At the other end of the spectrum is former stock market darling Asos with its soaring losses and predictions of a continuing decline in sales that could slump by as much as 15% in the coming year.
Looking at the Next results, analysts Eleonora Dani and Clive Black of Shore Capital point to the possibility of an emerging trend: “The focus on full price sales, as opposed to sales during clearance events, suggests a potential shift in consumer spending habits towards quality over quantity”.
This may be true in the case of Next’s core audience, but it would be imprudent to base any conclusions about the state of the wider retail market on this single piece of evidence.
Sure, Asos used to be the fast fashion go-to for millennials seeking the latest trends at the lowest prices. That Asos is now struggling would on the face of it suggest that the backlash against the throwaway culture is finally making an impact.
Except that it’s not. One of the biggest among the multiple problems faced by Asos is the continuing rise of ultra-fast fashion e-tailers such as Shein and fellow Chinese upstart Temu.
Shein reported annual revenues of nearly £19 billion last year and has projected that this will rise to just shy of £50bn in 2025. In December 2022 it overtook Zara to become the most frequently Googled fashion retailer in the world.
But Shein, which earlier this week announced its first UK acquisition in the form of the Missguided brand, has been feeling pressure of its own from Temu. Since launching in the US in July of last year, Temu has captured more than half of Shein’s market share in that country and is now topping the charts in the UK as the number one shopping app by downloads.
Squeezed budgets have left many consumers with little choice but to cut back wherever they can by overlooking the true cost of ultra-cheap clothing. The fashion market is not moving towards sustainability en masse, but rather is fracturing into subsets separated by ever-widening gaps.