THE BACKGROUND
In a largely mature market, lingerie makers have had to work hard at innovation to keep consumers interested. Diamante thongs, hipster pants and gel-padded bras have been introduced over the past few years, helping to boost sales by 7.9% between 2002 and 2003. The market has also seen new entrants such as celebrity brands Elle MacPherson Intimates and Love Kylie, while clothing retailers Marks & Spencer and Debenhams have expanded their ranges. But hosiery remains the biggest sector, as women continually need to replace their tights and stockings.
Women's underwear has been enjoying the celebrity treatment recently, with stars including Kylie Minogue and Elle MacPherson launching ranges.
This has provided a boost to a market worth £2.27bn in 2003, according to Keynote.
A mature industry, it has been limited in recent years compared with the early-90s, when it was invigorated by new fibres and products. Nevertheless, between 2002 and 2003 the market is estimated to have grown by 7.9%.
The market is made up of three sectors: lingerie, hosiery and corsetry.
Lingerie includes items such as knickers, camisoles and nightwear; hosiery comprises tights and stockings; and corsetry's main item is bras, since demand for girdles and corsets has declined.
Hosiery is the biggest sector, accounting for about 35% of the market.
This is in part because the products' limited durability makes them a frequent purchase. Corsetry makes up 33% of the total market, with lingerie at 31%.
A growing trend in this market has been for high-street fashion retailers to include lingerie in their ranges. This year Oasis and Reiss entered the fray.
Janie Schaffer, founder of Knickerbox, acted as a consultant to Oasis on its underwear range, Odille. 'Oasis recognised a huge opportunity to extend into underwear. We decided to build a brand to stand alongside Elle MacPherson's Intimates in department stores. It is pitched at 18- to 30-year-olds, which is a very good demographic for underwear. It's a price point down from Love Kylie and bridges the gap between designer brands and the high street,' she says.
Added competition
The combination of these high-street entrants, the inroads made by supermarkets such as Asda and Tesco and the rise in celebrity brands has put pressure on the traditional high-street retailers.
The well-publicised problems at M&S has seen it try various new ranges to shore up its position as the nation's top underwear seller, bringing in outside designers such as Agent Provocateur. Last March it introduced the Truly You range of larger cup-sized bras, camisoles and knickers.
It is also advertising its lingerie on-screen for the first time with a risque creative aimed at a younger audience than its core customers.
The static female population has not helped this market, but the trend for women to shop younger than their age would suggest has meant the market is broadening. The premium end has grown and stores such as Debenhams have branched out into the luxury sector with designer brands.
Other avenues of distribution include mail order catalogues and online stores such as Figleaves.com. Keynote reports that niche segments such as larger-sized lingerie and bigger cup-size bras have thrived through online retailing. The internet is also being used for sales of designer underwear, with The Lingerie Book, which was launched last spring, selling premium goods online and by mail order.
Driving trends
Lingerie accounts for about 17% of the total womenswear retail market, which is worth £13.4bn. This market has been growing in the UK in recent years, bucking the trend elsewhere in Europe, such as Germany and France, where it is static or slowing.
Demand remains constant for basic items such as bras and pants, so fashion drives the category. The main areas of innovation are in colours and fabrics.
Bras with 'invisible' silicone straps hit the shelves in 2001 and the gel-padded bra, introduced in 2002, was a result of developments in moulding and construction that have seen lighter bras, even in the larger sizes.
Decorated thongs appeared in 2002 when Gossard launched a diamante thong that left retailers with waiting lists for the premium pants (£15).
G-strings first became popular in the late-90s, and by 2002 thongs matched sales of conventional knickers, although bigger styles are making a comeback.
The fashion for hipster trousers and skirts has had a knock-on effect, with hipster pants proving popular.
While brands are limited in the pants market, the exceptions are Triumph-owned Sloggi and to some degree Jockey, since the men's brand extended into women's products.
Bra players
In bras there are several big names, with Sara Lee Courtaulds dominating the market with its Berlei, Gossard, Wonderbra and Playtex brands. Triumph International owns the Triumph brand, while other UK manufacturers include Charnos, Warners and Panache. International lingerie brands selling in the UK include Chantelle and La Perla.
Sara Lee is also a dominant force in hosiery, with its Aristoc and Pretty Polly brands. The market enjoys fewer fashion trend-generated peaks than lingerie, and is seen less as a gift purchase. However, the recent revival in fishnets will boost the sector.
While the hosiery manufacturers have introduced new fibres to create products such as the 'barely there' summer tights, younger women tend to go bare-legged, according to Mintel.
Overall, the retail market for the underwear sector is forecast to grow by 12.3% from 2004 to 2008, reaching a value of £2.62bn, according to Keynote. Due to the near-saturation of the market, there will be steady growth, averaging 2.9% a year. Downward pressure on retail prices and the market's maturity also account for the limited growth. However, Keynote predicts that the relative market shares of hosiery, lingerie and corsetry will remain stable during this period.
UK BRA MARKET BY BRAND SALES/SHARE
Brand 2003 2001 01-03
pounds m % pounds m % % chng
1 M&S 225 31 174 28 29.3
2 Triumph/Sloggi 51 7 43 7 18.6
3 Playtex 51 7 37 6 37.8
4 Gossard 22 3 12 2 83.3
5 Berlei 14 2 12 2 16.6
6 Pretty Polly 7 1 6 1 16.6
7 Charnos 7 1 6 1 16.6
8 Warner 7 1 6 1 16.6
9 Other own-label 232 32 174 28 33.3
10 Other 109 15 150 24 -27.3
Total 725 100 620 100 16.9
Source: Mintel
SHARE OF RETAIL MARKET BY SALES TO ADULTS AGED 15+ (%)
Brand 2003 2001 1999
1 Marks & Spencer 38 37 38
2 Asda 14 10 9
3 Matalan 14 12 n/a
4 Bhs 10 11 12
5 Next 8 7 4
6 Tesco 8 7 4
7 Debenhams 8 9 5
8 Littlewoods 6 6 5
9 Top Shop 5 7 4
10 Dorothy Perkins 4 3 3
11 Burton 3 4 4
12 Other discount store 10 10 7
13 Mail order/internet 8 10 8
14 Market stall 7 9 7
Source: NOP/Mintel
ANALYST COMMENT - KATY MCLAUGHLIN, SENIOR RETAIL ANALYST, MINTEL
The growth of the lingerie/hosiery market will be built on product development and innovation driven by fashion trends. Lingerie is no longer a standalone; it is an integral part of the fashion market.
The key for brands and retailers is to be on top of outerwear trends and understand that what the consumer decides to wear on top governs her choice of underwear and hosiery.
The consensus is that the market will continue to grow, but sales of ever-more sophisticated private labels will outpace those of brands.
There is, however, much to do to improve the shopping experience. How underwear is displayed in-store is a key influence. Should items be arranged by style or brand?
What will make it easier for women in particular to shop and find, thus encouraging them to buy more?
Following a good 2003, Marks & Spencer has been working hard to develop women's lingerie sub-brands, including the 'designer' ranges.
But while the product is good, there is increasing price competition.
Key competitors including Next and Debenhams have been enhancing and expanding their ranges as well as sharpening price points.
The growth of Tesco and George at Asda looks to be as unstoppable in underwear as it does in outerwear. Range expansion and enhancement, product/own-brand innovation, department upgrades and strong advertising and marketing, as well as massive footfall, indicate that they will take an increasingly big share of the market.
A key development will be if these new players decide to stock name brands as well as their own labels, adding to competition for the mainstream retailers.
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