Apparel Manufacturers

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 4,100 apparel manufacturers in the US transform fabrics into clothing and accessories. The companies described in this report are known as “cut-and-sew” apparel manufacturers, and produce items such as dresses, suits, shirts, and pants. “Cut-and-sew” manufacturers differ from apparel knitting mills, which produce knit products, such as hosiery, socks, and underwear. Apparel firms design and market apparel, but may outsource their entire manufacturing operations to firms outside the US.

Demand Driven by Trends

The apparel market is driven by constantly evolving fashion trends and fads, many of which can be short-lived.

Complications from Foreign Production

Apparel companies that rely on foreign firms for any part of production are more vulnerable to remote management problems, increases in transportation expenses, and trade-related issues.

Industry size & Structure

A typical apparel manufacturer employs about 14 workers and generates $1-2 million annually.

    • The apparel manufacturing industry consists of about 4,100 companies that employ about 57,000 workers and generate $7.4 billion annually.
    • The industry is fragmented - the 20 largest companies account for 22% of industry sales.
    • Most large apparel companies, such as VF Corporation and Ralph Lauren, outsource the production of garments to low-cost manufacturers located abroad. American Apparel is one of the largest US clothing manufacturers that produce goods domestically, but has experienced financial difficulties.
                            Industry Forecast
                            Apparel Manufacturers Industry Growth
                            Source: Vertical IQ and Inforum

                            Recent Developments

                            Jan 11, 2024 - Growth Prospects in the Adaptive Clothing Market: Study
                            • The US adaptive clothing market has growth potential if producers can lower production costs and create a wider selection of more fashionable clothes, according to a new study in Just Style. The authors of the study, published in the International Journal of Fashion Design, Technology, and Education Journal, noted that one in four US consumers have experienced at least one type of disability. According to the study, adaptive clothing typically has higher prices, limited choices, and is less stylish than non-adaptive equivalents. Adaptive clothing typically has a more complex development process and may require specialized textiles, additional quality testing, and more time spent on modification. The study suggested producing more adaptive options, such as dresses and outerwear, and adding more clothes for children and teenagers. The study also recommended that manufacturers leverage duty-free tariffs available in the US for adaptive clothing to help lower prices.
                            • US manufacturing activity contracted in December 2023, falling below the baseline for growth for the fourteenth consecutive month, according to the Institute for Supply Management’s Manufacturing ISM Report on Business. The Manufacturing PMI registered 47.4% in December, up from the 46.7% recorded in November. A reading above 50% indicates manufacturing expansion. December’s New Orders Index remained in the contraction zone at 47.1%. The December Production Index was 50.3%, up from November’s 48.5%. Only one manufacturing industry tracked by the ISM reported growth in December: Primary Metals. The industries reporting contraction in December were Printing & Related Support Activities; Apparel, Leather & Allied Products; Plastics & Rubber Products; Machinery; Nonmetallic Mineral Products; Textile Mills; Petroleum & Coal Products; Paper Products; Wood Products; Fabricated Metal Products; Computer & Electronic Products; Miscellaneous Manufacturing; Furniture & Related Products; Electrical Equipment, Appliances & Components; Transportation Equipment; and Chemical Products.
                            • Lower consumer spending, supply chain challenges, competitive pressures, and inflation are expected to limit growth in the US apparel manufacturers industry, which is projected to decline at a less than 1% CAGR from 2022 to 2027, according to a recent Inforum forecast. This rate is slower than the projected growth of the overall economy. The slowdown follows volatile industry growth during the pandemic in 2020 (-5.2%), 2021 (13.7%), and 2022 (6.9%).
                            • Consumers are expected to spend an average of $875 on gifts, decorations, food, and seasonal items for the winter holidays, according to the latest National Retail Federation (NRF) survey conducted by Prosper Insights and Analytics. The 2023 projection is $42 more than 2022 and aligns with the average holiday budget in the past five years. Consumers are expected to spend about $620 on gifts and $255 on seasonal decorations, candy, and food. About 92% of US adults will celebrate an event such as Christmas, Hanukkah, or Kwanzaa, and more than 40% of shoppers will begin their holiday shopping before November. Top shopping destinations include online (58%), department stores (49%), discount stores (48%), and grocery stores and supermarkets (44%). Popular gifts planned include gift cards (55%), clothing or accessories (49%), books, video games, or other media (28%), and personal care or beauty items (25%). Gifts of experience are becoming more popular with holiday shoppers, with 23% planning to give one, compared to 19% in 2021.
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