Price wars, private labels dominate apparel market influence - The DSN Productivity Report

Discount Store News, August 5, 1996

Discount department store chains are wielding private label and proprietary label programs in increasingly comprehensive ways, both to boost productivity in lagging apparel divisions and to position themselves through product differentiation.

"Lifestyle merchandising"--staking out a consistent look across product categories--is the watchword. Since casual is the most accessible style statement for mass merchants, the phenomenon is most pronounced in denim, fleece, casual dress and office casual-related separates programs. Major examples include Route 66 at Kmart, Faded Glory at Wal-Mart and the Cherokee program at Target, elements of which will be visible at Venture, Caldor and other regionals.

Denim, the discount store mainstay, is being driven by price and a hotly contested struggle among the brands. At lower or middle price points, many chains use a private or proprietary denim label.

Brittania is hyping its Levi's connection and Riders its Lee affiliation as they grapple for the premium business. Meanwhile Chic/H.I.S. is pouring on the advertising efforts for its brands and introduced a new one--H.I.S. for Her, featuring waist-and-inseam sizing, an innovation in women's jeans.

Both trends--sharper pricing and image mongering--will intensify as fashion innovation takes a back seat to marketing, replenishment logistics and price wars. According to one study, the average retail price that consumers paid in 1995 for a pair of five-pocket jeans, across all size and gender classifications, was less than $13.50.

Margins are better in men's slacks, as the popularity of casual styles have encouraged retailers to form a new core department of products built around men's khaki looks and casual tops.

At the same time, the consumer's search for value seems to be presenting discounters with an opportunity to gain share in suit separates, dress shirts and related furnishings. Wal-Mart's contract with Farah and the efforts of regional chains to upgrade their men's dress selections are indications of a trend with staying power.

              Apparel
           Productivity