Lovelock from the company's headquarters in north London. "We are firmly entrenched in it and aim to take a bigger slice of a smaller pie."
To do that, Miss Selfridge instituted many changes over the last year.
It began to remodel its stores--changing from a look of the Seventies to a funkier Nineties style based on a Barcelona nightclub.
It brought in consultants to help formalize the structure of its product ranges--including the launch of the "Miss Selfridge Range Diamond," which is hung throughout its headquarters to remind merchandisers of which niche they are targeting with specific product lines.
It added more basic, less fashion-forward merchandise such as jeans and T-shirts.
It introduced a lower-priced collection called Low Down Wicked, to maintain its price-competitiveness. "The 15-to-25-year-old age group is diminishing in numbers, but someone has to cater to them," said Hillary Monk, an analyst at the retail consulting firm Verdict Research. "Miss Selfridge has managed to maintain its niche, but what has always been a mystery is why it has never expanded more. It probably could trade off twice as many stores."
In the U.K., it has 106 freestanding stores and 24 Miss Selfridge in-store shops. Lovelock said he doesn't expect to dramatically increase that number. It also operates nine in-store shops in Germany, but Lovelock remains cautious about expanding the chain overseas. Miss Selfridge already carries footwear, cosmetics and accessories and plans to add more lifestyle products such as stationery, note pads and other novelty items.
All of Miss Selfridge's products are sourced either in the U.K. or from low-cost suppliers in Continental Europe or the Far East. Key price points for fall range from about $46 (26 pounds) for pants, dresses and skirts to $77 (50 pounds) for jackets to $107 to $154 (70 to 100 pounds) for coats. The U.S. has no chains comparable to Miss Selfridge in terms of its leading-edge fashions and price points, said Lovelock, who travels to America several times a year to study the junior market.
"The closest thing to us in terms of approach is the Wet Seal chain," he said.
One of the main differences is cultural, said Lovelock.
"Since most British teenagers are still required to wear uniforms to school, they want to change into the latest fashions when school is out to assert their individuality, helping to fuel the junior market," he explained. In addition, Britain still has a strong club culture. "But catering to the latest fad can be dangerous for any retailer if it guesses wrong," said Lovelock.
Part of the reason for introducing the "Range Diamond" at Miss Selfridge was to iron out the dramatic swings in profitability the chain experienced in the past, Lovelock admitted. So the diamond covers everything from basics, which are in the stores for 26 weeks, to a core collection catering to about 80 percent of customers, to leading-edge styles exclusive to Miss Selfridge that are in-store for only four to six weeks. "Miss Selfridge has always been known for affordable, leading-edge fashions," said Lovelock. "By introducing a core collection, we can now take those leading-edge looks and knock ourselves off rather than letting our competitors do it. Now we can balance those looks with our core and basic ranges. Of the fashion chains in the U.K., our name has the greatest street credibility. The key is keeping that balance between leading edge fashion and affordability."
--Fairchild News Service

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