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NPD Figures Reveal Slowdown for Innerwear

A lack of newness and innovation in the $14.5 billion market is dragging down overall sales in the category.

Innerwear needs a wake-up call.

This story first appeared in the July 29, 2013 issue of WWD.  Subscribe Today.

A lack of newness and innovation in the $14.5 billion innerwear market — particularly in the daywear and shapewear sectors — is dragging down overall sales in the category.

The industry, which includes bras, underwear, sleepwear, loungewear and robes, barely coasted by with a total dollar increase of 0.8 percent and a 0.1 percent decline in unit sales from June 2012 to May 2013, according to the most recent report by The NPD Group Inc./Consumer Tracking Service.

That’s a major change from a 4 percent dollar gain and a 2.8 percent decline in unit sales in the same 2011-12 time frame, reported NPD. It also reflects a significant shift from a healthy intimate apparel business in postrecession 2010, when consumer spending was cautious but the category continued to generate sales gains in the 2 to 3 percent range.

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The reasons for the transition are compelling.

Consumer confidence surged to a five-year high this past May to 76.2 — its highest reading since February 2008, according to The Conference Board. But the optimism of an improving job and housing market did little to bolster the demand for commodity-type merchandise that was the mainstay of the 2008 recession. Just as shoppers have begun to open up their wallets for newness and fashion, they are being “bored to death” with basic goods, said Marshal Cohen, chief industry analyst for NPD.

Cohen singled out the main causes for the drop in dollar volume to several factors: sameness of product, an overly cautious retail and manufacturing environment and a “lazy” manufacturing industry that is making little effort to innovate. Also impacting the innerwear business are other industries such as activewear, swimwear and sportswear that have been chipping away at intimates for years, but are cannibalizing the sports bras and daywear sectors, which include camisoles and bodysuits.

At the same time, lingerie has been hit by retailer demand for leaner inventories, as well as fewer promotions and discounted merchandise at stores, which has ultimately eroded overall unit sales, said Cohen.

“The good news is there is some growth, but it’s not monumental. It’s coming from an average price increase, not from new, innovative products that drive the business, not from sexy intimates and not from [promotional] sales. Stores are not inventoried deep enough to discount merchandise,” explained Cohen. “The average growth is only around 1 percent. The industry knows this and is taking advantage of a situation that is not product-driven or consumption-driven.”

Cohen identified a “risk-averse” retail environment as contributing to the malaise in the market.

“Innerwear should be one of the most passionate products for women to buy.…But what’s happened is the industry has been forced into some of this…an environment where retailers are so cautious they say, ‘Just give me the essentials.’ Retailers don’t want to take chances and they don’t want excess inventories. The brands have responded in return. It’s sad because the consumer is excited again after the recession.”

In an effort to stimulate business over the past several seasons, a majority of lingerie makers have adhered to the tried-and-true formula of repositioning the same styles of bras, shapers, camis, sleepwear and robes in a different palette of seasonal colors and trendy brights. They have also recast popular prints such as animal patterns and florals in additional color mixes.

But the recoloring strategy has worn thin with consumers who are looking for key items and styles that have a fresh spin on innovative, lightweight fabrics and high-tech applications that add perceived value to the product, enhance the comfort level and provide figure-problem solutions.

“The industry is asleep at the switch,” said Cohen. “In the last few years, women have been buying a lot of shapewear, but the shapewear industry still hasn’t been able to convince women they need a wardrobe of shapewear. That’s because they haven’t created enough variety of style and design.…They may have added an item that gives full or partial shaping and coverage, but there’s no new excitement.…It’s the same with daywear ­— it’s not at a growth rate. The growth is coming from the bra and panty businesses.”

The numbers tell the story. In the 11 months through May, shapewear sales fell 8 percent to $688 million, while daywear plummeted 11.4 percent to $337 million. In the same period, dollar sales of sleepwear, a top category in 2012 with a host of new fabrics such as MicroModal and a new generation of silklike Lycra spandex blends, were down 3.5 percent to $3.6 billion.

In the same time frame, dollar sales of bras and panties increased 3.1 percent to $6.5 billion, and 4.8 percent to $3.38 billion, respectively.

The outlook for the second half doesn’t look rosier, according to Cohen.

“This has been percolating for a couple of years, and it’s starting to impede long-term growth,” he cautioned. “Swimwear, activewear and sportswear have been chasing this business for ages, and it’s become a hugely competitive arena. Now, it’s a matter of who’s going to get better at innovation. Innerwear business is being eroded and appears to be losing the war.”