SIC 2341
WOMEN'S, MISSES', CHILDREN'S, AND INFANTS' UNDERWEAR AND NIGHTWEAR



This category includes establishments primarily engaged in manufacturing women's, misses', children's, and infants' underwear and nightwear from purchased woven or knit fabrics. Knitting mills primarily engaged in manufacturing underwear and nightwear are classified in SIC 2254: Knit Underwear and Nightwear Mills. Establishments primarily engaged in manufacturing women's and misses robes and dressing gowns are classified in SIC 2384: Robes and Dressing Gowns, and those manufacturing children's and infants' robes are classified in SIC 2369: Girls', Children's, and Infants' Outerwear, Not Elsewhere Classified. Establishments primarily engaged in manufacturing brassieres, girdles, and allied garments are classified in SIC 2342: Brassieres, Girdles, and Allied Garments.

NAICS Code(s)

315212 (Women's and Girls' Cut and Sew Apparel Contractors)

315211 (Men's and Boys' Cut and Sew Apparel Contractors)

315231 (Women's and Girls' Cut and Sew Lingerie, Loungewear, and Nightwear Manufacturing)

315221 (Men's and Boys' Cut and Sew Underwear and Nightwear Manufacturing)

315291 (Infants' Cut and Sew Apparel Manufacturing)

Industry Snapshot

Intimate apparel had grown into an impressive $14 billion business by 2002, with sales doubling over the last 10 years. In 2002 alone, retail sales in the intimates sector grew $1.5 billion. With a history of remaining strong during tough economic times, the trend continued in the post-September 11, 2001 recessionary climate. Boasting relatively low-priced luxury, lingerie is accessible to consumers of all economic levels and most major manufacturers of lingerie experienced solid sales during 2002. With overall retail sales down, however, the innerwear industry would continue to be affected by the growing consolidation among retailers. Threatening to push out smaller, independent firms, the industry may yet still feel the reverberations of the tough economic climate of 2001 and 2002. Additionally, some makers of bras, underwear, robes and sleepwear who operated or contracted with operations in the Middle East worried about the fallout from war with Iraq in 2003.

Comfort was king in the intimate apparel industry. The post-September 11, 2001 atmosphere left consumers demanding clothing with greater comfort. New, more comfortable stretch-microfiber fabrics could be found in underwear and sleepwear, robes, and lounge wear. Lounge wear also became more dressed up and crossover wear became increasingly popular with manufacturers making clothing that consumers could sleep in, lounge in, or leave the house in. The trend to casual dress in the United States also factored in to give the lounge wear and innerwear industry a boost. The industry consensus was that 2003 would be among strongest years for lingerie in recent times, producing high single-digit to low double-digit growth for spring.

Organization and Structure

When tracking the density of establishments by their census region of concentration, the highest number of establishments were located in the Middle Atlantic, South Atlantic, and Pacific regions. When ranked by the number of establishments per state, as well as total employment level per state, New York led the way, followed by California, New Jersey, North Carolina, and Pennsylvania.

Background and Development

The modern history of women's underwear produced for mass consumption more or less began in the 1830s to 1840s with the manufacture of ready-made undergarments. Stay stitchers and gorers using hand techniques were employed in factories or worked from home as "outworkers." Around the early 1860s, the widespread use of sewing machines pushed underwear output to unprecedented levels. Other complementary technologies, like the band knife (which enabled garment workers to slice through several layers of material at once) proved instrumental in reorganizing the factory floor along the lines of the "batch" system.

During the 1870s, underwear was available in attractively packaged boxes with decorative and typically colored labels. Large-scale advertising campaigns trumpeting the virtues of underwear became commonplace by the end of the 1870s. Well into the 1880s, the marketing themes became more explicit in an attempt to match the luxury and erotic appeal of the undergarments. Underwear could be purchased from large department stores or by mail order from companies like Sears, Roebuck and Co. of Chicago or the Great Universal Stores located across the United States.

Fashion historians refer to the period of 1890 through 1913 as the "Belle Epoque." It was characterized as a period of extravagance and conspicuous consumption in women's dress in general and in women's underwear in particular. Underwear was much lighter in appearance, feel, and weight and, compared to its lackluster mid-Victorian antecedents, more luxurious and glamorous in conception. New luxury underwear first became available in sets that included nightwear and were christened with the group name "lingerie," a term derived from the French word "linge," meaning linen. Earlier material mainstays such as cotton longcloth and flannel were replaced by cambrics, merino, and silks. The extravagance in tastes and materials continued to lead the underwear fashion charge until the economic slump of the 1930s, which ushered in the era of mass-produced machine made rayon lingerie.

