Andrea Della Mattia (820560159), Elizabeth Kyi (820352822), & Jacqueline Trunks (821550381) Fash 224, Section #02, Diana Sisto

Fredericksburg, VA

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Perry’s Department Store

Table of Contents

STEP I: CUSTOMER PROFILE 3-10

CUSTOMER SEGMENTATION 3-4A DAY IN THE LIFE OF JEN 5-6A DAY IN THE LIFE OF MIRANDA 7-8A DAY IN THE LIFE OF HOLLY 9-10

STEP II: INDUSTRY RESEARCH 11-21

MARKET RESEARCH 11-16TREND REPORT: FALL/WINTER 2013 17-21

STEP III: THEME & INSPIRATION BOARD 22

STEP IV: DESIGN & CONCEPT BOARD 23-24

LINE LIST 24

APPENDICES 25-36

APPENDIX A: IMAGES 25-27APPENDIX B: FIGURES 28-33APPENDIX C: GLOSSARY 34-36

BIBLIOGRAPHY 37-39

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STEP I: CUSTOMER PROFILE

CUSTOMER SEGMENTATION

Perry’s department store classifies its stores by ranking them as either A, B, or C based primarily on the customer profile of their average consumer (Guthrie, 2006). This segmentation allows Perry’s to more specifically target a certain consumer and tailor their assortment of styles and merchandise accordingly. This consumer segmentation aims to segment the women’s denim jeans market based on benefits sought and further categorizes them based on an established VALS™ type. Refer to Figure 1.1 for a more in-depth segmentation.

STORE A/EVENING GLAM/EXPERIENCERS“A” stores are in the late introduction phase of the fashion cycle and carry fashion-forward merchandise and have higher average purchases. The merchandise assortment is broad and shallow with many styles, but a limited number of sizes and colours. Store “A” customers are looking for merchandise that is exclusive and of a designer variety (Guthrie, 2006). This rank of store would likely carry premium to super premium denim jeans.

VALS™ experiencers are an appropriate segment to target for “A” stores, because they tend to have a progressive attitude with regard to fashion purchases (Guthrie, 2006). They also live in urban areas where these stores are located, as Perry’s has an “A” store located in downtown Fredericksburg. Experiencers are motivated by self-expression, have high resources and are young, enthusiastic, and impulsive consumers. They tend to seek variety and excitement and find an outlet in social activities. Experiencers are avid consumers and spend a comparatively high proportion of their income on fashion, entertainment, and socializing. Their purchases reflect an emphasis on looking good and having cool stuff (Guthrie, 2006).

Being social butterflies, experiencers are categorized in the “Evening Glam” segment, as these denim jeans consumers are likely to purchase specific jeans with evening wear in mind. These women purchase jeans for social occasions such as parties, dinner with friends, and attending bars and nightclubs.

STORE B/BUSINESS CASUAL/ACHIEVERS“B” stores are in the rise phase of the fashion cycle and carry knockoffs that are not as cutting edge as merchandise in “A” stores. Lower average purchases and price-sensitivity reflect a consumer that does not have the financial means or desire to risk emerging fashion trends. The merchandise assortment is filled with proven stock carried in more styles and colours (Guthrie, 2006). This rank of store would likely carry standard denim jeans.

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VALS™ achievers are an appropriate segment to target for “B” stores, as they live conventional lives and favour established, prestige products. Achievers are motivated by achievement, have high resources and live goal-oriented lifestyles. They exhibit a deep commitment to career and family and their social lives are structured around these values (Guthrie, 2006). These individuals and their families tend to live in suburban areas, which is appropriate, as Perry’s store “B” is located in suburban Stafford. Achievers value consensus, predictability, and stability and are active in the consumer marketplace (Guthrie, 2006).

With a heavy focus on their careers, achievers are categorized in the “Business Casual” segment, as these denim jeans consumers are likely to purchase specific jeans with business professional in mind. These women purchase jeans for professional occasions such as casual Friday and are looking for a conservative, clean-cut jean.

STORE C/WEEKEND WEARERS/MAKERS“C” stores are in the culmination phase of the fashion cycle and carry fashion for the masses. Customers of these stores are the most price-sensitive and least progressive with regard to fashion attitude. Therefore, these customers are concerned with value over styling and want products that are widely available at declining costs. Their merchandise assortment is narrow and deep, with fewer styles in an array of colours and sizes (Guthrie, 2006). This rank of store would likely carry economy denim jeans.

