Athleisure and Lingerie Research
The lingerie market is evolving, so much so that it is often now referred to as the underwear market, reflecting a change in emphasis from the sexy to the functional. In 2025, the global lingerie markets forecast is hotly debated. One thing that is agreed is it is substantial, so there is much riding on changing consumer behaviors. Consumer behavior recently has seen a move toward the more functional and comfortable, which is reflected in industry sales. Victoria's Secret decline in fortune has been partially caused by a new wave of industry disruptors, including Parade and Cuup. The entrance of retailers into the lingerie market has been lead by Walmart's strategic acquisition of Bare Necessities, while Bendon is looking to Naked Brand to leverage its access to the US Capital markets following the merging of the two companies.
INSIGHTS INTO CONSUMER LINGERE BUYING BEHAVIOR
Market Share Changes Reflect Buyer Behavior
- In the lingerie industry, the market share of different competitors is very much a reflection on buyer behavior. Recent years have seen changes in buyer behavior in this vertical, which are reflected in a reorganization of the market hierarchy.
- The top five brands in women's underwear used to be Victoria's Secret, Fruit of the Loom, Jockey, Maidenform, and Vanity Fair. Together these five brands went from a combined market share of 51.6% in 2013 to 41.2% in 2018.
- The market share that these five companies lost is being eaten up by athletic brands including Aerie, PVH, Soma Intimates, Nike, Under Armour, Adidas, Lululemon, H&M, and Champion. The combined market share of these companies went from 9.1% in 2013 to 12.7% in 2018. Aerie experienced the most substantial increase, more than doubling its market share from 1.6% to 3.2%.
- A Coresight Report explains the changing behavior, "Gone are antiquated images and stereotypes of 'sexy' women wearing lacy lingerie. The definition of sexy today has evolved into how a woman feels and less how she looks. The conversation now includes words such as 'confident,' 'strong,' 'athletic,' 'powerful,' and 'assertive."
- Victoria's Secret, now teetering dangerously close to becoming a relic of a different time, saw its market share fall from 31% in 2018 to 24% in 2018.
Push-up vs Bralette
- Previously there has been an industry focus on the sexy and flirty elements of lingerie, however changing consumer demands have seen the lingerie industry refocus on the comfort and functionality of the product.
- The number of bralettes sold in 2019 eclipsed push-ups by more than 16%, illustrating the current trend in consumer buying behavior. There is also a noticeable downward trend in the overall sales of push-up bras in the last few years, despite the occasional upswing.
- It is also despite the average cost of a push-up bra in the US having fallen from $39.81 to $27.70 and the average bralette cost of $33.30.
- The following graph reflects consumer buying behavior from the US and UK in 2018 and 2019, in relation to push-ups and bralettes.
- Analysts suggest there may be an opportunity in the maternity and nursing bra ranges within the special sizes market based on recent buying trends that have otherwise seen a drift toward the more functional products.
- Padded bras still hold the lion share of the market, followed by sports, bralettes, and push-ups.
- The brief is slightly ahead of the thong in the underwear range, followed by the bikini, Brazilian, shapewear, and boy short.
- The number of high waisted panties sold has grown by 29% in the past 2 years. Hipster styles, on the other hand, have experienced a decline in sales of 68%.
- The following graph illustrates consumer buying behaviors for the different types and styles of bras and underwear based on the stock in UK and US retailers on 11 February 2020.
- Consumer behavior is still very much influenced by celebritites. The shape wear line illustrates this. When Kim Kardashian announced then launched her Skim range, the market responded accordingly.
- This would be expected in the majority of instances like this. However, the shapewear market is considered one of the most stable markets within the lingerie industry, with demand holding constant year to year.
- Consumer behavior can still be influenced hugely by celebrity behavior, which opens a door of opportunity for both the lingerie industry and the celebrities themselves.
Different Shades of Nude
- The changing social and political environment has seen a greater emphasis being placed on diversity and inclusivity by the consumer. Inclusivity and diversity have forced the lingerie industry to redefine long-held norms.
