NEW YORK — Innovation in a product-driven sector is expected to keep intimate apparel buoyant in a retail environment that’s been described by executives as being as unpredictable and fearsome as “The Perfect Storm.”
This story first appeared in the July 8, 2002 issue of WWD. Subscribe Today.
Like much of the apparel industry, innerwear took a major fourth-quarter hit last year. According to NPDFashionworld, retail sales of intimates at all channels of distribution in 2001 fell about $500 million from $12.5 billion in 2000.
While vendors generally said political ramifications of terrorist threats have generally not compromised foreign sourcing and production, it was noted that tighter security at U.S. Customs has led to longer lead times in receiving goods.
Also contributing to the short-term decline in late 2001 was the desperate promotional activity at major stores, especially in the national name-brand bra business, which retailers hoped would help anchor declining sales of soft goods. As reported, the problem — reflecting a loss of $100 million in bra sales to $4.5 billion in 2001 — still persists and retailers and manufacturers foresee no easy way out this year.
Nonetheless, bolstered by a demand for commodity-type goods and fashion merchandise, intimate apparel has been on the rebound in the first half. Based on a focus on key items versus wide assortments that can confuse cautious shoppers, innerwear executives said they believe third- and fourth-quarter business will be ahead by 10 to 12 percent following last year’s dismal fourth quarter.
Fall and holiday bookings for at-homewear and pajamas have been strong, as demand for cozy items that give consumers physical and psychological comfort continues to grow. Daywear items of soft, seamless microfiber and sexy lace numbers also are bolstering business.
NPD credits two primary factors for influencing consumer purchases of intimates:
The issue of comfort through newness and feel-good microfiber blends with Lycra spandex continues to motivate 46 percent of total retail sales.
A strong demand for fashion styles and colors is stimulating 44 percent of overall sales.
Fit, price and brand recognition are the other motivators. There’s also been a big return to romantic looks, which has stepped up orders for bridal fare for the boudoir.
Charles Nesbit, president and chief executive officer of the Sara Lee Intimate Apparel unit of Sara Lee Corp., said: “The Sara Lee U.S. and Canadian intimates businesses rebounded within a few weeks of 9/11. Since the holiday season, our sales volume has been trending well up from last year and has exceeded our projections. We are looking forward to a good fall season.”
Nesbit credited new products such as the Bali gel strap bra, a new hanging program of Playtex and Just My Size bras in mass channels, and an expansion of the Body Revolution bra by Barely There, as top-selling ideas.
“The Barely There Body Revolution seamless bras have enjoyed strong consumer acceptance and I am expecting similar results from the upcoming launch of Body Revolution II,” said Nesbit. “There has also been a significant turnaround in the Playtex business in the spring driven by revolutionary new products such as Only You glue-fusion styles and Body Zen seamless styles.”
He added that Santoni allover seamless products, particularly new bra styles by Playtex and Barely There “have been major incremental contributors to volume.”
Nesbit said that leveraging Sara Lee’s worldwide innovation is key for global growth.
“We are developing new capabilities to more quickly bring technology and innovation from around the world to market at the same time,” he said. “During the coming year, you will see more European designs introduced in domestic brands, as well as innovation from the U.S. translated into European brands.”
Tom Ward, president and Chief Executive Officer of Maidenform Inc., said: “Business is tough but continues to improve, with the consumer being more responsive to strong branded product innovation. At Maidenform, we have seen the strongest reaction to our Maidenform brand with specific strength in our Customize It and One Fabulous Fit products.”
Ward said a number of new “innovative products” bearing the Lilyette, Flexees and Maidenform brands will be unveiled at the Aug. 5-9 market.
Kathy Nedorostek, president and chief operating officer of Natori Co., said: “Our overall business both in the Natori designer label, Josie the contemporary label, and the new Cruz label has continued to be very strong. We have been aggressive in intensifying key classifications, items and newness in fabrics for all of our brands. Since we had a strong first half with the retailers, we are anticipating the positive sales trend to continue for the second half.”
Assessing the consumer’s mindset, Victor Lee, president and chief operating officer of NAP Inc., said: “If the weak economy continues into the third quarter, I think consumers will be tired of not spending and will bend again and salvage Christmas.”
Lee added that the firm’s wholesale sales year-to-date, as well as fall-holiday bookings, are ahead by low double digits.
“I believe the overall environment has been strong for intimate apparel, at-homewear and pajamas because a lot more people are staying home,” he said. “We are continuing to offer new fabrics and innovative new offerings. That’s where the demand continues to be.”
Lee noted that the licensed Princesse Tam Tam line of foundations and sleepwear has been expanded to 200 doors of major department and specialty stores, and the licensed Crabtree & Evelyn sleepwear collection has recently been introduced in England. Plans are to expand distribution to France and Germany.
“I also want to stress the point that security is very important and we will be following much more stringent security controls through U.S. Customs,” Lee added. “We plan to participate in several government sponsored initiatives.”
Howard Radziminsky, senior vice president of sales at Movie Star Inc., said, “Our retail business for spring was actually very good, but because of 9/11 we were very careful about shelf stock and we did not have the inventory to ship as much as we could have this spring. The key challenge now is to always be ready to reinvent your business as trends change and identify emerging fashion into salable product.”
As for the impact of terrorism on business, Radziminsky said: “Customs is inspecting more goods and it is taking longer to clear many incoming shipments. We are having to look at longer lead times at a time when we want to work closer to need. We have not left any countries we are in and we have been cautious in India and Pakistan when the Kashmir situation was hot. But we are still making goods there and have had no problems.”
Bob Nolan, president of the Jockey and designer brands at Jockey International, said he is anticipating increases in the “high double-digits” for fall and holiday selling, noting that key items have been driving the women’s business.
A new shaper of cotton and Lycra with a seamless waistband called Simple Comfort by Jockey will be introduced in the fourth quarter. It will be supported by national print advertising, as well as point-of-sale materials, said Nolan.
Top-selling ideas at Jockey continue to be an allover seamless microfiber brief called No Panty Line, which is produced in Asia, and a line of panties called Comfies which is manufactured domestically.
Regarding a possible fallout of more innerwear companies this year, Nolan said: “It’s going to happen. It’s a tough, costly environment to operate in. You have to have strong financial apparatus to operate, because of the needs of more sophisticated technology. Everything is so sophisticated now with MIS and EDI that if you’re not doing well financially, you lose your edge.”
John Halbreich, co-president of Jaclyn Apparel and its I. Appel unit, agreed: “The continued malaise of the financial market will affect the intimate apparel market. There will be efforts by retailers to consolidate and unfortunately, there will be the demise of manufacturers that have serviced the needs of a single retailer. To survive, manufacturers must provide retailers and their consumers with significantly dissimilar and creative products.”
Addressing the issue of status brands, David Martino, president and ceo of Denton, Tex.-based Russell-Newman Inc., said the firm’s licensed lines of sleepwear and robes by Laura Ashley and Tommy Hilfiger are expected to continue “gaining a strong hold” for fall and holiday.
“I do believe the second half overall will be better and retailers will experience increased sales compared to a year ago,” said Martino.”