WOOL BUREAU: LUXURY DEMAND BOOSTING SALES
Byline: Stuart Chirls
NEW YORK — A flock of positive indicators, from high consumer awareness to fashion trends and improved raw material production, point to a revitalization of the wool apparel market that should make the fiber increasingly important to retailers in the months ahead.
“We have learned that consumers want quality, sophistication, function and, above all, comfort, and that they are willing to pay for it,” said Wilbur (Pete) Peter, director of the Americas for the Wool Bureau, the Americas’ arm of the International Wool Secretariat (IWS), the wool research and marketing group funded by Australian wool growers. “In this country, the consumer is definitely in a spending mood for luxury goods, and wool is part of that,” Peter said.
He was the featured speaker at a luncheon last week of the New York Textile Group at the Union League Club here.
“The consumer is not just changing the retailer’s view of wool, but of apparel retailing in general,” Peter said. “And this trend extends beyond apparel. Marketers also see luxury goods as the key to increasing margins in categories ranging from groceries to furniture.”
Peter cited the booming U.S. economy as the engine that is driving renewed consumer confidence.
“We are in the midst of one of the greatest sustained periods of economic growth in the history of the country. Unemployment is approaching historic lows, per capita income is rising fast, inflation is low and the stock market is soaring. All have combined to boost consumer confidence to its highest point in 28 years.”
Wool has benefited from the growing desire for quality in the U.S., where demand for the fiber is at a 10-year high, Peter noted.
“Looking at consumption of wool apparel by U.S. consumers, we can see how dramatic wool’s resurgence in the U.S. marketplace has been.”
From 1992 to 1996, U.S. wool consumption in men’s and women’s woven apparel and knitwear increased at least 7 percent annually, according to Wool Bureau data. While the final data is still being analyzed, total consumption for 1997 is expected to have increased by about 4 percent. Looking ahead, consumption is forecast to grow to more than 200 million pounds by 1999; it was 137 million pounds in 1992.
“With very little growth in the overall retail market, wool’s share [of the combined apparel market — knitwear and women’s and men’s wovens] has grown from 7.5 percent in 1992 to an estimated 9.5 percent today, and should rise to 10 percent by the end of the century,” said Peter.
The Wool Bureau’s data showed that women have effected the most dramatic transformation at retail. Peter said, “Consumption of women’s wovens has risen by more than 50 percent, from 67 million pounds in 1992 to an estimated 107 million pounds in 1998. In fact, U.S. wool consumption in woven women’s wear is currently at its highest level ever.
“And reflecting this quality trend, we are also seeing many traditionally nonwool consumers trading up from pure synthetic garments to midpriced wool blends.”
Knitwear is always a large category for wool, and the numbers there indicate wool’s renewed vigor is apparent in a wide spectrum of apparel.
Wool consumption in men’s and women’s knitwear increased from 19 million pounds in 1992 to an estimated 33 million pounds in 1998, boosting wool’s share of the knitwear market from 12 percent in 1992 to an estimated 20 percent today.
“In recent years, the increases in wool knitwear consumption have been driven by strong growth in merino programs,” Peter said. “While we believe this market is now reaching its peak, other wool knitwear products such as lighter-weight lambswool will offer future growth.”
In wool men’s wear, which in the past several years has been affected by the widespread trend away from tailored clothing to more casual styles, consumption still grew from 50 million pounds in 1992 to an expected 60 million pounds in 1998.
“The quality trend is showing itself in a couple of different ways in men’s wear, and wool is perfectly placed to take advantage of both of these,” said Peter. “The first is a visible upgrading in the quality of fabric used to manufacture men’s suits. We are seeing more manufacturers producing garments with finer fabrics, many of which, for example, are merino extra-fine qualities. And what is extraordinary is that it is happening at all price points.”
The second, he said, is the emergence of a “third” wardrobe built around higher-quality casual looks. “Instead of chinos and a polo shirt, men are trading up to wool trousers, a blazer and merino knits, end uses where wool dominates. What’s interesting about this trend is that it is being led by younger men.”
Peter noted that while wool’s overall share of the U.S. apparel market is 9 percent of total volume, in value that share doubles to 18 percent. The value will continue to rise, he said, as consumers continue to trade up in quality.
Imports account for the largest portion of wool garments in this country. In 1986, imports made up 35 percent of U.S. wool consumption. In 1998, that figure is expected to grow to more than 60 percent.
“This change has been fueled primarily by the implementation of the North American Free Trade Agreement rules and 807 trading agreements, which brought with them opportunities for U.S. industry to increase fabric exports to NAFTA and 807 partners,” Peter said. “Between 1990 and 1996, U.S. exports of mostly wool fabrics to Canada nearly quintupled and exports to Mexico were up 270 percent.
“And while in the past consumers were often focused on price alone, we believe that it is now quality, not price, that is driving demand and that is good news for all involved in wool processing, manufacturing and retailing in this country.”
As an example, Peter said that although there was a decline in Australian wool production throughout the Nineties, the proportion of fine wool in the total crop has increased steadily in the past decade.
In addition to its ongoing promotional efforts, the IWS has introduced a number of products designed to extend wool’s market reach. These include blends of wool and fine-denier polyester for lightweight fabrics aimed at year-round wear, a treatment to make wool machine-dryable, using wool with Lycra spandex and blending wool with other natural fibers such as cotton, for more comfort.
“On the process-efficiency side, we have developed weavable singles yarn, a technology that reduces yarn manufacturing costs by enabling single worsted yarn from midmicron wools to be woven into high-quality lighter-weight fabrics,” said Peter. “Lower manufacturing costs are also possible for woolen spinners with the introduction of bicomponent spinning technology, which enables the manufacture of lightweight knitted and woven [blend] products.”
The IWS has opened two new technical centers, one to serve the Asian textile and apparel industries in Ichionimya, Japan, and one in Biella, Italy, for the U.S. and European markets. They join an existing facility in Yorkshire, England.
Peter noted, “We have moved away from a centralized technical development center in order to insure that all of our technical developments are carried out with industries’ partners from an early stage, that the innovations we select to develop are commercially viable and that the time it takes for these innovations to be commercially marketed is reduced.”