VALS™ makers are an appropriate segment to target for “C” stores, as they tend to prefer value to luxury. Makers are motivated by self-expression, but unlike experiencers they have low resources. They primarily experience the world by working on it and are practical people who value self-sufficiency. Achievers live within a traditional context of family and practical work and have little interest in what lies outside of that context. Overall, achievers are suspicious of new ideas and unimpressed by material possessions (Guthrie, 2006). These types of individuals typically live and work in rural areas, such as Caroline County where Perry’s store “C” is located.

Primarily simple folk, makers are categorized in the “Weekend Wearers” segment, as these denim jeans consumers are likely to purchase specific jeans with casual wear in mind. These women purchase jeans primarily with comfort, utility, and durability in mind, while still remaining polished and presentable.

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STEP I: CUSTOMER PROFILE

A DAY IN THE LIFE OF JEN(IMAGE A)

Jen is a 28-year-old socialite and PR consultant. She is single and lives alone in the downtown core of Fredericksburg in a small one-bedroom loft. Her goal is to relocate to Washington, where she works, when she earns enough money, but for now she makes the most of the city life that Fredericksburg has to offer her. She is currently earning a salary of $55,000 per year. She is creative, energetic, and self-involved.

As an experiencer, she is primarily motivated by self-expression and though her resources are moderate, she is willing to spend a large portion of her income on image and entertainment since she has no one to support financially but herself. Jen has a large social network of friends and acquaintances that keeps her social life constantly in flux.

Jen wakes up around 7:45 am each morning after hitting the snooze button an average of three times and spending a few minutes cuddling her 3 year old Pomeranian, Molly. She then gets up and hurriedly dashes around her apartment, trying on and taking off different outfits from her diverse closet until she has put together the perfect trendy outfit. She then leaves her apartment to begin her thirty-minute drive to work in her silver VW bug, stopping to pick up two Starbucks skinny vanilla lattes for her and her boss, and barely makes it on time for 9 o’clock. Jen attended community college but obtained her position in her creative field largely through networking and making connections at social events.

Jen maintains a professional yet very friendly relationship with all of her coworkers. The environment in her office is very laidback; she often arrives to work with Molly in tow. She will often spend lunch breaks browsing the malls with coworkers to spot new styles and must-haves at the mall near her office. Despite her modest discretionary income, Jen is willing to spend a high proportion of it on looking good and having the latest things while the rest of her discretionary income is spent on entertainment and having fun.

She derives great enjoyment from entertainment and thus, always likes going out for dinner or drinks and socializing, an activity she indulges in three to four times a week. For such outings, Jen generally likes to wear a trendy and fashion forward pair of denim jeans with a cute silk blouse or sequined tank. When purchasing denim, she values the privilege of style, constantly seeking out the newest colours, patterns, silhouettes, and materials.

By the end of her work day, if she is not already going out for happy hour drinks with her coworkers, Jen likely has a bombardment of texts from friends waiting on her iPhone 5 asking her to meet them out at a bar downtown. She will usually order a glass of pinot grigio and a salad when she goes out for dinner with friends.

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Her apartment is a social gathering area for her circle of friends, and so after dinner she will often have a girlfriend over at which point they will gossip, read magazines, and do their nails. Once all her friends have gone home, she is worn out and ready to settle in and watch the latest episode of Girls online with her puppy, Molly, before going to sleep to rest up for her next day of activity.

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STEP I: CUSTOMER PROFILE

A DAY IN THE LIFE OF MIRANDA (IMAGE B)

Miranda is a 39-year-old wife and mother of two, living in the suburbs of Stafford with her husband, Ben, six-year-old son, Jake, and eight-year-old daughter, Lena. She is friendly and personable, acting as a prominent member of the community by participating in local events and socializing with other community members. She leads a relatively conservative and traditional lifestyle, with a nuclear family structure, stable career, and moderate household income of approximately $95, 000 per year between her and her husband.

