Los Angeles, CA (PRWEB) February 07, 2013
The Clothing Alteration Services industry is highly sensitive to changes in consumer spending because it provides services that are extras and, therefore, discretionary. A modest 3.2% decline in per capita disposable income sent industry revenue plummeting 9.4% in 2009. In fact, industry revenue suffered even before incomes fell, and continued its downward trend as income rebounded. As a result, revenue has declined at an average annual rate of 1.0% from 2008 to 2013. “Over the past three years, however, as consumer incomes have steadily climbed, demand for apparel and associated services has mounted,” says IBISWorld industry analyst Nikoleta Panteva. Revenue in upstream clothing retail industries is expected to increase in 2013 – 2.2% in the Women's Clothing Stores industry and 1.1% in the Men's Clothing Stores industry – creating the potential for higher demand for alteration services. IBISWorld anticipates the Clothing Alteration Services industry's revenue will increase 2.1% to $1.2 billion as a result.
Mom and pop shops heavily dominate the industry. The estimated 58,161 establishments employ an average of 1.1 workers each, and generate revenue of about $19,876. The typical business caters to its immediate geographic market and does not experience much competition from other tailors. However, the industry is nearing its saturation point. Over the past five years, the number of shops has grown at an annualized rate of 2.4% while average revenue per establishment fell from $23,474 in 2008. Increasing internal and external competition has become a more prominent industry trait. Internally, operators located close to other tailors compete on price and range of service offerings. Externally, industry players face competition from retailers that offer complementary tailoring services when a customer purchases a garment. The intensifying competition, coupled with declining consumer demand during the recession, has caused industry profit margins to remain constrained over the past five years.
While revenue is projected to grow through 2013, increasing industry saturation and growing competitive pressure will continue to stifle profitability. Consumer demand will return once the nation comes out of recession and unemployment drops; Americans will turn to tailors to fix their professional attire. However, the number of businesses is anticipated to grow 2.9% per year on average, increasing competition and cutting into margins. According to Panteva, the Clothing Alteration Services industry has a very low market share concentration; the average revenue per establishment is only an estimated $19,876 in 2013, representing only 0.002% of the total market. Nonemployers dominate the industry, with 97.7% of all establishments comprised of only a single person. Industry operators stay so small because there are little to no economies of scale to be gained by increasing in size. Instead, a large number of small establishments each serve a small geographic region. For more information, visit IBISWorld’s Clothing Alteration Services in the US industry report page.
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IBISWorld industry Report Key Topics
This industry provides clothing alterations, which involve cutting, sewing and reworking clothing items to customers' specifications. Industry operators are commonly called sewers, seamstresses or tailors.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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