Apparel Industry Trends

Part
01
of two
Part
01

US Apparel Industry

The spreadsheet has been populated with data, U.S. retail industry sales, e-commerce sales, number of retail stores, price point, and stock price over the last 5 to 10 years, as available. Some figures are not available in the public domain. For the purpose of this research, apparel retail or apparel stores are also referred to as 'clothing and clothing accessories stores', apparel and accessories stores, or clothing retailers.

UNITED STATES APPAREL (CLOTHING) STORE SALES

Statista reports, the clothing/apparel stores in the United States has generated sales values between year 2007 to 2015 as:

2008 = $157.7 billion
2009 = $151.37 billion
2010 = $158.28 billion
2011 = $168.1 billion
2012 = $176.13 billion
2013 = $178.99 billion
2014 =$183.13 billion

From a Retail Dive article, the 2016 retail sales of the U.S. apparel industry was:
2016 = $218.4 billion

There was no available report that could pinpoint sales for 2017, thus, we can estimate the sales using the growth rate from 2014 to 2016 which is 9.21% (this percentage was calculated using a CAGR calculator at a period of 2 years).

2017 = $218.4 billion * 1.0921 = $238.51 billion (estimated)

E-COMMERCE APPAREL SALES IN THE UNITED STATES

The United States e-commerce sales in the apparel industry for 2010 to 2015 was:

2010 = $28.0 billion
2011 = $34.2 billion
2012 = $41.0 billion
2013 = $48.6 billion
2014 = $56.6 billion
2015 = $64.8 billion

2016 = $72.130 billion
2017 = $80.957 billion

There was no available report for 2007 to 2009 for e-commerce sales for apparel in the United States, thus, we can estimate the value using CAGR between 2010 to 2015 which was 18.27% (this percentage was calculated using a CAGR calculator at a period of 5 years). Using the 18.27% CAGR to estimate sales between 2007 to 2009 results in:

2009 = $28.0 billion / 1.1827 = $23.67 billion
2008 = $23.67 billion / 1.1827 = $20.02 billion
2007 = $20.02 billion / 1.1827 = $16.93 billion

NUMBER OF APPAREL/ CLOTHING STORES IN THE U.S.

The Census Bureau and American FactFinder database revealed that a survey was performed every 5 years, between 2007 and 2012, and the result for 2017 have not been published yet.

Total of clothing and clothing accessories stores (all establishments in the US):
2012 = 147,709 stores (from 59,210 firms)
2007 = 156,468 stores (from 66,813 firms)

Notice that the number decreased in 2012. If we follow the trend from 2007 to 2012, and use this to estimate number for 2017, the result would be:

2017 = 147,709 - (156,468–147,709) = 138,950 stores (estimated)

An article also revealed that the United States is "home to about 100,000 retail clothing stores."

PRICE POINTS

Price points were derived by getting the average price per unit from the average price of women's and girls apparel, men's and boys' apparel, sports and swimwear, underwear, and hosiery as released by Statista on an annual basis. The summary of these from the Statista database is as per below:

2011 = $12.05 per unit
2012 = $12.43 per unit
2013 = $12.30 per unit
2014 = $12.46 per unit
2015 = $12.47 per unit
2016 = $12.61 per unit

STOCK PRICE

In order to provide you with the indicative average stock price of the U.S. apparel brands, I first determine at least four of the largest or top apparel brands in the U.S. (from Ranker and Business Insider's list) that are also selling their items in retail stores and whenever their stock prices over the years are available in the public. Then I looked for each historical stock price over the years. These apparel brands are Ralph Lauren, Gap, Nike, and Abercrombie & Fitch.

Their stock price was summarized in this order: first figure is for Ralph Lauren, second is for Gap, third is for Nike, fourth figure is for Abercrombie & Fitch, and the fifth is the average of the four apparel brands.

Ending year results (all numbers are in US$):

Dec 2007 = 55.27 / 16.55 / 13.95 / 61.20 / $36.74
Dec 2008 = 40.76 / 10.62 / 11.25 / 17.97 / $20.15
Dec 2009 = 72.98 / 16.97 / 14.86 / 27.79 / $33.15
Dec 2010 = 100.42 / 18.28 / 19.51 / 46.81 / $46.26
Dec 2011 = 125.76 / 15.75 / 22.33 / 40.17 / $51.00
Dec 2012 = 137.83 / 26.81 / 24.26 / 40.15 / $57.26
Dec 2013 = 164.29 / 34.37 / 37.49 / 28.09 / $66.06
Dec 2014 = 174.17 / 37.83 / 46.39 / 24.98 / $70.84
Dec 2015 = 106.61 / 22.74 / 60.95 / 24.20 / $53.63
Dec 2016 = 88.24 / 21.67 / 50.16 / 11.31 / $42.85
Dec 2017 = 103.69 / 33.83 / 62.55 / 17.43 / $54.38

COMMENTARIES FROM ANALYSTS OR FIRMS ON THE FUTURE OF U.S. RETAIL INDUSTRY

1. NRF (National Retail Federation) — The NRF projected that the U.S. retail industry sales will grow between 3.8% and 4.4% from 2017 figures in the coming years. "Online and other non-store sales, which are included in the overall number, are expected to increase between 10 and 12 percent."

2. McKinsey — "The McKinsey Global Fashion Index forecasts industry sales growth to nearly triple between 2016 and 2018, from 1.5 percent to between 3.5 to 4.5 percent." The U.S. will no longer hold the largest market share in the fashion industry. It further stated that "more than half of apparel and footwear sales will originate outside of Europe and North America, as the main sources of growth are emerging." Growth in online sales of apparel and footwear globally will be about 10% until 2020.

