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Sample provided by Research enquiries: Liz Hague, Sales Manager email: [email protected] tel: +44 (0)1527 573 604 US toll-free: 1-866-545-5878 fax: +44 (0)1527 577423 Global market review of lingerie and intimate apparel – forecasts to 2017 2012 edition February 2012 By Malcolm Newbery With contributions from Divya Divakaran and Jane Steadman Published by Aroq Limited Seneca House Buntsford Park Road Bromsgrove Worcestershire B60 3DX United Kingdom Tel: +44 (0)1527 573 604 Fax: +44 (0)1527 577 423 Web: www.just-style.com/market-research/ Registered in England no: 4307068 i SingleSingle-user licence edition This report is provided for individual use only. If you would like to share this report with your colleagues, please order additional copies or sign up for a multi-user licence by contacting: Liz Hague Research manager, just-style.com Tel: +44 (0)1527 573 604 Email: [email protected] Copyright statement © 2012 All content copyright Aroq Limited. All rights reserved. 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For details of the current special joining offer visit: www.just-style.com/offer.aspx *Prices correct at time of publication. iii Table of contents Chapter 1 Executive summary Lingerie explained The current approach to lingerie collections Different types of lingerie retailer Branded and own label lingerie, market share comparisons Market growth and market share; the Boston Consulting Group (BCG) matrix The importance of brands and own labels in emerging markets The UK lingerie market, a fieldwork analysis The lingerie retail market, 2004 -2011 The lingerie retail market, 2012-2017 Interview with the editor of lingerie buyer on trends and issues affecting the sector Chapter 2 Lingerie explained Product definitions and lingerie product categories Styling history Garment construction The current approach to lingerie collections Chapter 3 Brands and own label Different types of lingerie retailer Brand and own label pricing The retail market pricing segmentation The lingerie price-fashion matrix Chapter 4 The importance of brands and own labels in major developed markets Branded and own label lingerie, market share comparisons Market growth and market share; the Boston Consulting Group (BCG) matrix Market growth and market share; an alternative fast moving consumer goods theory Market share by price point Market growth and market share theory, North America in 2012 VF (Vanity Fair) Corporation and Fruit of the Loom Market growth and market share theory, North America in 2017 Market growth and market share theory, Western Europe in 2012 Key lingerie sector events in 2006, 2007 and 2011 Market growth and market share theory revised, Western Europe in 2012 Market growth and market share theory, Western Europe in 2017 Chapter 5 The importance importance of brands and own labels in emerging markets BRICs BRICs ratings as fashion retail markets Brazil Scalina iv Baci Lingerie Russia Silvano Julie France India The market Etam and Pantaloon Lovable Page Industries (Jockey) Indiginous brands China The apparel market summarised Aimer Ordifen Jianertan Chapter 6 The UK lingerie market, a fieldwork analysis Product types The Price-fashion matrix Key points worth noting Stock density and presentation Trends for spring-summer 2012 Chapter 7 The lingerie l ingerie retail market, history The lingerie retail market, 2004 The lingerie retail market, 2008 The lingerie retail market, 2010 Chapter 8 The lingerie retail market, current The lingerie retail market, 2011 The scale of the revised 2011 estimate Chapter 9 The lingerie retail market, future The lingerie retail market in 2012 The lingerie retail market in 2013 The lingerie retail market in 2017 Headlines from just-styles’s long term timelines Chapter 10 Interview with the editor of Lingerie Buyer on trends and issues affecting the sector v List of tables Table 1: Branded and own label bra price architecture, US and Western Europe Table 2: Lingerie price segmentation (bras), 2011, based on US market Table 3: 2004 market value (US$bn), volume (m units) and unit prices of bras and briefs sold in North America, Europe & Turkey, Japan & South Korea and world total Table 4: 2008 market value (US$bn), volume (m units) and unit prices of bras and briefs sold in North America, Europe & Turkey, Japan & South Korea and world total Table 5: 2010 market value (US$bn), volume (m units) and unit prices of bras and briefs sold in North America, Europe & Turkey, Japan & South Korea and world total Table 6a: 2011 market value (US$bn), volume (m units) and unit prices of bras and