- Nude colors are no longer just a darker shade of white. They represent a more accurate display of the different colors and backgrounds buying underwear today. More brands are attempting to incorporate the consumer demand for inclusivity into their product ranges.
- The following graphic illustrates the different shades stocked by some of the leading industry players between January 2019 and December 2019.
- High profile company, Savage X Fenty takes some credit for this newly found market emphasis after its products resonated with consumers after its launch. The high demand illustrated consumers needs were not being met in this area. This has been further emphasized by the increasing calls from the consumer for the industry to change its "one dimensional view of blackness"
- Another aspect of the push toward inclusivity is reflected in the demand by consumers for products that reflect the size they are rather than the size that the industry wants them to be.
- This has been illustrated in the Spring Fashion show were the number of plus size models was 89 in 2020, up from 50 in 2019.
- However, the graphic below illustrating the increase in demand for larger sized underwear searches coming up to Valentine's Day suggests that there is still further work required by the industry.
- The above graph illustrates that the consumer call for more inclusive sizing is still to be properly reflected by the industry. Despite overwhelming evidence that the distribution of individuals based on size and weight does not hold true, the majority of retail stores still stock along those lines.
- Twenty years ago, perhaps even ten years ago, the word sustainability would have been unlikely to come up in a conversation regarding lingerie. Today, consumers demand that industry is not only socially responsible, but that their actions are sustainable in the long-term.
- The lingerie industry does not have a good record in this area, with lingerie brands making up just 2.4% of all sustainable apparel. Research completed in 2019 suggests that this is changing, and that the change is driven by a trend toward eco-fashion by consumers.
- This will, in alll likelihood become an extension of the trend in consumer behavior toward comfort, functionality, and style. "Brands are starting to recognize that "female consumers need more than just a pretty bra. Consumers want to ensure the product they are buying is functional, eco-friendly and comfortable. The push into this space is also due to the purchasing behavior of Generation Z and Millennials, who are increasingly aware of sustainability."
- Recent research from PWC suggests that 21% of consumers will pay an additional 5% for a sustainable product, but that number is growing.
DIRECT TO CONSUMER BRAND DISRUPTORS
- Thirdlove's messaging encapsulates everything that the company aims to achieve. "Bras and Underwear for Every Body," a simple message, but one that has seen Thirdlove scale the online lingerie hierarchy. The brand encourages consumers to "Rethink Comfort" by providing "Next Level Comfort at the First Level."
- Frustrated by ill-fitting underwear, co-founder Heidi Zak was spurred into action. Teaming with experienced bra designer, Ra'el Cohen, who had a reputation for innovative designs based on breast size and shape, the two introduced Thirdlove's first bra to the market in 2013.
- Thirdlove's product was unique. No changing rooms, no discomfort, and no drama are just a few of the ways consumers describe Thirdlove's bra buying experience. Rather than use size templates, Thirdlove uses the real measurements of millions of women to create their products. The company boasts that its fit finder will find any women the ideal bra within 60 seconds.
- Despite having to carry twice the stock of other lingerie companies, Thirdlove invented the half cup, in order to fulfill its mission of finding the perfect bra for every woman.
- Interactive Advertising Bureau CEO, Randall Rothenberg described why Thirdlove is considered an industry disruptor when he described Thirdlove as "a leader in converting raw data into product development and related messaging." He went on to say "They use millions of real women's measurements, not size templates, to make and carry bras with more and better fits than any store can stock. They’ve built a community among their consumers. Together, this has catapulted ThirdLove into No. 3 among online lingerie brands."
- Earlier this year, Cuup announced an $11 million round of Series A funding. The investment was lead by Insight Partners and brought Cuup's total funding to $15 million. Cuup is a two-year-old company that has disrupted the market with its approach to bras focusing on "simple modern bras with a perfect fit."
- The company has connected with consumers, with the results speaking for themselves. 95% of those who have used Cuup's service have made a purchase after a 30 minute video-conference.
