Report on UK Fashion Retail and Strategies for Guess Clothing Brand

This report analyzes the UK fashion retail sector and provides strategies for Guess clothing brand to respond to the challenges in the industry. It discusses key alterations in the retail environment, micro environment of Guess, and offers suggestions and recommendations.

GUESS- report analysing a specific retail sector at GUESS clothing brand
and how a large retailer might respond to the issues facing the sector in g

Table of Contents
Introduction......................................................................................................................................1
Introduction to Company............................................................................................................1
Key relevant alterations in UK fashion retail..............................................................................2
Significant alterations in micro environment of Guess...............................................................4
Suggestions and discussion of strategies & tactics.....................................................................6
Recommendations.......................................................................................................................8
Conclusion ......................................................................................................................................9
References......................................................................................................................................10

Introduction
Retail refers to process associated with selling of goods as well as services via different
distribution channels for earning a profit. Basically, it is sales of goods for end users but not for
resale and is carried out for consumption by purchaser (Berry, Broadbent and Otley, 2016). This
comprises of sales of merchandise from one single point for furnishing purchase to individuals or
consumers who incline to utilise that specified product. Here, the single point indicates the
purchase which has been made by brick and mortar retail store or via internet shopping
catalogue, a website or mobile phone. Group of firms who are liable for fashion supply chain
which goes from manufacturing to consumers for rendering fashion services and goods is
referred to as fashion retailing. Fashion implies style of clothing as well as accessories that are
being worn at any instance of time by group of individuals. Fashion retailer illustrates the
strategies that initialise from key positioning of factors that comprises of experiences, assortment
and speed channels for differentiating themselves among their competitors (Bloom and et. al.,
2012). In this report formative discussions has been made on changes that takes place in fashion
retailing industry along with retail environment. Along with this report discuss problems that has
been faced by companies and strategies with the help of which they can overcome changes in
well defined manner.
Introduction to Company
Guess is an American clothing retailer and brand who provides services for both men as
well as women. They are public organisation which deals within fashion industry. It was founded
on 1981 and is headquartered in Los Angeles California, United States. There initial design was
slim fitting stonewashed jeans, 3-zip marilyn and soon they became symbol for adventurous,
young and sexy lifestyles. They emphasise on accessories and clothing that is characterised
through fickle customers, intensive competition as well as short lifecycles.
Features of company: The best feature which is being provided by this organisation is
loyalty as well as commitment for their human resources so that they can be a topmost brand.
Location: They are global lifestyle brand that possess huge range of denim, accessories
and apparel which are being offered within around 80 countries across the world (Dholakia,
Dholakia and Chattopadhyay, 2012). Guess carry out their operations in around 945 retail stores
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in Asia, Europe and Americas. Near about 35% and 40% of net sales is carried out by Europeans
as well as Americans respectively.
Operations: Guess has divided their operations into five different segments, they are
Americas Retail, Europe, Licensing, Americas Wholesale and Asia. The licensing comprises of
licensing operations of Guess worldwide and possess 15 international as well as domestic
licenses.
Sales & marketing: Apart from there brick-and-mortar operations, Guess wholesale their
accessories as well as apparel for mass merchandisers like upscale boutiques and speciality shops
worldwide. Along with this, they also deliver there products via online medium through usage of
distributors and licensees (Dos Santos, Svensson and Padin, 2013).
Key relevant alterations in UK fashion retail
Background of retail marketing: It implies a procedure where retailers can be engaged
within process for promotion of awareness along with interest related with services and products
in an effectual manner for generation of large profitability via carrying out sales of essential.
This is the crucial aspect associated with commercial activities that is liable for offering
opportunities for buying their assets at huge margin range. Retailing market comprises of critical
fields that involves distinct types of products selling (Fuentes and Hagberg, 2013).
Traditional distribution channel: It denotes a chain by making its use, services and
goods which are passed or reached to their customers. Distribution channels involves
wholesalers, distributors, retailers and various others.
1950’s Manufacturer is king: The King was manufacturer of services as well as products
in 1950. At that specified time, demands and needs of customers were not high so that
manufacturer can produce.