On the average day, Miranda wakes promptly at 6:00 am to the sound of her Apple alarm clock, designed to house her latest-edition iPod touch. She begins the day by primping and getting ready, very conscious of the personal appearance she projects to peers. When dressing for work, her wardrobe can generally be classified as business casual, usually consisting of a clean cut pair of dark wash denim straight leg jeans, a silk blouse, and a perfectly tailored blazer; she aims to portray the perfect combination of professionalism and form flattering trendiness. When making purchasing decisions for her work wardrobe, she prioritizes fit and appropriateness.

Once she is dressed and ready to start her day, she wakes her children and together with her husband, Ben, works as a team to prepare breakfast and get the children ready for school before sitting down to eat as a family. Once the children are safely on the school bus, Miranda kisses Ben goodbye as they both leave for work. She climbs into her recently purchased Honda CRV, bought for its reliability and safety features, and begins her 30 minute commute to work.

Work, for Miranda, takes place at the public elementary school in downtown Washington where she teaches social sciences to grade 7 and 8 students. A full time teaching career has always been a goal of Miranda’s because she yearned for a job that would allow her to balance the two main priorities in her life: career and family. She also derives great pleasure from setting goals for her students and watching them achieve these goals over time because she values and is motivated by achievement. She also enjoys the stability and predictability of her career in teaching. The job allows her to know she will be home for her children when they are off school in the summer and when they get home from school, but also offers her the job security she requires to support her family. This is very important to her as she dislikes risk.

In the evenings, she prepares dinner for everyone while Ben helps the children with their homework. They will usually eat traditional North American dishes and always sit down as a family to eat, as Miranda values this quality time with her family. At night, she routinely watches the 9 o’clock news with her husband before retiring to bed to rest up for the next day.

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On weekends, Miranda routinely goes on shopping outings with her sister to spend quality time engaging in one of their pastimes. She is an active consumer in the marketplace because personal image is an important aspect of life to her. She purchases well-established and relatively prestigious brands to convey her personal successes outwardly and because she does not want to take too much economic or social risk by buying new and cutting edge brands. In terms of fashion, Miranda falls into the early majority segment of the diffusion of innovation curve.

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STEP I: CUSTOMER PROFILE

A DAY IN THE LIFE OF HOLLY (IMAGE C)

Holly is a 41-year-old nurse, living and working in Caroline County. She is married with three children between the ages of 8 and 12. She lives a traditional, small-town life, having grown up and lived in Caroline County all her life. She is satisfied with her daily routine and has little interest in things that do not directly affect her. Holly is a maker and loves simplicity and practicality and does not derive pleasure from material possessions unlike her experiencer and achiever counterparts.

She wakes early every morning, often before sunrise, to ensure she has time to get house chores done first thing in the morning. Every morning, Holly’s husband, John, drives her to work in their shared Ford pick up truck, which they bought primarily to accommodate John’s contractor profession. Holly works as a nurse at a family doctor’s office near her home. Between her and her husband, Holly’s household earns approximately $79, 000 a year. She is motivated by and derives self-satisfaction from a day’s work well done which allows her to appreciate her practical job. Furthermore, the hands-on nature of nursing fulfills her desire to experience the world by working on it. Often, Holly’s patients are friends and fellow community members and thus, Holly must be very impartial and accepting in her place of work, qualities that come to her naturally.

Holly usually walks home from work at the end of each day and immediately begins making a homemade meal for her family. She is a believer is hearty homemade meals and fresh from the ground produce. Therefore, a lot of what her family eats is straight from her garden or the local butcher. Her family and friends have always praised her talent for making good homemade comfort food.

At home, Holly is a caring and nurturing wife and mother. She believes in structure and organization, giving every family member a place and duty at home. Each of the children is allotted certain daily and weekly chores, which are monitored on a chore chart created by Holly that hangs on the wall in the kitchen. She often takes on small crafty projects such as this, which gives her home a very do-it-yourself feel. Holly also enjoys gardening; over the years she has built a large and intricate garden of fresh vegetables as well as an aesthetically pleasing array of flowers and plants. She takes great pride in her creation and would rather put effort into the appearance of her garden than the appearance of her wardrobe.

