Super Premium Denim Jeans Sales Fall While Denim Rules ..

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The year 2008 has been bad for most of the industries and early 2009 has not been good either.Apparel industry has not been an exception and  has been hit with a 6.3% decline in the first quarter.. However, sales of denim jeans has been a bright spot in this otherwise dismal scenario. The sales of jeans has actually grown 2.3% in this period . Does it mean that denim jeans are actually cannibalizing the share of other apparel bottoms ? Possibly . Levi’s – which has seen a growth in denim sales, has its non-denim Dockers brand  hit hard, and several of its retail stores have gone out of business.

But all is not gung-ho in the denim industry . Some of the segments of the industry have suffered while others have gained. Let’s try to find answers to some questions related to the denim industry in US.

 

What is the situation of the total denim sales in USA ?

 

  1. The denim jeans industry – a $13 billion industry – has actually grown 2.3% December 2008 – February 2009 where the apparel sales as a whole has declined 6.3% !
  2. Sales of large denim companies has improved .VF reported revenue from Wrangler jeans was up 3% in the first quarter of 2009, and Lee jeans sales was up 7% !

What is happening to the Super Premium Denim Category ?

 

  1. This category of premium denims with a price tag of $200+  has suffered and sales went down 17% in this category last year .
  2. Reason – Inspirational shoppers are not going that high and luxury customers are not buying more than 2-3 pairs anymore..
  3. So at 7 for All Mankind, about 95% of the company’s jeans are now less than $200, up from 70% a year ago.
  4. True Religion : Wholesale sales were down 17% in the first quarter, and sales at its stand-alone stores were down about 10%. But they are not yet changing their strategy and reducing prices. They expect consumers to come back for their jeans.

What are the manufacturers of Premium Denim Brands doing to fight recession ?

  1. They are trying to communicate to their buyers why their jeans are so expensive. As Topher Gaylord, President of  7 for All Mankind says "It’s the hand distressing and other denim treatments make his production costs 10 times higher than jeans sold in the mass market” and this is what they are tyring to teach their customers.
  2. Due to drop in sales at Luxury departmental stores, they are trying to open more of their own stores. True Religion opened more than 30 in the last year. Lucky Jeans, owned by Liz Claiborne , is adding a number of specialty shops .
  3. They are trying to become a Life Style brand – with non-denim clothes and accessories to thrive.

What are Department Stores doing to shore up their denim sales ?  

  1. Discounting their prices . Not depending on sales of Premium Denim Brands and instead focusing on their own or other mid-priced denim brands.
  2. Trying to add more denim brands . J.C.Penny  now sells about 25% more brands of jeans than it did five years ago, including wide-leg dark-denim jeans with cuffs
  3. Department stores are buying more of the $200-and-under jeans for this  fall.

What are traditional denim brands like Levi’s and Wrangler doing?

 

  1. Trying to understand the needs of their consumers better and delivering those products at reasonable prices.
  2. Levi’s eg, is capitalizing on the trend toward "boyfriend jeans," which are snug on the rear and loose in the legs.were snug skinny-fit jeans, slim-fit jeans that Graden says are "not as snug," as well as new back-pocket treatments.
  3. Wrangler began offering jeans with a "Comfort Solution," which includes a waistband that expands as you move.
  4. Gap is trying to build jeans every bit as good as any premium player and trying to regain lost market share by offering 7 seven different "fits" for men and seven for women, including "always skinny" and "curvy."

So it seems that denim is there to stay – whether its good times or bad. But denim brands will have adopt different strategies and cater to their own niche in a proper way. Check out some more details on Premium Denims on this article from USA Today  here

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