1960’s Consumer is king: With respect to this, preferences and tastes of customers are
included, firms render services and products as per their customers. This makes there consumers
King.
1970’s trade is king: Within this era, organisation furnish their services as per trade and
fashion which prevails within the market. Here, trade is king as well as the operations of firms
were carried out as per trade.
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1980’s marketing emphasis: Here, the emphasis was laid on marketing. They are liable
for furnishing goods as well as services for gaining profits as well as ensure that higher
productivity is attained by firm (Glover and et. al., 2014).
2000’s relation/ethical /societal influences on retailing: This implies modern era in
which organisation organisations are manufacturing there services and products with respect to
demands of customers, there lifestyle and also aims at gaining higher profitability.
New distribution channels:
From around 2008, firms have started to utilise different modes and channels through
distribution of goods and services via direct selling, through intermediaries, supply chain, dual
distribution, supply chain or by making use of website and internet (Hagberg and Kjellberg,
2015). For an instance, electronic-commerce (e-commerce) denotes a distribution channel which
might be utilised via Guess for distributing their products worldwide. When organisation utilise
this specified channel then it is crucial to abide to international trade laws while distributing their
products.
PESTEL Analysis
This denotes a tool with whose assistance firm can effectually determine factors which
creates impact on organisation. This will enable Guess within identification of threats along with
opportunities for taking corrective course of action for attaining organisational goals within
effectual as well as expeditious way. With respect to Guess, the PESTLE analysis has been
shown below:
Political Factor: This involves two elements they are how and up to what extent
government interferes within operations of organisation. It comprises of interest rates, tax
policies and various others (Hamister, 2012). Government of UK has imposed new tax rates
which creates an influence on performance of company and demands of customer. Apart from
this, UK has stable government that enables Guess to make use of corrective measures that will
aid them to acquire market as well as improvise productivity.
Economic Factor: It involves economic performance i.e. inflation rate, exchange rates,
economic growth and many others. This creates influence on economy of country as well as
firm. UK government has undergone via financial crisis that has lead to enhancement within
unemployment rate. This has affected the productivity of Guess as this creates an impact on
purchase behaviour and revenue. For an instance the individuals who have job can only buy their
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fashionable products (Hristov and Reynolds, 2015). To deal with such kind of situations they
render affordable trade for creating a impact on services that are delivered by them.
Social Factor: This factor is associated with social as well as culture changes which
takes place. As technology is disrupting, it has created a strong influence on the ways in which
services are delivered in UK. This challenge is taken like a opportunity by Guess and they have
formulated strategies accordingly for satisfying demands of their customers. This will lead to
enhancement within overall profitability as well as efficiency of firm (Nguyen, 2013).
Technological Factor: This factor deals with adaptation to latest as well as innovative
technologies for attaining higher levels of outcome. Technology is one of the huge opportunity
for Guess to growth as they can develop apps for providing convenience to customers for
tracking information with respect to product before physically visiting the shop. It will lead to
generation of enhanced relationship along with interaction among organisation and their
customers. This will lead Guess to attract ample number of customers towards their services
through which profitability can be increased.
Environmental Factor: This involves prevention of environment by making use of eco-
friendly products. It will create a significant influence on profitability of Guess as customers are
obsessed about healthy environment. Therefore, organisation has opted for making use of new
ways by which efficiency can be enhanced as well as wastage of products can be minimised this
will lead to enhance profitability as well as add value to company.
With the assistance of PESTLE tool, Guess have got various possibilities as this will
allow them to capture the market in efficient as well as effectual manner.
Significant alterations in micro environment of Guess.
SWOT Analysis
A strategic tool through the assistance of which firm can efficaciously analyse their
strengths, weaknesses, opportunities along with threats for creating an impact on functions of
organisation in a effectual way is referred to as SWOT analysis. With respect to Guess, it has
been illustrated below:
Strengths Weaknesses
 Guess renders their customers with
latest fashion as well as designs and for
 Duplication and fake imitations of
products has created a pessimistic
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this they have been recognised with
various awards (Spaargaren, Oosterveer
and Loeber, 2013).
 They have enhanced customer loyalty
programs for attracting their customers
and strong distribution channels along
with this they have good geographic
presence.
