KEY COMPANY INFORMATION
Reiss is a UK-based fashion brand and retail store chain owned and run by the founder, David Reiss. Reiss has established a design philosophy centred on creating design-led menswear, womenswear and accessories. Reiss was founded in 1971, and its first store in London’s Bishopsgate sold men’s suits. It did not move into women’s clothes until 2000.
Today Reiss is a highly respected, prominent business in the global fashion arena for both men and women. Its philosophy of holding creativity at its heart will guide Reiss through its international business development.
The Reiss customer looks for original and directional design with a strong focus on quality and detail — they expect impeccable service across all channels.
Reiss also has great pride in its celebrity following; from members of the Royal family to Hollywood stars, the Reiss offering appeals to the most stylish of celebrities and fashion influencers. (Reiss, 2019)
MISSION STATEMENT
With an uncompromising commitment to delivering innovative and original products it fuses exceptional design, quality and value. (Reiss, 2019)
OBJECTIVES
Reiss remains committed to ensuring that its operations and supply chains promote safe, fair, legal and humane working conditions.
They have done a lot to redress the gender pay gap across all areas of their business. Some of the steps taken to improve engagement and retention of talent include the promotion of their policies such as flexible working and shared parental leave which benefit all, and enhancement of their maternity package for their female employees. (Reiss, 2019)
STATISTICS
It has 160 stores in 15 countries. [2023 update: It now has 160 stores in 16 countries] Reiss has seen a significant increase in the number of its stores, including key stores in Heathrow Terminal 5 and Westfield London, to almost 100 outlets worldwide, and Reiss intends to eventually grow to 250 stores worldwide. The brand has opened in New York’s Greenwich Village. In April 2016, a majority stake was sold to the American private equity firm Warburg Pincus for £230 million.
Ted Baker and Superdry rank much higher than Reiss with consumers that would recommend the brand to others. Reiss performs better with consumer experiences with the brand than Superdry with higher levels of consumers having excellent experiences when using the brand. Superdry is considered by most as being innovative alongside being the most accessible and shows the highest usage results out of these premium lifestyle retailers. Ted Baker is considered the most stylish, and surprisingly more (28% of) consumers view Superdry as being more stylish compared to Reiss (24%).
Key demographic groups – Ted Baker and Superdry see the highest levels of usage in consumers aged 16-24 with Ted Baker seeing a peak in females in that age range whereas Superdry sees more of a peak in usage in young males. Reiss is more popular amongst 25-34 year-olds and shows higher usage by males with a quarter (24%) of males saying that they had ever used the brand compared to 14% of females of the same age range. This is due to males generally being less trend orientated and more likely to purchase fewer but better-quality items. (Mintel, 2018)
Just over half 51% of consumers said that they had ever heard of British clothing retailer Boden, the lowest score of the brands due to its (only 3) physical stores situated in London and the brand being a predominantly a mail order retail. Reiss was very close behind with only 54% of UK consumers ever hearing of the brand. (Mintel, 2018)
Premium brands including Burberry (+40% LFL), Joules (+22.8%), Ted Baker (+17.9%) and Reiss (+11.6%) all outperformed what remained a weak clothing market (+1.6% in Q4). (Mintel, 2017)
Premium brand Reiss has reported an 8.3% sales increase to £186.3m and a 21.3% rise in EBITDA to £19.3m for the year to 2 February 2019.
Reiss CEO Christos Angelides credited the results, in part, to a refreshed brand and product offer across stores and online.
Like-for-like sales for the period grew by 13.2%, and there was a strong performance over the Christmas season. Like-for-like sales in the eight weeks to 5 January 2019 rose by 19.1%
During the year, the business reduced its promotional activities to improve margins. It also invested in omnichannel infrastructure and operational capabilities, including the implementation of RFID (radio frequency identification) technology in UK stores to improve multi-channel stock transparency.
Commenting on the results, Angelides said:
“The initiatives we put in place to refresh the brand and product offer, both in store and online, have resonated well with our customers.
“Last year, we continued a programme of investment across all areas of the business that specifically focused on upgrading the design and quality of the Reiss product offer. This, coupled with operational improvements, has delivered a step change in performance.”
He noted that despite a strong start to the new year, with group sales for the 10 weeks to 13 April 2019 up by 27.9% to £36.5m, the retail environment remains a challenge.
“Early sales from the Spring Summer ‘19 collections have maintained the positive momentum that built towards the end of last year, reflecting our drive to unlock the brand’s potential,” he said. “However, I am conscious that the retail environment remains subdued and we will not be complacent as we continue in our work to create beautiful, timeless clothes for Reiss customers.” (Brown, Geoghegan and Whelan, 2019)
PESTEL ANALYSIS
POLITICS
In 2018, Reiss manufactured products in 15 different territories including China, Turkey, Portugal, Romania and Italy. These 5 sourcing countries accounted for 90% of our purchasing volumes which saw Reiss consolidate its supply base and focus on strengthening long term supplier partnerships.