When Holly shops, she prioritizes value and functionality over all else. In terms of apparel, she seeks out basics that are designed to serve their purpose while still looking presentable at a relatively low price point. She gets excited about finding a good bargain and does not see the point in spending a lot of money on luxury items when a less expensive product will serve the same purpose. She does not enjoy shopping and when entering a store, she wants to ensure it will always have her size

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and a consistent line of products that changes little from visit to visit. She would rather not spend time browsing through an array of styles and colours but likes to see a reliable selection. Often, Holly will stick to one brand of jeans once she finds her perfect fit and style. Once one pair wears out, she will rebuy that same pair of jeans or at least a pair of jeans from the same brand to save herself the hassle of looking for something new.

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STEP II: INDUSTRY RESEARCH

MARKET RESEARCH

SCOPE & SIZE OF THE WOMEN’S DENIM JEANS MARKETThe denim jeans market is pervasive among apparel sales in North America. Jeans account for 1/5 of all cotton clothing sold at retail (Denim Jeans, 2011). Furthermore, 76% of US consumers own jeans and wear them regularly (Denim Jeans, 2011). In 2011, jeans represented 12% of all clothing sold (Denim Jeans, 2011). Judging by these statistics, denim jeans can be considered a classic, defined as: an enduring style that reaches a plateau of acceptance and endures for a long period of time (Sisto, 2013).

The jeans market is mature, saturated, and highly fragmented. A highly fragmented market can be defined as a market that consists of several small to medium size companies that compete with each other and with large enterprises for consumers’ dollars (Monaco).

As of 2011, the women’s jean market sold 265.5 million units at $8.3 billion USD (Jeans in the US, 2012). Economy jeans lead sales at $3.7 billion USD, closely followed by standard jeans at $3.3 billion USD (Jeans in the US, 2012). Premium and super premium jeans made up $1.3 billion USD of jean sales (Jeans in the US, 2012). Reference Figure 2.1.1 and Figure 2.1.2 for additional information.

Between the years of 2006 and 2011, the women’s jean market decreased in value by 8.9% (Jeans in the US, 2012). The cause of this fall stemmed from a dip in consumer spending due to the global economic recession (Global Market Review, 2012). However, the Global Market Review of Denim and Jeanswear predicts that the industry is in recovery mode and will grow in value over the next six years; the growth is fueled by cost-effective sourcing and the rise of designer denim (Global Market Review, 2012). Women’s denim sales are projected to grow to $8.75 billion USD by 2016 (Jeans in the US, 2012).

RECOMMENDATIONS

Based on this research data, it is recommended that Perry’s department store move ahead with their plans to create a private label of women’s denim jeans focusing on cost effective manufacturing to facilitate profit, and a brand image of exclusivity in ‘A’ stores due to the rising demand for premium denim.

AGE RANGEDenim jeans are the among most egalitarian outerwear garments in that they are worn by classes low and high and a by vast age range. Denim jeans growth sustenance is derived from its popularity across all age and demographic segments. Women aged 16-70 years old consistently wear jeans with older women

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representing a key demographic growth segment in the West (Guthrie, 2006). The United States represents an ageing population, however only 9.6% of Fredericksburg’s population is over the age of 65 years old, as seen in Figure 2.1.3 (US Census Bureau, 2010). Persons between ages 18 and 65 years old represent 69.7% of the population in the city of Fredericksburg (US Census Bureau, 2010). In terms of the women’s denim jeans market, segmentation is key to a profitable period in tough economic times, such as those facing the US consumer market.

RECOMMENDATIONS

Based on this research data, it is recommended that Perry’s department store target women aged 18-65 years old for their private label denim jeans line. Perry’s will focus tightly on women aged 40+ years old by creating a youthful and fashion-forward jeans line that makes them feel at ease.

SIZE RANGEWomen’s denim jeans follow sizing standards created by the International Organization for Standardization under ISO/TR 10652:1991 (ISO). Depending on the brand, women’s jeans sizes may be labeled either as dress sizes, ranging from 0-24, or based on waist measurements, ranging from 23”-34” (Country Outfitter, 2013). Figure 2.1.4 shows conversions for women’s dress sizes and waist measurements. Although women’s jeans are not usually labeled using standard sizing, this information has been included in the sizing chart in order to give a general idea of the overall sizing. Another important factor in sizing of women’s denim jeans is length. In recent years, jeans manufacturers have acknowledged women’s varying heights by creating jeans in petite, regular, and tall lengths. This helps to eliminate the frustrations that many women face in buying denim jeans and having to spend additional money hemming and tailoring them to fit their unique stature. It is also common practice in the women’s jeans market to employ vanity sizing, whereby a certain size is incorrectly labeled a smaller size in order to flatter the wearer.

