This document provides information about EU trade channels for garments. It discusses the structure of different trade channels including clothing chains, department stores, hypermarkets/supermarkets, and others. It also covers topics like order quantities, retail ratios, gross margins, and the fashion cycle of buying periods and collections. The overall goal is to help attendees understand the trade channel structure and identify potential business partners in the EU garment market.

1. EU TRADE CHANNELS
IDENTIFY
OPPORTUNITIES
Introduction to the EU
garment market
CBI-Inexmoda-Proexport
Medellin 4 August
Cali 5 August
Bogota 6 August
By Josephine Koopman

2. Josephine Koopman , 8-2014, CBI2
Agenda training session
1. Trade channel structure
2. Ratio’s
3. Fashion cycle

3. Goal of this training session
Understand the trade channel structure
And
identify your potential businesspartners
Josephine Koopman , 8-2014, CBI3

4. EU trade channel structure
Josephine Koopman , 8-2014, CBI4

5. Josephine Koopman , 8-2014, CBI5

6. Clothing chains
Private label chains
- Fast fashion
- Lead time reduction
- No stock but replenishment
- Avoid warehousing
- Own design and cut and marketing
- Lower quality and price
- Many delivery moments
Josephine Koopman , 8-2014, CBI6

7. Clothing chains
Single brand fashion chains
- Average/high priced and higher quality
- Higher percentage of basic clothing
- No stock but replenishment
- Avoid warehousing
- Own design, cut and marketing
- More delivery moments
- Sourcing mainly Europe for the high-end brands
Specific clothing chains
- Selected product groups
Josephine Koopman , 8-2014, CBI7

8. Department stores
- Private label and brands
- Contracted manufacturers and sub-contractors,
others own production facilities
- Very wide range of clothing, basics to fashion
- Wide range of quality and price level
- Lead times are longer than clothing chains
Josephine Koopman , 8-2014, CBI8

9. Hypermarkets - Supermarkets - Value retailers
- Subcontracting for private label
- Finished product buying for special promotion
- Basic items, low fashion level
- Fewer delivery moments
- Expected increased market share
Josephine Koopman , 8-2014, CBI9

10. Factory outlets and discounters
- Volume
- Discounted out dated articles
- Overproduced quantity
- Promotional items
- Wide range
- Delivery time crucial
- Repeat orders
Josephine Koopman , 8-2014, CBI10
Mail-order Companies

11. Web shops
- Growing market share
- Companies transfer to shop only on-line
- Additional to “brick” shops brands
- Virtual
- Pay online
- Margin
Josephine Koopman , 8-2014, CBI11

12. Market segmentation bodywear
High price luxury segment Market share 5-10%
Armani, Donna Karan Intimates, Gucci, La Perla, Prada
Upper middle price segment Market share 15-20%
Chantelle, Gossard, Marie-Jo, Wolford, Wonderbra
Middle price segment Market share 25-30%
Triumph, Sloggi, Schiesser, Ten Cate, Dim, Fila, Esprit, Mexx
Low to middle price segment Market share 35-40%
Private labels, like Marks & Spencer, Hema, Etam, Zara, H&M
Low or very low price segment Market share 10-15%
No brands or fancy labels
Source: Fashion & Vision (2011)
Josephine Koopman , 8-2014, CBI12

13. Different distribution channels in different countries
Josephine Koopman , 8-2014, CBI13

14. Southern Europe: independent retail and franchise
England: Few independent retailers
The Netherlands and Germany: buying organizations
Josephine Koopman , 8-2014, CBI14
Distribution channels differ per country

15. Order quantity indication
Discounters: 3000- 5000 pcs per style. Branches: + 150
Private Labels: 300-1500 pieces per style; Branches: 50-100
Clothing chains: >300 pieces per style, Branches: +50
Department stores: 300-3000 per style depending on number
outlets
Brands; best performing styles: 300-2000 pcs; selling in seasons
Mail order companies: start with >300 and repeat orders
Web shops: <300
Designer shops:
Josephine Koopman , 8-2014, CBI15

16. Sources
www.aedt.org (European Association of Retailers)
www.fashionunited.com
www.Sippo.ch market surveys
www.CBI.eu market surveys
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17. Josephine Koopman , 8-2014, CBI17
Agenda training session Trade channels
1. Trade channel structure
2. Ratio’s
3. Fashion cycle

18. Josephine Koopman , 8-2014, CBI18
Exporting manufacturers
Importers/Wholesalers/distributors 1,3-1,7
Agents
Salary
Bonus
5-15%
Retailers 2-5
Department
Stores
Clothing
chains
Hyper/super
markets
Mail order
companies
Web
shops
Factory
outlets
Designer
shops
Distribution channel general mark-up
European manufacturers1,4-1,7

19. Josephine Koopman , 8-2014, CBI19
Retail Ratio’s General (depending on customer)
Your margin: FOB selling price vs costprice
Trends due to crisis:
- Shift mid-prices to low priced segments (discounters
hypermarkets etc)
- Heavy markdowns, and promotional activities. ( 2nd one for
free)
- Growing importance bargain sales

