NEW YORK — Branded sportswear manufacturers need to keep looking over their shoulders at private labels, which gained more ground in 2003.

Brands owned and sold exclusively by a single retailer, also known as private labels, accounted for 42 percent of all women’s and men’s sportswear sold last year — making for sales of $28.4 billion. At an average price of $18.09, this translates into 1.57 billion units sold.

The category’s share of the overall sportswear market picked up four points over the prior year, when it accounted for 38 percent of the market. Taken another way, sales of private label sportswear grew by more than 8.1 percent, handily outpacing the 1 percent rise in overall sportswear from 2002 to 2003.

The data comes from the Private Label Sportswear 2004 Annual Report, produced by the consultancy Markethink Inc., and STS Market Research, which tracks the purchases of more than 12,000 consumers and extrapolates overall market performance.

Led by specialty stores such as Old Navy and Express, private label merchandise is a way for retailers to capture margin that would have otherwise gone to a wholesale vendor. The trade-off is that risk increases as the complexity of production and brand-building is added — the retailer becomes a manufacturer. Also, stores are solely responsible for the excess inventory they produce.

Women’s merchandise makes up 66.8 percent, or $19 billion, of the total private label sportswear market. About 49 percent of the women’s sportswear market is in private brands.

“Jeans, dresses and sweats have a relatively low share within private label as compared to their share of overall sportswear,” said the report. “There are so many established national and designer brands in those categories, that the private label brands have less of a hold, relatively speaking, on the consumer.”

By type of retailer, specialty stores were the category leaders, accounting for $13.4 billion, or 47.2 percent of private label sales.

“Specialty stores dominate private brands and private brands dominate specialty stores,” said the report. “Without these eponymous labels, the stores would not have grown to the powerhouses that they are today, nor would private label be as significant a factor in sportswear.”Gap Inc.’s Old Navy division took the prize as the top private label retailer with a 7.9 percent share of the overall sales. Coming in second was Wal-Mart, with 7.5 percent of the market, and third was J.C. Penney, with a 6.4 percent share.

Sales of private label merchandise grew fastest at the national chains, which include moderate-priced stores such as Kohl’s, with an increase of 21.8 percent to $4 billion. The channel had a 14.2 percent share of overall private label sales.

Department store sales of private labels shot up 16.1 percent to $1.5 billion, with a market share of 5.3 percent.

“Department stores also have the dubious distinction of a 2003 average private label sportswear price that was 21 percent below its average sportswear price, the deepest discount in the market of any major distribution channel,” said the report.

Discounters, which saw their sales of private label drop 4.2 percent to $4.7 billion last year, also approach private labels as lower-priced alternatives to the national brands they carry, said the report.

“Discounters are offering neither enough value with their value brands, nor enough brand aura with their exclusive brands,” noted the report.

Women's Private Label Sportswear '03 vs. '02
Category
Sales (m)
% change
units (m)
% change
Average Price
% change
Jeans
$2,417
14.1
107
15.1
$22.56
-0.8
Pants
$3,375
1040%
165
14.2
$20.44
-3.3
Shorts
$884
-1330%
67
-10.8
$13.09
-2.8
Skirts
$1,186
450%
55
9.3
$21.55
-4.4
Total Bottoms
$7,861
730%
395
8.5
$19.91
-1.2
 
Knit Tops
$3,440
4.8
301
11.5
$11.44
-6
Woven Tops
$2,430
14.7
155
20.8
$15.69
-5.1
Sweaters
$2,491
6.6
117
7.9
$21.25
-1.2
Total Tops
$8,361
8.1
573
13.1
$14.60
-4.4
 
Dresses
$1,494
-6.8
45
-0.9
$32.98
-5.9
Sweats
$1,264
24.1
64
21.8
$19.80
1.9
 
Total Sportswear
$18,980
7.3
1,077
11.2
$17.63
-3.5
Sales and units in millions, average price in dollars. Percent change reflects 2003 versus 2002
Source: STS Market Research

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