The bodywear market in Ireland - CBI

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					                CBI MARKET SURVEY: THE BODYWEAR MARKET IN IRELAND



                                       CBI MARKET SURVEY

                         The bodywear market in Ireland
                                   Publication date: July 2009

Introduction
This CBI market survey gives exporters in developing countries (DCs) information on some
main developments in the bodywear market in the Republic of Ireland (Ireland). The
information is complementary to the information provided in the CBI market survey ‘The
bodywear market in the EU’, which covers the EU in general. That survey also contains an
overview and explanation of the selected products dealt with, some general remarks on the
statistics used, as well as information on other available documents for this sector. It can be
downloaded from http://www.cbi.eu/marketinfo.

1       Market description: consumption and production

Consumption
Total consumer spending on bodywear fell by almost 3% in 2008 and reached € 394 million.
Per capita expenditure on bodywear amounted to € 90 in 2008, which was well above the EU
average of € 78 and was the same as in the UK.

Ireland ranked 18th in EU bodywear consumption in 2008, below Hungary and above Slovakia
and accounted for 1.0% of total EU consumption.

Table 1.1 Consumption of bodywear in Ireland, 2004-2009, in € million
                                    2004        2006           2008      AAGR*)           2009
                                                                            in %      forecasts
 Underwear                           106         112            116       +2.4%             106
 Foundation wear                      89          95             98       +2.5%              94
 Night- and home wear                 63          66             65       +0.8%              61
 Swimwear                             27          28             27       +0.3%              25
 Hosiery                              82          91             88       +1.9%              86
 Total bodywear                      367         392            394       +1.8%            372

 Annual change in %             +2.2%      +2.3%          -2.9%                           -5.7%
 T-shirts                          210        232           238            +3.3%            235
*) average annual growth
Sources: Euromonitor (2009), Eurostat (2009) and trade estimates

As described in appendix A of the CBI market survey ‘The bodywear market in the EU’,
functions of T-shirts vary strongly. According to most bodywear analyses, T-shirts are not
included in statistics about consumer expenditure of bodywear, but are mentioned separately in
table 1.1.

As described below (see: economic developments) shrinking consumer spending will lead to an
estimated fall of 5.7% on bodywear expenditure in 2009.

Demand for bodywear is determined by several factors like demographics, economic
developments and attitude of consumers towards fashion. These factors are discussed below.
Other more general factors are discussed in chapter 2 of the CBI market survey ‘The bodywear
market in the EU’.

Demographics
Ireland’s population is increasing strongly, from 3.8 million in 2000 to 4.4 million in 2008. In
2010 the population will have grown to a projected 4.5 million. A fifth of the population



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                CBI MARKET SURVEY: THE BODYWEAR MARKET IN IRELAND



consists of children aged below 15, and just over a third of the population is under the age of
25. These are relatively high levels in comparison to the rest of Europe. Conversely, adults
aged over 65 accounted for 11% of the population, one of the lowest percentages in Europe.

Table 1.2 Population trends in Ireland, 2004-2010 (in ‘000)
                               2004        2006         2008          2010
                                                                 forecasts
 Males                        2,003       2,102        2,187         2,253
 Females                      2,025       2,107        2,191         2,254
 Total                        4,028       4,209        4,378         4,507

 Age groups (in %)
 0-14                         20.9       20.5           20.4          20.4
 15-64                        68.0       68.4           68.4          68.1
 65+                          11.1       11.1           11.2          11.5
 Total                      100.0      100.0           100.0         100.0
Sources: Eurostat (2009) and Euromonitor (2009)

Economic developments
Following a slowdown in real GDP growth in the early part of the new millennium, 2003 saw
the economy pick up again, with growth at 4.3%. Growth increased in 2005 (+5.9%) and
remained robust in 2006 and 2007 (+5.4%). The Irish economy is currently experiencing a
depression: GDP in 2010 will be more than 10% below its 2007 level, the standard definition of
a depression. After a decline in GDP of 3% in 2008, further contractions are forecasted of
7.7% and 2.6% in 2009 and 2010, respectively. This is attributable to contracting domestic
demand, led by (among others) shrinking consumer spending.

Attitude of consumers towards fashion
Younger fashion and consumer behaviour are similar to the UK, although older consumers are
less conservative and more casually dressed than in the UK.


