NEW YORK — After a couple of years of explosive growth, driven in part by the advent of the low-rise look and the rise of some powerhouse high-end brands, the jeans business got a bit tougher in 2002.
This story first appeared in the July 17, 2003 issue of WWD. Subscribe Today.
A number of factors played into that trend. One was a matter of supply and demand: After all that frenzied jeans buying, Americans had quite an assortment of jeans in their wardrobe — more than 10 pairs on average, by one estimate. Another was that the mercurial juniors’ shoppers suddenly seemed a little bored with the category, which led their purchasing to slip.
But the jeans business is so large it almost defies generalization. The consumer who struts into Wal-Mart (which sold one out of every eight pairs of jeans purchased in the U.S. last year) looking for a $15 pair of jeans to wear around the house, has different motivations from the woman picking out a $200 pair of Diesel jeans to wear out to a nightclub.
Proof that it’s hard to pin down the roughly $5 billion market can be found by looking at the findings of major market-research firms that follow the industry.
The NPD Group Inc., Port Washington, N.Y., found the total amount of money spent on jeans last year by women aged 13 and up rose 4.8 percent to $4.92 billion.
STS Market Research, Cambridge, Mass., found spending by a comparable group eased 3.7 percent to $5.26 billion, though it also noted that sales picked up in the first quarter of 2003, rising 2.3 percent from a year earlier.
Sources at both companies stood behind their findings and attributed the difference to their methods of polling. NPD polls 40,000 people a week, with frequent changes in who is polled, while STS draws on a group of 10,000 people who are repeatedly interviewed.
Like all polls, their results also could be skewed by problems such as people not remembering what they bought or misunderstanding questions, though both companies contend their sample groups and methods are crafted to avoid any misunderstanding.
While the companies disagreed on the direction the overall jeans market headed last year, they did agree that spending by teens, who had helped fuel the category’s aggressive growth in 2001, eased off.
STS found spending by female teens represented 21 percent of the overall women’s outlay on jeans in 2002, down from 23 percent in 2001. At the same time, spending by young adults aged 20 to 24 picked up the slack to represent 11 percent of the category, up from 9 percent. (See Table 1.)
Marshal Cohen, a senior industry analyst at NPD Group and NPD Fashionworld, said his company also noticed that trend.
“The young are not buying at the same robust pace that they were in the past. Overall, that’s true, and in denim, that’s also true,” he said. “What’s happening is the teen market was in major consumption mode over the last couple of years, with the trend so hot.”
He said teens’ closets are starting to fill with jeans, which is one reason they’ve started to look for other fashion options.
More broadly, consumers across all age groups have deepened their denim wardrobes over the past two years. According to Cotton Incorporated’s Lifestyle Monitor, women consumers aged 16 to 25 polled in the first quarter of 2003 reported they owned 10.2 pairs of jeans, on average, up from 8.5 pairs. Across all age groups, women on average said they owned 8.2 pairs of jeans, up from 6.9 pairs. (See Table 2.)
The slowdown in demand among juniors’ shoppers helps explain why jeansmakers ranging from VF Corp. to Sergio Valente have stepped up their focus on the contemporary market in recent months, with several companies offering more modern styling in misses’ fits.
NPD’s Cohen suggested there was a reason for the pickup in spending among contemporary shoppers. “As people age, they gain weight,” he said. “The item they’re wearing from a few years ago doesn’t necessarily fit.”
That assertion also is borne out by statistics. According to STS numbers that break down the market by size type, the fastest-growing category in 2002 was plus-size jeans, which saw sales rise 20.2 percent. Over the same time, sales of misses’ jeans eased 2.9 percent. (See Table 3.)
“The growth in plus sizes is absolutely dramatic,” said Art Spar, president of STS. “I don’t think that reflects a one-year change in the shape of Americans, but it may be showing an awareness of the part of manufacturers and retailers to give plus-size women more product.”
Spar cited the success of specialty chains like Fashion Bug and Lane Bryant in appealing to women with plus-size offerings as a reason for the growth.
