UK: Tesco plans own-label online clothing store

Tesco is planning to launch a new online fashion store devoted to selling its own labels, trying to replicate the success of fashion websites such as Asos which have boomed during the downturn. The new Tesco website will offer thousands of items and is expected to be ready for this year's autumn ranges.

The project is being masterminded by clothing boss Terry Green and is intended to have an entirely different look to the existing Tesco.com websites.

Asos recently reported a 108% sales rise in the last nine months and claimed that 1.2 million people had bought something from the site in the last six months. It and similar sites have been successful by allowing shoppers to browse by size, label, style or colour. On the Asos site, for instance, there is a choice of about 600 different dresses. A store such as Top Shop, by contrast, might stock 60 dress options.

The boost to online fashion has come from fast broadband connections, which allow shoppers to see multiple views and colour options close up and even watch footage of the clothes being modelled.

Tesco's move comes as most retailers are struggling to persuade shoppers to spend on anything other than food. In a speech yesterday, Tesco's boss, Sir Terry Leahy, said trade was getting very tough, with 25% of shoppers now selecting goods from discount and value ranges.

Fashion stores are suffering particularly badly in the downturn and have been forced to slash prices, hitting profits.

Although Tesco has held up relatively well compared with other retailers, with its Christmas sales of clothing up 5% on last year, it has been missing out on internet trade. Online fashion has been extremely robust, despite the recession, and is the fastest-growing retail section on the internet.

In 2007 internet clothing sales totalled £1.7bn - equal to 4% of the total market for clothing. Industry insiders predict that the online fashion business will have grown to 13% of the total clothing market and be worth some £6bn by 2016.

Asda put its George fashion ranges online last year, and the department store chain John Lewis is currently revamping its fashion website to make it more user-friendly. Some 15% of Next's sales now come through the internet, and last year M&S said its online sales had grown 63%.

Research from the online retail specialist IMRG this month showed that the clothing, footwear and accessories sector had seen year-on-year growth of around 30% last year. IMRG said it was a myth that clothing sales were growing fast because shoppers ordered multiple sizes only to return those that did not fit. The researchers said that only 21% of shoppers admitted to regular multi-ordering.

The new Tesco site follows a short trial last year which a spokesman said demonstrated that online shoppers wanted "thousands of lines to choose from".

The site will offer its Florence & Fred and Cherokee ranges, as well as the new My Favourite Things range for children, which is fronted by the Sound of Music star Connie Fisher. Basics such as socks, tights and underwear will not be available.

Tesco's commercial director, Richard Brasher, said the new site "will be designed to look different from any of our other online sites".