Production
The clothing sector in Ireland continued to decline in terms of production volume and numbers
employed, reflecting the increasing importance of outsourcing. Since 1990, the apparel sector
has declined. Information about production in Ireland has not been published by the usual
sources like Eurostat’s Prodcom and Euratex since 2004.
The Irish trade association published a member’s directory on http://www.ibec.ie/icata
including links.

Trends in consumption and production
• Outer- and bodywear companies continue to operate the outsource model, while focusing
   on building brand and marketing capability. Domestic demand for bodywear is strong
   however, prices fell during recent years.
• In Ireland, the demand for bodywear for the full-figured women is increasing. Many
   companies started new collections for bigger sized lingerie, which is a growing sector in
   Ireland.

Opportunities and threats
± The increase in population combined with a high per capita spending on bodywear make
  Ireland a potentially attractive trading partner for manufacturers in DCs. However, it should
  be noted that the size of the Irish population remains limited and consumer expenditure is
  shrinking.
+ Opportunities will be found by those exporters who can recognise and respond to the rapid
  demographic changes taking place in Ireland today. Many Irish consumers are fashion
  conscious, but want to find new fashionable products which are also competitively priced.




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                CBI MARKET SURVEY: THE BODYWEAR MARKET IN IRELAND



    Lower cost exporters in DCs are well placed to take advantage of the declining Irish
    economy.

    The same development or trend can be an opportunity for one exporter and a threat to
    another. Exporters should therefore analyse if the developments and trends discussed in
    this survey provide opportunities or threats. The outcome of this analysis depends on each
    exporter’s specific circumstances.

More information on opportunities and threats can be found in chapter 7 of the CBI market
survey ‘The bodywear market in the EU’.

Useful sources:
• http://www.ibec.ie/icata; website of the Irish trade organisation for textiles and clothing.
• Euratex Bulletins - http://www.euratex.org.

2       Trade channels for market entry

Most interesting trade channels for exporters in DCs are wholesalers, clothing multiples and to
a lesser degree department stores and manufacturing companies.
Which channel will be chosen, depends on factors like (among others):
• Which type of bodywear producer (OPT, CMT, FOB, private label or own brand producer)
   tends to export to Ireland. These types of producer are described in chapter 1 and 2 of the
   CBI survey ‘Guidelines for exporting bodywear to the EU’.
• The resources available and the priority given to the Irish market.

Ireland is the most concentrated clothing retail market in Europe. Specialist clothing retailers
account for the bulk of the bodywear market, namely 62% in 2008, of which 9% independent
retailers and 53% clothing multiples.

Dunnes Stores (http://www.dunnesstores.com) and Penneys (http://www.primark.co.uk) lead
the specialist sector; together they captured a significant 45% market share. Dunnes (161
stores, of which 122 in Ireland) is by far the largest retailer of clothing in the country and is
often classified as a clothing specialist, because its clothing offer represents an important part
of its sales mix, although strictly spoken Dunnes Stores is a mixed goods store. Penneys (189
stores, of which 38 in Ireland, 136 (Primark) in the UK and 12 in Spain and 3 in other
European countries), owned by Associated British Foods (ABF) which operates Primark in the
UK, is similar to Dunnes Stores in that it operates at the value end of the market.

The only bodywear specialist chain is Odille (7 stores in Ireland) a sub-brand of Oasis.
However, the future of this small chain was uncertain at the moment of compiling this survey.
Oasis (33 stores in Ireland) sells the bodywear brand Odille and is one of the four brands of
the former Mosaic Group (since March 2009: Aurora Fashions -
http://www.aurorafashions.com), just like Karen Millen (9 stores in Ireland and selling lingerie
and swimwear) and Warehouse (17 stores in Ireland and selling beach and swimwear).

After Dunnes Stores and Penneys, the clothing retail market becomes more fragmented;
chains are: all brands accounting for an estimated 106 stores of the Arcadia Group (UK); Next
(24 stores, UK); New Look (24 stores, UK) and Barry & Sons Fashion Stores (13 Japan stores,
mainly franchising, http://www.barryandsons.com).
There is also inward investment coming from retailers based elsewhere in Europe i.e. other
than the UK. Notable examples are, besides Denmark’s Bestseller (72 stores of several
formula, mainly outerwear), Mothercare (17 stores), Inditex (22 stores, of which 9 are Zara, 5
are Pull & Bear and 5 Bershka) of Spain, Benetton of Italy (24 stores) and H&M of Sweden (9
stores).




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                CBI MARKET SURVEY: THE BODYWEAR MARKET IN IRELAND



Non-specialists accounted for 38% of the bodywear market in 2008, of which 20% department
and variety stores (including hypermarkets), 6% sports shops, 4% home shopping companies
and 8% other retailers (food retailers, market stalls and other).

