The enticement of gimmicky "buy one, get two free" promotions for national bra brands has been a cash cow at department stores for over a decade — but the promotional frenzy appears to be losing its magic.
Since the mid-Nineties, consumers have been trained to wait for promos to buy national brand bras such as Vanity Fair, Maidenform, Warner's, Olga and Bali. It's created a cycle of revolving sales for a majority of department stores for which the volume-producing events have driven business for entire intimate apparel departments.
The increasing popularity of lingerie on international catwalks and media exposure in magazines and TV, and the attention received by Victoria's Secret, the $5.61 billion lingerie powerhouse, has turned lingerie into a must-have fashion item, but basic, replenishable goods continue to be the backbone of the $12.6 billion intimates business at retail.
A new direction is taking shape at department stores, which are beginning to focus on smaller, better brands like Felina, Jezebel, Natori and Josie, b. tempted by Wacoal that offer basics with a fashion twist and fashion items. A number of chains are starting to cut back on real estate and open-to-buy dollars for promotional bra brands, and are reevaluating and editing brands, as well as sizes, colors, fabrics and styles. It's part of a strategy at major stores like Macy's and Bloomingdale's to differentiate themselves from moderate department stores such as Kohl's that also promote national-brand foundations.
At Macy's, part of the strategy has been to feature exclusive bra brands such as Luleh by Maidenform, Christina by Olga and Paramour, which was created by Felina Lingerie. Adding to the better segment is Tommy Hilfiger Intimates, produced under license by Delta USA and hitting Macy's floors in the next several weeks.
Regarding the shift to premium brands, Josie Natori, chief executive officer of Natori Co., said, "There's a very fine line. In times like this you want product with a fashion twist, but you don't want something that's everywhere. And the better business is a cleaner business with little or no markdown money. Besides, there's a whole new generation of customers who have never heard of the national bra brand names. I think the customer is much more savvy about fashion."While national bra brands have a tremendous assortment of styles, retailers have generally placed their bets on generic, cookie-cutter looks anchored in one style: seamless, molded-cup T-shirts bras. There are just so many same-style bras a woman will buy, though, and industry executives believe consumers who are feeling the economic pinch will make do with basic merchandise they've already purchased, rather than shell out more cash for the same product.
Andrew Postal, managing partner at Marketing Management Group, said, "The industry is struggling on how to stimulate a scared consumer. Typically, if a new brand comes in it will be taking market share from another brand. My guess is it will come out of somebody else's hide. It's going to be very interesting to see how these [brands] do in the space at stores."
Addressing the upcoming introductions of several new innerwear brands to the U.S. market, including Emporio Armani, Bjorn Borg, Juicy Couture, Jessica Simpson and Puma, Postal said, "Maybe stores will do a launch-of-the-month club."
Arnold Aaronson, managing director of retail strategies at Kurt Salmon Associates, said, "The promotional addiction in this category is starting to wear out, even though customers are interested in value during this difficult economic period. I think people will get along with what they have. They'll need much added stimulus to pry money out of their wallets. The only way to induce customers to buy is to provide something new and different."
Regarding the issue of space for national brands versus better brands, Aaronson said, "They've all got to fight for their space. Stores can't abandon brands that have performed, but they certainly can edit what the brands have to offer. There won't be a total abandonment unless a brand or a store is not performing."
John Adams, vice president of branded sales at Felina Lingerie, said, "When I was at Wacoal and DKNY Underwear, department stores realized they couldn't compete with brands that were on sale all of the time They wanted to be different from the Kohl's of the world. Retailers said, 'We can't grow profitably.' As a result, national brands are getting smaller space. I think better brands have to have product that's everyday wearable. But it can't just be about fluff."
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