Lack of focus dampens women's apparel sales - Discount Industry Annual Report, part 2

Discount Store News, July 20, 1992

Women's apparel sales grew modestly in 1991, but that glimmer of hope has retailers poised for a more promising 1992.

The problems that have plagued ladies' apparel retailers for the past few years - little fashion direction and competition from specialty stores - are still the obstacles facing full-line discounters this year.

The lack of a clear fashion trend is the most pervasive problem. In addition, the success of off-pricers that feature department store merchandise at value prices has made it all the more urgent for full-line discounters to develop a complete fashion statement in their ladies' departments.

Brands still are the key to a successful apparel merchandise mix. The larger vendors, Gitano, Chic, Bonjour and Sasson, continue to be well-recognized in consumer studies.

However, the most successful brands during 1991 reflected the careful shopping patterns of a money-conscious consumer. Intimate apparel was among, the leading categories in the women's area, with Fruit of the Loom and Hanes among the top-selling brands.

Fruit of the Loom is expected to make even more of an impact on the discount market in the coming year. Waranaco licensed the Fruit of the Loom name and the first line of bras under that label hit stores spring 1992.

In sportswater, shorts - which were a hit across all apparel markets - are doing well again in summer 1992 and for fall, denim looks like a winner; the five-pocket basic silhouette is favored by most discount buyers.

In a market searching for a trend, the word "basic" has come to mean a style all its own.

Five-pocket jeans, T-shirts in a range of colors and black leggings were uniformly fundamentals in the women's area.

Now that a few seasons of modest spending have passed, retailers may see women finally needing to replace not just their bras and panties and black leggings, but sportswear and casual clothing as well.

In refining ladies' apparel, many discounters are again looking to private label.

Kmart this year announced its first major private label introduction since Jaclyn Smith, the B.E. line. Wal-Mart has signed an exclusive licensing agreement to use the White Stag label.

Kmart's B.E., much like Target's Merona program, gives the apparel basics a label of their own. Both programs focus on standard wardrobe pieces such as T-shirts twill bottoms and knit tops.

As in men's wear, sweaters performed poorly in 1991, but some detailed sweaters for holiday are expected to make a splash.

While full-line discounters try to capture the fashion customers, off-pricers are set on finding a way to keep the fashion-driven customers they already have.

One advantage for the off-pricers is that less is required in terms of display.

Full-line discount stores, on the other hand, work to update merchandise and fixturing in tandem.

Stores such as 50-Off, One Price Clothing and Burlington Coat Factory grew considerably in 1991 with a no-frills approach. Even market leaders such as T.J. Maxx found that extras such as carpeting are not as important in the off-price apparel format. In its new Long Island stores, T.J. Maxx took the carpeting off its ladies' fashion apparel area, but reported no difference in sales.

The display formats that work best for all types of apparel outlets are likely to keep changing.

Discounters are already limiting elaborate vendor shops and concentrating on well-displayed category departments. Target, for instance, has stayed away from vendor displays. Likewise, Kmart has created multi-vendor "power" departments rather than highlighting one vendor.

On the other hand, off-pricers are making concessions as well.

Four-way fixtures, waterfall display and somewhat shorter piperacks are making stores such as Marshalls pleasant to shop in without appearing like an expensive, full-price specialty retailer.

The success of off-pricers also has more companies entering the frey. Nordstrom's announced it would open a number of off-price stores this year, separate from its Rack close-out chain.

Target Stores also introduced its first specialty spin-off this year, Everyday Hero. Still in test mode, this all-apparel format is not expected to extend beyond two stores, at least for 1992.

     Ladies' Wear
     $19.0 Billion
Full-Line Discounters       $11.9B
Catalog Showrooms              -
Membership Warehouse        $0.7B
Specialty Discounters       $6.4B
     Full-Line Discount
     Store Productivity
Sales                       $11.9B
Sales Per Store           $1,488,000
Dept. Size                9,000 Sq. Ft.
Sales Per Sq. Ft.           $165.28
Turns                          4.5
Initial Markup                45.7%
Gross Margin                  34.2%
Source: DSN research