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London fights back
By Nina Jones |
January 11, 2009, Sunday
|
Print Edition
Print Edition
FROM Covent Garden to its teeming stock exchanges, the 2,000-year-old city of London long has been one of the world's most frenzied marketplaces, for fashion as well as money.
In the past 10 years, financial resources flooded the city, with private equity and hedge-fund firms drawn by its relatively light regulations. In turn, retail spending flourished: Retail sales in London in 2007 were estimated at 49 billion pounds (US$72 billion), according to the London Retail Consortium.
But the past year's credit crisis, in which England's banks were bailed out by the government and house prices plummeted, left the city and the nation teetering on the brink of recession.
London is integral to the UK's economy, providing 15 percent of the country's jobs, and retailing is the sixth-largest contributor to the city's economy. But in the five weeks before October 4, the city saw its first decline in retail sales in three years, when they fell 0.04 percent versus the same period last year, according to the London Retail Sales Monitor.
"Customers in London were more resilient than elsewhere in the UK, but turmoil in the city and the fastest rising unemployment in the nation have shaken confidence more than elsewhere," said Stephen Robertson, director general of the British Retail Consortium.
"London retailers are still outperforming the rest of the UK, but with the fallout from the troubled financial sector far from over, there may be worse times to come."
Retailers are pressing ahead, however, readying for an upturn in consumer confidence. The falling value of the British pound, recently down against the dollar and euro, is said to be attracting more European visitors to the city. In late October, the 1.7-billion-pound Westfield London mall opened in Shepherd's Bush, West London. It expects 20 million shoppers a year to an enclave of luxury stores, called "The Village," boasting Louis Vuitton, Prada, Dior and Burberry units.
And while London's West End, the city's main shopping area, with Oxford, Bond and Regent Streets, saw customer traffic dip 0.8 percent in October, traffic rose 11.6 percent in mid-November against the same period last year.
Jace Tyrrell, head of communications for New West End Co representing retailers in the area, believes international brands will always be drawn to the West End, whatever the economy. "(Retailers) have to make a statement about their brand here," said Tyrrell. "We have 200 million visitors a year - retailers open their biggest stores with unique product here."
Banana Republic and Abercrombie & Fitch opened vast stores on Regent Street and Savile Row over the past two years, and Tyrrell said Anthropologie and Hollister were scouting London for locations. National Geographic just opened a flagship on Regent Street, Italian jeweler Pomellato opened on Brook Street, and Ferrari will open on Regent Street selling accessories and clothing.
And as the euro has gained strength against the pound, European visitors have flocked to London for luxury goods at competitive prices. Aside from designer and better-grade stores, Tyrrell said London's galleries, museums, theaters, restaurants and heritage are also a powerful draw for visitors.
"We have the whole package," said Tyrrell, who noted many retailers may open for the 2012 Olympics.
The city's edgy fashion scene also draws buyers and brands on the hunt for emerging trends, and students attending art and fashion colleges like Central Saint Martins, the Royal College of Art and London College of Fashion.
According to the British Fashion Council (BFC), London Fashion Week is worth 20 million pounds to the city's economy, generating 100 million pounds worth of orders for British designers.
Next February, London Fashion Week marks its 25th anniversary, and the BFC will introduce initiatives supporting London designers and stress the importance of fashion to the city and British economy.
The council in September established a fund to back emerging London designers, modeled on a Council of Fashion Designers of America (CFDA) program, and recipients will be announced in November. "This will allow us to make a real difference to existing businesses, helping them to grow and develop here," said Chairman Harold Tillman.
The city has a hard time keeping designers showing at London Fashion Week, with Saint Martins alumni Stella McCartney, John Galliano, Alexander McQueen, Sophia Kokosalaki and Matthew Williamson now presenting in Paris or New York.
To further cement their presence on the fashion calendar, the BFC negotiated with Paris, New York and Milan fashion weeks to secure London a five-day slot between New York and Milan ready-to-wear collections.
