This article describes a concept which could impact a variety of companies, countries or industries. To see what companies and articles reference this concept page, click here.

TOP CONTRIBUTORS

Jay

Shawn Woodhull

Women's Dress Sales Surge

In the 12 months ending April 30, 2007, dress sales had increased by 30%, compared to a 5% increase for overall women's clothing, according to the NPD group. ^[1] In trying to understand the fickleness of women's fashion, one popular theory is that dresses--which are one piece--make it easier to match one's top and bottom apparel. Target (TGT) and British department store H&M are examples of retailers that have keyed in on this fashion trend.

• One interesting complementary trend is the increase in pantyhose, which is produced by companies such as Hanesbrands (HBI), maker of leading brand Leggs.

Yoga Wear: A Lucrative Niche

• Lululemon (NASDAQ:LULU) is a high-end yoga clothing company ($165M 2006 revenues, $3B market cap) that IPO'd in May 2007. From May to October, the company's stock price appreciated over 50% due to the growing popularity of yoga, which attracts a wealthy demographic with high disposable income. The company has about 60 retail outlets in the U.S., Canada, Australia and Japan, where luxury fashion consumption is high. The company benefits from increased spending on healthy living and aging American baby boomers, with whom yoga activity is disproportionately high

Forget the Basics

Urban Outfitters (URBN) is a clothing and accessories retailer that mostly goes after women between the ages of 18 and 45. The company runs 3 different store brands, including its eponymous Urban Outfitters as well as Anthropologie and Free People.^[2]

The company sets itself apart from other similar retailers by focusing on trendy fashion--it does not sell basic clothing. The upside to this strategy is that customers are much more willing to pay full price. The downside is that the company has fewer economies of scale and must bring in fresh new inventory more frequently. As a result, Urban Outfitters is more efficient than big scale competitors such as Gap (GPS) and AnnTaylor Stores (ANN), generating one of the highest sales per square feet in the industry ($674 in FY 2007).

Surf/Snow Fashion: The "X" Factor

The impact of extreme/Xtreme sports (surfing, snowboarding, skateboarding, etc.) has pushed into the fashion industry. Apparel and accessories inspired by these sports is particularly popular with teenagers and young adults who embrace with the lifestyle that identifies with active outdoor sports such as surfing and snowboarding. Several companies have been looking to capitalize on this trend, particularly Billabong and Quiksilver, companies that were founded in the surfing and snowboarding cultures and manufacture apparel and accessories inspired by these sports. Aside from clothing manufacturers, retailers have been jumping in on this trend. Pacific Sunwear of California sells Billabong and Quiksilver (ZQK) products, while private-label based retailers like Aeropostale and Abercrombie & Fitch Company (ANF) have created their own sub-brands, Jimmy'Z and Hollister respectively, that sell surf-inspired merchandise. This kind of fashion is rooted in surf culture from Southern California but its popularity seems unlimited as stores across the continent have popped up, showing success even in Canada.

Notes

1. ↑ http://www.latimes.com/business/la-fi-dresses29jun29,0,6782473.story?coll=la-home-business
2. ↑ Urban Outfitters (URBN) Form 10-K, Fiscal Year 2007, "Business", pgs. 2-3