Victoria isn’t the only one with a secret anymore.The U.S. intimate apparel market represented $10.7 billion in sales in 2009, up 5.3% year over year outperforming apparel sales growth due to growth from players including JC Penney, Wal-mart, Target, Kohl’s and of course, Victoria’s Secret.
Sales in the intimate apparel category are expected to grow about 7% in 2010 according to a new report from Citi.
Lingerie has blossomed from a commodity into a fashion market segment with higher margins than apparel, according to Citi analyst Nancy Marino. Younger woman want style and value while older women want comfort and value.
The industry is growing in the mid to high single digits per year versus low to mid single digits for women’s apparel overall and growth is accelerating.
With these projections sounds like women may only be wearing lingerie soon.
The U.S. represents 30% of the global intimate apparel market and 20% of total apparel sales.
About 50% of the business is done in bras followed by underwear and sleepwear each at 25%.
Other categories include daywear, loungewear, shapewear and sleepwear.
Retailers are leading a major shift in the way women's intimate apparel is purchased. Growing demand for better service and shorter delivery times will play an increasingly important role.
Top Three Lingerie Players: Victoria's Secret with $5.6 billion, Wal-mart with $3.6 billion and JC Penney with $0.9 billion
Victoria's Secret has the most market share plus its teen-focused PINK line is quite strong as well.
Hanes' innerwear segment focuses on core apparel essentials consisting of intimate apparel, thermals, sleepwear, socks and hosiery. It sells under the brands Hanes, Playtex, Bali, Just My Size, barely there and the Wonderbra. Hankes ranks number in bras, number one in panties and number one in hosiery within the U.S. market in terms of unit share.
Maidenform's product lines include Donna Karen, Lilyette, Sweet Nothings and private labels.
Warnaco's apparel is sold under names including Calvin Klein, Warners and Olga.
Soma's results have been mixed with success in categories like dresses and fragrance too small to move the needle as yet. Soma's profitability is expected to improve in 2011. Sales are estimated to be around $95 million for 2010.
aerie could have significant opportunity in the teen lingerie market. The offering needs more colour, more fashion and more frequenct newness according to Marino. Sales are estimated to be around $160 million in 2010.
Sales from the 13 to 17-year-old age group represented 11% of the total, the lowest share of all age categories aside from the 65 and older group.
Older women are not exceedingly loyal to one particular store or channel when it comes to shopping for bras. Three in four women report they shop at discount stores for bras and over six in 10 shop at specialty stores.
The brand targets teen and college-age girls and serves as an entry point for girls to the VS brand. The VS brand is targeted to a 26-year-old versus Pink which aims for closer to 19.
After PINK stand-alone stores were tested in 2007 the first PINK stores were opened in Canada to great success.
It has minimal competition from Gilly Hicks, aerie and Gap Body so far. Marino said Gap started well but has become a little too basic which is not what the customer wants.
Gilly Hicks is not yet profitable with a base of 18 stores and the next two years are being looked at as a 'test' period for the brand.
aerie has had difficulty getting traction as the dominant brand message is not evident. The longer term plan for the brand is to incorporate a full lifestyle brand including apparel, lingerie, sleepwear, beauty and fitness categories. aerie is expected to end the year with 148 stores.
The U.S. women's sleepwear market is worth $2.7 billion per year with Wal-mart at the top with $1.4 billion
Wal-mart is followed by VS at $1.4 billion and JC Penney at $1.2 billion.
Lingerie companies have expanded into yoga and loungewear like Soma and that has helped drive traffic
PINK sells loungewear and apparel and has worked with around 60 universities including Syracuse, Texas A&M and University of Wisconsin to create collegiate gear for students at those schools.
aerie has expanded from underwear and dormwear into bras, accessories, personal care and swimwear in order to diversify the brand since its inception in 2006.
Data suggests that older women purchase a bra for themselves once every four to six months, while younger women are likely to purchase more frequently.
The 25-29 demographic appears to have the largest amount of population growth for lingerie. The 20-24 age group is set to decline fairly sharply though 2015.
Plus-size business for lingerie is projected for growth with total sales estimated at $6.5 billion in 2012
The intimate apparel market is also fragmented with Hanes which has sales of $1 billion followed by Fruit of the Loom, Jockey and Maidenform
Private companies are contributors as well.