London's spring 2009 shows will now run from September 20 to 24. "We all agree it is very important to preserve London Fashion Week. It provides the pool of talent we all benefit from," noted Diane von Furstenberg, CFDA president.
In the past 10 years, financial resources flooded the city, with private equity and hedge-fund firms drawn by its relatively light regulations. In turn, retail spending flourished: Retail sales in London in 2007 were estimated at 49 billion pounds (US$72 billion), according to the London Retail Consortium.
But the past year's credit crisis, in which England's banks were bailed out by the government and house prices plummeted, left the city and the nation teetering on the brink of recession.
London is integral to the UK's economy, providing 15 percent of the country's jobs, and retailing is the sixth-largest contributor to the city's economy. But in the five weeks before October 4, the city saw its first decline in retail sales in three years, when they fell 0.04 percent versus the same period last year, according to the London Retail Sales Monitor.
"Customers in London were more resilient than elsewhere in the UK, but turmoil in the city and the fastest rising unemployment in the nation have shaken confidence more than elsewhere," said Stephen Robertson, director general of the British Retail Consortium.
"London retailers are still outperforming the rest of the UK, but with the fallout from the troubled financial sector far from over, there may be worse times to come."
Retailers are pressing ahead, however, readying for an upturn in consumer confidence. The falling value of the British pound, recently down against the dollar and euro, is said to be attracting more European visitors to the city. In late October, the 1.7-billion-pound Westfield London mall opened in Shepherd's Bush, West London. It expects 20 million shoppers a year to an enclave of luxury stores, called "The Village," boasting Louis Vuitton, Prada, Dior and Burberry units.
And while London's West End, the city's main shopping area, with Oxford, Bond and Regent Streets, saw customer traffic dip 0.8 percent in October, traffic rose 11.6 percent in mid-November against the same period last year.
Jace Tyrrell, head of communications for New West End Co representing retailers in the area, believes international brands will always be drawn to the West End, whatever the economy. "(Retailers) have to make a statement about their brand here," said Tyrrell. "We have 200 million visitors a year - retailers open their biggest stores with unique product here."
Banana Republic and Abercrombie & Fitch opened vast stores on Regent Street and Savile Row over the past two years, and Tyrrell said Anthropologie and Hollister were scouting London for locations. National Geographic just opened a flagship on Regent Street, Italian jeweler Pomellato opened on Brook Street, and Ferrari will open on Regent Street selling accessories and clothing.
And as the euro has gained strength against the pound, European visitors have flocked to London for luxury goods at competitive prices. Aside from designer and better-grade stores, Tyrrell said London's galleries, museums, theaters, restaurants and heritage are also a powerful draw for visitors.
"We have the whole package," said Tyrrell, who noted many retailers may open for the 2012 Olympics.
The city's edgy fashion scene also draws buyers and brands on the hunt for emerging trends, and students attending art and fashion colleges like Central Saint Martins, the Royal College of Art and London College of Fashion.
According to the British Fashion Council (BFC), London Fashion Week is worth 20 million pounds to the city's economy, generating 100 million pounds worth of orders for British designers.
Next February, London Fashion Week marks its 25th anniversary, and the BFC will introduce initiatives supporting London designers and stress the importance of fashion to the city and British economy.
The council in September established a fund to back emerging London designers, modeled on a Council of Fashion Designers of America (CFDA) program, and recipients will be announced in November. "This will allow us to make a real difference to existing businesses, helping them to grow and develop here," said Chairman Harold Tillman.
The city has a hard time keeping designers showing at London Fashion Week, with Saint Martins alumni Stella McCartney, John Galliano, Alexander McQueen, Sophia Kokosalaki and Matthew Williamson now presenting in Paris or New York.
To further cement their presence on the fashion calendar, the BFC negotiated with Paris, New York and Milan fashion weeks to secure London a five-day slot between New York and Milan ready-to-wear collections.
London's spring 2009 shows will now run from September 20 to 24. "We all agree it is very important to preserve London Fashion Week. It provides the pool of talent we all benefit from," noted Diane von Furstenberg, CFDA president.
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