Lingerie Business Undergoes Dramatic Change in Weak Economy

Consumers are cutting back on luxe items.

Fashion and function is key at Frederick’s of Hollywood.

Fashion and function is key at Frederick’s of Hollywood.

Courtesy Photo

Lingerie business is taking a hit, but the sector still has areas of strength, retailers and vendors said.

This story first appeared in the October 13, 2008 issue of WWD.  Subscribe Today.

Buying patterns for lingerie purchases have changed dramatically because of turmoil in the global economy, merchants said. A majority of consumers are cutting back on big-ticket items such as upscale bra-and-panty sets priced at more than $120, and even affluent customers are forgoing high-end undergarments, sleepwear and boudoir accessories.

The risk-averse consumer is purchasing less-expensive items such as camis, moderate-price bras without coordinating undies, an impulse item like a thong or dual-purpose at-homewear and sleepwear in cozy fabrics that offer value and comfort, executives said. Sexy fantasy fare continues to sell for special occasion gifts, and licensed characters and logos with a sense of nostalgia, such as Tweety, Tinker Bell, Betty Boop and Coca-Cola, are selling because they represent happier times.

“In this economic landscape, our customer is looking for fun and sexy lingerie items that can be used for multiple purposes and take her from day to night,” said Linda LoRe, president and chief executive officer of Frederick’s of Hollywood. “We’ve found success in expanding on popular collections, such as our Exxtreme Cleavage Bra and trend aspects like pinstripes or lace detailing.

“Our customers respond well to this fashion-meets-function twist because they are getting both an everyday foundation bra and a fashion item all in one,” she said. “Add a matching panty or boyshort and you have a complete look at a very attractive price point. Another area that continues to do well is our corset collection, again because of the duality of the piece. It is the kind of lingerie that can be worn as both innerwear and outerwear and I think that multiuse functionality is key.”

Rebecca Apsan, owner of La Petite Coquette in Manhattan, said consumers are “extremely cautious, even wealthy customers.”

“Everyone is scared,” Apsan said. “There absolutely is price resistance. Even with luxury goods, people are holding back and buying one bra instead of four bras and coordinating panties. Now, they don’t buy the matching panties. They’re buying less-expensive items like a $45 camisole by Zimmerli instead of a bra by Oscalito for $100 or $120. It seems the wealthier they are, the more they look at the price tags and buy less.”

Regarding the pace of business, Apsan noted that September was “phenomenal, but sales the last couple of weeks have plummeted. Now the buying pattern is a mix. During the week, women buy regular foundations, and on weekends it’s fashion items and sexy bras and panties. Maybe that’s because women aren’t buying the lingerie, it’s husbands and boyfriends.”

Claire Chambers, founder and ceo of Journelle, a lingerie boutique that opened in New York last year, said, “Big-ticket purchases have dropped in the past few weeks, as have stock-ups on basics.”

“The mood seems wary, stressed,” Chambers said. “We have women in here after work who look exhausted and are browsing on their way home to clear their heads. Big purchases [of several items] have dramatically dropped. The same customer who used to come in and spend $600 is now spending $200. But we’re seeing a strong business in accessible lingerie that makes women feel good, such as $70 to $90 bras and bra sets that are pretty, unique and affordable. This type of purchase has a big emotional payback for women, yet the final sale is often in the $100 range, which I believe translates into not that expensive in New York.”

Best-selling brands at Journelle are Huit, Mimi Holliday and Elle Macpherson.

“We receive new merchandise monthly from these brands, which keeps the customer excited,” she said. “Also, they are not giving up fit for fashion, and today’s consumer knows more about fit than ever and expects even her fashion bras to provide support and comfort.”

Polly Berg, owner of a 35-year-old boutique that bears her name in Minneapolis, said, “The [pedestrian] traffic really fell off. It’s been about two weeks, but traffic is starting to come back. For us, the best-selling items are pajamas and robes, things that are cozy and comfortable.”

