Retailers Staging a Panty Raid

It seems as if lingerie wars will soon be coming to a shopping center near you and will include retailers such as JCPenneys, Target Corporation, Kohl’s Corporation, and many others since they have found that under wear is a fashionable trend for women.

As the retailers rush to cash in on the growing fashion trend, they are launching lingerie lines and giving old ones a makeover. These retailers are also redecorating their dressing rooms and offering professional fitting services, while other companies such as Chico’s FAS Inc., American Eagle Outfitters Inc., and Charming Shoppes Inc.’s Lane Bryant, have created stand-alone lingerie stores. These retailers are hoping to steal some thunder from Limited Brands Inc.’s Victoria’s Secret chain, which has dominated fashion lingerie in the United States for many years.

Lingerie has become only second to handbags as the fastest-growing apparel category on the market, which is why everyone in the retail market are trying to capitalize on its overwhelming growth. Last year in the United States retail sales of intimate apparel rose ten percent to reach over ten billion, which more than double the growth rate in 2005. Helping to drive that growth increase are new technologies and fabrics, which allow for such innovations as laser-cut seamless bras, and the growing fashion appeal of lingerie, particularly among young women.

The intimate-apparel category is appealing to retailers, simply because it has higher profit margins than regular apparel, drives store traffic, and boosts customer loyalty. Some analyst feel that if you solve the bra needs of a woman, then you will have a customer for life, which is basically the truth. Victoria’s Secret were the ones that largely created the market for fashionable lingerie in the United States by emulating the lingerie market in Europe. In 1982, Columbus, which is an Ohio-based The Limited bought a handful of Victoria’s Secret stores and a catalog at a time when most women in the United States owned a few sets of underwear in beige, black and white.

Many analyst envisioned women buying underwear as they are much more likely to purchase clothing by buying more frequently and choosing among a range of colors and styles. For much of the last twenty years, Victoria’s Secret had the market for fashionable lingerie to itself. Brands sold in department stores, such as Maidenform, Vanity Fair, and Bali, have typically appealed to different shoppers as the loyal consumers that tend to have more-conservative tastes. However, the younger and more fickle customers are being lured away by Victoria’s Secret, whose clothing apparel has a fashion component.

In the fiscal first quarter that ended on May the fifth, Limited reported its overall net income fell forty-seven percent, which was hurt by profit-eroding markdowns, and said it expects continued weak sales in its Victoria’s Secret division. Net sales at the lingerie unit rose almost fifteen percent, while the same store sales closely measured from the revenue from stores that opened at least a year increased two percent. The problems at Victoria’s Secret stem in part from recent product launches that did not make as much of a splash as last year’s Secret Embrace, a bra fashioned from a single piece of material that has no seams, stitches, or labels. Its teen line, Pink, is battling American Eagle’s aerie launched last August.

In February, JCPenneys launched its Ambrielle lingerie collection with a series of smoldering ads during the Academy Awards, and the company predicts the collection could become one of the store’s private-labels. Kohl’s recently announced it is launching three new lingerie lines this year, while Target has also made changes, redesigning and expanding its private-label Gilligan & O’Malley line, and offering seamless bras and sorbet-colored matching lace bra-and-panty sets, but lingerie was among its weakest sellers last year, according to the company’s reports. Wal-Mart Stores Inc. began upgrading its private-label Secret Treasures and plus-size, Just My Size lingerie, a few years ago, plus carrying a fuller range of styles like thongs, in addition to basic brands like Hanes and others.

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