The financial situation of the Danish fashion industry – 2013
By Hans Gottlieb, journalist, Fashion Forum
Although the financial crisis began more than five years ago, the financial recession has yet to be replaced by progress. This concerns both society in general and the cyclical fashion industry especially.
The sale of clothes, shoes, and accessories can still not be characterized as exuberant but after an economically tough 2012, where recession ruled across the board (from domestic wholesale to export), 2013 showed vague signs of improvement.
From 2012 to 2013 the total turnover in the fashion industry rose – excluding retail sale – with 0.3 percent to 38.7 billion DKK. Numbers from Dansk Fashion & Textile and Statistics Denmark indicate this rise.
The reason behind this minor rise in turnover is to be found beyond Danish boarders, since the export of Danish Fashion rose 2.7 percent in 2013 compared to the prior year. Combined export makes up nearly 60 percent of the Danish fashion industry’s turnover and in cash that amounts to 22.9 billion DKK in 2013.
If you take a closer look at export it is still near markets that does the hard work. Danish fashion industry’s top three export countries are Germany, Sweden, and Norway, which combined equals half of the fashion export.
However, the large markets that were behind the biggest progress in 2013 were located a bit more south. The top export performer of 2013 was the French market, which rose with 15 percent compared to 2012. Other markets also rose in 2013, namely Belgium (+13 percent), Great Britain (+8 percent), and Italy (+8 percent).
The heavy Danish market
While export indicated a positive development, 2013 was tough in a different way for the Danish fashion companies’ domestic wholesale. Once again the turnover dropped. The past five years the Danish wholesale has been struggling on the domestic market. In 2009 the domestic sale was nearly 15.1 billion DKK while in 2013 it ended up at 14.2 billion DKK.
This development is mutually dependent on the development in the domestic retail trade, which also struggles. According to numbers from Statistics Denmark (repeated in WEAR’s report ’Den Danske Modebranche 2014’) clothing sales has been dropping since the end of 2007 – with minor exceptions - and since the end of 2009 clothing sales has even been above the index of retail trade in general. From a positive perspective exactly this cyclical sensitivity means that the fashion industry is an industry, which can expect the most progress once the cycle in the national economy and consumer trust turns around, writes WEAR.
Development in e-commerce
Danish e-commerce is continuously on the rise - since 2009 the combined Danish e-commerce has almost doubled. According to Danish E-commerce Association (FDIH) the combined e-commerce turnover in Denmark was 32 billion DKK in 2009 while the number in 2013 had risen to 62.4 billion DKK.
According to FDIH’s yearly report the product category ‘clothes, shoes, and jewelry’ has accumulated to approximately 16 percent of all e-commerce in Denmark. Thereby, the fashion industry is the second largest online product category only surpassed by the product category ‘film, music, games, and toys’, which also makes up approximately 16 percent.
However, it is worth mentioning that the report shows a heightened tendency to purchase through foreign online shops. Since 2010 the Danish online shops’ share of the accumulated web sales for Danish consumers has declined with 10 percent meaning that Danish online shops in 2013 made up 69 percent of the Danish consumers purchases.
According to FDIH 20 percent of the Danes’ purchases in the product category ‘clothes, shoes, and jewelry’ in 2013 were made through foreign online shops.
Sources: Dansk Fashion & Textile and Statistics Denmark, FDIH (including ’Dansk e-handelsanalyse 2013’), WEAR’s report ’Den Danske Modebranche 2014’