RECOMMENDATIONS

Based on this research data, it is recommended that Perry’s department store utilize waist measurements for its sizing as this is common practice in the jeans market. For example, brand leaders such as Levi’s, Guess, and True Religion are carried in sizes based on waist measurements. More often than not, premium denim brands use waist measurement sizing, thus giving Perry’s Perfect Pair a premium denim edge. It is recommended that Perry’s department store carry sizes 24”-32”, as this range represents the majority of women, with sizes below or above focusing on specialty sizing such as plus size. For example, brand leader 7 For All Mankind carries jeans in sizes 24-32. It is not recommended that Perry’s use vanity sizing, as this can create confusion and contradicts the store’s aim to create a line of denim jeans that women can simply pick up and purchase without trying on.

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WHOLESALE & RETAIL PRICE POINTSThe denim jeans market as a whole is segmented according to price platforms, with four main categories ranging from cheapest to most expensive and includes economy, standard, premium, and super premium. Using a brand leader for each price platform and averaging its price at three major US retailers, an average retail price was calculated. Levi’s, Diesel, and 7 For All Mankind were used as comparisons for standard, premium, and super premium respectively. Economy jeans are typically private label jeans so for the purpose of this comparison Forever 21’s private label jeans were used to find an average retail price for the economy price platform. Forever 21’s jeans sell at an average retail price of $27.80 USD; Levi’s jeans sell at an average retail price of $58.65 USD; Diesel jeans sell at an average retail price of $177.79 USD; and 7 For All Mankind jeans sell at an average retail price of $225.50.

Using the equation C = R X 0.4, where C represents wholesale cost and R represents retail price, wholesale costs were determined for each of the four price platforms (Sisto, 2013). The wholesale costs are $11.12 USD, $23.46, $71.11, and $90.2 for economy, standard, premium, and super premium respectively.

RECOMMENDATIONS

Based on this research data, it is recommended that Perry’s department store price its women’s denim jeans based on the ranking of store that it will be selling in. Jeans targeted to customers shopping at store “A” will be priced as premium jeans, at store “B” as standard jeans, and at store “C” as economy jeans.

CONSUMER EXPECTATIONS & PRODUCT REQUIREMENTSThe market experienced a premium denim movement that peaked in 2005, which initially increased denim consumers’ willingness to pay a premium price for quality denim (Denim Jeans, 2011). Since then, there has been a trickle down effect in the market resulting in an expectation of quality and fit regardless of where consumers are shopping (Denim Jeans, 2011). Statistics have shown that 76% of consumers associate quality clothing with natural fibres (Denim Jeans, 2011).

According to Cotton Incorporated’s denim report, women ranked fit as the most important factor in purchasing denim, with 83% of women surveyed considering fit “very important” (Denim Jeans, 2011). Comfort, a flattering look, and price were also ranked as top purchasing factors in that order (Denim Jeans, 2011). Of those surveyed, 77% ranked comfort a very important factor, 71% listed flattering look in the very important category, and 66% claimed price was a very important factor (Denim Jeans, 2011).

In the same survey, brand was ranked lower in importance by consumers (Denim Jeans, 2011). However, brand associations may still be important to consumers in

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terms of their previous experience with a particular brand’s fit, feel, and look. According the to the survey, 56% of women prefer to buy a brand of jean they already own (Denim Jeans, 2011).

Consumers purchase denim jeans with durability, longevity, and versatility factors in mind because they see value in products they feel will last long and fit well (Denim Jeans, 2011).

RECOMMENDATIONS

Based on this research data, it is recommended that Perry’s department store prioritize fit, comfort and figure flattering styles in the production of their private label line based on women’s expectations of jeans. This will ultimately create positive brand association in the minds of consumers. This combined with an effective integrated marketing campaign will inevitably result in brand loyalty among women’s denim consumers, which is the ultimate goal of Perry’s Perfect Pair.

