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Women’s Denim By the Numbers

The denim industry has shrugged off the recessionand is showing stronger growth and renewed vigor, with women’s sales increasing 6.2 percent in the last year.

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Special Issue
WWD Denim In Depth issue 05/19/2010

 


The denim industry has shrugged off the recession and is showing stronger growth and renewed vigor.

Women proved throughout the economic downturn that they had come to view denim as a wardrobe staple, an item with higher perceived value due to its versatility and durability. They may have been willing to trade down on price, but they certainly weren’t willing to trade out.

Sales of women’s jeans in the U.S. rose 6.2 percent to $8.52 billion for the 12 months through March 31 compared with sales of $8.02 billion, a 4.6 percent increase, during the same period in the prior year, according to data from market research firm The NPD Group.

While the gains are notable, there’s still evidence that the impact of the financial crisis continues to linger. According to NPD, the average price for women’s jeans fell 1.3 percent to $23.18 from $23.49, marking the second straight year of declines. That trend offers some explanation of the presence of two newcomers to the rankings of the top 10 women’s brands this year. Angels, a junior line that sells at Kohl’s, and Just My Size, a plus-size line, claimed the ninth and 10th spots this year, respectively, with both lines retailing between $20 and $30. Pushed out of the top 10 were Lucky Brand Jeans and Liz Claiborne.

Brands and denim specialty retailers are seeing clear signs of a rebound. Leah Eckelberger, owner of Boston’s Jean Therapy, offers her store to advertising agencies, magazines or financial institutions to host private shopping events for their clients. Those events dried up 14 months ago, but have started to come back recently.

“In the last three months, we’ve definitely seen the return of that and it’s been amazing,” said Eckelberger. “That, to me, is a sure sign that things are a lot better than they were.”

Lady Fuller, owner of the Blues Jean Bar, a chain of seven stores in Chicago, Dallas, Denver, San Francisco and Santa Monica, Calif., described 2008 as “hideous” and the first half of 2009 as “rough.”

However, the difficulties forced her to reexamine her business and adapt in order to survive. Fuller started carrying the majority of her stores’ 40 or so brands on consignment, a move she credits with helping keep the business afloat. She also made a concerted effort to make sure her selection of brands didn’t look anything like the mix offered at local department stores. Fuller and many other denim boutiques were burned when those neighboring department stores slashed prices on leading premium labels in order to dump inventory, making their stores look prohibitively expensive.

 

“We went and found smaller vendors that were less known and more interesting to our customers,” said Fuller.

Brands such as Fidelity and DL1961 caught the attention of customers and Fuller said her sales so far in 2010 are 20 to 30 percent above 2009.

Fuller also said customers have come out of the recession looking for more from their purchases.

“I think people are very conscious about where they spend their money and how they spend it,” she said. “If they feel someone can explain to them why this product is different and value of it…they’re willing to spend the money there.”

 

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There’s been another indicator for Fuller that customers are loosening up and getting more interested in fashion.

“White jeans,” said Fuller, “which makes me think people are back to buying not just the necessary jeans, but a bit more fashion-oriented jeans. We were not prepared for how many people were interested in the white jean.”

Sheryl Blit, owner and buyer for Havana Jeans, which has stores in Rye and Scarsdale, N.Y., and Stamford, Conn., echoed Fuller’s sentiments about having to reexamine business practices and finding ways to reduce inventory risk. Her customers are feeling more comfortable to spend, but their cautious attitude makes sales slightly less consistent. As a result, she’s still keeping a close eye on inventory and strong sellers.

“Last year, we had to figure it out,” said Blit. “Now, I think we’ve figured it out. We just have to stay on top of it and we’re working harder.”

Frank Pizzurro, former vice president of retail for AG Adriano Goldschmied, opened his own denim boutique, Brooklyn Denim Co., just over two months ago and is finding strength in distinct price segments.

