Jeans - US - January 2004

SUMMARY

The U.S. jeans industry is a $12 billion retail consumer market in 2003, just as it was in 1998. An estimated 450 million pairs of jeans are purchased every year on an average annual basis. Indeed, jeans are the most widely produced piece of apparel in the U.S. Huge production and consumer acceptance, however, have not been enough to grow sales.

Jeans have long been a cyclical market being driven in the main by factors such as employment conditions, U.S. productivity, fashion trends, lifestyle factors, and celebrity endorsements. Manufacturers and retailers are constantly challenged to maintain the market by staying on top of fads, changing tastes, and consumer desires for different styles of jeans. Keeping up with changes was very difficult from 1998-2003. Production shifted almost entirely outside the U.S., retail chains lowered prices on imports, inventory management became a crucial part in the success of a chain, and consumers' desire for casual clothing widened to include much more than jeans.

However, many companies have still managed to profit, thanks to the substantial lowering of the cost structure in the jeans industry. The fact that wholesale prices fell steadily in 1998-2003, and all U.S. production has already been transferred out of the country, suggests that there is a basis for a somewhat stronger market in 2004-08. Yet, the potential for rising sales of jeans will be tempered by numerous overseas supply sources, a very crowded retail market, and what looks like the beginning of a trend towards other types of casual wear. Jeans manufacturers and retailers will be able to capitalize on this trend, to the extent that they participate in the non-denim and denim-hybrid market.

Key issues covered in this report are the high degree of loyalty to iconic brands, lost jobs and the importance of imports to the market. Original consumer research examines attitudes and behavior by age, gender, ethnicity and income, and a six-year trend analysis predicts future growth.

The focus of this report is denim jeans-as commonly defined in the industry-as a form of casual pants that contain raised seams, often with back pockets sewn on, made from denim or some other durable fabric. Usually provided in various shades of blue, there is also some amount of black jeans and other colors included within the scope of this report. Mainly, this is a blue jeans report.

For the purposes of this report, only pants are included. Excluded from the report are the following apparel items:

• Denim skirts
• Denim shorts
• Denim jackets
• Denim accessories
• Denim coats and other garments.

TABLE OF CONTENTS

Introduction & Abbreviations

INTRODUCTION

OTHER RELEVANT REPORTS

DEFINITION

ABBREVIATIONS & TERMS

• Abbreviations
• Terms

EXECUTIVE SUMMARY

JEANS: THE MOST POPULAR FORM OF APPAREL

POOR ECONOMIC CONDITIONS, LOST JOBS FLAG JEANS SALES

• Lost jobs in factories, manufacturing

JEANS IMPORTS DEFINE THE MARKET

ICONIC BRANDS LEAD TO HIGH DEGREE OF BRAND LOYALTY

EXTENSIVE RETAIL DISTRIBUTION NETWORK KEY TO SALES

PURCHASING HABITS AND ATTITUDES SEPARATE JEANS CONSUMERS

• Teens

FUTURE-RETURN TO GROWTH

MARKET DRIVERS

A PAIR OF JEANS FOR NEARLY EVERY OCCASION

• Casual Fridays prevail in the U.S. workforce

U.S. ECONOMY, MANUFACTURING WOES HURT JEANS SALES

• Graph 1 Monthly Consumer Confidence Index, June 1997-December 2003
• Growth in SOHO workers benefits jeans business

YOUTHS DRIVE THE MARKET

• Figure 1 Total U.S. teen spending, at current and constant prices, 1997-2002
• Figure 2 U.S. population projections, by age group, 1998-2008

JEANS VERSUS OTHER WEAR AFFECTS PRICING

• Figure 3 U.S. retail sales of jeans, by price point, 2001 and 2003

MARKDOWNS, PROMOTIONS, AND SALE PRICES MOVE JEANS

MARKET SIZE & TRENDS

• Figure 4 Total U.S. retail sales of jeans, at current and constant prices, 1998-2003
• Graph 2 Total U.S. retail sales of jeans, at current and constant prices, 1998-2003

MARKET SEGMENTATION

INTRODUCTION

• Figure 5 Sales of jeans, by gender and age, 2001 and 2003
• Graph 3 Share of jeans sales, by gender and age, 2003

MEN'S JEANS

• Figure 6 Sales of men's jeans, 1998-2003

WOMEN'S JEANS

• Figure 7 Sales of women's jeans, 1998-2003

BOYS' JEANS

• Figure 8 Sales of boys' jeans, 1998-2003

GIRLS' JEANS

• Figure 9 Sales of girls' jeans, 1998-2003

SUPPLY STRUCTURE

INTRODUCTION

FOREIGN TRADE

• Figure 10 U.S. imports of men's or boys' pants, by country of origin, 1997-2002
• Figure 11 U.S. exports of men's or boys' pants, by destination, 1997-2002
• Figure 12 U.S. imports of women's or girls' pants, by country of origin, 1997-2002
• Figure 13 U.S. exports of women's or girls' pants, by destination, 1997-2002

COMPANIES AND BRANDS

• Figure 14 Estimated manufacturer wholesale sales of jeans in the U.S., fiscal year 2001 and 2003
• Graph 4 Estimated manufacturer wholesale sales of jeans in the U.S., fiscal year 2003
• More fabrics, more styles cycle through the market
• Levi Strauss & Company
• VF Corporation
• Gap, Inc.
• Tommy Hilfiger Corporation
• Jones Apparel Group, Inc.
• Polo Ralph Lauren Corporation
• Liz Claiborne, Inc.
• Nautica Enterprises, Inc.

