LONDON — Will $3 cotton T-shirts, $13 embroidered bras and $16 hipster trousers, stacked and hung supermarket style, set off a retail revolution? Asda, which this week unveiled the first stand-alone stores for George, its $1.6 billion apparel and accessories brand, hopes so.

Asda, a wholly owned division of Wal-Mart, is testing whether its supermarket brand can flourish in the high-street retail arena. The company hopes George’s combination of everyday low prices and fashion-conscious clothing will sweep even more market share away from U.K. stores, including Marks & Spencer and Next, now that it’s on central shopping streets, in addition to out-of-town supermarkets.

“Value retail is growing up, and we’ve been a big player in that,” said Andy Bond, managing director of George and director of all nonfood business at Asda. “It was the right time to move to the high street. We have the confidence, we have the backing. Now we have to ask ourselves the question, ‘Can our economics work on the high street?’”

Bond said he believes that within five years, worldwide sales of George could overtake those of Gap Inc., America’s largest apparel specialty retailer, which posted sales of $14.45 billion in 2002.

Bond noted Asda was treating the stand-alone stores, in Leeds and Croydon, a London suburb, as supermarkets. “The IT systems are the same, and the merchandising is just like a supermarket: clear and efficient. Now we just have to get the volumes of customers we need into the store.”

Bond estimated the Croydon unit would need about 10,000 shoppers per week for the 11,500-square-foot store to generate the sort of margins needed to justify high-street rents. According to industry sources, that store will have to achieve annual sales of $860 (541 pounds) per square foot for men’s wear and$1,011 (636 pounds) per square foot for women’s wear in order to be profitable.

All figures are converted from the pound at current exchange rates.

Bond declined to say how much Asda had invested in the two units, and did not give any sales projections, although he offered that the 8,500-square-foot Leeds unit, which opened to the public earlier this week, had sold double its forecast on opening day.George’s Croydon store, which opens to the public on Monday, has an anonymous, utilitarian look, with black-and-white speckled floors, metal clothing rails and posters of models wearing George hanging on the walls. The two-floor store, located in the Whitgift Shopping Centre, has one entrance inside the mall and one at street level. The store carries some 7,000 items.

On the upper floor, row upon row of children’s cotton shirts, trousers, jackets, baby clothes, underpants, tights, pajamas and lingerie hang next to one another like soldiers standing at attention. The merchandising couldn’t be more straightforward.

At the back of the store, shoes and bags are lined up on tables, while men’s shirts and ties are packaged and sold together like tube socks or underwear, three to a pack at the knockdown price of $13.

Prices are writ large and bold on black-and-white signs so even the most nearsighted customers can’t miss them. They’re also pinned prominently onto the clothing in the high-street window just to drive the value-for-money point home.

Bond said he’s hoping the two units will teach Asda how customers shop the George collection when it’s sold on its own, rather than alongside laundry detergent, toilet paper and frozen chicken. George is currently sold in most of Asda’s 240 stores in the U.K.

“We view this as a two-way learning experience,” he said. “We’ve applied the supermarket merchandising formula to these new stores and are hoping to apply what we’ll learn here to the George supermarket format.”

Keith Wills, retail analyst at Goldman Sachs in London, said that selling George within stand-alone units will be the true test of its brand power. “It’s one thing to sell George in a supermarket, where sales are driven by basics and children’s wear, and another thing to sell on the high street, where sales are driven by fashionable women’s wear,” said Wills.

Asda is now the U.K.’s number one children’s retailer and second-largest clothing retailer by number of units sold, after Marks & Spencer. In terms of market share, M&S in 2002 controlled 11.6 percent of the clothing market, while Asda’s share was 3 percent.“There are a lot of questions here,” Wills said. “Does George have the cachet and credibility to survive on the high street? Can they broaden their appeal with a bigger variety of women’s wear and men’s wear that appeals to an older audience? In order to put pressure on their competitors, they are going to need to succeed across the board.”

Kate Bostock, the creative director of George, believes the range is broad enough to stand up on the high street. “We’re already an established family brand, and we’re very proud of the breadth of our offer.”

Maureen Hinton, senior retail analyst at Verdict Research, the London-based retail consultancy, said she’s convinced that George’s new retail format will be a hit. “The pricing is going to send shock waves across the high street, and I do think they have their finger on the pulse of the market. They have fast fashion, classic fashion and basics, and it’s all good quality,” she said after visiting the store this week.

“I also think this collection looks better in a store context than it does in a supermarket,” she added. “As a result of that, and its new in-town, more accessible locations, the brand is going to pick up a new load of customers.”

The new George format is already affecting competitors.

Last month, the U.K. discount retailer Matalan said it planned to test a small-store concept inside shopping centers. The first 12,000-square-foot trial shop will be in Portadown, Co. Armagh, in Northern Ireland. It will open next month and stock men’s, women’s and children’s clothing. If that pilot store works, the company plans to roll out the small-store concept across the U.K., a spokeswoman said. Matalan’s average store size is about 35,000 square feet.

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