Clothing Stores
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 35,400 clothing retailers in the US generate revenue by selling a variety of apparel and apparel-related products to consumers. Clothing stores sell primarily new clothing, and may specialize in a particular category, such as men, women, children, infants, families, or accessories. Family clothing stores account for 57% of industry sales. Women’s clothing stores are 19%; other specialty stores are 20%, and men’s clothing stores are 4%.
Seasonality of Demand
Most clothing stores experience major seasonal fluctuations during the winter holiday and back-to-school periods.
Trends and Fads Rapidly Change
The clothing industry is in a constant state of change, driven by fashion trends and fads.
Industry size & Structure
The average clothing retailer employs fewer than 25 workers and generates $6 million annually.
- The clothing retail industry consists of about 35,400 companies that employ 852,000 workers and generate about $225 billion annually.
- Family clothing stores account for 57% of industry sales. Women's clothing stores are 19%; other specialty stores are 20%, and men's clothing stores are 4%.
- The industry is concentrated at the top, and highly fragmented at the bottom. The top 20 firms account for 55% of industry sales.
- The average independent clothing retailer operates out of a single location, employs fewer than 10 workers, and generates between $300,000 and $900,000 annually.
- The industry includes national chains, regional chains, and independent retailers. Some large apparel manufacturers have retail operations.
- Large companies include TJX Companies (TJ Maxx, Marshalls), The Gap, Victoria's Secret & Co., American Eagle Outfitters, and Ross.
Industry Forecast
Clothing Stores Industry Growth
Recent Developments
Jan 14, 2025 - Retail Brands Join in Catalyst Merger
- Six retail banners have joined under a recent merger between legacy department store operator JC Penney and Sparc Group, according to Chain Store Age. The new organization is called Catalyst Brands. Sparc Group owned a portfolio of brands, including Aeropostal, Brooks Brothers, Eddie Bauer, Forever 21, Lucky Brands, and Nautica. Catalyst said it is exploring strategic options for its Forever 21 chain. The newly formed company will operate as a joint venture and owns over 1,800 locations with 60,000 employees. Sparc Group, which stands for Simon Properties Authentic Retail Concepts, was a strategic partnership between Simon Property Group, Brookfield Corporation, Shein, and Authentic Brands Group. JC Penney has struggled in recent years, filing for Chapter 11 bankruptcy protection in 2020 before being acquired by Simon Property and Brookfield for $800 million.
- Retailers are facing a nearly 30% increase in the rate of returns compared to last year, which could cut overall profit margins on the industry’s $1.2 trillion in global sales, according to Salesforce data reported in PYMNTS. Shoppers have already returned $122 billion in merchandise, per the report. According to Salesforce’s Consumer Insights Director Caila Schwartz, “Retailers had a robust holiday season, but a 28% rise in the rate of returns compared to last year is a cause for some concern.” AI tools are expected to be important in minimizing revenue losses on returns and reengaging with shoppers, per Schwartz. Returns volumes have increased in part due to the growth in online shopping and shopper practices such as “bracketing,” involving ordering multiple sizes or variations with the intention to return unwanted items, according to Hannah Bravo, head of Loop Returns. She said retailers are taking different approaches to managing returns such as offering longer return windows, charging fees related to item returns, and letting customers keep low-value items instead of returning them.
- Consumer confidence levels declined in December 2024, falling by 8.1 points from the previous month, according to The Conference Board. The Consumer Confidence Index was 104.7 in December 2024 from 112.8 in November 2024. Dana Peterson, chief economist at The Conference Board, noted that those remaining most confident on a six-month moving average basis confidence were those aged under 35 and those in the income category of over $100,000. Per Peterson, “The recent rebound in consumer confidence was not sustained in December as the Index dropped back to the middle of the range that has prevailed over the past two years.” Purchasing plans for homes decreased while plans to buy new cars and big-ticket items rose in December 2024 on a six-month average basis.
- The US clothing stores industry is projected to grow at a CAGR of 2.4% between 2024 and 2028, according to a forecast from Inforum and the Interindustry Economic Research Fund, Inc. The expected growth rate is slower than the overall economy‘s anticipated growth. The report noted that consumer confidence is expected to improve in the forecast period, which bodes well for the retail and wholesale industries. Factors that continue to limit consumer spending are lower consumer sentiment levels, higher interest levels, and elevated price levels. On a positive note, inflation is subsiding, which supports a moderate increase of real disposable income by about 1.9% in 2024 and 2.4% in 2025. Retailers have seen internet sales increasingly grow in share since the pandemic, growing from 12.8% of total sales in February 2020 to 17.9% in April 2024.
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