News broke this week that South African billionaire Christo Weiss has invested £20M into a project led by ex-ASDA chief, Andy Bond, which will aim to compete with supermarket apparel ranges and take up position on the UK high street.
Their war-cry is ambitious. The yet unnamed clothing chain is called ‘Project 50’ in reference to the intention to open 50 stores within 2 months of their launch.
The project’s offering aims to target mothers and children and will cover basics as well as fashion. The launch will take advantage of unused space on secondary UK high streets, which have been plagued by a decrease in footfall and rent hikes.
But does the huge success of supermarket apparel retail in the UK leave much space for new competition? And in a high street busy with large family retailers Next, Marks & Spencer and H&M, where can Project 50 fit in?
Identifying the competition
To understand who exactly is under threat, we’ve analyzed seven largest UK mass and value retailers on the high street. We’ve plotted the number of products at each retailer, as well as the scale of the discounted proportion of their offering. Alongside that, we’ve looked at median price point. Next and Marks & Spencer have huge offerings, but their price point does not align them with Project 50’s earmarked segment. They are not a threat to Project 50, and as long as Next and Marks & Spencer can maintain and communicate the quality of their offering. And if they keep deliver a fashion-forward offering suited to their own shoppers, they are out of direct fire.
Uniqlo’s offering is small and median price point low – Project 50 certainly has room to dominate here with their own clothing basics, if the assortment is large.
The most direct competition however comes from George at ASDA, Matalan and Tesco’s F&F, whose pricing is very low, assortments are broad and discounting at healthy rates. George at ASDA focuses the majority of their assortment in the $5-10 price bracket, whilst Matalan and Tesco have relative balance from $5-20. Project 50 will need to enter with a strong $5-15 assortment of apparel to disrupt this market.
Breaking down those three retailers’ assortments by gender shows George at ASDA’s strategy aligned with Project 50’s target of womenswear and childrenswear. They also have a lower rate of discounting than Matalan or Tesco F&F, and a high sell out rate, at 13.9%. Even without Andy Bond at the helm, Project 50 poses most threat to George.
The biggest wins for Project 50 will be where they can differentiate from the existing value offering – whether that’s through product or price. Looking at a category assortment of the UK value market, we can see the heavy weighting this segment places on tops and footwear, followed by bottoms. In contrast, the mass market has a heavier weighting on accessories than value does. Project 50 would do well to build into the accessories category, at a value price point, to lure the mass market shopper towards their own offering. There is also room for the value market to grow the dress and outerwear categories.
Taking up space of the UK high street, which has seen dramatic changes over the last ten years, is a risky proposition. Certainly Project 50 could take advantage of the now falling rental prices as landlords scramble to fill space, but store mix isn’t the only reason the UK high street has suffered.
For many UK retailers online is what has taken over as the flagship presence, suiting the busy lifestyle of the family shopper better. Maintaing an engaging in-store presence has required innovation – through in-store technology and convenience features such as click and collect. Going after the family shopper in the UK is complex – as towns and cities grow, this customer travels to the high street in a vehicle and parking costs in UK towns can be prohibitive. Supermarkets have boomed, with their free parking and convenience. To really contend, Project 50 better prepare to make number 1 of those 50 stores their online flagship.