briefs sold in North America, Europe & Turkey, Japan & South Korea and world total Table 7: 2012 market value (US$bn), volume (m units) and unit prices of bras and briefs sold in North America, Europe & Turkey, Japan & South Korea and world total Table 8: 2013 market value (US$bn), volume (m units) and unit prices of bras and briefs sold in North America, Europe & Turkey, Japan & South Korea and world total Table 9: 2017 market value (US$bn), volume (m units) and unit prices of bras and briefs sold in North America, Europe & Turkey, Japan & South Korea and world total Table 10: 2004-2017 market value (US$bn and % growth) of bras and briefs sold in North America, Europe & Turkey, Japan & South Korea and world total Table 11: 2004-2017 market value (US$bn and % growth) of bras sold in North America, Europe & Turkey, Japan & South Korea and world total Table 12: 2004-2017 market value (US$bn and % growth) of briefs sold in North America, Europe & Turkey, Japan & South Korea and world total List of figures Figure 1: Price-fashion matrix, bras UK Figure 2: Market growth and market share (Boston Consulting Group) matrix Figure 3: Brand market attractiveness matrix Figure 4: Brand market attractiveness matrix, US 2012 Figure 5: Brand market attractiveness matrix, US 2017 Figure 6: Brand market attractiveness matrix, Western Europe, 2012 Figure 7: Brand market attractiveness matrix, Western Europe, 2017 Figure 8: UK lingerie brands and own labels, functional/sport and practical/traditional Figure 9: UK lingerie brands and own labels, contemporary/fashionable and high fashion/glamour Figure 10: UK lingerie brands and own labels, extreme fashion vi Chapter 1 Executive summary Lingerie explained As in previous editions of the just-style lingerie report, lingerie is defined as being composed of three major product groups. They are: 1. Bras 2. Briefs 3. Daywear and shapewear Sleepwear garments are excluded from this report. There is no doubt that technology, in both materials (fabrics) and construction (sewing), have dramatically influenced the sector since the 1960s. Fabrics are lighter and contain more stretch. Construction methods include more welding and taping to complement old fashioned stitching. The current current approach to lingerie collections As the sector consolidates (fewer brands and own label retailers), the emphasis has shifted from category subset specialisation to sub brands addressing each sub sector with a range dedicated to that area. This is an issue which may well be approaching a tipping point, according to the Editor of Lingerie Buyer, namely whether to specialise or whether to attempt to satisfy all consumer types. Different types of lingerie retailer Across the whole apparel industry, the retail distribution of clothing is composed of two basic approaches, namely retailers who sell manufacturer brands or retailers who sell their own label merchandise. The fundamental differences between the two approaches are that, for own label, the retailer has to design the garment, choose the fabric and source it, produce illustrations, specifications, and measurement charts against which the garment will be manufactured, select a manufacturer and negotiate the price at which the garment is bought, and manage the supply chain and ensure that the manufacturer produces and ships on time and to the required quality. For retailers selling manufacturer brands the tasks are simpler. They merely have to choose the brand, buy what they want from the brand collection at the brand’s wholesale price and wait for delivery. 1 Chapter 2 Lingerie explained Product definitions and lingerie product categories This is the fifth edition of just-style’s report on the lingerie market. Most readers will already be familiar with the category and its subsets. In the previous reports on lingerie, the product offer was explained as being composed of three major groups: • Bras • Briefs • Daywear and shapewear These segment definitions were taken from a Textile Outlook International report which further explained them as: • Bras are garments to support and shape the breasts, in a wide variety of styles • Briefs (in the US, panties) are garments worn from waist to thighs in a wide variety of styles • Daywear includes camisole tops and skirt slips • Shapewear is intended to firm and shape the body, and includes bodies, teddies, corsetry, and girdles It is important to note here that some market researchers include sleepwear in the lingerie category. Although most lingerie brands have some sleepwear in their ranges, much of what is worn today as sleepwear is daywear such as T-shirts and