US Edition It was a single sentence in a report on Emap but it was most revealing. The magazine company, publisher of Nursing Times, Retail Week and Construction News, had a new revenue unit. It was called WGSN and most readers will be forgiven for having never heard of it.
WGSN, (Worth Global Style Network), is a trend forecasting website with more than 38,000 users including Armani and Walmart. At the end of January, EMAP revealed WGSN created £40m of revenues in 2010, up by 5pc on the previous year – roughly the same amount of revenue generated by all of Emap's magazines put together.
In an era of social media and hyper-connectivity, trend forecasting is becoming more and more important for business. And it is therefore also becoming a big and highly competitive business.
Trend forecasting sites have come a long way since British brothers Julian and Marc Worth started WGSN in 1997. Back then all style forecasting happened in print and was a major books business. The Worth brothers took it online, all in one place, updated daily, and then charged business annual subscriptions starting at £16,500.
They sold the business to Emap in 2005 for £140m.
Fashion houses and product companies soon stopped buying their seasonal books - filled with predictions and fabrics – and turned to the web.
However, despite the speedy advent of digital, WGSN remained a lone beast in this space, forecasting the 'next big thing' in everything from street style to brand marketing, for the best part of a decade.
That was until 2008, when an American rival, Stylesight, came on the scene offering a similar service for a cheaper annual subscription fee. Now Stylesight, having raised $26 million and backed by venture capital firms Volition Capital (formerly Fidelity Investments) and Cue Ball Capital, is going head to head with WGSN, still the market leader, competing for an identical pool of customers.
The sector has come of age, with many free sites predicting the next waves across a range of industries and disciplines such as technology or social behaviour. Trendwatching.com, a UK player, recently published a free 'trend briefing' for businesses on how and why they should practise 'Random Acts of Kindness' – which it claims will be a winning strategy for communicating better with consumers.
Marc Worth has re-entered the sector with Stylus, a service for the world of interiors.
Chuck Richard, vice president and lead analyst of research company Outsell, says trend forecasting, as part of the data driven trends sector, could have a global market value of $36bn.
Nowhere else is the demand for understanding the next major trends as crucial as it is in the fashion industry. And despite many sites offering trend forecasting or fashion 'future insights', for free, most retail brands are still paying for WGSN or Stylesight – or both.
Digital subscription services are the holy grail both in business to business and consumer publishing, but why does the fashion industry, which is built on its own creativity, pay considerable annual sums for 'forecasting', which is not data-driven or scientifically proven?
How can these trend forecasters predict the future? And how much of what we see on the catwalk or in the shops comes from the designers or the forecasters? Isn't it just a case of 'emperor's new clothes'?
Susannah Kempe, WGSN's chief executive, says not. Her site has had a revamp and the new layout lets the service's 3,000 corporate clients and 38,000 individual users better 'live in their specific worlds'.
"The site had become too dense so we re-designed it so that people could find what they wanted with one click. And so that if someone was a knitwear designer, they could live within an environment solely focused on this discipline," she explains.
The 400-strong WGSN, which also counts Marks and Spencer among its large client list, has improved some of its tools – such as adding visual search. It also created a smaller, cheaper 'lite' version of the service so people can access the service who don't need the full version.
However, according to a fashion industry insider, WGSN's redesign didn't go far enough – with not enough key tools having been added to help designers with their workflow.
There has also been the accusation that private-equity backed WGSN has not invested in the service and instead focused on stripping out costs.
Kempe argues the redesign helped WGSN attract customers who had cut their subscription during the recession – but admits certain brands like Spanish high street powerhouse Zara, had a shaky start with the design having been used to the old layout – but are now "used to it and using it well".
She also denies that Emap is stripping costs out of WGSN. "Yes, that may have been true two years ago, but since David Gilbertson became our chief executive, the opposite is true. We are now investing in the site, acquiring other services [such as Denimhead in order to increase WGSN's focus on the material] and moving into new areas," she says.
However, the 200-strong Stylesight, headquartered in Tommy Hilfiger's former office in New York, with a base in the UK and satellite offices worldwide, hopes to change the sector by creating a technology-driven company which focuses on providing tools for creative departments as much as editorial content.
Set up by Frank Bober, 66, a former designer and manufacturer, Stylesight. charges $7,500 for an entry level subscription, has 2,500 company subscribers, including Prada and Zara – and 25,000 individual users.
"We have an in-house technology team that has created tools like our photo tagging technology [which allows users to click on any piece of clothing pictured on Stylesight and search by image] which help clients' workflow.
"We don't view this industry as having two to three thousand clients, we see it as having 10-20,000 potential clients – in areas of the world Western forecasting has never been made accessible before – such as China. This is why we have 30 people actively translating the site all day into several languages for these markets."
Bober stresses he is in the business of subscriptions and the sign Stylesight has been a success is when a client says the service saved money and time.
"I want to provide a service where people can ascertain value from the proposition. This is why we are focusing on providing tools – such as 'clip' [which allows designers to copy and paste any image from in and around the web on a working screen on Stylesight], to help people work better."
But how does trend forecasting actually work and how can it provide value to the companies subscribing?
Isham Sardouk, senior vice president of Trend Forecasting at Stylesight, has experienced life as both a client, when he was designing at Victoria Secrets, and now as a forecaster-in-chief.
"We work 18 months ahead across several markets such as men, women, children and interiors, and our job is to provide food for thought," he says. "There is a 16 to 18 month lead time with retailers and so the majority of our forecasts are not for the fast track fashion decisions but for the longer term decisions, although we do provide short term forecasts too.
"We are not doing the designers' jobs for them . We trust our client to use our content to adapt our message and make it our own. Our target audience is not the high end but more the high street retailers."
Sardouk has been in the trend forecasting business for 20 years and says he gets some of his inspiration for his forecasts from new designers and the way they are using new technology. He volunteers "rapid prototyping" as an example. Using new types of 3-D printers, young designers are now able to "print" out a whole shoe or a dress as a prototype in plastic – not for wearing – but in doing so bring new ideas for design looks to the table.
"There's no way of explaining forecasting. There is a lot of intuition," he says. Stylesight, like WGSN, provides its clients with 'Forecast Confirmations' showing how predictions and themes have been borne out in the shops and on the catwalks.
However, Sharon Graubard, Stylesight's chief trend analyst, who trains the forecasters of the future, admits that a lot of forecasting is self fulfilling.
"If you tell clients something is going to be big, you will probably make it so," she says.
"Forecasting is a sixth sense. You can be too early. You can also let your own taste get in the way. But usually you can feel a trend bubbling up on the streets and then you find the seeds of it on the catwalk. Our job is to pull it all together for client and educate them about how best to channel the zeitgeist."
Graubard, who finds her inspiration on walks to work along New York's fashion-filled streets, says that Stylesight's employees are the best users, as they work all day on it and give feed back as to how the tools can be improved.
Sardouk says: "People will always pay for something they require to get their job done,"
"We are giving people content they need. We aren't debating issues - we are giving them ideas, sketches they can download – essentially we giving our clients everything we need to create their collection."
It seems almost impossible to assess the impact these trend forecasters have on their clients.
Forecasting is becoming big business, blending editorial with technology tools. However, the battle lines have been drawn and the winner will be the forecasting service who can keep innovating and keep up with technology developments, providing indispensable tools and information for their clients.
As Bober puts it, "Our future will be in becoming to designers what Microsoft is to office workers – giving them all the tools plus the information they need to do their jobs.
"The fashion industry always needs feeding. I don't see anybody naked anywhere. The world needs clothes. And clothes need to be designed.
"Designers need us to help them do their jobs in the best way possible."