In terms of dollars spent, specialty chains — particularly those with their own strong brands like Gap and Express — lead the jeans business across the size spectrum.
In 2002, specialty chains held 33 percent of the jeans market, doing $1.75 billion in sales, up from $1.74 billion a year earlier. Trailing them were discount stores, with 18 percent market share; national chains, with 15 percent of the market, and department stores, with 13 percent. (See Table 4.)
The biggest growth channel for women’s denim apparel sales in 2002 was off-price retailers, who saw their sales rise 30 percent, according to Cotton Inc. and STS. That phenomenon reflected category-wide inventory problems for some fast-growing brands, sources said. Oddly, at the same time, factory-outlet store sales slipped 36.4 percent. Specialty store sales were up 5.5 percent, while mass merchant sales eased 11.6 percent. National chain sales were off 0.1 percent.
Despite their shrinking sales, mass merchants remained key outlets for jeans. The top three jeans outlets in 2003 were Wal-Mart Stores, J.C. Penney Co. and Kmart, with the specialty chains, Gap, Old Navy, Express and Lane Bryant, also making appearances in the top 10, according to STS. (See Table 5.)
“The jeans category is a category that is more well suited for mass merchandisers than would be, let’s say, dress slacks,” said STS’ Spar. “I’m not expecting to see men go buy suits at Wal-Mart. That’s not going to happen…but khakis and denim are just made for the mass merchants.”
The leading position of the specialty chains in general shows they’re holding up in the face of the industry-wide trend of price deflation. According to NPD’s Cohen, the average selling price for a pair of jeans at specialty stores last year was $29.35, more than double the $14.46 average price at mass merchants. In between fell department stores, with an average price of $25.09, and national chains, with a $21.68 average.
Belying the tremendous competition and attention surrounding the premium and superpremium jeans market, where prices can soar well past the $100 mark, the bulk of the action in the jeans business remains in low-priced styles. Half of the 225.1 million pairs of jeans purchased in the U.S. last year cost less than $20, according to STS. Only 3 percent of jeans purchased — about 6.8 million pairs — cost $50 or more. (See Table 6.)
Officials at STS and NPD said the share of market for jeans priced over $100 was too small to get a meaningful measurement through polling.
The desire to pay lower prices also has consumers out in search of sale signs. STS found that last year 58 percent of all pairs of jeans purchased were bought on sale, up from 53 percent in 2001.
The lineup of top brands reflects consumers’ focus on value. Eight of the top 10 jeans brands, in terms of sales by unit, sold at moderate or mass price points, according to STS. Bucking the trend were two status brands, Tommy Hilfiger and Calvin Klein. (See Table 7.)
But private label jeans are also a growing force, representing 39 percent of all women’s jeans sales in 2002, up from 37 percent in 2001, STS found. Two mass market brands, Wal-Mart’s Faded Glory and Kmart’s Route 66 — both produced by Bonjour Group — made the top five private labels. (See Table 8.)
“Faded Glory is doing extremely well with women,” said STS’ Spar. “They’re not doing nearly as well with men, but they’re just a very powerful private label with women.”
While industry executives contend the jeans business isn’t subject to the wild swings other fashion categories see because jeans typically remain a staple of the American wardrobe even when they’re not on the runway, the same isn’t necessarily true for other denim categories. Sales of denim skirts last year were off 14 percent, while sales of shirts dipped 35.8 percent and sales of skirts and dresses rose 10 percent, according to Cotton and STS.
Cotton Lifestyle Monitor, which polls 4,000 people a year, found women’s attitudes toward denim are changing, with practicality taking greater precedence over fashion.
Among women respondents ages 16 and over in 2003, 50 percent said being practical was a major concern driving purchases of denim garments, up from 48 percent who gave that answer in 2001. Only 44 percent said looking good was the major concern, down from 47 percent.
Despite that shift, the poll found more women enjoy wearing denim. In 2003, 51 percent said they like wearing it, up from 49 percent in 2001.