Off-pricers size up the plus market - special sizes clothing

Discount Store News, Nov 2, 1992

As off-price retailers continue their sales climb, they are making a statement in specialized category areas, in particular plus sizes.

Though special sizes have not grown as quickly as apparel off-prices themselves (in 1991, sales at off-pricers increased 12% to $10 billion, according to DSN research) plus sizes is an area with great profit potential.

NPD Research reported that plus sizes account for about 15% of the total women's wear market. In addition, unit purchases for that segment have grown by 32% since 1982, compared to only a 7% growth of unit purchases for all women's apparel.

Capitalizing on a Growing Market

At the moment, stores such as 50-Off, Goody's Family Clothing, Loehmann's, Filene's Basement and Marshalls all devote a section of floor space to larger sizes. Each store is also looking toward ways to capitalize on this growing market. In the off-price area, however, few specialty stores exist devoted solely to the category, with the exception of Dress Barn Woman.

The off-pricers have a particular challenge because demographics for their type of store done by various industry groups portray a customer that is a little older with some college education and a higher annual income.

According to Kathy C. Yohalem, president of Yohalem, Ltd., a marketing and consulting firm, off-pricers have come a long way in the plus size area in terms of the space devoted to the category. However, Yohalem believes there is much room for improvement.

"The overall apparel presentations at stores such as T.J. Maxx are very good, as is the merchandise selection. That has to be better translated to the plus size area and even to petites, both of which seem to be treated like stepchild categories," she noted.

Because off-pricers like Marshalls and Burlington Coat Factory are known for the branded goods they carry at value prices, they are destinations for the plus size shopper.

"The plus size customer wants the same fashion and value a an average size woman," noted Yohalem. "Off-pricers, especially if they carry stylish branded lines at good price points, can have a loyal following."

New York-based Loehmann's which is known for its designer name offerings as well as for the national brands it carries, has long included some plus sizes in its merchandise mix. A piperack or rounder of skirts would go from as small as a size 2 to a size 16. Sizes 14 and 16 are considered transition sizes and are often found in both regular size sections and special size departments.

However, the company has made a play for the plus size customer by introducing new displays and merchandising agendas for that product area.

According to Doug Meyer, vice president, marketing, Loehmann's is renovating about 10 stores per year and the plus size area will benefit with a better department presentation in those stores.

"Everything will be much more zoned out in the newer stores." he said. "There will be more definitive category areas that make it much more user-friendly."

Marshalls, Andover, Mass., has also segmented its large size area, but has gone a step further. As it does in regular sizes, Marshalls divides its merchandise by product category. Plus size dresses are separated from suits, outerwear and other categories with signage used in the rest of the store.

One company that has seen growth in this area is CFG Purchasing, a buying office that is a division of Certified Fashion Guild. CFG buys goods for off-pricers such as Annie Sez as well as fashion chains such as Mandy's. The company acts as an agent for these retailers and buys off-price goods from manufacturer closeouts, overruns and the like.

"There is a real hunger for off-price goods," reported Lee Mandelbaum, vice president. "It is not confined to one segment."

Marvin Goldstein, gmm, CFG, noted that plus sizes are a growing area for the company. "We do all special sizes including petites, but the plus size area is seeing more movement," he noted. In particular, Goldstein noted that outerweater is one of its largest moving product areas, "We're also seeing a resurgence in dresses."

Despite the growing competition among off-pricers and the increasing number of these types of retailers, Mandelbaum sees no downturn in the marketplace. "Buying and selling off-price is a way for people to compete. It can allow them to take an added mark-up," he said. "Also, we really look closely at quality. People find it hard to believe, but price is secondary." According to Mandelbaum, retailers that combine quality merchandise with off-price pricing are going to be the winners in attracting plus size customers.