- After realizing that 75% of customers were wearing the wrong size bra, Cuup used "fit therapists" to ensure a perfect fit, giving customers a more "enjoyable, easy-to-use bra fit experience." This new approach to bra-buying has been an escalating market disruptor since its inception.
- Attempting to redefine the sexy underwear market is Parade, a company specifically targeting the Gen Z demographic. Parade adopts socially responsible practices for producing colorful, sustainable underwear.
- Launched in 2019, Parade is proved to be somewhat of a market disruptor. The company experienced a 100% increase in sales in the two months since its launch, selling more than 60,000 pairs of underwear. With $1 from every $9 pair of underwear going to Planned Parenthood, Parade caters for every size and background with its XS to 3X sizing, a message reinforced in its marketing.
- The interest that Parade is receiving is no doubt due, in part, to partnerships with Swarovski and Bite Beauty, which have seen its brand awareness grow.
Savage X Fenty
- Rihanna's brand, Savage X Fenty is orientated toward the diverse sizes and skin tones that others in the lingerie industry fail to cater for. Savage X Fenty hit the ground running when its products hit the market in May 2019, with the 90 pieces that made up the product range selling out online within a month. A year later, there are over 800 pieces retailing on the US site.
- Savage X Fenty has been a wake-up call for the lingerie industry reminding them that "one size fits all" is a myth. Rihanna's company offers complete size inclusivity, so any woman of any size can shop there. The disruption caused by Savage X Fenty invoked action from the market with a 34% increase in the size inclusivity products across the market, as the following graph illustrates.
- Backed by an Instagram campaign, Savage X Fenty has caused similar changes in the neutrals market, with a range of new honey and brown sugar tones.
- Brook One is unique from the other disruptors included in this list. Brook One has a focus on sustainability, not only in the way that it packages its products but relative to the products themselves as well.
- When they launched onto the market, Brook One sought to distinguish themselves from others in the lingerie industry based on sustainability. The products offered by Brook One, are made from 100% sustainable cotton with real silk used for the trim. The products are made in the US, at a higher cost to the company to ensure the company complies with labor laws.
- While the company did not make as big market disruption as some of the other companies on the list, it has still nonetheless created a disruption. Its product, appealing immediately to a class of consumers that had largely been ignored by a number of the larger lingerie brands. Brook One was able to quickly capture a significant share if the demographic that seeks sustainable products. This has seen brands reevaluate their sustainability records and accountability to bring the brand in line with current consumer sentiment.
MERGERS AND ACQUISITIONS
Naked Brand Group & Bendon
- Naked Brand Group and Bendon announced that they planned to merge on 20 June 2018. The merger is considered to be of benefit to both companies, who many believe are similarly aligned. The two companies "will become wholly-owned subsidiaries of Bendon Group Holdings Limited, a newly formed Australian holding company ("Holdco"), and the shareholders of Bendon and the stockholders of Naked, respectively, will become the shareholders of Holdco."
- Bendon is a New Zealand-based lingerie and swimwear company with a 70-year history of best in category and design. It's brands include "Heidi Klum Intimates and Swimwear, Stella McCartney Lingerie and Swimwear, Bendon, Bendon Man, Davenport, Evollove, Fayreform, Hickory, and Lovable."
- Naked Brand Group was founded on the desire to change how products that are worn close to the skin fit, feel, and function. Naked's inner wear products are sold through leading online and department stores in North America including Nordstrom, Bloomingdale's, Dillard's, Soma, Saks Fifth Avenue, and Amazon.
- The benefits of the merge extend to both parties. Bendon will gain access to the US capital markets. This will enable it to develop its business globally, both organically and through strategic acquisitions in the future. Naked Brand group will have the opportunity to leverage the global wholesale and retail distribution channels that Bendon has developed.
- Naked Brands CEO, Carole Hochman said of the merger, "We are extremely excited about the potential of this proposed merger, and look forward to capitalizing on Bendon's scale and expertise to further expand the Naked brands. The Bendon team has built a phenomenal business, and by leveraging their infrastructure, product and geographic knowledge, and talent, we believe that we can accelerate our growth in the inner wear fashion and lifestyle market."