 Other than fashion clothing, they also
provides accessories like jewellery,
watches, etc. and has attained
leadership position within short interval
of time.
 Guess has developed strong
relationship among their dealers and
they also promote their products.
impact on sales of brand.
 They were a part of controversy which
occurred in nineties and created a
strong impact on image of brand.
 A relevant proportion of Guess is
rented which means that they have to
make huge payments. This adds up
their cost.
 Guess possess low budget for their
quality control department as compared
to their competitors due to this there
occurs lack of consistency along with
damage is created to quality of their
products (Spaargaren, Oosterveer and
Loeber, 2012).
Opportunities Threats
 New product range will assist them
within expansion of their business as
well as radiate customer base.
 Enhancement within online space and
electronic retailing. This will lead them
to earn high revenue.
 Technology will lead Guess to collect
data for their customers as well as
enhance the marketing efforts which
denotes that costs of their operations
can be minimised.
 Guess can make use of International
market that renders new opportunities
 The major threat is that the manpower
as well as labour cost may increase.
 Enhanced technological evolution by
competitors in industry acts as a huge
threat for Guess as this may lead to
decline within market share.
 Increasing competition in industry puts
descending pressure on prices that are
being offered. This leads to decline
within revenue of Guess if they can
adjust with alterations in prices.
 The taste of customers changes which
leads to creation of pressure on fashion
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for expanding their business along with
figures of their sales (Vaara and
Whittington, 2012).
retailers like Guess as it becomes
difficult to meet changing needs of their
probable customers.
Suggestions and discussion of strategies & tactics
Competitor Analysis
Guess face huge amount of competition (bebe Stores, Levis and Calvin Klein) from the
brands which already exist within the market and carry out their operations within retail industry.
Along with this, they also emphasise on rendering higher quality of services and products by
which they can captivate ample customers as well as ensure higher profitability. The segments
of fashion brands in which they are functioning and operating within global market can be
depicted through usage of fashion pyramid (Berry, Broadbent and Otley, 2016). Basically, within
fashion retail market high price fabric is associated with high quality, made-to-measure garment,
impelling customer services and various other optimum attributes through which attention of
customers can be gained.
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(Source: The Fashion Pyramid, 2019)
Wheel of Retailing
This theory is utilised by firm for explicating institutional alterations which occurs when
innovators enters within the retail arena. There exist four steps in wheel of retailing, they have
been illustrated below:
Establishing and penetrating in the market: In this stage, the emphasis is laid on new
retailers who makes an entry within the market along with strategy of offering low price. This is
only possible by making use of creative cost cutting methods (Bloom and et. al., 2012).
Expanding in the market: When such kind of retailers acquire more experience within
the market then they enhance their customer base with a rationale of increasing their sales. This
will lead firm to have increased profit margin by acquisition of market shares
Stabilized business model attracting margins: Within this step, the firm is within
established place and can earn or gain higher profit by making use of appropriate pricing
strategies.
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Illustration: The Fashion Pyramid

(Source: The Wheel of retailing concept, 2019)
Entry of another retail competitor: This is last step within theory, where different
competitors enter within the market as well as lead to creation of competition for the existent
firms (Dholakia, Dholakia and Chattopadhyay, 2012).
Conflict theory
There exist distinct types perspectives in context of social philosophy as emphasis is laid
on materialistic illustration. Conflict theory is liable to power differentials which generally
comprises of dominant ideologies and class contracts. Through the assistance of this, Guess can
efficaciously able to identify revolution, war, competition along with structural inequalities. This
will further lead efficacious accomplishment of their organisational goals. Along with this,
through usage of conflict theory firm can identify competition which prevails within marketplace
as well as they can be resolved in an appropriate manner (Dos Santos, Svensson and Padin,
2013). Furthermore, restricted resources are liable for creation of higher possibilities which
conflicts with business environment as well as creates impact on productivity and profitability.
Recommendations
Suggestions for Guess have been illustrated beneath:
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Illustration 1: The Wheel of retailing concept

 Through the execution of innovative technologies as well as acceptance to various
distribution channels firms can enhance their sales ratio and they can captivate various
individuals which will lead them to have enhanced productivity in an effectual way.
