Skyrocketing unemployment and plummeting disposable income harmed demand for apparel
Los Angeles, CA (PRWEB) May 03, 2013
The Men's Clothing Stores industry has proven to be especially sensitive to the economic recession. Sinking consumer sentiment, brought about by skyrocketing unemployment and a slowdown in personal disposable income growth, limited downstream demand for apparel during the recession. As a result, IBISWorld expects revenue to decline at an average annual rate of 1.6% to $8.7 billion since 2008. “A turnaround in sentiment and high-end purchases, however, is expected to push revenue up 1.4% through 2013,” says IBISWorld industry analyst Nikoleta Panteva.
A pattern of merger and acquisition activity has also characterized the Men's Clothing Stores industry over the past five years, and is expected to continue through 2018. The number of firms has declined at an average annual rate of 1.5% since 2008, totaling an estimated 8,193 in 2013. “Industry major player Phillips-Van Heusen finished its acquisition of Tommy Hilfiger in 2010,” adds Panteva. “This event, along with similar ones earlier in the decade, indicates a more highly concentrated industry where the companies are fewer but larger.” IBISWorld forecasts this trend to continue. The industry is expected to have a medium market share concentration; over the five years to 2013, this percentage has increased. Due to the poor economic environment and the shrinking size of the industry, employment and wages have declined since 2008. In an effort to cut costs, employers have slashed aggregate wages at an average annual rate of 3.5% during the five-year period, bringing wages to $1.3 billion in 2013. The number of workers has declined at an average rate of 4.2% per year in the same time.
The future looks a little brighter for industry operators. Revenue is forecast to rebound over the five years to 2018. As consumers regain their purchasing power and unemployment returns to near-normal levels, discretionary spending on apparel will begin to grow. With the rise of offshoring and importing in the upstream manufacturing industry, input costs will likely fall. This will allow for low-cost purchases for apparel retailers and consumers. Clothing is, of course, an essential part of daily life, so although this industry is currently experiencing a downturn, revenue will return to growth once the economy fully recovers. For more information, visit IBISWorld’s Men's Clothing Stores in the US industry report page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld
Friend IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189
IBISWorld industry Report Key Topics
Men's clothing stores retail a general line of new men's and boys' suits, formal wear, shirts, T-shirts, casual slacks, jeans, sport coats, blazers, sports apparel, sweaters, overcoats, raincoats and accessories. Services may also include basic alterations such as hemming, taking in or letting out seams, and lengthening or shortening sleeves.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.