MILAN — They are style conscious, looking for something special and they’re worth an estimated $10 billion.

It’s tough to pin down data on the European denim market in this culturally diverse continent spanning from Copenhagen to Crete. Anxious to protect their corporate clients, data banks and researchers don’t willingly divulge the details on these countries and their customers. Adding to this lack of transparency, many jeans manufacturers here are small, privately held companies that release few financial figures.

But it doesn’t take a spate of statistics to know that denim is big business in Europe. On Milan’s bustling Corso Vittorio Emanuele II, shoppers mill about in hip-hugging jeans with flared legs. Embroidered and appliquéd looks abound, as do denim skirts.

Cinzia Arnaboldi, a 26-year-old from the lakeside town of Como, said she buys about three to four pairs of jeans a year and prefers classic, basic styles. Her favorite brand is Meltin’ Pot, an Italian label that interprets American hip-hop styles for a European audience.

“I like the kind that are faded in the front,” she said, as she window-shopped for shoes with her friends.

Industry observers are willing to share at least a few secrets about the complexity of this multicultural market. First and foremost, continental consumers are savvier shoppers than their American counterparts, with a keen eye on price-quality ratios and staying stylish.

“The European customer is very attentive to an innovative product,” said Andrea Ciccoli, vice president of Bain & Co. in Milan. “They are used to a wider product assortment than U.S. customers.”

Bain & Co. estimates that the denim market in the European Union was worth about $10 billion in 2002. Germany was the biggest market by far, accounting for about 30 percent of the pie. The U.K. is the second-biggest market making up 19 percent of the total. Italy comes in third place with 18 percent and France stands fourth with 15 percent. Bain also pointed out that Spain, historically a small market for jeans, is the fastest growing in Europe.

Heiner Sefranek, owner and manager of German-based jeans company Mustang, said Europeans, accustomed to paying higher clothing prices than their American peers, tend to be more quality conscious.“The average American price of jeans is lower,” Sefranek said. “A pair of Wrangler jeans in America could cost $12. Here, maybe it’s $25.”

Europeans’ fashion-forward tendencies have managed to give birth to some of the edgiest names in the international denim industry. Italy alone is home to a whole crop of names, such as Diesel, Replay, Gas and Miss Sixty.

Denim players on the other side of the spectrum also are exerting a force in Europe, in terms of price. The average retail price of a pair of jeans in the U.K. fell by 11 percent between 1998 and 2002, according to a recent report from research group Mintel. Value retailers like Matalan are bringing in cheaper jeans from abroad, just as supermarket chains like Tesco and Asda, the latter with its in-house George Essentials range, are winning market share in the lower-priced segments.

“The market for jeans is projected to continue to be buoyant in 2003, with market growth expected in the low-priced and higher-priced segments,” Mintel said. “Meanwhile, prices in the mass market will continue to be under pressure.”

So, what is the key to convincing a customer to pay a premium for a pair of jeans? A stylish edge that distinguishes them from the rest of the pack. Industry watchers often cite brands such as Miss Sixty, Diesel and G-Star as success stories.

“There will be room in the market for all kinds of jeans, from classics through to fashion lines, but the most buoyant part of the market is still predicted to be in fashion,” Mintel said. “This represents a higher-risk area for many, but there are rich rewards for those companies that get it right.”

The women’s market in the U.K. is destined to grow, although at a slower pace than years past. Sales this year are seen coming in at $768.7 million (461 million pounds), according to Mintel. That is 2.9 percent higher than the $747 million (448 million pounds) of 2002, but slower than the 34.9 percent and 8.9 percent growth seen in 2002 and 2001, respectively. Styles targeting younger customers, including faded washes, low-slung waistlines and flared legs, helped fuel sales.Italy also saw its inhabitants buying more jeans last year. ACNielsen SITA said Italians bought $1.79 billion (1.56 billion euros) worth of jeans in 2002, up 11.4 percent from 2001.

“All products have their cycles, and for a long time jeans didn’t do well,” said Annamaria Armano, an ACNielsenresearcher. “Three years ago, the cycle took off again both for casual and designer labels.”

Armano said all types of labels, from basic Levi’s to designer denim like Roberto Cavalli and John Richmond, benefited as jeans became stylish again. The trend also spilled over into different products, boosting the sales of jean jackets and skirts. These products also were able to command higher prices. The average price of a pair of jeans in 2002 rose 5.2 percent to $43.30 (37.7 euros) a pair, according to ACNielsen SITA.

But, like all cycles, the denim trend can’t sustain itself forever at these levels. Armano said the jeans market is close to the saturation point.

“We expect this cycle to come full circle soon,” she said. “Who knows how much longer it can last at these levels?”

One of the biggest players in the European market is Levi’s. The denim giant sold $1.09 billion worth of jeans in Europe during the fiscal year ended November 24, 2002. Although market share data isn’t available for every European country, Mintel estimates that Levi’s holds about 15 percent of the U.K. market.

Rossella Beato, a researcher with Pambianco Consumer Research in Milan, said Levi’s has been successful at diversifying into specialty products that are more fashion oriented, like vintage styles, and at the same time keeping its grip on the mass market.

“Levi’s, with its limited editions, has stayed authentic in its core business, but at the same time modernized its brand,” she said.

Mustang’s Sefranek said Levi’s has lost some of its market share over the years to both fashion brands and trade brands like New Yorker or denim offerings from chains like Gap and Esprit.

Emerging niche brands or even “microniche” brands like Meltin’ Pot, Kulte, Evisu and Nolita, are appealing more to European consumers, according to Beato. She said consumers want something that distinguishes them as individuals and isn’t immediately identifiable as a certain brand.Ciccoli estimated that while it is difficult to predict the future for the overall denim market, as it is closely linked with macroeconomic cycles, the high-end fashion segment of the jeans market looks more dynamic and is destined to grow at a rate of 4 to 5 percent a year.

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