The nineteenth century introduction of elastene stretch fabrics exerted a tremendous influence on underwear production. Elastene was perfected in the 1930s, when the popularity of ready-made underwear began to seize the day. It supplanted the more upscale fabrics associated with the Belle Epoque.

During the 1940s, events surrounding World War II and its lingering after-effects put changes in the underwear industry on a 10-year hold as resources used throughout the apparel industry were diverted to wartime production. For instance, foundation wear finishing tape was used for cartridge belts; the production of hooks, eyes, and stocking supporters was supplanted by brass armaments manufacture; and ace machines were used for making camouflage nets. Nylon, invented in 1938, was used for glider tow ropes and parachutes; it wasn't used for the production of underwear until 1947.

During the 1950s, nylon and other manmade fibers entered into the production of underwear and dominated the scene. At the time, nylon's chief drawback was its nonabsorbent property, but later the fabric was somewhat modified and woven to obtain a more comfortable porous state. Another manmade material achieving popularity was rayon, which, when mixed with cotton, created a shiny and always new appearance. Other manmade 1950 notables were polyester and acrylic undergarments. In 1959 lycra, arguably one of the most important and versatile of manmade fibers, was introduced and was originally referred to as Spandex or elatomerics, only to be renamed elastene in 1976. Containing no natural fiber at all, lycra was lighter and proved far more durable than rubber elastic; it remained a foundation wear mainstay well into the 1990s.

The decade of the 1960s and early 1970s ushered in a tumultuous period of great social and political upheaval. Television exerted a powerful influence, and Maidenform Inc. became the first U.S. company to advertise underwear on a national level. Vogue and other glossy women's magazines were highly attuned to promoting a version of what the beautiful woman looked like in terms of both her outer-and innerwear garments. During this period, attitudes toward sex and the traditional woman's lifestyle, both outside and inside the house, were under assault, opening up new avenues for self-expression and lifestyle changes. More restrictive types of underwear previously equated with outdated notions of decency faded; in their place came bikini-style briefs. The popularity of the briefs, which were available for men and women alike, rested on their comfort and usability.

The teenage apparel market first became a distinct entity during the 1950s and became an institutional mainstay in the 1960s. The needs of younger girls (misses) for suitable and acceptable underwear reflecting their own stage of development and active involvement in various social activities was readily acknowledged. As a result, the U.S. company Lily of France introduced a special "Lilies" line of underwear for college-age girls, along with a preteen collection called "Teenform," which was later imported into Britain by Berlei.

By the 1990s, the 30-year transformation of children's and infants' underwear had achieved significant results. Unlike the underwear that was worn up to the late 1960s, undergarments in the 1990s washed easier; were more attractive, lightweight, and durable; and were less prone to induce irritation. The comfort provided from T-shirts made from cotton and simple crop tops left a favorable impression on the mother or child able to recall the discomfort related to wearing undergarments made from knitted wool, liberty bodices, and burdensome knickers lined with breakable elastic during the 1940s, 1950s, and early 1960s.

Downsizing due to the elimination of and mergers between establishments became a recognized trend by the late 1980s. By the mid-1990s things began to stabilize somewhat, yet it was not clear whether the trend had been entirely played out. The opening up of the countries of the former Soviet Union and Eastern Europe, where there resided a well-trained apparel workforce ripe for capitalist investment, also presented the industry with untapped opportunities that looked promising, even if they had not yet been fully explored. Further long term uncertainties were thrown into this mix with the 1993 passage of the North American Free Trade Agreement (NAFTA), and, later that year, the General Agreement on Tariffs and Trade (GATT).

Well into the 1980s, the entire U.S. apparel industry was negatively impacted by the erosion of middle-class income earners, who generally accounted for the overwhelming percentage of apparel purchases. At the same time, the growing trend toward the foreign relocation of apparel establishments—and the foreign outsourcing and re-entry into the United States of intermediate apparel-related work formerly performed in the United States under the auspices of provision 9802 of the Harmonized Tariff Schedule of the United States—did not bode well for U.S. job growth prospects. Apparel import competition leading to the progressive deterioration of domestic market share of U.S. apparel manufacturers also showed no sign of abating.