Berg said top-selling brands are pajamas of woven cotton by Bedhead that have a young, contemporary look, and velour robes by Diamond Tea and Carlton Hall.

“There’s been no price resistance, at least not yet,” Berg said. “But I think for Christmas shopping we’ll see some of that.”

Maureen Stabneau, senior vice president of merchandising at barenecessities.com, said, “We are still showing good growth in spite of the economy. We just finished our third-quarter business — up over 30 percent over last year. As we go forward into the final quarter, there are areas that we still feel will continue to be opportunities. The first of these is the shapewear category. Customers are still at the beginning of an awareness curve for this type of product. They are learning about it and its benefits. They are spending their dollars on it.”

Wendy Spector, co-owner of UnderWraps, a lingerie shop in Fort Lauderdale, Fla., said, “Mainly basics are selling, though we carry high-end and sexy looks, and cater to a wealthy crowd that travels. Everyone is asking about price and says, ‘I think I’ll hold off for now.’ They’re not buying as many items, either. Whereas they used to buy six to eight pieces of lingerie, they’ll do two to three at most, and they think twice about anything over $100.”

Spector said “essentials” include Chantelle’s microfiber bras with smooth cups priced at $60 to $75, and styles with a touch of lace for $75 to $90, as well as bras by Le Mystère in the same price range. Other strong items include Hanky Panky’s lace thongs for $18 and Commando’s laser-cut panties for $18 to $25.

Barbara Silberman, owner of a namesake specialty boutique in Miami, said people are “sticking to basics like T-shirt bras with smooth cups and panties in neutrals.”

“Instead of buying six new bras, like three T-shirt bras and three pretty, lacy styles, they’re only buying one,” Silberman said. “Price is certainly an issue. I sell all price points, Felina and Jezebel in the low $30s, OnGossamer in the $40s and Wacoal in the $50s and $60s. But costs have gone up across the board for lingerie makers and increases are being passed down to the consumer.”

From a manufacturer’s perspective, James Martino, president and ceo of Russell-Newman Inc., said, “We are having very good sell-throughs in [basic] underwear. In fact, stores are moving up their deliveries to meet demand. We are also getting earlier-than-normal sell-throughs on microfleece and other warmwear fabrics. The consumer is buying more to need. I do not think as much Christmas shopping is happening early. Many of the purchases right now are for immediate gifts or for consumers themselves.”

Richard Leeds, chairman of Richard Leeds International, said, “For our company, whether it’s a midtier department store like Kohl’s, mass merchants or specialty stores, what is selling is sleepwear or at-homewear that is fun and directed at what I call the young at heart, 21 and older, not necessarily tweens or juniors. I’m specifically referring to licensed merchandise that brings an emotional response from the consumer that takes you back to a time that makes you feel peaceful and happy.”

Zack Salino, president of D2 Brands, a unit of Isreal-based Delta Galil Inc., said, the company is “finding that there are pockets of strength that are always right in any market, and they continue to perform. Delta Galil is a global leader in seamless technology and it is the seamless panties in both our Tommy Hilfiger and Nicole Miller intimates that have remained well above average, even in this tough market. Conversely, in our own luxury Tra-La-La lingerie brand, it is the most extravagant, fun and flirty collections and panty offerings that retailers are flocking to because they are working well.”

Bob Vitale, vice president of merchandising and sales at Wacoal America, said, “At Wacoal, we have always been very careful in assuring that the price-value relationship in our products was in the best interests of consumers. Like everyone else, our business is suffering from the reduced consumer traffic in the last few weeks, but our sales trends versus last year continue to exceed department averages. Our Top Solution bra, at $62, is priced competitively with our top contour styles and has felt no greater than the average impact.”

Greg Gimble, executive vice president of Va Bien International, said along with retailers seeking to avoid risk, “consumers want top mileage out of everything they purchase. That means a basic product that can be worn frequently for a long period of time, rather than a fashion piece that will date quickly. A particularly consistent performer for us has been our balconette T-shirt bra, which, in retrospect, we priced wisely under $50.”