- While the Executive Chairman of Bendon, Justin Davis-Rice said, "This is a transformative merger that will create a powerful creative, marketing, operational and capital markets platform. As a publicly traded company in the U.S., we expect to have an opportunity to accelerate our growth and strengthen our position as a global leader in intimate apparel, swimwear, inner wear fashion and lifestyle brands through both organic growth and strategic acquisitions. We are also delighted to partner with industry pioneer, Carole Hochman, who brings unrivaled experience to our company and whose expertise is expected to not only strengthen our existing brands but to provide us with an unprecedented opportunity to develop our sleepwear business, a product category that represents a significant growth opportunity."
Wacoal International Corporation & Intimates Online (Lively)
- On 31 July 2019, it was announced that Wacoal International, the parent company of Wacoal America, was to acquire Intimates Online or Lively, as it is more commonly known. The deal was worth $85 million, with an additional $55 million available in performance-based payouts.
- Lively was founded by former Victoria Secrets model Michelle Cordeiro Grant and has since its inception had a focus on size inclusivity. Although sold predominantly online, Lively has two retail stores in New York and Chicago. The brand is best known for the team of 80,000 product ambassadors built through social networking and digital marketing.
- On the other hand, Wacoal has become the premier lingerie brand in the US department and specialty stores since it was launched in the US in 1985. Wacoal has focused on "fit," using high-quality material and technical innovation to meet consumer's evolving demands. Its product is backed by strong manufacturing capabilities and good business infrastructure.
- The acquisition is considered to be to the benefit of both parties. The loyal customer base of engaged Millennial consumers Lively brings with it differs from Wacoal's traditional customer base, which will allow Wacoal to focus on future growth through e-commerce and digital marketing channels. Lively will benefit by having access to Wacoal's design and manufacturing resources and distribution channels.
- President and CEO of Wacoal America said, "The Lively brand has worldwide business potential that may be achieved with Wacoal corporate support globally. As one of the digitally native brands that are positively disrupting the US intimates' business, Lively has quickly established an incredible following. Our collaboration with Lively will no doubt result in dramatic sales growth and market share gains in the Americas, enabling both brands to engage and win the important millennial customer, and market more effectively in the evolving digital world. We are very excited to welcome Lively to the Wacoal family."
- While the Founder and CEO of Lively, Michelle Cordeiro Grant had this to say about the acquisition. "We built Lively to inspire women to live life passionately, purposefully, and confidently. We invest in our community and customers to empower them to celebrate their individuality and enable them with products to look and feel their best. Wacoal's core values have a beautiful synergy with Lively's, enabling us to come together, not just to take market share, but to also create market share. We are so proud to be joining such an incredible organization and look forward to the positive impact we can make together for our customers and communities around the world."
Walmart & Bare Necessities
- Bare Necessities offers more than 160 different brands that include lingerie, shape wear, and sleepwear. It focuses on developing its lingerie options online and has experienced rapid growth in its online sales. Bare Necessities employs complex sizing and highly specialized products to ensure that customer needs are met.
- On 12 October 2018, it was announced that US retail giant Walmart had acquired Bare Necessities for an undisclosed sum.
- For Walmart, the deal is part of a wider acquisition strategy that targets category leaders and digital brands unavailable anywhere else. Bare Necessities is considered a category leader in the lingerie and sleepwear categories.
- Bare Necessities will continue to run its own e-commerce site, which will run as a standalone and complementary brand. However, over time Bare Necessities products would also be incorporated onto the Walmart site. The CEO and Founder of Bare Necessities, Noah Wrubel, will become Walmart's leader of intimates.
- The benefits of the acquisition to Walmart include the "deep segment expertise to demystify a complex category shopping experience, along with strong brand relationships, as well as an extensive content offering and operational capabilities specifically designed for the intimates business."
- No further comment was made regarding the acquisition.