SIC 5621

This industry includes establishments primarily engaged in the retail sale of a general line of women's ready-to-wear clothing. This category also includes establishments primarily engaged in the specialized retail sale of women's coats, suits, and dresses. Custom tailors primarily engaged in making women's clothing to individual order are classified in SIC 5699: Miscellaneous Apparel and Accessory Stores.

NAICS Code(s)

448120 (Women's Clothing Stores)

Industry Snapshot

The economic recession, begun in 2001 and fueled by the terrorist attacks of September 11, 2001, progressed relatively unabated into 2003 when the United States went to war with Iraq. During these times of economic instability, consumers became conservative spenders, which left its mark on the women's apparel industry. Women's apparel sales reached $89.3 billion in 2002, a 6.7 percent decrease from the previous year. In the women's apparel market, women opted for more practical but stylish and affordable clothing suitable for both work and leisure.

Several of the nation's retailers failed to catch on to the new trend, putting many retail stores in trouble. However, industry leaders like The Gap, Inc., with $14.5 billion in sales, and Limited Brands, Inc., (formerly The Limited), with $8.4 billion in sales, performed quite well in 2002. The two industry giants succeeded during the slump by exploring new markets and responding to customer needs.

Organization and Structure

The structure of the U.S. retail industry, including women's clothing stores, has changed significantly since the early 1990s, moving from a production-driven market to a consumer-driven market. Nontraditional retailers, such as discounters, off-priced stores, and factory outlets, fared well.

Because of continuing competition from nontraditional retailers, department stores such as J.C. Penney and specialty stores such as The Limited increased their focus on private labels. For example, J.C. Penney's Arizona clothing line offered uniqueness and style that national brand labels sold by discounters and outlet stores did not provide.

In the mid-1990s, consumers demanded more convenience and quicker service from growing no-store retailing, particularly in direct-mail order, television, and online shopping. An Internet shopping study by Ernst & Young LLP reported that the number of retailers selling online tripled in 1998 to 39 percent. The online market was estimated to reach $13 billion in sales at the end of 1999.

The relationship between larger retailers and suppliers significantly intensified because a growing number of retailers were taking on entrepreneurship roles traditionally performed by apparel producers. Larger retailers and direct-mail order companies were making decisions in areas such as product design, fabric selection and procurement, and apparel production, which in turn influenced production scheduling, pricing, and delivery dates.

Background and Development

Women's clothing stores were introduced in Europe in the late 1700s—slightly later in the American colonies—at a time when productive capability, population, and prosperity allowed clothing production to move out of the house and into the factory, and clothes to move into retail stores. Around this time, seamstresses began opening shops offering custom-made hats, dresses, cloaks, or other garments. These garments of the latest fashion were for those who could afford to hire out the work of stitching. Trading posts in the frontier areas carried cloth and some ready-made apparel.

The invention of the sewing machine, the rise of mass production, and the proliferation of retail stores by the late nineteenth century led people first to sample and later to rely on ready-made clothing for sale as a reliable means of obtaining fashionable clothing. In the 1890s, ready-to-wear clothing came into its own, and by the turn of the century ready-made women's wear was available in abundance in the United States. By the 1920s, it was considered more fashionable to buy clothing from a store than to make it at home.

For many years, the department store and the downtown women's shop were the mainstays of women's wear retailing. Department stores offering a vast selection of goods and specialty stores catering to unique tastes dotted the urban landscape. For those with enough money, shopping became a social event. Along with the growth of women's clothing retailing came the increasing importance of fashion.

The women's apparel industry established a voice in government through the National Retail Federation (NRF), the trade group representing the entire spectrum of the nation's retail industry. In the early and mid-1990s, the NRF lobbied the U.S. Congress on issues such as minimum wages and the proposed health care plan. The NRF was opposed to an increase in the minimum wage on the grounds that many retailers would have to close down operations or fire staff to meet expenses with a higher wage base.

In 1994, Women's Wear Daily reported that the NRF opposed the Clinton administration's proposed universal health coverage on the grounds that more than 700,000 jobs would have to be eliminated in all retailing. At that time only 35 percent of retail workers received health care benefits. The NRF supported a plan that emphasized offering health coverage but did not require employers to pay for that coverage and allowed for the creation of purchasing pools for group insurance.