KEY BRANDS & LABELSThe Gap Inc. (which encompasses Old Navy) is the leading company in women’s denim, holding 4.7% market share (Jeans in the US, 2012). The top 5 companies in terms of market share as of 2011 were The Gap Inc., Levi’s, VF Corp. (encompassing Lee, Wrangler, and Rock & Republic), Warnaco Group Inc., and Walmart (Jeans in the US, 2012).

Levi Strauss & Co is the leading brand of denim, not only in the US but globally as well (Jeans in the US, 2012). The next two leading brands in the US are American Eagle and Old Navy (Jeans in the US, 2012). Other large players in the denim market include: Guess, Polo, Abercrombie & Fitch, True Religion Apparel, J Crew, Express, H&M, Joe’s Jeans, Hudson, Forever 21, Hurley, Zara, Esprit, Ann Taylor, 7 For All Mankind, and Banana Republic (Jeans in the US, 2012).

Fast fashion retailers are also increasing their market share in the denim market, with chain stores such as H&M and Zara on the rise (Jeans in the US, 2012).

RECOMMENDATIONS

Based on this research data, it is recommended that Perry’s department store positions itself in the market alongside these leading companies, while maintaining brand differentiation by offering a versatile, go-to pair of jeans for a target audience slightly older than that of other leading companies and offering the feel and youthfulness of premium denim at a slightly lower price point.

CONSUMER LIFESTYLEIn recent years, there has been a cultural shift toward a growing acceptance of casual dress in everyday life and even in a business setting (Segmentation is Key, 2011). The trend toward more casual dress is visibly hitting middle class

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consumers, opening up opportunities in the denim market (Segmentation is Key, 2011). Furthermore, statistics have shown that women between the ages of 17 and 70 wear jeans an average of 4.11 times per week, demonstrating that jeans are a staple item in the closets of many females (Guthrie, 2006).

RECOMMENDATIONS

Based on this research data, it is recommended that Perry’s department store move forward with development of their private label women’s denim jeans line. With growing trends toward acceptance of casual dress, there is significant opportunity for growth within the denim industry, especially among the middle class and in a white-collar business setting. The key to success, based on lifestyle research, is strategic segmentation, potentially focusing on a middle-class, middle-age target market.

LEADING DENIM MANUFACTURERS & MOST POPULAR LABOUR MARKETYears ago, the majority of denim was produced domestically in the US, however in 2010 98% of denim jeans were imported (Denim Jeans, 2011). In recent years there has been a shift to outsourcing apparel production, specifically denim, to developing countries such as China, Mexico, and Bangladesh (Sisto, 2013). In 2012, these three countries combined accounted for 66.4% of units imported (Denim Jeans, 2011). In terms of women’s jeans, China is the top supplier, accounting for 44.2% of US imports (Denim Jeans, 2011).

Leading denim manufacturers include Aarvee Denims and Exports and Arvind Mills, both based in India; Black Peony, based in Jiangsu Province, China; Bossa, Orta Anadolu, and Isko, based in Turkey; Cone Denim, based in the US; Lanyan Group, based in Shandong Province, China; Raymond UCO Denim, a joint venture between Raymond in India and UCO in Belgium; Tavex Corporation, formed with the merger of Brazil-based Santista Textile and Spain-based Tavex; Vicunha Textile, based in Brazil; and Weiqiao Textile, the largest cotton textile producer in China (Textiles Intelligence, 2010).

RECOMMENDATIONS

Based on this research data, it is recommended that Perry’s department store base its manufacturing in one of the top three manufacturing countries. As China is the leader in women’s denim jeans, it is recommended that Perry’s Perfect Pair be manufactured at Weiqiao Textile, as it is the largest cotton textile producer in China.

MARKET CONDITIONS & LABOUR COSTSIn times of economy turmoil and decreased discretionary spending, denim is one of the most resilient products due to the fact that it is considered a clothing staple. The condition of the denim market is better than that of other apparel segments; this is especially true for North American culture and its growing acceptance of casual clothing, with women’s denim jeans sales the strongest in North America

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(Euromonitor International, 2011). North America is the world’s largest market for denim, with the US in particular holding one of the top five positions in the jeans market when considering both value and volume growth (Euromonitor International, 2012). North America leads the way for private label denim sales, as it holds the biggest market share in value terms, only being outperformed by economy jeans in 2011 (Euromonitor International, 2012).

