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 4,600 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 12 workers and generates $1-2 million annually.

    • The apparel manufacturing industry consists of about 4,600 companies that employ about 55,800 workers and generate $7.8 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

                            Nov 16, 2022 - Apparel a Top Category for Holiday Spending
                            • Apparel is a top category for holiday spending this year, according to a recent survey released by market research firm NPD Group. About 43% of respondents reported needing new coats, jackets, and other outerwear. NPD suggests the need for wardrobe updates is being driven by the return to offices, parties, and other in-person gatherings. Over the past two years, outerwear spending has been muted as people spent more time at home and opted for layering instead of buying new coats and jackets, which has created some pent-up demand.
                            • Despite high inflation and rising interest rates, the National Retail Federation (NRF) expects consumer spending to remain resilient this holiday season. While the NRF acknowledges consumers are feeling the pinch of higher interest rates and inflation, it believes economic fundamentals – including job growth, rising wages, and savings accumulated during the pandemic - will sustain consumer spending. The NRF also points to US gross domestic product growth of 2.6% in the third quarter as evidence that the US economy hasn’t slipped into recession. The NRF forecasts holiday spending will rise between 6% and 8% over 2021 levels to reach between $942.6 billion and $960.4 billion. The outlook for 2022 is down from the 13.5% rise seen in 2021 but is better than the average 4.9% growth seen over the last decade.
                            • While some are expecting a brisk peak shopping season, many retailers are still busy trying to unload overstocked inventories to make way for holiday goods, according to Retail Dive. In a survey of retail executives released by Accenture in October, 99% said they had increased promotional activities as part of their holiday plans, and 35% said they were deeply discounting or using other strategies to reduce excess inventory. Some industry watchers suggest a pullback in consumer spending could result in retailers’ bloated inventory issues bleeding into 2023. Widespread apparel inventory excesses on the retail level could reduce wholesale demand.
                            • Amid inflation, 38% of consumers said they plan to spend less on gifts this holiday season than last year, according to a survey by Morning Consult released in November. About 45% of shoppers said they planned to spend about the same as they spent in 2021. The most popular gift category is gift cards, with 56% of survey respondents saying they planned to give them. Gift cards are not as affected by inflation as goods and allow for greater control over spending. Other popular gifts include apparel (39% of gift buyers), toys (36%), money (33%), and holiday food and alcohol (29%).
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