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Friday, July 11, 2014

Apparel Industry Research 2014

What has the apparel industry been up to this year?  Well, as with most years it has been very active.  Although the year is not yet over, we can certainly provide a brief mid-year report.

We have seen many companies come and go as the world economic events take their toll on all segments of the market.  Obviously, the easiest thing to talk about would be the discussion about how the retail environment continues to trend toward online sales rather than brick & mortar.  The e-commerce landscape is growing in volume as well as competitiveness.

Competitive sales help spur an increasingly fragile retail landscape.   The drive to get consumers in front of sales stock is more competitive than ever before. Flash sales, once reserved for high end stock or electrical goods, are this year on the verge of sweeping the breadth of the apparel industry.

Many clothing companies have met with difficult situations this year.  We only have to take a look at the stock market to see that companies are not fairing as well as they have in years past.

Quiksilver – Jan 2, 2014 – July 11, 2014 stock down approx. 62%.

American Apparel – year to date they are down over 9%, but if we stretch this out a bit and look at the last year (July to July) they are down around 44%)

Billabong – if we look at this international stock (Australia), we see they are having problems.  This year may not look so bad, but if we look at 5 years, we see that they are down over 90%. Billabong International Limited. (ASX:BBG)

Coldwater Creek – oops. They are in big trouble.  Women’s clothing retailer Coldwater Creek Inc. announced on April 11 that it is seeking Chapter 11 protection and will be liquidating inventory,
JC Penny – doing OK year to date.  But if we look at full year from July 2013 to July 2014, we see they are down around 50%.

To name a few that have had difficulty in the stock market (caused by apparent difficulty with their business in general).

In regard to sourcing and manufacturing, one of the larger challenges in 2014 is maintaining “responsible” practices.  For example, clothing companies are expected to manage their carbon footprint and maintain a green environmental friendly business.  As apparel manufacturers, it is an added challenge and expense that had not necessarily been as critical in years past.

Omnichannel appears to be an important buzz word for the garment industry during 2014.  Omni-Channel Retailing is the evolution of multi-channel retailing, but is concentrated more on a seamless approach to the consumer experience through all available shopping channels, i.e. mobile internet devices, computers, brick-and-mortar, television, radio, direct mail, catalog and so on

Wearable technology is also taking the world by storm this year. The potential in the wearable tech segment of the industry will explode during the next few years.  Burberry’s Angela Ahrendts move to Apple sent out a strong signal to the technology and apparel industry that something is clearly in motion in regard to the consumers designer to obtain wearable tech.  While the focus will initially be on accessories, taking the lead from Google Glass and Apple’s iWatch, the increased acceptance of tech in fashion will see retailers strive towards developments in technological fabrics and lifestyle appropriate clothing.  Even the 2014 World Cup got in on the action as the referees wore smart watches to help monitor the soccer game.  The Samsung Gear Live smart accessories are also making a move this year.  Some companies like Nike are taking a breather from the smart tech market, but as they move out others move in.

Learn about fashion reports here on Apparel Search.

Find resources that provide professional research reports for the apparel industry in the education section of our site.

What do you think are the most important factors effecting the garment industry this year?
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