A new World Trade Organization was established in 1995, and the Multifiber Arrangement (MFA) that allowed importing countries to limit the flow of imports from lower-cost, developing countries was replaced by the Agreement on Textiles and Clothing (ATC), which required the phasing out of MFA quotas over a 10-year period. According to Linda Shelton in an Industry, Trade, and Technology Review report, "The elimination of MFA quotas likely will have a significant impact on the U.S. textile and apparel sector given the level of protection that such restrictions have provided domestic producers over the past two decades." Since the U.S. has until 2005 to implement the ATC, the legislation's impact on the women's, misses', children's, and infants' underwear and nightwear industry may not be realized for several years.

To date, the most far-reaching domestic response to the deteriorating conditions impacting the industry was to invest in state-of-the-art communication systems that facilitate the rapid flow of information used to immediately react to, and determine, consumer preferences formed in the marketplace. This consumer driven process, which the industry refers to as the "quick response" system, integrates several dimensions of the production cycle with the intent of shortening the cycle's duration. Via the immediate feedback of consumer sales information from the retail to manufacturing level, producers are able to implement productivity improvements and shrink inventory levels and their associated costs to a bare minimum. To determine the changing direction of consumer tastes, the quick response system compiles the results of consumer surveys, which express what consumers most likely will and will not purchase in the immediate future.

In addition to the quick response system, the industry also directed sizable investments at computer controlled automated machinery. With the primary intention of increasing productivity, these investments targeted the areas of design, cutting, embroidery, sewing, finishing, ticketing, and distribution operations. In order to compete within their own industry, as well as against other nonapparel industries, the industry's leading firms were the first to implement these investments to any significant degree. Their ability to finance high-cost technological advances was related to their economies of scale and access to internally generated funds. With the passage of time, if the middle- and lower-tier firms failed to respond by adapting these new technologies, then an uneven pattern of technological change would result and most likely exacerbate the downsizing trend active throughout the industry.

In the late 1990s, globalization best described the apparel industry as a whole, but especially the underwear and nightwear segment. Expected to continue into the next century, foreign sourcing, sewing, and manufacturing—compelling trends of the decade—prompted not only huge savings but also significant growth. A November 1999 issue of Apparel Industry Magazine reported "a seismic shift to overseas sewing;" industry player Fruit of the Loom saw these operations skyrocket from 12 percent to 95 percent, for example. Foreign sourcing of basic knit fabrics, the article also noted, grew 25 to 30 percent each year for the past two to three years.

Globalization owed part of its success to the industry's willingness to invest in the latest advancements in information and communication technologies, influencing another market trend industry leaders called speed-to-market, a streamlining process that put products on the shelves and racks more quickly. Many apparel companies implemented these systems enterprise-wide in an effort to not only increase their speed and visibility, but also to fully integrate all of their business needs. Such "One Company" strategies, the executives argued, allowed the business unit to aim for a collective use of resources to reduce redundancies. They added that doing so had a dramatic effect on sales.

Current Conditions

Sales of intimate apparel reached $14 billion in 2002, a $15 million increase over 2001 with sales doubling over the last 10 years. In 2001, sales projections had specialty stores leading the sector in sales, with a 30 percent share of the market; mass merchants had a 26 percent share; departments stores captured 16 percent; national chains had 12 percent; and all other channels made up the remaining 16 percent of market share in intimate apparel sales.

Comfort was a key trend in the post-September 11, 2001 atmosphere, especially in the lingerie and sleepwear industry. Industry executives noted that clothing with greater comfort, particularly stretch-microfiber underwear and sleepwear, robes, and athomewear with style and cozy fabrics, was in greater demand in 2001 and 2002. Some attribute the trend to the cocooning effect on Americans after September 11, with travel down and more consumers spending more time at home. The overall trend in apparel to casual dress also factored in to the increase in comfort wear at home. Sleepwear sales nationwide rose 9 percent in the first six months of 2002 over the previous year. During the same time, "warm and fuzzy" pajamas prices were up three dollars per unit and silk or rayon pajamas sold for more than three dollars less per unit. Sleepwear and athomewear rose in specialty stores, national chains, and mass merchants in the first six months of 2002.

At the same time, lounge wear became dressier. In fact, it was dressed-up enough to leave the house for casual activities. Lounge sets, in flannel or pile with special trims and motifs, were among the lines manufacturers were promoting. Crossover items also became key, with the ability to move from sleepwear to lounge wear to outdoor casual wear. With a surge in popularity, yoga-inspired clothing gave rise to yoga-inspired innerwear lines from manufacturers like Donna Karan, who launched her Donna Karan Body Spa line that also featured seamless knit microfibers.

