Fashion crisis costs the High Street £700m

Experts fear another big name may go bust as . . .

FASHION sales suffered their worst decline in seven years as bargain hunters refused to pay full price for their summer wardrobes and winter woollies.

Shoppers have become used to heavily discounted clothing and many have been delaying their purchases until prices fall.

Retailers have also blamed changing habits of shoppers, who are instead spending their cash on eating out and experiences rather than updating their wardrobes. This caused fashion shops to lose almost £700m over the 52 weeks to the end of September compared to this time last year, a report shows.

The gloomy update from research firm Kantar Worldpanel will send a shiver across the High Street as retail giants Next, Marks & Spencer and Debenhams all struggle to grow sales.

It could prove even worse as the latest figures do not take into account the loss of BHS – worth over £400m in sales – which shut its doors at the end of August. And experts at Kantar fear another big name could soon go bust. Glen Tooke, the firm’s insight director, said: ‘Given the events of this summer, this no longer seems impossible.’

In June, Kantar revealed the value of the fashion market, which includes clothing, footwear and accessories, contracted for the first time in six years, with sales growth falling by 0.1pc.

Its latest data shows the decline continued over the summer and the market has now seen four months of consecutive sales falls.

Tooke added: ‘Fashion retailers are still following the same patterns of overbuying and deep discounting, and consumers are increasingly reluctant to pay full price.’

He warned that retailers are refusing to listen to their customers, preferring to tell them what to buy rather reacting quickly to what they want. This is because many order their items months ahead so cannot react to changing trends.

Tooke said: ‘Most recently the decline has been driven by falling frequencies of buying, giving retailers fewer opportunities to encourage shoppers to part with cash.’

British chains have been shamed by nimbler foreign rivals.

Zara owner Inditex uses Spanish factories to react faster to changing demand, giving executives tighter control on production and the time taken getting clothes on shelves. This sets it apart from competitors using Far East manufacturers which sometimes have to wait months for their cut-price designs to arrive.

Tooke said: ‘Rather than chasing after the same “micro trends” as every one of their competitors, they need to work on understanding what their customers really want and to fulfil their needs. Retailers have responded to falling sales by investing less in their lines, when what they need to be doing instead is addressing these problems more proactively.’

Only ten top fashion retailers are worth more than £700m, which means the decline in the market is equal to one of them disappearing from the High Street.

Earlier this month a survey from accountant BDO said that Britain’s fashion retailers suffered a slump in sales during September as unseasonalbly warm weather deterred sales of autumn and winter collections.

H&M posted disappointing sales for last month – up just 1pc compared to the same month in 2015. It said: ‘The warm weather had a very negative impact on H&M group’s sales.’