By  on October 1, 2007

The plethora of private label resources at last month's Lyon, Mode City trade fair in Lyon, France, hit on a touchy topic in the intimates industry: brands versus private label.

Store brand sleepwear, robes, loungewear and underwear have been prevalent in innerwear departments for the past decade because of the ease of recreating styles and trends from the major brands. But the realm of foundations — bras, shapers and corsetry — has remained relatively clear of copyists because of the high level of technical expertise needed to grade, fit and design a product that offers function, comfort and fashion.

However, the Lyon fair was filled with a new breed of manufacturers, designers and merchandisers familiar with the intricacies of corsetry, with 41 firms from Mainland China and 18 from Hong Kong. The specialized foundations trade has been fine-tuned by growing demand for private label undergarments from retailers that want to differentiate themselves from competitors.

Consolidation continues to shrink the innerwear industry at all levels on a global basis, from fabric makers and innerwear producers to retailers, and the transition is creating a new business model where major brands and specialty retailers are working directly with fabric mills and their Asian suppliers to provide innovative, new product, executives noted.

"The traditional big foundations brands are being killed by the promotional spiral and the move to private brands, as well as the emergence of the big specialty brands where they are minor players," said a foundations executive who did not want to be identified. "Specialty retailers use the big brands to get into business, and then quickly develop their own design teams so they can go directly to Asian factories and enjoy higher margins. Plus it's much faster to direct source."

The Lyon show featured private label teams from a number of U.S. stores, such as Nordstrom, Dillard's, J.C. Penney, Kohl's, Victoria's Secret, Soma by Chico's, Gap Body, Banana Republic, Wal-Mart, Target and Lands' End.

Scores of national brands from the U.S. and European markets that have traditionally exhibited in Lyon were absent. They included Warner's, Olga, Calvin Klein Underwear, Bali, Hanes, Lejaby, Lou, Aubade and Simone Pérèle. Exceptions included long-established French brands Chantelle, Empreinte, Lise Charmel, Cadolle, Rien, Princesse Tam Tam and Sabrina Nadal, as well as Natori and designer licensees like John Galliano, Alberta Ferretti, Féraud and Nina Ricci.The decline in longtime exhibitors, primarily top French foundations labels, began in 2006 when brands such as Aubade, Barbara, Huit, Lejaby, Simone Pérèle and Princesse Tam Tam did not participate, said Sandrine Dervin, director of international development at show producer Eurovet.

"Overall, the context of globalization and its impact and changes in the lingerie sector, including increased competition, has forced brands to make strategic and budgetary choices to deal with these new problems," Dervin said.

The interest in private label innerwear is growing, according to consumer panelist data from The NPD Group, a Port Washington, N.Y.-based research firm. From July-August 2005 to July-August 2007, private brand innerwear has increased in dollar and unit sales, as well as average retail price point. Over the two-year span, dollar volume of private label innerwear rose to $4.79 billion from $4.14 billion, and unit volume grew to $555.3 million from $527.7 million. Dollar volume of national brands, primarily foundations, during the same period totaled $4.52 billion against $3.95 billion, while unit volume inched up to $791.9 million from $715.2 million.

The average retail for private label innerwear increased to $8.63 compared with $7.84, while national brands averaged $5.71 from $5.52. Private label's average unit price increased to $8.63 from $7.84.

Despite the growing presence of private brands, Robert Zarabi, president and chief executive officer of Chatsworth, Calif.-based Felina Lingerie, said, "For fashion product, it's very difficult to do private label foundations and expect it to fit right. They can have the best quality control, but they don't have the fit model we do in the U.S. They take a 34B cup bra and grade it up to a 40DD. They are simply copyists, so if they copy a La Perla bra, it doesn't mean it will sell in the U.S. It's easy to do sleepwear and panties, but you have to have the right people in place with 15 to 20 years of technological experience in the bra business."

Felina, which also produces bras by Jezebel, owns factories in Thailand.

"I think one of the expectations of this business is the anticipation of high margins and I think private label gives that to retailers," said Josie Natori, ceo of Natori Co. "Clearly, we represent something else, a certain aesthetic. And we've been around 30 years."Bob Vitale, executive vice president of sales and marketing at Wacoal America, said: "Superior fit, that's where the rubber hits the road. Whether it's materials that are expensive and provide good fit or the way the fitting process is done, it's questionable if a private label manufacturer can provide the proper fitting bra."

Wacoal produces all of its products at company-owned factories.

Victoria Vandagriff, president of Bendon USA, maker and distributor of Elle Macpherson Intimates and Fayreform, said staying competitive is a matter of thinking outside the box.

"You have to understand why the retailers are getting into private label," Vandagriff said. "EMI and Bendon have developed a private label division and the intent right now is less about addressing an EMI customer, but addressing a full-figure customer. Four major retailers have come to us to do private label, full-figure bras. It's not about competing with brands, it's about being in the game and expanding our channel of distribution."

Sonja Winther, managing director of Chantelle, a high-end French bra brand, said it's imperative for a branded manufacturer to own manufacturing facilities.

"I think it's the right business model approach," Winther said. "We are a vertical, integrated company where we own our own factories, so we'll be less affected. We don't go around shopping for factories for production and design. We develop everything in-house."

One area that still appears to be withstanding the private label onslaught is licensed characters. Richard Leeds, chairman of Richard Leeds International, whose company does sleepwear with characters like Tweety, Felix, Tinker Bell, Betty Boop and Mickey Mouse, said, "Some retailers have tried generic art with novelty screens and prints. But it's a real mistake if a person thinks an artist can be bought to do cute puppies and monkeys and think they're getting Paul Frank."

From an entrepreneurial designer's point of view, Leigh Bantivoglio said, "Private label has always been there, nipping at our feet, but now it's a real threat. [Retailers and major manufacturers] may have the manufacturing capabilities, but at the end of the day, they can do pieces and colors, but they can't design."One longtime manufacturer-turned-retailer who did not want to be named, singled out last year's May Department Stores Co.-Federated Department Stores Inc. merger, now operating under the Macy's Inc. nameplate, as the turning point for what he predicts will be the main contributor to a glut of proprietary labels in the marketplace. So far, Macy's has five private innerwear brands: Alfani, I. Magnin, Morgan Taylor, Charter Club and, most recently, Jenni, which is merchandised in a similar fashion to Pink by Victoria's Secret.

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