Leading department stores are Heatons (81 stores, http://www.heatons.ie), UK based
Debenhams (16 stores) and Brown Thomas (4 stores, http://www.brownthomas.com). An
important variety store chain is, besides Dunnes Stores, the UK based Marks & Spencer
operating with 17 stores in the Irish Republic. Super- and hypermarkets are Tesco (100 stores,
http://www.tesco.ie from the UK) and from Germany discount stores Aldi (45) and Lidl (100).

The largest chain of sports goods shops in Ireland is Lifestyle (77 stores,
http://www.lifestylesports.com).

Home shopping in Ireland has grown strongly over the past few years with e-commerce
allowing many traditional catalogue operators to expand their offer online thus providing a
greater degree of flexibility and responsiveness to changes in the market. Store-based players
are also looking to benefit from the advantages of a multi-channel offer. The home shopping
sector remains small compared to other West European countries. The leading catalogue
players – N Brown, Next, Otto Versand and Damart (http://www.damart.co.uk) – are foreign
companies.

Different margins and prices apply in each trade channel, with multiples of 2.3 up to 2.8 of the
manufacturer’s or importer’s price. Wholesalers’ margins tend to range between 30–40% of
the CIF price, while retailers’ margins are between 45–65%. More information can be found in
chapter 3.2 of the CBI market survey ‘The bodywear market in the EU’. Price is an important
selling factor, especially in the lower segments of the clothing market (hyper- and
supermarkets and discounters), whereas in the higher segments factors like quality and
fashion are more important than price. An indication of differences in price levels by types of
outlets has been given in chapter 1 of the same survey.

Information on trade structure, manufacturers and other business contacts can be found at
http://www.ibec.ie/icata the website of ICATA, the Irish Clothing and Textile Alliance or more
general information at the website http://www.enterprise-ireland.com.

3       Trade: imports and exports

Imports
In 2008, Ireland imported 5,897 tonnes of bodywear, valued € 382 million, consisting of 82%
knitted bodywear and 18% woven bodywear. Total imports showed an annual growth of 8.7%
in the period 2004-2008. Imports in 2008 were almost 10% lower in 2008 than in 2007.
Ireland is the 12th largest importer of bodywear in the EU, behind Denmark and Sweden,
accounting for 1.7% of total EU imports.

The UK remained by far the leading bodywear supplier to Ireland accounting for an import
share of 54% (in terms of value) in 2008. The UK is followed by China (14%), India (7%) and
Turkey (5%). Imports from China increased by 27% and from the UK by 5% in the period
2006-2008. Other countries with exports of more than € 5 million to Ireland were: Belgium,
Germany, Italy, Bangladesh and The Netherlands.

The bodywear import share of EU countries increased from 64% in 2006 to 67% in 2008. In
2008, 32% of total Irish imports of bodywear came from DCs (in value) against 34% in 2006.
Imports from DCs increased in terms of volume (+1%) and decreased in value (-6%) in the
period 2006-2008. This fall can mainly be ascribed to decreasing imports from Turkey,
Bangladesh and Cambodia. Other DCs with growing exports to Ireland were China, Indonesia,
Vietnam and Egypt.



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                CBI MARKET SURVEY: THE BODYWEAR MARKET IN IRELAND



Table 3.1 Bodywear imports by Ireland per product group, 2004-2008, in € million
                                      2004        2006         2008    Annual change in
                                                                              %
                                                                       2004-08 2007-08
 Total bodywear                      283.6       380.3         381.9    +8.7%     -9.8%
 Of which:
 Underwear                             32.0        45.5         50.8    +14.7%       -7.8%
 T-shirts                             130.0       179.0        168.6     +7.4%      -15.5%
 Night- and homewear                   29.5        43.3         43.8    +12.1%      -12.2%
 Hosiery and socks                     41.8        52.9         61.3    +11.7%      +12.5%
 Foundation wear                       39.5        47.6         45.5     +3.8%       -8.8%
 Swimwear                              10.8        12.0         11.9     +2.5%      -17.4%
Source: Eurostat (2009)

In 2008, 6.0 million knitted underpants for men and boys were imported into Ireland, of which
93% was made of cotton; against 4.8 million in 2006, of which 92% cotton-made. Average
import prices of cotton underpants etc. for men and boys were € 1.94 in 2006 and € 1.79 in
2008. Leading suppliers of cotton pants in 2008 were China (2.0 million at € 1.09), UK (1.9
million at € 3.15), India (1.3 million at € 0.77) and Turkey (0.2 million at € 1.22).

