This article profiles the EU market for outerwear andincludes knitted and woven outerwear for men, women and children, leathergarments and clothing accessories.


Market size


  • The EU market for outerwear amounted to € 251 billion in 2006, which was 88% of total clothing consumption. Consumption of outerwear grew 8.4% during the period 2002-2006, of which 1.8% in 2005-2006.
  • Germany is still the most important country in clothing consumption in the EU, but the difference between Germany and United Kingdom has become smaller again. Five countries (Germany, UK, Italy, France and Spain) account for 75% of EU outerwear consumption.
  • Consumers in the UK, Belgium and Austria are the biggest spenders on clothing in the EU, while per capita consumption in the new EU member states was far below the EU average of € 585.
  • Experts forecast that clothing expenditure in several of the new EU member states will continue to see robust growth in the period to 2010, while expectations in the major EU countries are moderately optimistic. The number of garments purchased per head of the population will continue to rise, but prices will not follow this growth rate. The populations are becoming more multi-ethnic and the average age is increasing. This will lead to new demands and consumer behaviour.


Production


  • The volume of the EU clothing production declined by 8.4% in 2005, on top of a 5.9% decline in 2004. Preliminary figures for 2006 indicate that the downturn in production is accelerating again.
  • The declining competitive position caused by increased production costs explain why the total turnover in the EU clothing sector declined.
  • Italy is the dominant clothing producer in the EU accounting for 35% of total EU turnover in 2005, followed by France, Germany, Spain and UK. Just over 80% of the EU garment industry is concentrated in these five countries.
  • Most of the EU manufacturers have developed an outsourcing policy.


Imports


  • The EU imported outerwear valued € 87.5 billion in 2006, of which 50% came from developing countries (DCs).
  • The average import price fell by 20% in the period 2002-2006, caused by factors like an intensified price competition among suppliers and a cheaper US dollar.
  • Germany remained the leading importer; imports decreased by 5.7% during the period 2002-2005 but increased 9.2% in 2006 and rose above the 2002 level. Germany was followed by the UK, France, Italy, Spain, Belgium and The Netherlands.
  • Developments in imports of outerwear varied strongly per EU country during the period 2004-2006, from booming imports (more than 40% growth) into Spain, Poland, Slovakia, Latvia, Lithuania and Estonia to stabilizing imports into Hungary, Bulgaria and Malta, and decreasing imports (more than 15%) into Luxembourg.
  • China remained the leading outerwear supplier to the EU, followed by Turkey, Germany, Italy and Bangladesh. Total imports from China increased considerably: 68% in the period 2004-2006. In 2002, 11% of EU imports came from China and 18% in 2006.
  • The role of DCs increased strongly from 44% in 2002 to 50% in 2006. This percentage was significantly higher for products such as knitted and woven garments for babies, T-shirts, woven outdoor jackets, woven skirts and leather garments, but significantly lower for products such as woven suits/ensemble, woven indoor jackets and knitted outdoor jackets.


 

Exports


  • The EU exports increased 1.3% in the period 2004-2006 to € 59 billion. A slightly increasing share of 25% went to countries outside the EU, mainly Switzerland, the USA, Russia and Japan.
  • The leading EU exporter of outerwear remained Italy (22% of total exported value), followed by Germany and France.


Trade structure


  • Developments in the retail sector, like a growing concentration at retail level, expanding by internationalization and growing competition, lead to an increased demand for fashionable  products against low prices.
  • The EU market has witnessed the relentless growth of clothing multiple chains and franchised outlets, leading to the decline of the formerly strong independents sector. This trend will be continued in the coming years.
  • The hypermarket format, with its strong non-food component and international character, plays an increasingly important role in outerwear sales in Western as well as in Eastern EU countries.
  • The fast changing demand in the clothing market is a significant factor. Because of the higher dynamics of the clothing markets in terms of more rapidly changing consumer preferences and more seasons per year, there is a general tendency in the clothing branch  to demand shorter delivery times and smaller volumes of series and orders.
  • The role of importing wholesalers and importers remains relatively important but will slightly decline, while the role of clothing multiples and, to a lesser degree, buying groups or franchise formula will increase in the coming years. Parallel to the trend for suppliers to make their clothing abroad is a trend for retailers or wholesalers to bypass the local industry totally, by means of direct imports.


Opportunities for developing country exporters


  • The considerable decrease of production in the major EU countries has led to a further sourcing of products in low-cost countries and, probably, of products with a higher design content. Besides the traditional lower range market segment, the largest middle range market segment may also offer good opportunities for exporters in DCs.
  • Importers in the major EU countries have built up a comparative advantage by specializing themselves in design and other functions, like preparation of samples, logistics, marketing etc., while simple production operations take place increasingly in other countries. As time goes by, even more of the first mentioned functions are leaving these EU countries too.
  • The focus on casual and leisurewear will be continued for the coming years, but to a much smaller degree. Besides this trend, there is a tendency to use more natural fibres, mainly cotton and blends with cotton, at the expense of man-made fibres.
  • Caused by economic developments, many consumers on lower incomes will continue to seek low priced clothes.
  • It should be noted that exporters in DCs will be faced with demands for high quality and environmentally friendly products.


Source: CBI Market Information Database