The model has proven to be very successful, however of late, the entire fashion industry has faced a number of challenges in everything from tough economic conditions which produce low consumer confidence, to higher commodity costs in the form of cotton prices, to rising wage pressures in China.

Andrew Moore, managing director of Asda’s clothing retailing unit George, in an interview with the Financial Times said the company had a tough first quarter of the year, particularly in women’s wear, however Mr. Moore says that April has largely been good, as bank holiday season coupled with warmer weather kicked in, and the country was captivated by the royal wedding.

According to Mr. Moore, consumers remain nervous, which means that trading conditions continue to be volatile. Essential summer items, such as socks and underwear always do well, whilst men’s wear and children’s wear also remain solid. In the all important women’s wear segment, dresses are strong and swimwear according to Mr. Moore is “going through the roof” with high double-digit increases in sales.

“But customers are being quite cautious about more discretionary merchandise . . . that perhaps isn’t as versatile or you may only wear a few times . . . party wear for example. There are definitely signs of customers being more cautious about that and more practical. [They are] really focused on what they need to buy, first and foremost,” he says.

George, which analysts estimate delivers annual sales of roughly £2 billion expects sales from stores open at least 12 months will increase.

Despite fragile consumer confidence, the cost of manufacturing items is rising, with those retailers who cater to the value for money sector bearing the brunt because they have the least flexibility to raise their prices.

Although labour costs in China continue to rise, cotton prices have begun falling. In order to mitigate an environment of rising costs and inflation, George at Asda is seeking to take advantage of some of the muscle its parent, the world’s largest retailer has, and is stepping up joint procurement efforts, beginning with fabric purchases.

Despite all that, Mr. Moore estimates that George will have to raise its prices by anywhere between 5 to 8 per cent come October.

Since George’s business model is largely based on volumes, higher prices is a worry for Mr. Moore, who used to work at Marks and Spencer,  helping George Davies establish Marks and Spencer’s clothing label Per Una.

Mr. Moore says his primary concern is protecting the lowest price items from price increases by as much as he can“ That is where our volumes are. So actually in terms of volume changes, I think it will be very minimal,” he says.

However there is a much larger issue in the fashion industry at play. two decades ago, the idea of buying clothing from a supermarket remained a novelty, today however the novelty has faded as ever increasing numbers of consumers do some form of clothes shopping in supermarket asiles.

Rival retail chains are beefing up their clothing offering, with Tesco, the UK’s largest retail chain undertaking a major revamp after admitting its offering simply was not up to the mark.

Market research firm Kantar Worldpanel ranks George the UK’s third biggest clothing retailer as measured by volume, whilst Verdict a consultancy firm ranks its fifth as measured by value of sales.

Mr. Moore has embarked on a strategy on focusing on customer needs, using them to develop products, as the clothing retailer seeks to move forward.

Recently the retailer engaged with thousands of its customers as it sought to obtain a deeper understanding of their requirements.

Simultaneously George is also seeking to add style whilst continuing its core focus on quality and value. The clothing retailer is sponsoring Graduate Fashion Week, with some collections to be chosen to be offered as web exclusives in time for the Christmas shopping season. George Facebook fans will get to have a say in which designs they thought they liked best, which will help the team at George develop the designs into wearable garments for its customers.

“What we have to do is continue to reinvent ourselves,” says Mr. Moore who is increasingly focusing on the company’s online offering and its development internationally.

Andy Bond, Asda’s former chief executive set ambitious goals for the super market chain, with plans to open as many as 150 standalone home and clothing stores by 2015, targets which so far have failed to materialize, with only just a handful of stores opening.

“When Andy made the announcement 15 months ago or so, we didn’t realise that the economy was going to be quite what it has been. But, we’re still fully behind it and it’s a big opportunity for us,” says Mr. Moore.

George plans on opening its first international franchise stores, most likely in Lebanon and Dubai next year, and this autumn, the company will be revamping its website.

If the franchise stores in the Middle East, it is highly likely that more stores will open up in other parts of the world.

“I will not say the world is our oyster,” says Mr. Moore, “but if it is successful, and we are very confident it will be, we will be looking at other regions as well.”

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