underwear. The quantitative figures in this report include maternity and mastectomy bras, which although specialist garments are today also designed with the objective of being fashionable. It excludes totally specialist garments such as: • Body armour bra products for the military or the police • Incontinence pants for medical patients When it comes to the marketing of bra styling, most of the larger branded catalogues put their bra offerings into four generic categories. They are: 2 • Underwired • Padded Chapter 3 Brands and own label Different types of lingerie retailer Across the apparel industry, the retail distribution of clothing is composed of two basic approaches: 1. Retailers who sell manufacturer brands. 2. Retailers who sell their own label merchandise. The fundamental differences between the two approaches are that for own label the retailer has to: • Design the garment • Choose the fabric and source it • Produce illustrations, specifications, and measurement charts against which the garment will be manufactured • Select a manufacturer and negotiate the price at which the garment is bought • Manage the supply chain and ensure that the manufacturer produces and ships on time and to the required quality For retailers selling manufacturer brands the tasks are simpler. They merely have to choose the brand, buy what they want from the brand collection at the brand’s wholesale price and wait for delivery. This distinction is just as true in the lingerie retail market as in any other product category. In lingerie as elsewhere in fashion retail, the distinction is additionally about scale. A single boutique can buy a very small quantity from a manufacturer brand. A single boutique cannot contemplate selling own label. No supplier would be prepared to make the garments for the boutique in such small quantities. To be in the own label business, the retailer requires a critical mass, which is most easily expressed as a minimum number of branches of the own label chain. It is for this reason that new own label retailers are rare. In the UK Theo Paphitis, the owner of the Ryman stationery chain and one of the dragons of the entrepreneurial TV show Dragon’s Den has started an own label lingerie chain, Boux Avenue. In September 2011, it opened its seventh branch, and its first in the UK’s North East region at the Metrocentre shopping mall in Gateshead. However, most own label lingerie chains are much bigger than Boux Avenue. The world’s largest is Victoria’s Secret with sales of US$xxxbn and xxxxx US branches as at 9th November 2011. 3 Chapter 4 The importance of brands and own labels in major developed markets Branded and own label lingerie, market share comparisons It is an undisputed fact, that in the lingerie product category, brands compete better with retailer own labels than they do in many other categories. In a previous edition of this report, Pamela Scott, the managing Editor of Underlines, a founding member magazine of the European Network Dessous media grouping, commented that brands survive well in lingerie because of two factors that are in their favour; fit and exclusivity. Her stance was that women, once convinced that a particular brand was “right” for them, would remain loyal to it. Nevertheless, this is an attitude that has to be tempered by the realities of different degrees of brand and own label power in different parts of the world. Other accepted facts are that: • The United Kingdom and the Republic of South Africa have the most concentration of buying power in the hands of relatively the fewest private label retailers in the world • The US has a high concentration of retail buying power, but within retailers that are more inclined to buy brands than to follow a private label model (although in lingerie, Victoria’s Secret is a dramatic example of the opposite approach) • Northern Europe (Germany, France, Benelux and Scandinavia) are more inclined to private label, whilst the Mediterranean Latin countries favour a branded approach • Japan has a few huge brands (such as Wacoal) but then a rather fragmented market in both brands and private label • In the developing countries of India and China, brands are only slowly finding a niche position in what until recently has been a market/bazaar driven retail sector • Brazil, another of the BRIC economies, has its own tradition of South American brands, many of which sell well in the Brazilian chains of prominent European own label retailers such as Zara and C&A 4 Chapter 5 The importance of brands and own labels labels in emerging markets BRICs Much has been written recently about the importance of the