Harrington Collection
Harrington Collection
Sizing Up the Active-Wear Market
Marketing Management
1. What is your evaluation of the women’s apparel industry and Harrington’s position? How has the average price of women’s apparel changed? What is your evaluation of their financial performance?
The Women’s Apparel Industry The U.S. women’s apparel industry market is mature, given that the average growth rate from 2005 to 2007 was 4.66%. Within the industry, there are 6 categories of clothing in which companies compete: haute couture, designer, bridge, better, moderate, and budget. Each category targets customers with different needs and different price ranges, with haute coutre and designer clothing ranging upwards from $10,000 and moderate to budget clothing below $50. In 2007, the primary channel by which retail sales occurred was specialty stores. At 58.6%, specialty stores dominated the other channels, with department stores having 19% of retail sales, discounters and mass merchandisers having 11.4% of sales, warehouse clubs/supercenters at 8.1%, and other channels at 2.9%. Ultimately, the total number of retail sales for 2007 was 133 billion, with the majority of units in women’s apparel being sold under the $100 price point, about 75%. Most sales were in specialty stores, and they ranged from budget to better. An economic downturn has influenced the clothing market since the early 2000s, which has led to a change in consumer buying habits. Because of the downturn, customers are very price sensitive and prefer less expensive apparel, as over half of the clothing sold in the apparel industry has been done so “on sale”. To cut their costs, many companies have begun to outsource. In 2005, imports accounted for 82% of all sales. The issue of cutting costs is important, because the clothing market is highly competitive. With low barriers of entry (and therefore low costs of entry), there are many brands competing for market share and
Sizing Up the Active-Wear Market
Marketing Management
1. What is your evaluation of the women’s apparel industry and Harrington’s position? How has the average price of women’s apparel changed? What is your evaluation of their financial performance?
The Women’s Apparel Industry The U.S. women’s apparel industry market is mature, given that the average growth rate from 2005 to 2007 was 4.66%. Within the industry, there are 6 categories of clothing in which companies compete: haute couture, designer, bridge, better, moderate, and budget. Each category targets customers with different needs and different price ranges, with haute coutre and designer clothing ranging upwards from $10,000 and moderate to budget clothing below $50. In 2007, the primary channel by which retail sales occurred was specialty stores. At 58.6%, specialty stores dominated the other channels, with department stores having 19% of retail sales, discounters and mass merchandisers having 11.4% of sales, warehouse clubs/supercenters at 8.1%, and other channels at 2.9%. Ultimately, the total number of retail sales for 2007 was 133 billion, with the majority of units in women’s apparel being sold under the $100 price point, about 75%. Most sales were in specialty stores, and they ranged from budget to better. An economic downturn has influenced the clothing market since the early 2000s, which has led to a change in consumer buying habits. Because of the downturn, customers are very price sensitive and prefer less expensive apparel, as over half of the clothing sold in the apparel industry has been done so “on sale”. To cut their costs, many companies have begun to outsource. In 2005, imports accounted for 82% of all sales. The issue of cutting costs is important, because the clothing market is highly competitive. With low barriers of entry (and therefore low costs of entry), there are many brands competing for market share and