Alongside the traditional bikini, hi-cut, and brief panties, trends in styles for 2002-03 included boy briefs and boy brief "hipster" style panties, which experienced substantial growth for the sector. Colorful styles, prints, and appliques were popular, and the lower rise silhouettes complimented the parallel trend of low-rise jeans. However, G-strings and thongs, especially low rise versions made of mesh, remained an important source of volume and expansion for manufacturers and retailers. Seamless lingerie, utilizing the popular microfiber fabric and providing a clean look under clothing, also was an important trend.

Industry Leaders

Sara Lee Branded Apparel—the largest division of Sara Lee Corporation, a multi-faceted company whose products span from food to polishes, cosmetics, and jewelry—was the number one maker of women's, misses', children's and infant's knit underwear and nightwear. Famous for its introduction of the Wonderbra, Sara Lee's intimate apparel subsidiaries included Hanes, Bali, and Bessin. Parent company Sara Lee employed 154,900 in 2002, with the Branded Apparel division posting $6.45 billion in sales, down 16.9 percent for the year.

VF Corporation, most notable for its leadership in the denim market, was also a leader in intimate apparel via the Vanity Fair label. Vasarette and Lily of France are also among their lingerie labels. Industry analysts attributed the company's success to recent aggressive growth in select Latin American countries and their greater focus on improved quality of customer goods. With an employee roster of 56,000, VF saw 2002 sales of more than $5 billion, down 7.9 percent for the year.

Victoria's Secret Stores, Inc., the largest subsidiary of Intimate Brands, is the leading specialty retailer of women's lingerie in the United States. Through its 1,000 stores in U.S. malls, the company sells such brands as Dream Angels and Body By Victoria. The company also sends out about 375 million of their ubiquitous catalogs per year, offering intimate apparel, clothing, and footwear. In addition, the company also offers its wares on its Web site. Annual, televised fashion shows have also garnered attention for the company. Sales rose 2.7 percent for the year, reaching $2.4 billion in 2002.

Not all lingerie makers fared so well in the early 2000s. One of the leading marketers of bras to department and specialty stores in the United States, Warnaco Group came out from bankruptcy protection in early 2003. Licensing its own brands, as well as high-end ones like Calvin Klein and Warner, 2001 sales yielded $1.67 billion, a 25-percent loss. Employees numbered 18,026. Fredrick's of Hollywood, renown competitor of Victoria's Secret, also emerged from bankruptcy vowing to update its image to appeal to younger consumers.

Workforce

In 1997 the total number of individuals employed by women's and children's underwear and nightwear manufacturers fell to 24,402, compared to 31,200 in 1995. The majority of them (19,224) were classified as production workers who labored a total of 36,673 hours and earned $271,314 during the year.

Research and Technology

Computer technology and tools, including processes and products that resulted from them, helped the apparel industry make great strides in overall output with the approach of the twenty-first century. While such revolutionary accessories like information technology (also known as IT), the Internet, and the World Wide Web streamlined the business and introduced novel approaches like e-commerce, much of the focus remained on providing quality products in a timely manner. Cost proved to be a hurdle for most—if not all—industry participants, but many researched numerous methods and found various means to overcome it. Most of the initial challenges were met with improvements, some of which spawned industry innovations.

Innovations in material were important in driving industry sales during the early 2000s. New, high-tech materials included softer, multifunctional microfiber fabric that had the capability to wick away moisture and increase warmth. They were also better able to retain their shape while providing body control in areas like the stomach and thighs. Easy to care for, new fabrics mimicked the feel of silk and had appealing new textures. Traditional fabrics such as flannel got a boost from technology that gave it an even softer feel. Materials went from two-way stretch to four-way stretch, making for a more comfortable, better fitting garment.

Further Reading

"2001 Census Report." Body Fashions Intimate Apparel, December 2001.

Guilford, Roxanna. "Understanding the Challenges of Underwear." Apparel Industry Magazine, 1999. Available from http://www.aimagazine.com/nov99stor11.html .

"Invisible Intimates." DSN Retailing Today, 10 June 2002.

Monget, Karyn. "The Comfort Factor Grows." Women's Wear Daily, 7 October 2002.

——. "High Expectations for Spring." Women's Wear Daily, 29 July 2002.

——. "Increases Through Innovation." Women's Wear Daily, 8 July 2002.

——. "Let's Get Physical." Women's Wear Daily, 26 August 2002.

——. "Looking for Comfort During Tenuous Times." Women's Wear Daily, 2 December 2002.

"Panties Polarize." DSN Retailing Today, 28 October 2002.

U.S. Department of Commerce, Economics and Statistics Administration. Annual Survey of Manufacturers: Statistics for Industry Groups and Industries. Bureau of the Census, 1999. Available from http://www.census.gov .



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