The retail clothing market is struggling.
The overall turnover of the sector is struggling to grow. It stood at 25.340 billion euros in 2009. The context of crisis is for many in these results. Consumers prefer promotions or balances to make purchases, but in these periods, margins are smaller. The extension of sales recently allowed by law will accentuate this phenomenon. Moreover, household arbitrage is much more in favor of leisure than clothing. The sector is more and more concentrated around franchise networks. They have means that allow them to conduct a very aggressive strategy in terms of variety and renewal of offers. The prices offered are also very attractive. In particular, large groups do not hesitate to have collections delivered delivered directly to the stores in just one go. Thanks to this system, the chains reduce their stocks and attract more customers thanks to micro-collections. The development of Internet sales is fast and increases the competition. In these conditions, independent professionals are very much threatened. The defaults were 1054 in 2009 and 932 in 2010. The survival rate beyond 5 years is 43.7%. These high figures show that independents can only remain competitive by reducing their margins, which weakens their profitability. In addition to the end of the collection isolated independent stores must get rid of their stocks by organizing promotions or balances that further reduce an already low margin. The share of the self-employed is reduced to 20% of the turnover of the market.The constraints of creating a clothing store
No training is required to practice in this sector. Similarly, no specific rule concerns the opening of a retail clothing business. It is subject to the common law of the retail trade as well as those relating to the safety of the places receiving from the public.
As for balances, the law introduced floating balances that supplement the national summer and winter balances, which last a week less. Professionals can arrange two extra weeks on dates that suit them.
The status of shopkeeper in clothing
The professional has the status of merchant and is registered with the register of companies of the Chamber of Commerce and Industry. As for most activities, it will be possible to exercise it as an individual entrepreneur, the taxation then follows the regime of industrial and commercial profits.
If he creates a company, the professional is subject to corporation tax
Finally, he includes the income from his activity in his income tax return if he has opted for self-employment.
In this sector, most professionals work in the form of companies.
VAT is 19.60%.
The characteristics of the profession
The isolated independent professional must join a group to remain competitive. These signs require good locations and sufficient space. The investments are heavy and especially they must be renewed frequently. Due to the number of references, computerization is essential to monitor stocks in an optimal way.
The management of a point of sale of clothing
point of sale of clothing” />
The low profitability of the sector requires the professional rigorous management. It will therefore track its turnover by breaking down by product lines and also by collection. It must imperatively control its stocks and tend towards a management with tight flow to limit as much as possible these. Its pricing strategy must be dynamic and stick to product rotation. In particular, it takes into account normal periods and sales periods. It monitors its gross margin so that it does not weaken its profitability even during the sales period.
The clothing market is a seasonal market. He is also very sensitive to modes that can vary the results of some clothes. The recipes are higher for the holidays and throughout the month of December. The month of October is also an excellent time with the arrival of the first cold. Finally, January, with the balances, also makes good numbers.
Clusters and chains perform much better than single professionals.
The heaviest burdens are purchases. Due to the vagaries of fashion, weather conditions, and the cyclical nature of the market, it is crucial that these purchases be perfectly controlled.
Personnel costs are the second largest item with network membership fees and advertising fees.
Rents from good locations in urban areas or shopping centers are also very high.
The clothing market depends mainly on the tastes of the customers. Therefore, it is necessary to be at the forefront of fashion and to practice attractive prices. Particular attention must be paid to inventory management, which must be sufficiently small so as not to incur additional costs. The balances policy must respect the profitability of the margins.
In this risky market, equity must reach at least 30% of the total to ensure the strength of the business.