Irish imports of knitted briefs for women and girls increased from 20.5 million in 2006 to 23.8
million in 2008, of which 67% was made of cotton and 32% of man-made fibres. Average
import prices of cotton briefs were € 1.17 in 2006 and € 0.99 in 2008. Leading suppliers of
cotton briefs in 2008 were China (10.0 million at € 0.57), UK (3.1 million at € 2.46), India (1.8
million at € 0.62) and Turkey (0.8 million at € 1.20).

Imports of T-shirts decreased from 50.2 million at € 3.56 in 2006 to 47.0 million units at
€ 3.59 in 2008. 92% of imported T-shirts was made of cotton and 6% of man-made fibres in
2008. Leading suppliers of cotton T-shirts in 2008 were UK (13.9 million at € 4.76), India
(10.5 million at € 1.86), Bangladesh (5.5 million at € 1.21), China (3.6 million at € 2.26) and
Turkey (2.4 million at € 3.70).

70% of total imported value of night- and home wear concerned knitted nightwear
(nightdresses and pyjamas). 6.1 million knitted nightdresses and pyjamas for women and girls
were imported into Ireland in 2008, of which 77% was made of cotton at € 3.84 per unit and
1.2 million knitted pyjamas for men and boys, of which 88% cotton-made at € 3.67 per unit.

Two product types: knee- and full-length cotton stockings for women and girls and synthetic
panty hose and tights (< 67 decitex) covered 61% of total value of hosiery and socks imports.
Imports of knee- and full-length cotton stockings for women and girls decreased by 10% to
26.3 million pairs at € 0.97 in 2008 (€ 0.93 in 2006) and imports of synthetic panty hose and
tights (< 67 decitex) increased to 5.4 million pairs at € 2.16 (€ 2.90 in 2006).

Imports of bras (excluding sets of briefs and bras) increased from 6.5 million at € 5.32 in 2006
to 9.8 million at € 3.94 in 2008. Imports of bras covered 85% (in value) of total foundation
wear imports in 2008. Leading suppliers were UK (4.8 million at € 5.91), China (1.9 million at
€ 2.29), Indonesia (1.3 million at € 1.89), The Netherlands (0.8 million at € 1.33) and
Bangladesh (0.6 million at € 1.93).

Exports
Ireland exported 578 tonnes of bodywear valued € 35.7 million in 2008, consisting of
underwear (46%), T-shirts (17%), night- and home wear (14%), hosiery (11%), foundations
(8%) and swimwear (4%). Total bodywear exports fell 42% during the whole period 2004-
2008.

Ireland is the 24th largest exporter of bodywear in the EU, above Luxembourg, Cyprus and
Malta, and accounted for 0.1% of EU total exports in 2008.


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                CBI MARKET SURVEY: THE BODYWEAR MARKET IN IRELAND




The UK remained by far the leading destination; 42% of Irish exports went to the UK in 2008
against 49% in 2006. Other destinations, ranked in size of exports, were The Netherlands
(19%), Spain (10%), Russia (8%) and Germany (6%), of which exports to Russia showed the
biggest growth.
Destinations were mainly (90% in value) other EU countries. Destinations outside the EU were,
besides Russia, among others, Israel (1% of total exports), Switzerland (<1%) and the USA.

The size of re-exports cannot be derived from the available trade statistics.

Opportunities and threats
+ The share of DCs in Irish imports of bodywear decreased from 34% in 2006 and 2007 to
  32% in 2008. The low share of imports from DCs, which is far below the EU average of
  54%, offers possibilities for exporters in those countries.
+ Developments in average import prices will put further pressure on Irish producers and
  force them to source abroad.
± Import shares from DCs were lower than average in product groups like foundation wear
  (25%) and hosiery (27%) but much higher for night- and home wear (51%).
± Ireland is a declining market for bodywear, however, it has an increasing number of
  younger people who are more open to fashionable bodywear. The market is dominated by
  imports, not just from the UK, but other sources as well.

More information on opportunities and threats can be found in chapter 7 of the CBI market
survey ‘The bodywear market in the EU’.