Posting modest returns in the mid-1990s, women's clothing sales were expected to remain strong into the twenty-first century. Dedicated women's stores, however, faced renewed competition from alternative retail venues offering specialty or general line women's apparel in addition to other product lines.

Sporting goods retailers were devising new strategies to increase women's apparel business. In 1995, women's apparel ranged from 10 percent to 40 percent of store merchandise. Sporting goods retailers saw strong potential in the women's apparel market. Retailers increased floor space to accommodate women's products; set up women's departments; increased stock of best-selling brands; and held store events to draw more female customers.

Department stores also responded to the increased demand for women's apparel and began repositioning themselves to win back the customers they had lost to more focused outlets like The Gap and The Limited. Such retailers as Bloomingdale's and Dayton Hudson Department Stores reexamined the big picture in 1995 and revamped the women's apparel collections.

The large-sized women's clothing market grabbed the attention of clothing retailers in the mid-1990s with sales reaching $20 billion and claiming 24.7 percent of the market. The key factors that influenced these sales were an increase in fashions featuring younger silhouettes and the use of better fabrics. Lane Bryant, a division of The Limited Inc., brought in more fashionable clothes and worked to change the perception of large-size fashion. "Our customer wants to wear the exact same fashion her skinny friends wear," noted Lane Bryant's chief executive Jill Dean in a 1999 Wall Street Journal interview.

One of the hottest growth areas in retailing during the late 1990s was discounting. Clothing retailers saw an opportunity to bring fashionable clothes at reasonable prices to the masses. In 2002, Target was the country's third largest discounter and a $40 billion division of the Dayton Hudson Corporation. Nearly 35 percent of Target's sales come from the clothing department. Old Navy, a division of The Gap, was launched in 1994 to compete with stores like Sears and Target with this concept in mind."

Current Conditions

As the United States initiated the war with Iraq in March of 2003, the U.S. economy remained soft and consumers remained cautious. As a result, the clothing industry reported sales numbers below those previously forecasted, down 6 to 7 percent rather than the anticipated 3 to 4 percent for the month. The retailers with the most success—or least amount of decline—were those that offered moderate-priced, affordable sportswear that combined the right amount of fashion with value. The industry was expected to remain stagnant until the United States' involvement with Iraq concluded and the economy recovered.

Fashion and marketing of fashion began to change as the large population of Baby Boomers reached their fifties. The demographic shift to an older America essentially harmed the clothing industry because older shoppers tend to spend less on clothing. However, the aging of the Baby Boomer generation, a population that does not want to look or act "old," is motivating retailers to provide new lines that modify fashionable junior looks in styling and fit to better accommodate a mature woman.

Retailers continue to target junior shoppers as a consistent source for revenues. Young consumers, who tend to have more disposable income than older shoppers, spend more money on clothing and are more conscious of fashion trends. For example, according to NPD Fashionworld, in the first nine months of 2002, junior business reported a 9 percent gain, increasing from $8.8 billion to $9.6 billion during the same time period of the previous year. On the other hand, misses business, the largest sector of the women's clothing industry, reported a decline of 8 percent, from $29.2 billion to $26.8 billion. Women between the ages of 17 and 24 increased spending on clothing by 1 percent, whereas purchases by women between the ages of 35 and 44 fell by 10 percent, and purchases by women over the age of 55 dropped off 13 percent.

During the first nine months of 2002, of all women's apparel sales, national brands accounted for 34 percent; private label, 36 percent; and designer brands, less than 5 percent. In units of clothing sold, national brands took 40 percent; private label, 37 percent, and designer label, less than 3 percent. Dresses, skirts, and tailored clothing all declined in sales and units sold, but increases were seen in jeans and in knit shirts.

