Heidi Klum has designed the new Esmara range for Lidl

Heidi Klum has designed the new Esmara range for Lidl

Industry experts are applauding discounter retailers' attempts at breaking into the apparel sector with zero impact to their existing supply chains – a move retail analyst GlobalData forecasts will see clothing sales grow by more than 90% in the channel by 2022.

German discounter Lidl yesterday (18 September) launched a new fashion line called Esmara, designed by supermodel Heidi Klum. The 40-piece range in sizes 8-18 is based around leopard print, cobalt blue, black and white and will be available until stock sells out. 

Suede shoes and jackets are among the product offering, with a suede biker jacket at a pricepoint of GBP49.99 (US$67.60) compared with competitor brands selling similar offerings for GBP80.

According to GlobalData's discounters report, Lidl is able to offer lower pricepoints due to the higher volumes it sells – creating the advantage of scale and benefits of margin – as well as selling product in boxes on shelves that customers are not permitted to open prior to sale. This method effectively utilises existing store fixtures, without the need for extra merchandising staff.

"The clothing offer fits easily into the supply chain, keeping costs low," explains Molly Johnson-Jones, senior retail analyst, GlobalData.

"Lidl has used the same strategy on its clothing line as it does with its groceries. The poles of useful and cheap versus lavish but still good value plays into the dichotomisation of consumer demands that we have seen in retail over the last few years. Consumers want good value basics alongside the opportunity to indulge themselves with a treat which does not break the bank."

While Lidl's introduction of the range is a small step in the discounter's entry into the apparel sector, GlobalData says it follows the move of Poundland's acquisition of Pep&Co, and long-term "is both a threat to the existing clothing market...and a way to drive organic clothing sales growth".

Long-term, the channel's undercutting of existing value retailers on price will see market value rise to GBP643m from a current GBP334m.

"Products are designed to maintain margins at low prices and fit in with the existing supply chain and clothing adds another area for the discounters to grow sales and disrupt the mainstream market," says Johnson-Jones. "Esmara might not be a threat to the clothing market now, but it will change consumer perception of discount clothing and taps into a niche which has been neglected so far."