BY KATE ABNETT
LONDON, United Kingdom — Outside the Victoria’s Secret Store on
New Bond Street in London, a line of sheepish looking men are
texting, avoiding eye contact and pretending not to notice the pink
winged corset in the window they are leaning against.
Inside is an explosion of lace, frills, fragrances and cosmetics
— an absolute shrine to getting undressed, decked out like a
boudoir with black-lacquered walls and hundreds of glittering
mirrors. Framed photographs of the Victoria’s Secret Angels are on
display like family portraits, while headset-wearing shop
assistants dart through the throngs of female shoppers.
Victoria’s Secret, the largest underwear retailer in the US, has
transformed lingerie shopping from a chore into a blockbuster
experience. And a visit to a VS store is a lesson in just how far
the lingerie market has come in the last decade. According to data
provided by Euromonitor, the global underwear market was worth just
over $110 billion in 2014.
The underwear industry operates much the same way as the
clothing industry. Some companies, like Agent Provocateur, design
and distribute their own underwear, but many operate licensing
agreements. Stella McCartney, for example, design the products in
collaboration with a company like Bendon Group, which owns the
licenses for Stella McCartney and Heidi Klum Intimates. Bendon then
makes the products in its network of production facilities and puts
them on sale in its retail partners, as well as, say, Stella
McCartney’s own stores.
And much like the clothing industry, most underwear is made in
Asia. In part, because it’s cheaper. But also because the technical
skills and machinery needed to make underwear — in particular, to
make lingerie — don’t exist at scale elsewhere.
A few luxury brands make their own — like La Perla, which has a
specialist lingerie factory attached to the company’s HQ in
Bologna, Italy — but this can hike the price and production time. A
Bendon-made bra takes nine months to go from design to shop floor.
Agent Provocateur bras (which are made in North Africa, Europe or
Asia) take up to a year. A La Perla bra takes at least 12 to 15
months.
In the US and Europe, a few big companies, including L Brands
(which owns Victoria’s Secret), Hanes (which owns Wonderbra and
Playtex), Triumph International and Calzedonia Group hold the
lion’s share of the underwear market. In a cultural quirk that sets
it apart from the US and Europe, the UK’s underwear market is led
by high street retailer Marks & Spencer, which holds a 26
percent market share.
In Asia, the market is much more fragmented. Asian underwear
companies often do a dual business in selling under their own brand
name and manufacturing for international labels. Chinese label
Cosmo Lady, for example, is also a lingerie material supplier to
Victoria’s Secret, while Japan’s Wacoal Holdings Corp runs its own
label and produces intimates for brands including DKNY.
But in recent years, new trends and technologies — from
performance materials to start-ups that sell underwear
subscriptions — have shaken up the underwear business. The first
thing to know: the thong is a thing of the past.
“The big surprise is young women moving to full coverage panties
and migrating away from the thong,” said Marshal Cohen, chief
industry analyst at NPD Group, a market research firm. “The new
younger consumer is demanding comfort,” said Bernadette Kissane,
apparel and footwear associate at Euromonitor, of the reason behind
this shift.
The popularity of sweatpants (a loose style that makes VPLs a
non-issue), innovation in ‘seamless’ materials, as well as a shift
in young women’s attitudes to dressing for comfort as well as
style, have contributed to a big increase in sales of
fuller-bottomed briefs and decline in sales of thongs. Last year,
thong sales dropped by 7 percent, while sales of fuller underwear
bottoms grew 17 percent, according to NPD Group.
“After the explosion of thongs as the fashion shape of the ‘90s,
today less than one in ten of the knickers we sell is a thong,”
said Soozie Jenkinson, head of lingerie design at Marks &
Spencer. The same trend is true of the luxury lingerie market. “We
sell more briefs than thongs,” concurred Garry Hogarth, CEO of
Agent Provocateur.
Women are also opting for comfort up top. “There has been a real
trend towards non under-wired lingerie,” said Nancy
Szachno-Dressel, lingerie buyer at department store John Lewis,
where non-wired bras now comprise 40 percent of bra sales, up 32
percent year-on-year.
Men are also reshaping the market. As menswear booms, the male
consumer is also taking more interest in what’s happening
underneath his clothes.
“In the last five years I've seen an explosion in the amount of
men's underwear brands,” said Joel Primus, who founded men’s
underwear label Naked in 2010. Born out of a trip hiking up Machu
Picchu, Naked has pushed into the fast-growing men’s performance
underwear category, pioneering seam-free briefs to wear under slim
pants and sport-friendly styles made from x-static sliver-infused
fabric that, frankly, “didn't stink when you wore it.”