Industry Leaders

The leaders in the women's clothing store retail industry in the United States were The Gap, Inc. and Limited Brands, Inc. The Gap, founded in 1969 by Don and Doris Fisher in San Francisco, has become an international specialty retailer offering men's, women's, and children's casual clothing and accessories. The Gap operated nearly 4,250 stores in six countries in 2002, including The Gap, GapKids, Baby Gap, GapBody, Banana Republic, and Old Navy Clothing Co. The Gap has stores in the United States, Japan, the United Kingdom, Canada, France, and Germany. The company reported $478 million in net income on $14.5 billion in revenues for the fiscal year ending January 2003.

The Gap expanded quickly in the 1980s, purchasing the Banana Republic chain in 1983, launching GapKids, and BabyGap in 1986, and opening its first overseas store in London in 1987. By 1990 The Gap was one of the most successful apparel retailers and the second largest clothing brand in the United States. One of the biggest successes for The Gap was the Old Navy division, launched in 1994. In less than three years, The Gap opened 282 Old Navy stores and hit sales of $1 billion. Gap Online was introduced in November 1997. In 1998, The Gap reported a 28.8 percent return on capital and 17 percent average annual sales growth. The company planned to increase its international presence by opening 400 new U.S. stores and 100 new international stores in 1999. The company budgeted $1 billion for 1999 store openings.

Limited Brands, Inc., the top U.S. women's apparel retailer, was founded in 1963. The Limited distributes and sells women's and men's apparel. The company operated 4,600 specialty stores in 2002 under the retail names of The Limited Stores, Express, Lerner New York, Lane Bryant, Henri Bendel, and Structure.

The mid-to-late 1990s marked a number of changes for Limited Brands. The company spun off the Victoria's Secret and Bath & Body Works chains in 1995, creating Intimate Brands Inc., 84 percent owned by Limited Brands. In 1995, Limited Brands also purchased the Galyan Stores, a chain of outdoor-oriented stores. The company took a cautious approach to adding more stores, opening three new stores in 1996 and four in 1997. However, during the summer of 1999, Limited Brands sold its majority stake in Galyan's to the investment firm of Freeman Spogli & Co. The deal left Limited Brands with a 40 percent stake in the company. Limited Brands made Abercrombie & Fitch Co. its own public company in 1998, and in 1999, The Limited spun off The Limited Too to shareholders.

After enormous success throughout the 1980s, Limited Brands experienced financial difficulties in the mid-1990s. The company redesigned its women's division by re-staffing, new advertising, and improving quality. Sales for the 2002 reached $8.4 billion, resulting in a net profit of $502 million, a decline of 3.3 percent from the previous year. Limited Brands hoped to improve profits by carrying deeper inventories of fewer styles. Lane Bryant, offering fashionable clothes for women in sizes 14 to 28, became one of the company's strongest performers.


According to the U.S. Department of Labor, Bureau of Labor Statistics Women's clothing stores employed an estimated 263,850 people in 2001. Nearly 84 percent of all jobs in the industry are sales related. The mean annual salary of a salesperson in the women's clothing industry in 2001 was $16,450. Managers and supervisors of sales associates had a mean annual salary of $28,600. Management occupations, which accounted for 2.5 percent of the workforce, had an annual average salary of $56,940. Buyers, which hold.5 percent of the jobs, had an average annual salary of $45,370. Employment prospects in women's clothing are traditionally most abundant in sales, where the majority of the workforce is female. Prospects for employment of women were expected to remain strong in the sector despite flat growth.

There were three basic categories of jobs in women's apparel retailing: sales associates, store management, and merchandisers. Larger chains may have also employed their own product testers, fashion consultants, and comparison shoppers. As U.S. retailing firms became more diverse and turned increasingly toward international markets, a corresponding increase in the need for multilingual personnel in all of these categories was predicted.

Sales associates are responsible for performing customer service and a variety of operational duties such as setting up displays and organizing stock. Store managers oversee sales, operations, and personnel functions. Merchandisers work with the apparel manufacturers to select apparel for the retailer and control merchandise expenses. Training for merchandisers and buyers usually includes college course work or fashion school.

Wages in the retail industry are typically lower than the average across industries, and working hours often span a seven-day week. However, the effect of the seven-day week is eased by the use of part-time employees. In some shops and departments, the sales staff received a combination of salary and commission.