 Firms can take advantage of online shopping software through which they can provide
their customers with shopping facilities. This will enable Guess to save time by
acquisition of satisfactory services.
 Firm can have effectual pricing strategies like penetration as this will render with with
price as well as quality effectual services & products for their customers. With the
assistance of this, Guess can emphasise on their customers for having their loyalty along
with valuable positioning within marketplace (Fuentes and Hagberg, 2013).
 Guess can provide satisfaction to their customers by making use of innovative
technologies and tools within manufacturing unit for gaining competitive enhancements.
Firm need to determine the actual demands as well as needs of their customers by
offering them with premium pricing strategies. Along with this, qualitative offerings will
lead to attract more number of customers in an effectual way which will lead them to
accomplish their goals and attain profitable enhancements within market.
Conclusion
From above report, it can be concluded that, firms within retail sector can enhance their
services for generation of enhanced economic growth which tends towards further generation of
options related with employment to individuals. This is one of the most crucial aspect that is
liable for offering satisfactory services as well as products to their customers along with this they
also make sure their satisfaction. The PESTLE as well as SWOT analysis have been carried out
of organisation for determination of their strengths along with weaknesses for gaining
enhancements from opportunities by identification of threats. This leads to to enhancement
within business growth by making sure higher competitive edge with respect to their competitors
present within the market. There exist distinct types of strategies and tactics which will assist
firm to enhance their productivity along with profitability in effectual way.
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References
Books & Journals
Berry, A. J., Broadbent, J. and Otley, D. T. eds., 2016. Management control: theories, issues and
practices. Macmillan International Higher Education.
Bloom, N. and et. al., 2012. Management practices across firms and countries. Academy of
Management Perspectives. 26(1). pp.12-33.
Dholakia, N., Dholakia, R. R. and Chattopadhyay, A., 2012. India’s emerging retail systems:
coexistence of tradition and modernity. Journal of Macromarketing. 32(3). pp.252-265.
Dos Santos, M. A., Svensson, G. and Padin, C., 2013. Indicators of sustainable business
practices: Woolworths in South Africa. Supply Chain Management: An International
Journal. 18(1). pp.104-108.
Fuentes, C. and Hagberg, J., 2013. Socio-cultural retailing: what can retail marketing learn from
this interdisciplinary field?. International Journal of Quality and Service Sciences. 5(3).
pp.290-308.
Glover, J. L. and et. al., 2014. An Institutional Theory perspective on sustainable practices across
the dairy supply chain. International Journal of Production Economics. 152. pp.102-
111.
Hagberg, J. and Kjellberg, H., 2015. How much is it? Price representation practices in retail
markets. Marketing Theory. 15(2). pp.179-199.
Hamister, J. W., 2012. Supply chain management practices in small retailers. International
Journal of Retail & Distribution Management. 40(6). pp.427-450.
Hristov, L. and Reynolds, J., 2015. Perceptions and practices of innovation in retailing:
Challenges of definition and measurement. International Journal of Retail &
Distribution Management. 43(2). pp.126-147.
Nguyen, B., 2013. Retail fairness: Exploring consumer perceptions of fairness towards retailers’
marketing tactics. Journal of Retailing and Consumer Services. 20(3). pp.311-324.
Spaargaren, G., Oosterveer, P. and Loeber, A. eds., 2013. Food practices in transition: changing
food consumption, retail and production in the age of reflexive modernity. Routledge.
Spaargaren, G., Oosterveer, P. and Loeber, A., 2012. Sustainability transitions in food
consumption, retail and production. Food practices in transition. Changing food
consumption, retail and production in the age of reflexive modernity, pp.2-31.
Vaara, E. and Whittington, R., 2012. Strategy-as-practice: Taking social practices seriously. The
Academy of Management Annals. 6(1). pp.285-336.
Online
Guess, Inc. 2019. [Online]. Available through:
<https://www.vault.com/company-profiles/retail/guess-inc>.
The Wheel of retailing concept. 2019. [Online]. Available through:
<https://www.marketing91.com/the-wheel-of-retailing-concept/>.
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