TEMPTING THE SHOPPER APPETITE
Byline: Karyn Monget
NEW YORK — Ever thought about reinventing the wheel?
Just ask innerwear manufacturers — particularly foundations makers — how they do it with the same product base of bras and shapewear year after year.
The answer includes a big dose of fashion, big advertising bucks and some pretty slick marketing — which ultimately gets consumers fired up enough to buy more of a product they’ve been wearing for years.
Retailers more or less face the same dilemma. And specialty chains and discounters apparently have figured out how to woo an increasingly finicky and diversified consumer base away from department stores and national chains.
At $10 billion in retail sales in 1996, the U.S. market for women’s intimate apparel represents 11.7 percent of the women’s apparel market (up from 10.9 percent in 1994), according to data provided by Fairchild Strategic Information Services and the NPD consumer panel diary. The innerwear market increased an impressive 14 percent in the last two years, a 7 percent annual growth rate — outpacing the women’s apparel market, which was up by 3 to 4 percent each year.
From 1994 to 1996, a big trend has been the share gain at specialty chains — most notably Victoria’s Secret — which captured 14 percent of the total innerwear market last year, against 13 percent in 1994, while department stores, national chains and non-chain specialty stores lost ground.
Victoria’s Secret — whose retail and catalog operations at Intimate Brands generated sales of $2.13 billion in 1996 — boasts one of the most recognized brand names in retailing (see related story, page 4). Victoria’s Secret knows how to lure customers — both men and women — into its stores, backed by its primary advertising vehicle: the glossy, supermodel-packed Victoria’s Secret catalog. The market share figure includes the Victoria’s Secret catalog as well as its retail operations.
Discounters, including Wal-Mart, Kmart, Target and regional chains, commanded the largest share — 26 percent — of the women’s intimate apparel market in 1996. They held the same share in 1994. A main reason for the discounter dominance: They offer value and more fashion looks that mimic the look of brands sold at department stores. As an example, Vassarette is the discounter’s answer to Vanity Fair and, along with Playtex, allows Wal-Mart to be a major player in the bra market. National chains such as Sears, Roebuck & Co. and J.C. Penney Co. came in second, accounting for 20 percent of the market last year, against 22 percent in 1994.
Department stores, such as those run by Federated Department Stores, Dillard’s Department Stores and The May Department Stores Co., among others, claimed third place in 1996, with a 17 percent share, down from 18 percent in 1994.
The only other channel to gain market share over the two years was direct mail — such catalog merchants as Avon Fashions and Spiegel — with 7 percent in 1996, versus 6 percent in 1994.
In 1996, the U.S. market for intimate apparel consisted of 1.5 billion units sold at an average retail price of $6.59 per unit. Bras were the largest product category, with $3.6 billion in sales and 36 percent of the overall market. Panties were second with $1.7 billion in sales and 17 percent of the market, followed by sleepwear, which also did $1.7 billion and claimed a 17 percent share.
The highest average price was paid in the robes and loungewear segment at $20.51, and the lowest was panties, $2.22.
Several shifts characterize the market from 1994 to 1996 and include the following:
Growth in sales to consumers under 24 and aging baby boomers.
Share gain made by cotton at the expense of synthetics.
The large-size and full-figure segment gained share from average sizes, particularly bras, and the potential for more growth is big due to a maturing population.
Shapewear finally experiencing some dollar growth — 18 percent from 1994 to 1996.
The panties business is not evolving into a “down and dirty” three-pair for $3 scenario. Consumers are willing to pay more for fashion, comfort and quality.
Bras: National brands rule, including Victoria’s Secret, and they’ve gained a tremendous share.
So what factors have helped to make lingerie such a lucrative business?
Wonderbra by Sara Lee Intimates is a key example.
Creating more hype than Frederick’s of Hollywood did in 1946, when the lingerie specialist introduced naughty black bras and panties to the American market — you could say Sara Lee is the spin doctor of rebirths in the intimate apparel industry — where cleavage and padded, push-up bras are a long-established mainstay.
