Plus-Size Apparel Chains Face Growing 'Invisible' Competition

The plus-size and big-and-tall apparel business is booming--precisely the reason that the major specialty chains are vulnerable to a growing but largely "invisible" threat from a host of mainstream retailers.

It's not hard to understand why retailers ranging from mass to upscale are looking to increase their share of this market. According to a new study from the Packaged Facts Division of Marketresearch.com, sales of women's/girls' plus-size apparel across all channels reached $47 billion last year, accounting for 27% of all clothing sales and nearly 40% of all women's/girls' apparel sales. Men's/boys' big-and-tall sales reached $29 billion, representing more than 16% of all clothing sales and--believe it or not--50% of all men's/boys' apparel sales.

In total, plus-size/big-and-tall sales accounted for 43% of all apparel sales, up nearly a full percentage point from 2005.

Between 2001 and 2006, the plus-size and big/tall segments grew by 41% and 40%, respectively, and they're projected to grow by 37% and 47% between 2006 and 2012, to reach $65 billion and $42 billion. That's average growth of 41%, to nearly $107 billion, for the market as a whole.

The specialty market is heavily dominated by just a few chains. On the women's/girls' front, Charming Shoppes generated an estimated $2.2 billion in plus-size sales in its most recent fiscal year through Lane Bryant, Fashion Bug, Catherines Plus Sizes and a new intimate-apparel chain launched last year, Cacique. United Retail, Inc. and its Avenue brand runs a distant second (about $462 million in sales). Casual Male Retail Group, with its Casual Male XL and Rochester Big & Tall brands, with $468 million in sales, is the only major player in the big/tall specialty sector.

The specialty majors and a plethora of smaller players generated an estimated $12.5 billion in plus-size sales and $7.1 billion in big/tall sales last year--nearly $20 billion in total.

That means specialty chains have a 26% market share, to non-specialized marketers' 74% share ($56.3 billion in 2006 sales). Most of these non-specialized sales are through mass merchandisers, supermarkets, chain drugstores and department stores, but PF estimates that up to $8.6 billion is generated through direct-sales channels such as mail-order houses, e-tailers and television home shopping.

Most important, non-specialty retailers hold that nearly three-quarter share of market while making virtually no effort to promote the availability of larger sizes--in fact, using quite the opposite strategy. PF notes that Wal-Mart in all likelihood sells more plus-size/big-and-tall apparel than any other retailer, and that brands like Ralph Lauren and Liz Claiborne also quietly carry large sizes (up to 22 or 24 women's).

In other words, while specialized marketers/brands position on size, non-specialized marketers extend the same brand positioning across all sizes. "It's easy to see how larger consumers gravitate to non-specialized brands if desired styles are available in plus or big-and-tall sizes," comment the analysts.

In fact, they maintain, the specialty channel is to a great degree at the mercy of non-specialized channels and "will only thrive as long as mass retailer-marketers, as a group, seem to ignore larger people's clothing needs." If mass retailers began including more diverse body types in their advertising, as they now include different races and ethnicities, the specialty channel, which is "on the bubble," would suffer greatly, they predict.

Because of the increasing competition and the difficulty of predicting how non-specialized retailer-marketers' strategies will play out going forward, PF projects growth for specialty retailer-marketers alone at a "conservative" 20% over the next six years (to reach $23.6 billion).

What are specialty chains doing to fight back?

While retail sales will always dominate, multi-channel strategies are more critical than ever now. Charming Shoppes already has several catalogs and is launching a Lane Bryant catalog in the fall. Both Charming Shoppes and United Retail report double-digit percentage growth in e-commerce (in fact, UR reported 52% growth for fiscal 06), and both are continuing to invest in online infrastructure and organization.

Like apparel marketers of all kinds, plus-size marketers are analyzing the performance of their sites and are particularly drawn to the measurability of online search and affiliate marketing, says Denise Zimmerman, president and chief strategic officer for NetPlus Marketing, which numbers Lane Bryant among its clients. "There's a huge opportunity for those who are willing to add a slight level of risk, by introducing targeted online branding and image elements, like display and rich media ads" to the marketing mix, she adds.

PF sees major opportunities for all marketers of larger-size clothing in the undertapped teens and tweens markets and urges upscale brands to rethink their "hidden" agendas. "The upscaling of the plus-size/big-and-tall clothing market has lagged well behind the same trend in mainstream clothing market," they note. "If marketers can overcome the idea that big body size should not be associated with their famous elegant brands, there is money to be made."

The growing presence of digital measuring kiosks (DMKs) in retail stores could benefit specialty stores but is more likely to make it easy for mainstream stores to compete. Small manufacturing runs of large sizes are cost-prohibitive, but DMKs could enable custom-tailored, on-demand orders of stylish, branded clothing, points out PF.

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