20. Josephine Koopman , 8-2014, CBI20
EU clothing retail prices: 5 clusters
1 High: Sweden, Denmark, Finland and Belgium
2 Above average: France, Luxembourg, Germany, Austria,
Netherlands, Italy
3 Average: Portugal, Estonia, Latvia
4 Below average: Czech Rep, Slovenia, Lithuania, Poland,
Ireland Spain
5 Lowest: UK, Malta, Hungary, Bulgaria
Source Eurostat 2010

21. Josephine Koopman , 8-2014, CBI21
EU body wear average consumer prices
What do you think are average prices?
Ladies
Bra’s Briefs
Hosiery
Men
Underpants
Socks

22. Josephine Koopman , 8-2014, CBI22
EU body wear average consumer prices
Check your potential buyer
Segments

23. Josephine Koopman , 8-2014, CBI23
Retail Ratio’s General (depending on customer)
Mark up 2,5-3
Sellingprice to consumer incl. VAT
buying price
(buying price is your price incl transport,direct cost, import duty)
Gross profit margin >51% incl sales
Turnover excl VAT-buying price x100%
Turnover excl VAT

24. Retail Ratio’s General (depending on customer)
Example
Dress shop price= 120 euro
Cost price 48 euro -
Gross profit 72 euro (markup is 2.5)
Gross profit 72 euro x100= 60%
Shop price 120 euro
But during sales 50%-70% discount
Dress shop price= 60 euro
Cost price 48 euro -
Gross profit 12 euro
Gross profit 12 euro x100= 20%
Shop price 60 euro
Josephine Koopman , 8-2014, CBI24

25. Josephine Koopman , 8-2014, CBI25
Ratio’s Retail
Gross margin 2011 (source HBO)
Ladies 47%
Men 46%
Baby Kids 44%
Body fashion 48%

26. Assignment
Define a potential trading partner (not the type of
trading partner you are working with already)
based on the type of exporting company you are:
Market segment
Price
Delivery time
Minimum order quantity
Josephine Koopman , 8-2014, CBI26

27. Josephine Koopman , 8-2014, CBI27

28. Josephine Koopman , 8-2014, CBI28
Agenda training session Trade channels
1. Trade channel structure
2. Ratio’s
3. Fashion cycle

29. FASHION CYCLE: Buying periods
Normally in garments at least 4 buying periods, Brands and
Retailer
Winter collection
Summer collection
Additional Flash collections
Fashion groups constant flow of products every few weeks
Josephine Koopman , 8-2014, CBI29

30. Josephine Koopman , 8-2014, CBI30
WINTERSALE
SPRING/SPRING
COLLECTION
PARTY COLLECTION
WINTER COLLECTION SUMMER
COLLECTION
SUM
M
ER
SALE
FLASH
COLLECTION
CHECK
WITH
YOUR
CUSTOMER
FASHION CYCLE: COLLECTION IN SHOPS

31. Josephine Koopman , 8-2014, CBI31
WINTERSALE
SPRING/SPRING
COLLECTION
PARTY COLLECTION
WINTER COLLECTION SUMMER
COLLECTION
SUM
M
ER
SALE
FLASH
COLLECTION
Total summer
collection, more
expensive items
Delivery 1
Additional special
Articles for
Summer collection
High summer collection, Low priced items
Short delivery, Special sale items
Total winter
collection, more
expensive items
Delivery 1
Special articles
Low priced items
Special sale items
Short delivery
FASHION CYCLE: SPECIFICS COLLECTION

32. Josephine Koopman , 8-2014, CBI32
WINTERSALE
SPRING/SPRING
COLLECTION
PARTY COLLECTION
WINTER COLLECTION SUMMER
COLLECTION
SUM
M
ER
SALE
FLASH
COLLECTION
orders winter
collection, more
expensive items
Delivery 1
Order High
summer
collection, low
priced items
Orders summer
collection, more
expensive items
Delivery 1 and
additional articles
Orders Special
articles
christmas/
party
FASHION CYCLE: Placing orders
Orders Low priced items
Special sale winter items

33. Josephine Koopman , 8-2014, CBI33
WINTERSALE
SPRING/SPRING
COLLECTION
PARTY COLLECTION
WINTER COLLECTION SUMMER
COLLECTION
SUM
M
ER
SALE
FLASH
COLLECTION
DESIGNER STARTS
DESIGNING
SUMMER
COLLECTION
NEXT YEAR
DESIGNER
STARTS TO
DESIGN WINTER
COLLECTION
NEXT YEAR
FASHION CYCLE: SAMPLE OFFERING
sampling
sampling

34. Josephine Koopman , 8-2014, CBI34
Agenda training session Trade channels
1. Trade channel structure
2. Ratio’s
3. Fashion cycle

35. Goal of this training session
Understand the trade channel structure
And
identify your potential business partners
Josephine Koopman , 8-2014, CBI35

36. Thank you for your attention!
Any questions?
Josephine Koopman , 8-2014, CBI36