The Wonderbra introduction to the U.S. market in 1994 — replete with outlandish media stunts such as shipments of Wonderbras to stores by helicopter and Wells Fargo armored trucks — made the idea a hot new product all over again.
Over the past year, Wonderbra rang up sales of $75 million at stores, and it’s expected to push ahead to $100 million this year, said Lee A. Chaden, president and chief executive officer of Sara Lee Intimates. And the Wonderbra brand — which rated 71 on the 1995 Fairchild 100 list of names most recognized by consumers — has been extended to include shapewear also bearing the Wonderbra name.
“We were successful in creating a brand, and consumers wanted that brand name on shapewear as well,” Chaden said.
Victoria’s Secret is another classic example of making an old idea fresh and exciting, with its new Angels collection of glossy, sheer bras and panties. In its former life in the Seventies, the sheer numbers were called Glossies by Lily of France and were designed by John Kloss.
In its new incarnation, the Angels line features nine colors, including red, turquoise and lemon yellow, as well as a signature shade of nude used by Kloss. Armed with a multimillion-dollar marketing and advertising campaign, Victoria’s Secret commissioned Herb Ritts to photograph the whimsical campaign on several “heavenly bodies” — Tyra Banks, Stephanie Seymour, Karen Muldar, Helena Christensen and Daniella Pestova. Tom Jones — the master of bump-and-grind — appears in Angels commercials, which started airing on TV in March.
In November, The Warnaco Group even managed to bring the glamour of Hollywood to consumers with its Marilyn Monroe by Warner’s collections of peekaboo baby dolls and blatantly sexy bras and panties. And Madonna — who made cone-shaped bras and bustiers a fashion item in the late Eighties — continues to dish out the cleavage.
Like an invitation to fantasize, the tag line for TV and print ads for the Marilyn Monroe line says: “There’s a side to every woman that’s very Marilyn.”
A lot of women have RSVP’d, according to Linda J. Wachner, Warnaco’s president, chairman and ceo. Wachner noted that the glamour brand, which is housed in shop areas, is expected to generate wholesale sales of $25 million its first full year.
“It’s selling phenomenally well in the U.S. and London,” Wachner said, noting that a top-selling item on both sides of the Atlantic has been a sheer, leopard-print underwire bra and coordinating panty inspired by the motion picture “The Asphalt Jungle.”
Hype aside, other elements contributing to the big intimate apparel picture includes the ongoing popularity of lingerie looks in ready-to-wear — and rtw looks in lingerie. Key trends this spring include sheer apparel, which has helped to bolster the demand for daywear items like bodyliners and shapewear to wear underneath.
Then, there’s the power punch of big-time designer names like Calvin Klein Underwear, Ralph Lauren Intimates and Donna Karan Intimates in the innerwear field, a small but potent segment that industry observers expect will grow rapidly over the next several years. These power players are expected to gobble up market share at the expense of traditional brands, as well as exude tremendous pressure on conventional labels. A main reason: in-store designer shops.
But this burgeoning designer business could well allow department stores to regain some of their lost leadership, particularly with a following of younger consumers.
Ralph Lauren Intimates — a full-fledged collection of innerwear produced under license by Sara Lee Corp. — is the newest contender, promising to pack a wallop in the arena with another potent force: Calvin Klein Underwear.
The Lauren innerwear — which will include men’s, and girls’ and boys’ underwear — could generate several hundred million dollars annually by 2000. Shipments of the women’s innerwear begin May 25 to 1,000 department and specialty store doors, and plans are to expand the number of doors to 1,500 by 1998 — about the same number as Calvin Klein men’s underwear and women’s innerwear.
Warnaco is all smiles these days about its established Calvin Klein innerwear business. Gross profits for Warnaco’s intimate apparel business in 1996 grew 16.7 percent to $302.4 million from $259.2 million, according to the firm’s 10K, fueled by a hike in sales of Calvin Klein underwear and innerwear. Sales of the Calvin Klein product rose 53 percent to $244.3 million from $163.6 million. Warnaco’s total sales of intimate apparel grew 16.4 percent to $802 million from $689.2 million the previous year. In the most recent first quarter, the firm’s innerwear sales rose 24.2 percent.