America and the World

According to Advertising Age International, with the success of global expansion, "the world will be a lot like a giant shopping mall by the year 2000." Expectations were that more consumers would be able to shop at the same popular retail stores anywhere in the world. In 1995, U.S. apparel retailers were occupied with expanding into Canada, Europe, and Japan.

Historically, Canada offered little market opportunity to retailers, putting restraints on size and economics, according to a survey in Chain Store Age. However, because the U.S. apparel retailers offered new concepts and were more advanced in customer service, market research, and distribution, Canadian consumers were more receptive to their arrival.

Eddie Bauer, a men's and women's apparel retailer, entered into the European market in 1997, joining apparel giant The Gap. Eddie Bauer UK was expected to open two retail stores and operate a catalog division in the United Kingdom. The Gap operated stores in the United Kingdom, Canada, Japan, France, and Germany by the end of 1999.

According to U.S.A. Today, "U.S. mid-price apparel retailers are doing well in Japan." The new trend in the Japanese market was a push toward affordable causal clothing and convenience. Eddie Bauer operated 15 stores in Japan and planned to operate more than 50 stores by the year 2000. The Gap opened four stores in Tokyo and opened its first freestanding store in 1996.

Further Reading

Bastian, Lisa A., and Thomas Cunningham. "Express Makes a Turn, but Limited Stores, Structure Take Hits." Women's Wear Daily, 18 May 1999.

Belgum, Deborah. "Apparel Firms Feel Brunt of Downturn in Retailing Sector." Los Angeles Business Journal, 12 August 2002, 3-4.

Bowers, Katherine, and Kristin Young. "As Denim Pales, Retailers Search for Next Key Trend." Women's Wear Daily, 16 October 2002, 10.

Brooklyn Public Library. Business Rankings Annual 1999, Farmington Hills, MI: Gale Group, 1999.

Conlin, Michelle. "Mass with Class." Forbes, 11 January 1999.

Ethridge, Mary. "Success is Fashionably Late for Columbus, Ohio-Based The Limited Inc." Knight-Ridder/Tribune Business News, 2 June 1999.

Goldblatt, Jennifer. "National Retail Federation Holds Conference in New York." Knight-Ridder/Tribune Business News, 22 January 1999.

Hammond, Teena. "Gap Sets $1 Billion Budget for Store Openings this Year; Firm to Expand U.S., Internationally; Also Expanding On-Line Presence." Daily News Record, 5 May 1999.

Kletter, Melanie. "Gap, Dillard's Produce Solid First Quarters; Nordstrom Does Not." Women's Wear Daily, 14 May 1999.

——. "Old Navy Helps Lift Gap Net in Fourth Quarter." Daily News Record, 26 February 1999.

Kroll, Luisa. "Time to Kick Some Butt." Forbes, 11 January 1999.

Larson, Kristin. "W2W: What to Watch—Everything in Moderation." Women's Wear Daily, 31 December 2002, 6.

Malone, Scott. "By the Numbers." Women's Wear Daily, 21 August 2002, S2.

Malone, Scott, and Julee Greenberg. "Makers: How Long Can the Ride Last?" Women's Wear Daily, 11 July 2002, 10.

Moin, David. "Easing Out the Excess Online." Women's Wear Daily, 7 February 2000, 22.

Patterson, Philana. "Lane Bryant Expects Same-Store Sales to Rise 10 Percent Due to Updated Fashions." The Wall Street Journal, 28 June 1999.

Schneiderman, Ira. "Apparel Sales 'Challenging."' Women's Wear Daily, 27 November 2002, 9.

"Some Retailers Say War Hurt March Sales." NPD FashionWorld, 1 April 2003. Available from .

U.S. Department of Commerce. U.S. Industry and Trade Outlook 1999. New York: McGraw Hill, 1999.

U.S. Department of Labor, Bureau of Labor Statistics. 2001 National Industry-Specific Occupational Employment and Wage Estimates, 2001. Available from .

Yeung, Vivian. "Boomer Generation Drives Changes in Women's Fashion." Wearables Business, 1 September 2002.

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