Companies in this industry operate physical retail establishments that sell clothing and accessories. Major companies include TJX Companies (TJ Maxx, Marshalls), Gap, and L Brands (all based in the US), along with Hennes & Mauritz (Sweden), Inditex's Zara chain (Spain), and Arcadia Group's Topshop (UK).
Revenue for the global apparel and footwear industry reached $1.7 trillion in 2017, and is expected to grow by 2% by 2022, according to Euromonitor International. Key growth drivers include sportswear sales and demand from emerging markets.
The US clothing store industry includes about 95,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of almost $200 billion.
Personal income and fashion trends drive demand for clothing. The profitability of individual companies depends heavily on effective merchandising and marketing. Large companies can offer wide selections of clothing and have advantages in purchasing, distribution, and marketing. Small stores can compete by offering unique merchandise, targeting a specific demographic, providing superior customer service, or serving a local market. The US industry is concentrated: the 50 largest companies account for about 70% of industry revenue.
Competition for the clothing store industry includes department stores, discount and outlet stores, and internet and catalog retailers. The online and off-price apparel sales channels are growing rapidly -- especially among younger women who are major consumers of apparel -- primarily at the expense of specialty apparel and department stores. Online clothing sales grew 18.5% in 2018 to represent nearly 35% of US apparel sales, up from 30.6% in 2017, according to Internet Retailer's 2019 Online Apparel Report. With some $30 billion in apparel and footwear sales, Amazon is among the largest sellers of apparel in the US, along with Walmart and Target. Traditional department stores also are rapidly losing market share. Morgan Stanley predicts department stores will only comprise about 8% of the total US apparel market in 2022, compared with 24% in 2006. Off-price buyers account for 75% of apparel purchases across all retail channels, according to research firm NPD Group. Off-price is second only to the online channel in terms of growth rate, NPD reports.
Because of the lower costs to manufacture apparel abroad, US clothing retailers purchase the vast majority of the apparel they sell from vendors outside the US. The largest suppliers to the US are China, Vietnam, Bangladesh, Indonesia, and India. Tensions over trade between the US and China could result in consumers paying more for clothes, shoes, and accessories, or lower profit margins for clothing stores reluctant to raise prices.
Products, Operations & Technology
Major products include women's clothing (about 50% of industry revenue), men's clothing (about 20%), and clothing for children and infants (about 10%).
Sales & Marketing
Finance & Regulation
Regional & International Issues
Also includes the following chapters:
Quarterly Industry Update
Trends and Opportunities
Call Preparation Questions
Glossary of Acronyms