Amid challenges such as Brexit uncertainty and international tariffs, retailers are being forced to make difficult decisions to find the correct path for their warehousing
Pressures around what stock to hold, where to keep it, and the expenses related to moving it across borders are among the most pressing matters facing the fashion retail supply chain. Retailers have to decide where to invest: whether to manage their own warehouses or outsource, determine what level of automation they need, and tackle the issue of fulfilment from stores. (Whelan, Imms and Fish, 2019)
ECONOMY
Record levels of employment and rising disposable income have not been enough to raise the mood of the consumer as confidence has remained weak in the first half of 2019, as ongoing political and economic uncertainty around Brexit negotiations have dominated headlines.
E-commerce accounted for 20% of retail sales but more than half of the growth in the market in the first half of 2019. For some, online is fast becoming the channel and, with this shift, there is a need to balance investment growth with store profitability. (Deloitte United Kingdom, 2019)
The consultancy Capital Economics said a wetter and colder October than normal was expected to boost clothing sales, but instead they fell by 1% from September.
“In fact, the only bright spots were a 2% increase in department store sales volumes, which may have been helped by an early start to Christmas discounting. A 1.5% increase in fuel sales also helped increase the monthly figures. Excluding fuel, retail sales fell by an even sharper 0.3% month on month,” said Thomas Pugh, one of the firm’s UK economists. (Inman, 2019)
“British luxury businesses are committed to staying in Britain, but we are losing patience with the government taking us to the knife edge of no-deal,” Walpole chief executive Helen Brocklebank said.
“The cost to the UK economy in lost exports from British luxury will be nearly £7 billion and we believe that money should be used to strengthen the country not diminish it.
Meanwhile, around 80 per cent of the UK’s luxury goods go overseas, and the EU is its largest market. (Nazir, 2019)
SOCIAL
Building on the work conducted over the last 12 months, this year Reiss will focus on mapping fabric mills sourced in-house and suppliers of license partners. Reiss will continue to build transparent supplier relationships which will support its mapping efforts with suppliers who source raw materials on our behalf. It is our aim to have transparency on our 10 main fabric mills and their subcontractors.
Reiss is an International business, with a clear purpose and core values of honesty, transparency, authenticity, trust and we are proud of our diverse and global talent and believe in attracting and retaining individuals that can bring new ideas as our progression is driven by our people.
In 2017 they undertook gender pay gap exercise for the first time and at the start of this journey they were satisfied with their male and female employees were paid equally for doing equivalent jobs across their business.
They are doing everything now to address the issue and have come far with that. In 2018, they decreased this gap by 6.3% and their median pay gap is 3.4% lower than the national average of 17.9%. (Reiss, 2019)
TECHNOLOGY
The proportion of people liking or following brands on social media has shown a decline over the last year across all devices, from 50% in October 2017 to 47% in September 2018.
Online shopping via smartphone also rose over the period, by 2 percentage points to 57% of owners, with contactless smartphone payments growing the same amount, to 30%.
https://academic.mintel.com/display/918696/
Q3 saw growth in most online social and media activities (any device). The most significant was reading paid news sites and blogs, which rose six percentage points on Q2 to 39%.
https://academic.mintel.com/display/918668/
LEGAL
Naples police discovered “some 50 workers, including a pregnant woman and two teenagers were hiding in a window-less storeroom among rolls of leather and piles of shoes and bags,” per Reuters, all of whom were “undocumented” and allegedly making leather goods for some of Europe’s best-known luxury groups. (The Fashion Law, 2019)
Addressing issues such as slave-labour and sweatshops gives Reiss a major selling-point and the customer should made aware of their statement against that.
Just over a year after Los Angeles became the fourth U.S. city to ban the sale of fur, the state of California will become the first-ever state to ban sale of new fur products. On Saturday Governor Gavin Newsom signed into law Assembly Bill 44, legislation that as of January 1, 2023 will make it unlawful to “sell, offer for sale, display for sale, trade, or otherwise distribute for monetary or nonmonetary consideration a fur product.” The law will also ban the manufacturing of fur product in the state of California as of that date. (The Fashion Law, 2019)
ENVIRONMENT
Over three quarters (79%) of those asked admitted to finding it difficult to know when a fashion retailer is ethical. According to Mintel’s Clothing Retailing – UK, October 2018 Report, almost half (48%) of clothing shoppers said that they prefer to buy clothing from retailers that are trying to reduce their impact on the environment rather than those that are not. It is therefore important for there to be more clarity over which products and retailers are more sustainable.
https://academic.mintel.com/display/972426/
We can see from the data below that out of those asked men are more likely than women to look into how environmentally friendly a fashion retailer is before making purchases and as a result, they are more likely to know which ones are ethical.
https://academic.mintel.com/display/972426/
Many of the protests are “about ‘stop doing things, stop consuming, stop flying’,” Persson said in a recent interview. “Yes, that may lead to a small environmental impact, but it will have terrible social consequences,” including a lack of new job creation and “all the things that come with economic growth,” a sentiment that echoes Arnault’s statement that “if we don’t want to go backwards, we still need growth. (The Fashion Law, 2019)
MICRO ENVIRONMENT
There are two marketing environment types – micro and macro. These factors influence all of the decisions made by marketers when creating strategies for companies. It is impossible to control them but it is necessary to know and understand how they impact the marketing approach. (Oxford College of Marketing Blog, 2019)
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