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US clothing market controlled by TJ Maxx, Gap and Abercrombie

Industry Sector

Textiles and Clothing

Published

26 November 2012

Author

Alex De Angelis

Type of News

Market

The US clothing market saw demand increase by 4% in 2012, to reach a valuation of US$239.2 billion. Over the past six years overall demand had decreased by 4%, which shows 2012 to be a good year for the industry.

There is a growing trend towards "fast fashion" with consumers frequently buying inexpensive clothing rather than long-lasting pieces. Consumers are increasingly spending less of their income on clothing and less on each item of clothing. Generally, people are spending at either the high or low end of the market.

Households are the primary buyers, accounting for 89% of demand in 2012. Businesses are secondary buyers and accounted for 10% of demand, mainly for work uniforms. The American Apparel and Footwear Association estimates that consumers in the US purchased 20.5 billion garments in 2010.

The US clothing market is highly fragmented and filled with a few major players both domestic and international as well as innumerable mid-sized and smaller players.

Large companies include TJX Companies (TJ Maxx, Marshalls); Gap; Limited Brands; Ross; and Abercrombie & Fitch. The industry is concentrated: the 50 largest companies account for about 65% of industry revenue.

In 2011, several new entrants made a splash, including Fast Retailing's Uniqlo. Creative marketing campaigns, strategic alliances, and acquisitions likewise contributed to the changing retail landscape. Many strategies can be undertaken in an attempt to stay ahead of the pack, but the crowded nature of the competitive environment ensures an exciting dynamism.

Over the last five years, the average turnover per company increased from US$3 million to US$4 million, partly due to company mergers. The bulk of the clothing industry is located in California, New York and North Carolina and the textile industry is concentrated in the south-eastern states. Teenage fashion and premium denim labels are meanwhile mainly produced in Los Angeles, California.

With cotton prices stabilising and the economic forecast improving, the outlook for the apparel industry in the US is strong. The limited price increases that were implemented in 2011 are likely to stay in 2012 and beyond, boosting sales as the industry reverses the deflationary trend that had taken hold in the past decade.

For more information on the US clothing market, see the latest research: US Clothing Market

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