Bargain pricing is part of the DNA of the innerwear category.
From drugstore underwear to bridal bustiers, vendors and retailers said they are trying to respond to consumer demand for value in a category that traditionally has been better equipped to withstand a tough economy in comparison with ready-to-wear and sportswear. At the same time, shoppers expect the quality and stylishness of the product to be undiminished by the price-value equation.
This story first appeared in the August 16, 2010 issue of WWD. Subscribe Today.
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Innerwear vendors said retailers, ranging from drugstores and mass merchants to national chains and department stores, are requesting value-priced items such as fashion bras for less than $50, or shapewear, sleepwear, daywear and robes that have value-added details such as bows, embroideries and appliqués. There also has been strong demand for dual-purpose items that offer a perceived value, such as reversible shapers, tops and leggings, and corsetry that can be worn as rtw.
Guido Campello, vice president of branding and innovation at Cosabella, said the Miami-based company is providing more value incentives for department and specialty stores.
“We started adding a G-string with a chemise and a bottom with a baby doll last year, and it was so successful I decided to leave it on the line,” he said. “We also created a new thong that allows an opportunity margin for holiday that is called the ‘value panty program.’ When customers buy three pair, they actually get $16 a thong [$48 a packaged set], while when one pair is sold, the margin is greater for the retailer [because it’s listed] at $18. For holiday, we are doing the first-ever three pair for $48 in a gift box with pink grosgrain ribbon. Retailers have been asking for giftable items like this for holiday selling.” He added that the “same three-set for $48 is being done for J. Crew. But what we’re doing for J. Crew is a white cotton canvas ribbon on a Cosabella for J. Crew gift box with cotton thongs, instead of lace thongs, because that’s more J. Crew looking.”
Executives said four key factors will help determine the success of an innerwear item: price, value, fashion and its resonance as a gift.
According to The NPD Group, factory outlets reported a 20.2 percent increase in intimates volume, to $259.9 million, from July 2009 to June 2010 compared with July 2008 to June 2009, followed by warehouse clubs, up 10.8 percent to $314.8 million and specialty stores, a rise of 6.8 percent gains to $3.50 billion. NPD does not track drugstores and grocery chains.
“Retailers are looking for ways to bring consumers into stores with all kinds of schemes to give the consumer a sense that she is saving money,” said Arnold Aronson, managing director of retail strategies at Kurt Salmon Associates.
In the context of that environment, drugstores and food chains have a built-in advantage, but competition is fierce.
“Drug and food stores are where people are going for necessities, including underwear,” said Molly Mott, vice president of sales for the No Nonsense brand at Kayser-Roth Corp. “Chains like Walgreens, CVS and Duane Reade are trying to figure out what kind of perks to offer consumers. For the consumer, it’s about time and convenience and making less trips. And the consumer now wants to see a little more upscale shop environment and have a pleasurable shopping experience at these chains.”
Walgreens, the biggest U.S. drugstore chain with more than 7,000 locations, is beefing up its innerwear assortments and product categories.
“We recently…added selections of men’s and women’s underwear,” a company spokesman said. “This is one of the areas in which we’ve simplified the choices for the consumer by offering fewer brands, but a good and easier-to-choose-from selection.”
Sales of casual socks, tights, ladies’ underwear and men’s T-shirts are up at the ShopRite supermarket chain, the largest retailer-owned cooperative in the country, and price incentives are part of the strategy, a spokeswoman said. The chain carries Hanes, No Nonsense, L’eggs and Champion
“We frequently offer bonus packs and additional discounts via our ShopRite Price Plus club card — our shopper loyalty program,” the spokeswoman said. “We promote the category in our circular, so customers know that we have value pricing. ShopRite has a wider selection and devotes more aisle space to these categories than most of our traditional grocery competitors. We often will display these items outside the traditional aisle, giving them more customer exposure.”
Beyond price and value, Howard Upchurch, executive vice president and general manager of domestic innerwear at Hanesbrands Inc., which counts Hanes, Champion, Playtex, Bali, L’eggs and Wonderbra among its labels, said brand heritage plays a major role in luring customers into stores.
“There’s more than just price promotion going on here,” he said. “It’s more about brand and value.…People will buy a brand they know and trust.”