3. Fox Business — "Some of the United States’ most prominent retailers are shuttering stores in recent months amid sagging sales in the troubled sector." Twenty-two apparel retail stores are closing their stores in the near future. These stores include Abercrombie & Fitch, Aerosoles, American Apparel, The Children’s Place, Guess, among others.

4. WWD — "More than 1,875 fashion-focused stores are closing and the broader retail cuts are even more severe."

5. Released by Fast Company — "Wall Street analysts say, the retail apocalypse is upon us." The online retailer, Amazon, will dominate the online retail business and will gain 5% of total U.S. retail sales and some analysts revealed that they will "own half the online market within the next five years, a period during which, Credit Suisse predicts, a quarter of all malls will close." More than 8,600 stores will be closing.

CONCLUSION

All the findings above of the U.S. apparel industry-retail industry sales, e-commerce sales, number of retail stores, price point, and stock price- were entered into the spreadsheet attached, under worksheet 1. Graphs were also provided as requested.
Part
02
of two
Part
02

European Apparel Industry

Retail sales in the European Union grew an estimated 1.4% in the past year, reaching a total of almost 2.9 billion EUR. According to the data, the economic conditions in the region are not currently suitable for substantive growth, but there is enough stability to expect the sector will see modest growth in the coming years. However, it is important to note that performance varies significantly among countries, with France, Germany, the Netherlands, and the U.K. having the highest growth estimates.

I included information for the EU as a whole in the attached spreadsheet. Where possible, I used the information available in the official EUROStat service, which has the most recent statistical data for all issues in the EU. Since links to the specific data may not work properly, I downloaded the tables and also made them available in this spreadsheet. I would also like to note that, in some instances, I had to calculate the most recent data points using the average growth rate. Below I provide more detail about the information included in the spreadsheet.

RETAIL SALES

According to various industry reports, retail sales in the European Union will have modest growth in the coming year. In 2017, the sector experienced an estimated 1.4% growth. Economic conditions, characterized by unemployment and an aging population, will affect the strength of the retail sector to varying degrees across Europe. The data shows countries like France and Germany will show a stronger performance than less economically stable countries, like Italy and Greece. Despite being one of the leaders in the retail sector, the United Kingdom is set to break away from the European Union, generating a climate of uncertainty that is likely to affect economic outcomes in the EU and the U.K.

The information included in the spreadsheet was taken from the EUROStat system, particularly the NACE Rev. 2 G Turnover or gross premiums in million EUR. The information was available until 2016. For 2017, I calculated the new number based on the 1.4% estimated growth rate included in the GfK study on key retail indicators.

E-COMMERCE

The Ecommerce Foundation released a report about the relevance of e-commerce in Europe. The report found that a majority of businesses in the region already have a website (77%), but still few of them (18%) offer e-commerce services. Currently, clothing and sporting goods are the most purchased categories and Amazon is the leader online retailer, reaching a 38.5 billion EUR turnover in 2015. Nonetheless, the report found that grocery and food shopping will see the highest increase in online shopping in the coming years.

The spreadsheet included EUROStat information on e-commerce in Europe. Unfortunately, it is only available as a percentage of total sales so it is not an actual value in euros. This number is, additionally, only calculated from 2008 to 2016. I did not calculate the value for 2007 because there is no previous data available. It is unlikely the average growth rate from 2008-2016 can accurately estimate the 2007 value, when online sales were not as common. However, I did use the average yearly growth rate (shown in cell L9) to estimate the value for 2017, which resulted in a little over 20%.

RETAIL ENTERPRISES

Since the EU is composed of 28 different countries, the exact number of retail stores is not available, as each country collects data independently and EUROStat does not report this number specifically. Nonetheless, there is information on the number of retail enterprises registered in the EU per year. The data is available until 2015, therefore I used the average growth rate (-0.44%) to estimate the information for 2016 and 2017. Like in the United States, the total number of retail enterprises has been declining since 2007, although at quite a slow rate.

PRICE POINTS

Like in the case of retail stores, price points cannot be calculated at a regional level, since there are considerable differences in the sector across the EU. It would not be realistic to estimate a regional average ticket value when there are many variations in both, economic and regulatory issues. Therefore, I substituted the data with the per capita expenditure in consumer goods as estimated by EUROStat. This is the yearly amount each person spends on consumer goods in the EU. According to the data, this value has been growing, although it has had relevant declines in 2009 (likely because of the global recession) and in 2013 (related possibly to Greece, Italy, and Spain's economic woes). The data is only available until 2016, therefore, I calculated the 2017 value based on the average growth rate of the period, which resulted in 0.80% per year.

STOCK PRICE

The STOXX Europe retail index is an excellent measure of stock prices for the European retail industry. I included the price data available in a financial website. The index is composed of the most important retail companies in Europe, mostly located in the United Kingdom, France, and Spain. Coincidentally, although the retail sector in Spain lags behind France and Germany, the largest retail company in Europe is Industria del Diseño Textil or INDITEX, a Spanish company which owns Zara, Bershka, Mango, and other similar clothing stores.

As requested, I have entered the required information in the spreadsheet. Most of the data was available in EUROStat. In short, the retail industry in Europe will experience modest growth. Meanwhile, e-commerce will continue to increase its share of the total market.

Sources
Sources

From Part 01