After one of the toughest years in decades, sales of intimate apparel began to slowly pick up in September with increases of more than 3 percent because of a slight thaw in consumer spending for the category, industry executives said. They hope the trend can gain traction through the holiday selling season with key gift-giving items.
This story first appeared in the November 30, 2009 issue of WWD. Subscribe Today.
Orders for select fashion items have been completed for spring and early fall 2010, but buys for major programs are still filtering in and the outlook is uncertain because of a retail climate undermined by persistent economic turmoil, including 10.2 percent U.S. unemployment. As a result, merchants are planning modest first- and second-quarter gains of 2 to 4 percent, executives said.
Reflecting the retail environment for intimates, sales were off 2 percent from August 2008 to July 2009, totaling $10.2 billion, according to The NPD Group consumer tracking panel. Sales of innerwear from August 2007 to July 2008 fell 9.3 percent to $10.4 billion.
“We have definitely seen signs that the worst is behind us,” said Josie Natori, president and chief executive officer of Natori Co. “We have also worked very closely with retailers in having a balanced assortment of fashion and basics. For the last year, we have been in constant touch with the retailers to discuss new ideas and concepts. It is this kind of collaboration that has led, in the case of one retailer, to double-digit increases.
“Business will continue to be driven by key items that are right on in trend, value and price,” Natori said. “We had a very strong reaction across our brands on key item concepts in multiple colors. In particular, the maxi gown has been a key item in all brands.”
Bob Nolan, president of Jockey International North America’s wholesale and licensing operations, said, although many people are upbeat about holiday, “The fear is there will be a dip in the first quarter, when consumers start receiving credit card bills, and there’s the question of where the economy is going to be by then.”
Marcia Leeds, ceo of Richard Leeds International, said a strategic flow of goods will continue to be essential.
“We are designing into collections, but each collection can sit separately or flow on the rack together,” Leeds said. “We are more optimistic because we are flowing goods more strategically and focusing on key items. Flows are less, but this will keep our inventory down and ultimately have better sell-throughs. It’s more important to sell through the goods and have successful margins than to have to take big markdowns at the end of the season.”
Seth Morris, president of the Carole Hochman Design Group, said orders for spring are just starting to come in.
“We expect orders to be completed in about two weeks,” Morris said. “We are very encouraged by the support we are seeing and the reaction to the product and value equation across all of our brands. But so much depends on the results of the next six weeks. Everyone’s attitudes and strategies for balance of their 2010 purchases, on both the retail and wholesale sides, will be determined by the upcoming results.
“The expectations are certainly to see improvement over the awful comps of 2009,” he said. “With the hopes of a better holiday season and the continued enforcement of the new disciplines we have all embraced relative to inventory and expense controls, we are hopeful for a better 2010.”
Jon E. Lewis, president of the D2 Brands division of Delta Galil Ltd., which produces the licensed Lucky and Tommy Hilfiger innerwear, said, “November market orders should be finalized by mid-December, and based on market reaction, we are optimistic that we will meet our placement targets for third-quarter 2010.”
As for spring, he said most of the assortment and door expansion the firm has planned for 2010 comes in the fall.
“We are poised to respond immediately if we have success early in the year for our new introductions,” Lewis said. “We are more confident that if retailers see early success, they will increase assortments and expand doors more aggressively than first presumed. Although they remain cautious, if the industry has even modest success for holiday, retailers will go after proven winners in their assortment.”
Lewis described merchants as feeling “better about 2010 than they did in the August market, but they still remain wary.
“I believe once they actually see success at retail, they will feel more confident expanding their business,” he said. “There is still too much uncertainty for a major change in their expectations.”
He added the growth engine next year will be “new product that offers something unique to the consumer coupled with a strong price-value proposition.” Lewis said execution with deliveries and on the selling floor will be even more crucial though. Properly managing inventory while at the same time being able to meet potential demand will also be a challenge.
“Retailers need to get through the holiday season before making any predictions on spring,” said Greg Holland, vice president of sales for the Komar Co. and president of the licensed Donna Karan and DKNY sleepwear lines. “A large percentage of the business in sleepwear is done between Thanksgiving and Christmas. Sales performance during the holiday selling season will have a direct effect on the first quarter. If business is very good, then there will be less clearance and the stores will be looking to move up spring receipts. If holiday selling is slow, then the stores will have to deal with larger clearance inventories. The consumer is responding to price and perceived value.”
Rob Gardner, vice president and general manager of the licensed Donna Karan and DKNY intimates collections at Maidenform, said, “November market had a different feel than the past two markets. Retailers who had been very cautious with newness recently were ready to once again embrace it. Buyers seemed to unleash themselves a bit more. Of course, it had a lot to do with giving them what they wanted: trend-right styles that could truly impact the season, and are priced strategically.”
Guido Campello, vice president of sales, marketing and innovation at Cosabella, said, “Retailers have opened up immediate dollars to brand new product untested on the market. We have been able to push forward deliveries and product launches over and over again. Everyone is looking for the next pop on their floor and Cosabella is hungry to give it to them. We have launched a new brand, Cosabella Amore; a new shapewear collection, Smooth Breathe; a new activewear collection, Smooth Free, and we now have over 50 bras in standard sizing. We have also launched the new Aire panty. Next up is our Never Say Never Lace Shapewear collection that will launch in spring.”