This is marketing research on the Clothing Stores industry and can include information on the background, market structure, definitions, competitors, trends and developments of clothing stores and is related to retail, merchants and apparel.

Table of Contents

Table of Contents

1 Background 
2 Market Structure 
3 Market Metrics 
4 Industry Players 
5 Recent Trends and Developments 
6 Sources

Background

The growth of the U.S. clothing and apparel industry has tracked the growth in the general U.S. economy. The industry’s future growth depends on several factors, including the health of the U.S. economy, changing demographics, industry price trends, ability to meet the challenge of increasing imports, growth in exports, and the effects of new and expiring trade agreements.

Clothing and apparel demand is influenced by a variety of factors, including demographic trends. Growth in the number of households headed by baby boomers (born between 1946 and 1964), who are in their prime earning years, accounts for a large portion of apparel sales. The members of the “echo boom” (also known as generation Y), the children of baby boomers, are becoming significant consumers in their own right. Teens have more available income than ever before and have an impact on apparel spending as they prefer to buy trendy and brand name clothes, while older echo boomers are establishing their own households. Significant growth in the population of older Americans also bodes well for apparel spending. Those consumers are less concerned about fashion and concentrate more on comfort and function, spurring demand for casual clothing.

Market Structure

The clothing store industry is highly cyclical - it is very dependent on the direction of the economy and consumer spending. At the same time, other factors impact success: the latest trends and fashion, changes in the retail dynamics as well as general population demographics. Trends and fashion impact certain store segments more than others. Retailers such as Abercrombie, Gap or American Eagle are heavily influenced by the latest fashion trends among teens. It is always a challenge for these firms to correctly anticipate fashion changes and stay ahead of them. Larger, more diversified retailers offering broader lines of clothing to children, boys, women, etc will be less vulnerable.

Retail dynamics shifted significantly at the end of the last decade with the emergence of the Internet. Many catalog retailers were already well prepared such as Land’s End or others and could quickly shift and take advantage of the new move towards on-line purchasing. Other clothing store chains with a large set of stores were less prepared. Over time, almost all of these clothing stores have launched interactive web sites to take advantage of on-line purchasing which continues to increase significantly annually.

Demographics plays another key role. The baby boomer population has aged as noted above. At the same time, their own children are no longer teenagers and fashions and buying patterns continues to shift as the entire population gradually gets older. The baby boomers as well as their children are spending less on clothing as the decade advances.

The number of establishments in the industry has dropped in the past several years as a result of consolidation and other factors.

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Employment, however, has grown significantly. The clothing store workforce in the U.S. has increased over 10% and now exceeds 1 million retail workers.

This is an industry with moderate concentration. Several chains account for a large portion of sales. The 20 largest are responsible for over 50% of all revenues in the industry, but small niche clothing stores proliferate across the country.

Concentration of Revenue by number of firms in the industry is as follows:


Total Number of firms       Revenue as % of all firms in the industry

     4 largest                              28.0%
     8 largest                              37.8%
    20 largest                              52.0%
    50 largest                              65.3%

Market Metrics

Revenues has increased considerably in the 5 year period ending in 2002. Sales jumped 20% and have gone considerably higher since then as consumer buying of apparel has continued to increase every year.

Industry Players

These are major players in this market, but it is not an exhaustive list of all key firms.

Revenues, Net Income and Market Capitalization are expressed in US$ Millions.

Recent Trends and Developments

The trend toward retailers becoming apparel manufacturers and apparel manufacturers becoming retailers continues. Some retailers have established private label lines that allow them to deal directly with contractors. Some retailers use private labels to differentiate themselves from other retailers and fill in gaps in their product lines. Consumers increasingly associate national brands with consistency in quality and size, and this has allowed rapid growth in private label brands. Some U.S. apparel companies have established their own merchandise stores. Combining retailing and apparel manufacturing allows companies to create efficiencies by eliminating middlemen.

The 2007 poses a challenge to clothing stores. Retail sales have still b een strong going into the end of the year, but the continuing housing slump as well as higher interest rates and higher gas prices are anticipated to cut into discretionary consumer spending going into 2008. Clothing store sales may stagnate of that occurs.

Sources

• Most current US government sources