emerging markets, and particularly the BRIC nations (Brazil, Russia, India, China). Together they account for xx% of the population of the world. Their influence on the lingerie market is far less than that percentage, but it is growing at a time when the lingerie sectors of North America and Western Europe are, at best, flat. It is not possible to isolate key players using the Boston Consulting Group approach because the players are operating in a fragmented and market bazaar way, in markets that have yet to become fully managed by “organised distribution”. Organized distribution implies a clearly defined market with easily visible routes to reach the consumer such as boutiques, department stores, own label retailers and the internet. The BRICs have all the routes to reach the consumer but in a muddled and incoherent manner, when compared with the developed world. BRICs ratings as fashion retail markets Brazil's high spending on apparel items and strong clothing imports, make the country the most attractive emerging market destination for apparel retailers, according to a study from global management consulting firm A.T. Kearney. The A.T. Kearney retail apparel study looked at ten influences including apparel consumption and clothing imports/exports."There is great potential for global apparel retailers to succeed in Brazil," said Hana BenShabat, a partner with A.T. Kearney. "Brazil is the most attractive apparel market for reasons of demographics and demand." Brazil's clothing market is estimated to be growing at more than x% annually and is valued at US$xxxxbn. The country is young, with more than xx% of population below the age of xx. Small retailers make up more than xx% of a highly fragmented domestic retail apparel market. 5 Chapter 6 The UK lingerie market, a fieldwork analysis Product types Within the lingerie market the fieldwork established five main types of lingerie that consumers buy. The different categories for bras were: • Functional/Sports • Practical/Traditional • Fashionable/Contemporary • High fashion/Glamour • Extreme Fashion/Sex In order understand the current market positioning of branded and own label lingerie, a comparative shop was undertaken. In September 2011, department stores such as Selfridges, House of Fraser and Debenhams, together with own label lingerie retailers such as Marks and Spencer, Topshop, and Tenzenis were visited. The physical comp-shop delivered further understanding of the prices and styles of lingerie that are sold on the High Street. It is however also very important for the price-fashion matrix to include e-tailers such as Figleaves. The physical and online comp-shop, generated price-fashion information based on the prices of non wired full cup bras, for both branded and own label lingerie. The PricePrice-fashion matrix The price fashion matrix was constructed from the information collected from the comp-shop. The prices of the lingerie were converted to US dollars to keep the prices used consistent with the rest of this report. For ease of viewing, the comp-shop analysis has been displayed as three figures, Figures 8-10 below. 6 Chapter 7 The lingerie retail market, history The lingerie retail market, 2004 The first quantitative review of the lingerie market, made by the author for just-style, was in 2004. At that time, the lingerie market at retail prices was worth US$xxxxxbn. Within that total, the respective market values for bras, briefs and other lingerie apparel garments (daywear and shapewear) were as given in Table 3. Table 1: 2004 market value (US$bn), volume (m units) and unit prices of bras and briefs sold in North America, Europe & Turkey, Japan & South Korea and world total US$bn values World Total Total North America Europe and Turkey Japan and South Rest of the World Korea Total lingerie xxxxx xxxx xxxxx xxxx xxxx Bras xxxxx xxxx xxxx xxxx xxxx Briefs xxxx xxxx xxxx xxxx xxxx Other garments xxxx xxxx xxxx xxxx xxxx Bras xxxx xxx xxx xxx xxx Briefs xxxx xxx xxxx xxx xxxx xxxxx xxxxx xxxxx xxxxx xxxx xxxx xxxx xxxx xxxx xxxx Unit million volumes Unit US$ prices Bras Briefs 7 Chapter 8 The lingerie retail market, current The lingerie retail market, 2011 At the beginning of 2011 there were signs that the world was coming out of recession. By the end of an eventful year, that was no longer the case and forecasters everywhere were downgrading their GDP and market estimates. just-style have done the same. There are two estimates for 2011, the “was” and the “is”. just-style has to believe the “is”. Both are shown as Tables 6a and 6b, but only 6b is explained. The US$ market value for bras, briefs and