“The biggest drivers we're seeing are performance and luxury,”
said Primus. “Guys want their underwear to perform, first and
foremost, and then style is important. Colour, prints — something
that speaks to their own sense of fashion.” New York label 2(x)ist
is another performance underwear player aimed squarely at the
“self-purchasing millennial guy.” According to chief executive Tom
Speight, underwear “must round out his active lifestyle” and, to
this end, “synthetic fabrications and moisture management
properties show no signs of letting up.”
But as women’s briefs get bigger, men’s are becoming, well,
briefer. Boxers (a fitted short) now have the biggest share of the
men’s market at nearly 40 percent. And while briefs sales also grew
23 percent in the year ending September 2014, loose boxers declined
14 percent.
Even more than most clothing categories, underwear is all about
the fit. Marks & Spencer alone employs 6,000 bra fitters who
fit 150,000 customers every month. Somewhat surprising, then, is
the massive growth of the online lingerie market, which is forecast
to grow 18.2 percent from 2014 to 2019, according to market
research firm Research and Markets.
“Buying lingerie online was unthinkable 10 years ago,” said
Ambika Zutshi, chief executive of Fashionbi, a fashion and luxury
research firm. “Today, this industry offers comprehensive size
guides online, good delivery and customer-care services — and a
great alternative to consumers feeling uncomfortable while shopping
for intimates.”
“We see online as a great way for customers to repeat purchase
their favourite lingerie,” agreed Szachno-Dressel of John Lewis,
where online sales of lingerie have increased 207 percent in five
years — helped, in part, by services like specialist online
bra-fitting videos.
Indeed, online solves the tricky business of stocking bras in
all sizes (there are over 100) and taps the customer habit of
repeat buying the same basic items — a retail quirk also being
exploited by MeUndies and Manpacks, two start-ups that sell
subscription packs of underwear. Other start-ups taking advantage
of the growing online market for underwear include New York
start-up Adore Me, which drops a new lingerie collection each
month, and Ten Undies, which sells full-bottomed styles for women
online.
But perhaps the biggest revolution in the business of briefs is
the entrance of new competitors from outside the underwear space.
Fast fashion giants like Topshop,H&M and Forever 21 have all
launched their own lingerie lines, bolstered by collaborations like
H&M’s David Beckham ‘Bodywear’ collection. “We can see that our
customers in all markets really appreciate these collaborations,”
said Andreas Löwenstam head of menswear design at H&M, of the
partnership.
Such collections have got the big brands concerned. Millennial
shoppers are better acquainted with these stores than with lingerie
specialist brands or department stores. And underwear has
traditionally been less trend-led than clothing and made at a
slower pace — until now.
“Lingerie collections have evolved to mirror the breadth and
pace of seasonal ready to wear collections,” explained Lydia King,
buying manager at Selfridges. To shorten its time to market,
Victoria Secret has put its panties on what CEO Sharen Turney has
described as a “speed programme.” Bendon, too, is moving to a
vertically integrated supply chain like the one pioneered by Zara,
to match new product to customer demand, at speed.
“This requires speed, innovation, value, and service,” said
Justin Davis-Rice, chief executive of Bendon Group, of serving the
modern underwear consumer. “Key players such as ourselves are
evolving to deliver this through integrated supply chains… This way
the consumer pulls through what they demand instead of suppliers
pushing product that consumers don’t want.”
But for traditional underwear behemoths, their biggest weapon
against these new competitors is brand. Calvin Klein reports
logo-driven styles as one of its biggest drivers of growth — helped
by a celebrity-fuelled Instagram campaign. “The success of the
#mycalvins campaign popularised the notion of displaying one’s
underwear waistband,” said Cheryl Abel-Hodges, president of The
Underwear Group, PVH Corp, which controls Calvin Klein
Underwear.
But brand power is not limited to waistbands. Victoria’s Secret
has transformed a product once hidden for modesty’s sake into the
world’s most watched catwalk show. And as clothing labels like
H&M push into underwear, the major underwear brands push back.
Victoria’s Secret is the king of categories, with lines in
everything from sportswear to cosmetics. In five years, Agent
Provocateur swimwear has grown to 12 percent of the business, and
the company has also launched lingerie-inspired clothing.
“More lingerie is shown now than it was before, with bras and
corsets worn under jackets, and as outerwear,” said Garry Hogarth.
“I think we really are a luxury fashion brand.”
Source:
http://www.businessoffashion.com/