ADVERTISING & PROMOTION

INTRODUCTION

COMPANY & BRAND ACTIVITY

• Levi's Strauss Signature
• Wrangler (a division of VF Corporation)
• GAP
• Tommy Hilfiger
• Polo Ralph Lauren (G.I.V.E. Jeans)
• Liz Claiborne (Mexx)

RETAIL DISTRIBUTION

INTRODUCTION

• Old Navy, Wal-Mart shake up the retail space for jeans
• Figure 15 U.S. retail sales of jeans, by channel, 2001 and 2003
• Graph 5 U.S. retail sales of jeans, by channel, 2003
• Figure 16 U.S. retail share of jeans sales, by channel, 1998-2003

SPECIALTY STORES

• Figure 17 U.S. specialty store sales of jeans, 1998-2003

NATIONAL CHAIN STORES

• Figure 18 U.S. national chain store sales of jeans, 1998-2003

MASS MERCHANDISERS

• Figure 19 U.S. mass merchandiser store sales of jeans, 1998-2003

DEPARTMENT STORES

• Figure 20 U.S. department store sales of jeans, 1998-2003

THE CONSUMER

INTRODUCTION

PROFILE OF THE JEANS BUYER IN THE U.S.

• Figure 21 Distribution of jeans buyers, by demographic group, June 2002-May 2003
• Figure 22 Highest indexing sports and leisure activities among jeans buyers, June 2002-May 2003

THE JEANS WEARER

• Figure 23 Jeans wearers, November 2003
• Figure 24 Jeans wearers, by age, November 2003
• Figure 25 Jeans wearers, by household income, November 2003

AMOUNT SPENT ON LAST PAIR OF JEANS

• Figure 26 Amount of money spent on last pair of jeans, November 2003
• Figure 27 Amount of money spent on last pair of jeans, by gender, November 2003
• Figure 28 Amount of money spent on last pair of jeans, by age, November 2003
• Figure 29 Amount of money spent on last pair of jeans, by household income, November 2003

NUMBER OF PAIRS OF JEANS OWNED

• Figure 30 Number of pairs of jeans owned, November 2003
• Figure 31 Number of pairs of jeans owned, by gender, November 2003
• Figure 32 Number of pairs of jeans owned, by age, November 2003
• Figure 33 Number of pairs of jeans owned, by household income, November 2003

BRAND LOYALTY AND ATTITUDEs TOWARDS JEANS PURCHASING

• Figure 34 Attitudes towards jeans purchasing, November 2003
• Figure 35 Attitudes towards jeans purchasing, by gender, November 2003
• Figure 36 Attitudes towards jeans purchasing, by age, November 2003
• Figure 37 Attitudes towards jeans purchasing, by amount paid for last pair of jeans, November 2003

REASONS FOR BUYING MOST RECENT PAIR OF JEANS

• Figure 38 Reasons for buying last pair of jeans, November 2003
• Figure 39 Reasons for buying last pair of jeans, by gender, November 2003
• Figure 40 Reasons for buying last pair of jeans, by age, November 2003
• Figure 41 Reasons for buying last pair of jeans, by amount paid for last pair of jeans, November 2003
• Figure 42 Reasons for buying last pair of jeans, by those respondents who indicate always buying the same brand, November 2003

THE TEEN JEANS CONSUMER

• Figure 43 Teen jeans wearers, by gender and age, November 2003

AMOUNT TEENS SPENT ON LAST PAIR OF JEANS

• Figure 44 Amount of money teens spent on last pair of jeans, by gender and age, November 2003

NUMBER OF PAIRS OF JEANS OWNED BY TEENS

• Figure 45 Number of pairs of jeans owned by teens, by gender and age, November 2003

BRAND LOYALTY AND ATTITUDES AMONG TEENS TOWARDS JEANS PURCHASING

• Figure 46 Teens' attitudes towards jeans purchasing, by gender and age, November 2003

REASONS TEENS GIVE FOR BUYING MOST RECENT PAIR OF JEANS

• Figure 47 Reasons teens give for buying last pair of jeans, by gender and age, November 2003

CONCLUSION

• Adults
• Teens

FUTURE & FORECAST

FUTURE TRENDS

• Designers should find a way to compete on a basis other than price
• Celebrity endorsements provide clout for brands
• Oversupply of manufacturing capacity will continue to limit price increases
• Retail channels looking for more ways to compete
• Digital tailoring for the perfect-fitting jeans

MARKET FORECAST

• Overview-return to growth
• Figure 48 Forecast of U.S. retail sales of jeans, at current and constant prices, 2003-08
• Figure 49 Forecast of U.S. retail sales of men's jeans, at current and constant prices, 2003-08
• Figure 50 Forecast of U.S. retail sales of women's jeans, at current and constant prices, 2003-08
• Figure 51 Forecast of U.S. retail sales of boys' jeans, at current and constant prices, 2003-08
• Figure 52 Forecast of U.S. retail sales of girls' jeans, at current and constant prices, 2003-08
• Forecast Factors

APPENDIX: Trade Associations

APPENDIX: Research Methodology

CONSUMER RESEARCH

• Sampling & Weighting
• Presentation & Definition
• Further Analysis

TRADE RESEARCH

• Informal trade research
• Formal trade research

DESK & INTERNET RESEARCH

SOURCES

DEFINITIONS

FORECASTS

APPENDIX: WHAT IS MINTEL?

MINTEL PUBLICATIONS

MINTEL SERVICeS

• Product retrieval
• Retail audits
• Tailored research
• Global New Products Database

RESEARCH SUPPORT/CONSULTANCY/MIC

• The Mintel Information Centre (MiC)
• PR Research