US Apparel Industry An Analysis

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US Apparel Industry: An Analysis
Description: This report is a detailed study of the US apparel industry. It also discusses briefly the womens lingerie market. A comparative study and financial snapshot of the top three players - VFC, LIZ and Jones - have also been included, along with an indication of potential developments. It covers all important segments of the industry and analyzes the prevailing market dynamics. The report also contains an assessment based on the PEST model and Michael Porters Five Forces framework. Some of the trends observed in the industry include: Recovery in apparel demand Expansion of retail networks Growing online apparel sales Increasing net apparel imports

Women’s and girls apparel market, growing at 1.9% annually, will continue to provide the chunk of the demand for 2004-2009.


1. Introduction 1.1 Industry Definition The apparel industry primarily comprises companies that design, manufacture, market, and/or license brands for mens, womens, and/or childrens clothing. Apparel Sector NAICS codes and components 1.2 Industry Segments The US Apparel industry broad components:

Men’s Clothing Women’s Clothing Children’s Clothing Intimate Apparel Apparel Accessories 2. Market Dynamics 2.1 Market Overview The US apparel industry showed steady growth between 1998 and 2000 with sales of about US$176 billion in 2000. The apparel sales declined in 2001 due to recession in US. The industry saw a positive trend in 2004 reaching close to 2000 sales levels and reported 1.39% CAGR during 2001 to 2004. Market overview includes:

Market Size for US Apparel Industry

US Apparel Market by product segment Top Five Best Selling Clothing Categories for Men and Women Women’s Lingerie Market in US 2.2 Trend Analysis Recovery in Apparel Demand Expansion of Retail Networks- Share of Specialty Stores Online Apparel Sales growth Net Apparel Imports Core US suppliers and their market share Share of Private Labels Outsourcing and brand pricing Growth of Plus-Size Women’s Apparel 2.3 Key Drivers Current and Projected Trend of Baby Boomers Impact of Weak Currency on Apparel Industry Change in Per Capita Apparel Spending 2.4 Major Issues and Implications Impact of Imports on Profit Margins Retailer Consolidation A Threat to Manufacturers Likely affect of Embargoes on Imports US Textile Trade Deficit 3. PEST Analysis 3.1 Political Factors Quota Regulations effect on Competition US Safeguard Quotas on Chinese Imports CAFTA-US Partnership 3.2 Economic Factors Economic Growth Affects Consumer Confidence Declining Personal Savings Rate Impact of Currency Fluctuations US Apparel Prices Rising Gasoline Costs and Alternative Shopping Options 3.3 Social Factors Shifting Preferences of Baby Boomers Rising Obesity 3.4 Technological Factors Technology-Supply Chain Management Web Analytics tools/technology 4. Michael Porter’s Five Forces Analysis 4.1 Buyers’ Power Discount Retailers affect Pricing Retailers’ Consolidation

Apparel Manufacturers establishing Networks Branded shop-in-shops concept 4.2 Suppliers’ Power Rising Chinese Imports intensify Suppliers’ Competition Retailer Discounts Affect Margins Price Pressure on Suppliers 4.3 Rivalry among Competitors High Competition & Fragmentation Mergers & Acquisitions Emphasis on Brand Establishment Portfolio Diversification Increasing Innovation & Technology

4.4 Threat of New Entrants Brand Power as a factor Marketing and Advertisements act 4.5 Threat of Substitute Products Competing Spending Options 5. Competitive Landscape Revenue segmentation of:

V.F. Corporation (VFC) Liz Claiborne Inc. (LIZ) Jones Apparel Group, Inc. (JNY) 5.1 Competitive Positioning Apparel industry business models: Diversified portfolio companies Single-brand companies V.F. Corporation (VFC), Liz Claiborne Inc. (LIZ) and Jones Apparel Group Inc. comparisons on parameters: Products Geographic Presence 5.2 Competitive Strategies

V.F. Corporation (VFC) Liz Claiborne Inc. (LIZ) Jones Apparel Group, Inc. (JNY)

5.3 Financial Analysis V.F. Corporation (VFC), Liz Claiborne Inc. (LIZ) and Jones Apparel Group Inc. comparisons: Income Statement Analysis: Sales Growth Net Income Growth Profitability ratios Intimate Apparel Business (VFC) Balance Sheet Analysis: Liquidity Ratios Debt-Equity Ratios 5.4 Stock Market Performance Stock performance and stock price movements of: V.F. Corporation (VFC) Liz Claiborne Inc. (LIZ) Jones Apparel Group, Inc. (JNY)

7. Industry Outlook Industry and Apparel Demand Forecast Appendix I: International Conferences and Annual Meetings Appendix II: Industry Associations and Organizations List of Tables Table 2.1: 2004 Top Five Best Selling Clothing Categories for Men and Women Table 2.2: Rankings as per the Consumer Awareness Levels Table 3.1: Leading 10 Suppliers of the US Textile & Apparel Table 5.1: Diversified Portfolio (VFC) vs. Concentrated Portfolio (Nike) Table 5.2: Competitive Positioning – VFC, Liz and Jones Table 5.3: Products Global intimates, Imagewear, Outdoor and Sportswear Table 5.4: Liz Claiborne brands Table 5.5: Jones Apparel Group brands Table 5.6: Product Comparisons VFC, Liz and Jones Table 5.7: VFC Acquisitions Table 5.8: Liz Acquisitions List of Figures Figure Figure Figure Figure Figure Figure Figure 2.1: 2.2: 2.3: 2.4: 2.5: 2.6: 2.7: Market Size for US Apparel Industry 2000-2005 US Apparel Market by Product Segment 2005 US Womens Intimate Apparel Market 2004-2005 US Apparel Demand 1994-2004 Share of Specialty Stores in the US Apparel Market 2001 & 2004 US Apparel Net Imports 1999-2004 US Apparel Market Segments in 2003

Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure

2.8: Growth in Units of Apparel Sold 2003-2004 3.1: Demand for Apparel in US 1994-2004 3.2: International Exposure as % of Sales 2004 3.3: US Apparel Prices (Consumer Price Index) 1995-2004 4.1: Share of Specialty Stores in US Apparel Market 2001 & 2004 4.2: Advertising Spend as % of 2004 Sales 5.1: VFC Revenue Segmentation (Year end January 1, 2005) 5.2: Liz Business Segmentation 5.3: Jones Business Segmentation 5.4: VFC Annual Geographic Contribution 2005 5.5: Liz Annual Geographic Contribution 2005 5.6: Jones Annual Geographic Contribution 2005 5.7: Sales Growth – VFC, Liz and Jones 2005 (CAGR 2001-2005) 5.8: Net Income Growth – VFC, Liz and Jones 2005 (CAGR 2001-2005) 5.9: Profitability Ratios – VFC, Liz and Jones 2005 5.10: VFC Intimate Apparel Sales 2004 5.11: VFC Intimate Apparel Sales and Operating Margin Growth 2002-2005 5.12: Liquidity Ratios – VFC, Liz and Jones 5.13: Debt-Equity Ratios – VFC, Liz and Jones 2005 5.14: Stock comparisons– VFC, Liz and Jones Dec 2004-Mar 2006 6.1: Apparel Demand Forecasts, 2004 and 2009


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