“We’re doing really well at the moderate price, like $130 to $140 and under, and then we’re doing really well at $250 and up,” he said.

Pizzurro has been surprised to see more women coming into the shop looking for rigid denim, something he credits to putting his store in one of the city’s hippest and most fashion-forward neighborhoods.

“Brooklyn’s a little ahead of the curve, especially in Williamsburg, so we really get some good feedback,” he said.

Brand executives are seeing store buyers start to come out of their shells a bit more, as well.

“It’s evident that [buyers] are starting to get comfortable to spend money again,” said Michael Press, who joined Vintage Revolution as president in January. “We’re starting to get customers that are selling again.”

Press added that after relying on proven sellers to get them through the recession, buyers now have a “massive” appetite for new labels. The challenge of placing a newer label remains steep. Press estimated that retailers have cut inventory levels by 25 to 40 percent and are only moderately expanding those levels.

“I think [buyers] are definitely looking to expand their orders marginally,” said Ray Tolles, vice president of sales for the 1921 premium label, which is owned by the maker of Silver Jeans.

 

The Jegging Steps Forward

The denim legging, or jegging, has been the clear winner in the women’s denim category over the last year. Advancements in use of stretch fibers at the fabric level resulted in a product that hit all the right notes for consumers (see related story, page 32). It’s comfortable, fashionable and, above all, cheaper. For brands and retailers, the denim legging carried them through the darkest days of the downturn.

“The jegging has been our low-rise, boot-cut jean of the late Nineties,” said Eckelberger.

Eckelberger said the popularity of the style helped energize customers and also helped change the way people think about denim.

“Interest in a skinny jean and a jegging definitely got people in the door and refreshed what we think about, too,” she said.

Fuller said since denim leggings tended to be made of lighter-weight fabrics, they appealed to customers who viewed them as a year-round item.

“The jegging did hit at a good time to keep the business afloat, absolutely,” said Blit. “It definitely took some of your [traditional] denim sales away because this became such an item.”

Predictably, brands have flooded the market with their version of the legging and it appears the style has staying power.

“The denim legging category is so strong that it’s just one of those elements that’s been added to everybody’s jeans line,” said Tolles. “That’s not a transitional kind of thing like the boyfriend. That had a specific look for a specific time. The denim legging is just such a comfort factor that it’s now being incorporated into several different looks.”

 

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Following the Money

The denim industry’s appeal is capturing the attention of the financial and investment community, particularly in the premium segment. Many smaller premium labels were forced out of the market by the recession, but those that had a solid footing beneath them heading into the storm have become even more appealing coming out of it.

In March 2009, former Reebok chief executive officer Paul Fireman partnered his Fireman Capital Partners private equity firm with Webster Capital to invest in Hudson Jeans. The size of the investment was reportedly upward of $30 million and resulted in the installation of a board responsible for helping develop the brand into a global lifestyle label.

The latest investment came in February when Star Avenue Capital LLC acquired a majority interested in Los Angeles-based J Brand in a deal said to be valued in excess of $50 million. Star Avenue was established in early 2009 as a three-way partnership between Star’s management, private equity firm Irving Place Capital — a key investor in operations such as Aéropostale, Seven For All Mankind, Stuart Weitzman and The Vitamin Shoppe — and entertainment powerhouse Creative Artists Agency.

As part of the deal, J Brand welcomed former Jones Apparel Group Inc. ceo Peter Boneparth as its chairman.

“It’s a segment of the market I think has some real staying power and some upside potential, as well,” Boneparth said of the premium denim segment.

 

 

Women’s Jeans Brands by Sales

1. Levi’s*
2. Gloria Vanderbilt
3. Lee
4. Riders By Lee
5. Seven For All Mankind
6. Calvin Klein
7. Polo/Ralph Lauren
8. Wrangler
9. Angels
10. Just My Size

*Includes all Levi’s labels


 


Note: Data are for the 12 months through March 2010. Source: The NPD Group
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