Useful sources:
• EU Expanding Exports Helpdesk - http://exporthelp.europa.eu             go to: trade statistics
• Eurostat – official statistical office of the EU - http://epp.eurostat.ec.europa.eu       go to
   ‘themes’ on the left side of the home page        go to ‘external trade’    go to ‘data – full
   view’    go to ‘external trade - detailed data’
• Understanding Eurostat: Quick guide to easy Comext            http://www.eds-
   destatis.de/en/database/download/Handbook_Comext_Database.pdf
• Euratex bulletins - http://www.euratex.org


4       Price developments
Consumer prices
Inflation in Ireland increased from 2.2% in 2004 to 4.9% in 2007, but fell to 4.1% in 2008,
although this was still above the Euro area average. Forecasts for 2009 and 2010 are
respectively -0.8% and +1.3%. Bodywear consumer prices were under pressure and fell
between 3-4% during the period 2006-2008.

According to a price level study by Eurostat, clothing prices in Ireland were 9% below the EU
average in 2008. Four EU countries accounted for a lower price level of clothing, namely
Bulgaria, Lithuania, Romania and the UK.

The VAT rate for bodywear for adults in Ireland is 21% and for children’s bodywear 0%.

Import prices
Prices of imports into Ireland decreased during the period 2006-2008, as table 4.1 indicates.
Imports from other EU countries (mainly re-exports from the UK) showed a big fall in 2007
compared to the previous year. Average import prices from DCs in Asian countries fell
considerably in 2008.




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                CBI MARKET SURVEY: THE BODYWEAR MARKET IN IRELAND



Please note that these trends should be interpreted with care, as changes in imports do not
reflect the demand in Ireland.

Table 4.1 Developments in Ireland of average import prices in €, 2006-2008
                               2006          2007              2008      AAGR
                                                                          in %
 Total imports                  2.73           2.61            2.49      -4.4%
 Intra-EU                       4.60           3.91            4.00      -7.5%
 DCs                            1.56           1.61            1.45      -3.5%
Sources: Eurostat (2009)

Developments in import prices of specific bodywear products or product groups are mentioned
in chapter 3 of this survey.
Useful sources:
An impression of average prices can be formed by browsing through the catalogues of large
multiples, department stores (http://www.dunnesstores.com), mail-order companies or from
other company websites. For websites we refer to the previous chapter.


5       Market access requirements

As a manufacturer in a DC preparing to access Ireland, you should be aware of the market
access requirements of your trading partners and the Irish government.
For information on legislative and non-legislative requirements, go to ‘Search CBI database’ at
http://www.cbi.eu/marketinfo, select bodywear and Ireland in the category search, click on the
search button and click on market access requirements. Detailed information on packaging can
be found at the website of ITC on export packaging:
http://www.intracen.org/ep/packaging/packit.htm.

Information on tariffs and quota can be found at http://exporthelp.europa.eu.

In the field of bodywear, there are mandatory labelling requirements in Ireland for composition
of textiles, origin marking, size marking and care-labelling/washing instructions (see:
http://www.ginetex.net). Note that labelling has to be formulated in the English language.
Requirements for clothing sold in Ireland are assigned by the National Standards Authority
Ireland and can be found on http://www.nsai.ie. One specific requirement: nightwear and
garments commonly worn as nightwear are subject to certain labelling requirements
concerning their flammability. Children’s nightwear must satisfy the flammability programme
requirements specified in BS 5722. Babies’ garments and adults’ nightwear must carry a
permanent label, showing whether or not they meet the flammability standard.

6       Doing business

Information on doing business like approaching potential business partners, building up a
relationship, drawing up an offer, handling the contract (methods of payment, and terms of
delivery) and cultural differences can be found in CBI’s export manuals ‘Export Planner’, ‘Your
image builder’ and ‘Exporting to the EU’. These can be downloaded from
http://www.cbi.eu/marketinfo - go to search publications.

For more information on doing business in Ireland, visit the following websites:
• The trade association in Ireland is the Irish Clothing & Textiles Alliance (ICATA), which can
    be reached at http://www.ibec.ie/icata.
• The Futura Fair in Dublin is the international clothing trade fair. More information and a list
    of exhibitors can be found at http://www.futurafair.com.
• http://www.buyusa.gov/ireland/en/doingbusinessinireland.html
• http://www.chambers.ie the Irish Chambers of Commerce



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                CBI MARKET SURVEY: THE BODYWEAR MARKET IN IRELAND



•   http://www.enterprise-ireland.com



                This survey was compiled for CBI by Fashion Research & Trends

              Disclaimer CBI market information tools: http://www.cbi.eu/disclaimer




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