other lingerie apparel garments (daywear and shapewear) for the year just ended is as follows. Table 2 a: 2011 market value (US$bn), volume (m units) and unit prices of bras and briefs sold in North America, Europe & Turkey, Japan & South Korea and world total US$bn values World Total North America Europe and Turkey Japan and South Rest of the World Korea Total lingerie xxxxx xxxx xxxxx xxxx xxxx Bras xxxxx xxxx xxxx xxxx xxxx Briefs xxxx xxxx xxxx xxxx xxxx Other garments xxxx xxxx xxxx xxxx xxxx Bras xxxx xxx xxx xxx xxx Briefs xxxx xxx xxxx xxx xxxx xxxxx xxxxx xxxxx xxxxx xxxx xxxx xxxx xxxx xxxx xxxx Unit million volumes Unit US$ prices Bras Briefs 8 Chapter 9 The lingerie retail market, future The lingerie retail market in 2012 In 2010 there were signs that the world was coming out of recession. In 2011 those hopes were dashed and the market fell back by nearly US$xbn from its previous projection. The recovery, according to most economists and pundits, will be slow and painful. In this situation what is the prognosis for lingerie? As has been noted earlier in this report, lingerie, historically, has proved to be a resilient sector, both for the brands and for retailers. However, at the moment, as will be explored in the interview with the editor of Lingerie Buyer, that does not seem to be the case. European brands, such as Lejaby, have gone into administration, and independent lingerie boutiques are shuttering their shops and exiting the sector. In this scenario, it is predicted that for 2012, the lingerie market at retail prices will be worth US$xxxxxbn. This is marginally (down by xxx%) less than the 2011 figure. Within that total, the US$ market value for bras, briefs and other lingerie apparel garments (daywear and shapewear) is given in Table 7. Table 3 : 2012 market value valu e (US$bn), volume (m units) and unit prices of bras and briefs sold in North America, Europe & Turkey, Japan & South Korea and world total US$bn values World Total North America Europe and Turkey Japan and South Rest of the World Korea Total lingerie xxxxx xxxx xxxxx xxxx xxxx Bras xxxxx xxxx xxxx xxxx xxxx Briefs xxxx xxxx xxxx xxxx xxxx Other garments xxxx xxxx xxxx xxxx xxxx Bras xxxx xxx xxx xxx xxx Briefs xxxx xxx xxxx xxx xxxx xxxxx xxxxx xxxxx xxxxx xxxx xxxx xxxx xxxx xxxx xxxx Unit million volumes Unit US$ prices Bras Briefs 9 Chapter 10 Interview with the editor of Lingerie Buyer on trends and issues affecting the sector just-style often includes an interview in its garment category reports, either with a senior executive of a brand or own label retailer, or with a knowledgeable person in the industry. In the 2009 edition, interviews were conducted with both a magazine editor, Pamela Scott of Underlines, a UK member of the European group Network Dessous, and with an owner of an independent lingerie boutique selling brands in London. These interviews were conducted approximately one year after the October 2008 banking credit crunch crisis, long enough for the implications to trickle through the fashion supply chain critical path. Pamela Scott’s reaction to the initial question about recession and its effect on the lingerie sector was “overall, the word I would use is polarisation. Although even the luxury market is feeling the squeeze, the worst hit are the middle priced mass market lingerie companies. The top end are suffering but not so badly, and the budget discount end is benefitting”. If this report were being written a year ago, at the end of 2010, it would have been likely that it would have sounded cautiously optimistic about recovery. But, at the end of 2011, with the US unable to agree on an economic recovery policy, and European nations struggling with their euro-crises, the first question that juststyle asked Lotte Debell, Editor of Lingerie Buyer, a magazine published in the UK by the Hemming Group was: justjust-style: There is no doubt that we are in a “double-dip” recession. What is your evidence for this in terms of examples from brands of reduced branded advertising in the magazine? Lotte Debell: Branded advertising fell to an all time low in late 2009. Since then it has been rising steadily, although it is still lower than it was pre 2008. The double-dip has not hit advertising levels just yet. j-s: Is there similar evidence about the depth of the recession in terms of fewer retailer readers as independent boutiques shutter their shops, never to return? 10 Research enquiries: Liz Hague, Sales Manager email: [email protected] tel: +44 (0)1527 573 604 US toll-free: 1-866-545-5878 fax: +44 (0)1527 577423
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