Despite overall market growth, the denim jeans market as a whole has faced some challenges in previous years. In 2010, the industry faced global cotton shortages due to poor weather conditions, which ultimately pushed up the price of cotton (Euromonitor International, 2011). Due to financial pressure, this cost has inevitably been passed along to denim consumers, which will in turn impact volume sales. Therefore value growth is predicted to outdo volume growth due to the inflated price of denim jeans (Euromonitor International, 2011). Figure 2.1.5 illustrates the rising cost of cotton.

Further limitations in denim production exist in China’s labour market. Currently, China houses the denim capital of the world: a small town that solely produces more than a third of the world’s denim (Moore, 2011). However, the system is said to be breaking down because Western countries ordering production from China are not willing to pay a reasonable price. As a result, China is struggling to make profit and thus cannot keep taking orders from Western countries (Moore, 2011). The reasons behind China’s recent inability to profit revolve around rising labour costs in China as well as rising cotton costs globally (Agarwal, 2011). These limitations on outsourcing to China will have a severe impact on global giants such as Zara, H&M, and Topshop (Moore, 2011).

RECOMMENDATIONS

Based on this research data, it is recommended that Perry’s department store focus of US distribution of its women’s denim jeans line, as it has the largest denim market. Creating a private label denim line will likely be profitable for the company since North America leads the way for private label denim sales and holds the biggest market share in value terms. As well, it is recommended that Perry’s investigate alternative fibres to cotton for use in their denim line to allow the company to be somewhat immune to potential future cotton shortages. This will allow the company to keep costs low, which will translate into lower retail prices for consumers and increased profit margins for the company. Furthermore, it is recommended that Perry’s remain mindful of rising production costs in China and potentially seek alternative outsourcing options. Denim’s acceptance across all age groups, genders and classes has allowed it to emerge as a unique apparel category for which demand exists regardless of market conditions.

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STEP II: INDUSTRY RESEARCH

TREND REPORT: FALL/WINTER 2013

SALES TRENDSEconomic conditions, pricing, and demographic trends are the main factors driving denim sales. The US economy was heavy hit by the recession at the end of 2007. This translated into a marked slowdown in growth for the US women’s denim jeans market in the two years following in 2008-2009 (Euromonitor International, 2012). Despite this period of negative growth, numbers have since bounced back. Figure 2.1.6 and 2.1.7 illustrate the denim jeans market’s value and volume performance from 2006 to 2010 (Euromonitor International, 2012). In 2010 both men’s and women’s denim jeans combined raked in $14.5 billion USD for 508 million units sold in the US (Euromonitor International, 2012). This number increased further in 2011 to $14.6 billion for 510 million units sold and sales are expected to reach $15.2 billion by 2016 with 536 million units sold (Euromonitor International, 2012). In 2011, women’s denim jeans totaled $8.3 billion for 266 million units sold, accounting for 56.8% of the denim jeans market (Euromonitor International, 2012). Women’s denim jeans in particular are forecasted to reach 266 million units alone and garner $8.75 billion by 2016, as this particular segment showed a 1% increased in sales from 2010 to 2011 (Euromonitor International, 2012).

In the post-recessionary environment, economy pricing plays an important role. Currently, economy jeans holds 71% share of the women’s denim jeans market, but both standard and premium priced jeans have been gaining share, with 3% growth in value terms (Euromonitor International, 2012). However, premium denim jeans are strongest with the female segment of the population (Euromonitor International, 2012). From 2011 to 2016 super premium denim is forecasted to have the most growth with 11.9% by volume and 15.6% by value (Euromonitor International, 2012). Women’s denim jeans show a CAGR of 1% in volume over the forecast period with the fastest growth coming from the super premium price platform (Euromonitor International, 2012). Figure 2.1.1 and Figure 2.1.2 breaks down the US sales of women’s jeans from 2006 to 2011 according to economy, standard, premium, and super premium. Overall, consumers gravitate towards jeans that balance contemporary fashion trends with durability and quality.

Additional sales trends indicate that 43% of female consumers typically purchase their denim jeans at mid-tier department stores such as Macy’s, Kohl’s, and JCPenney (Denim Jeans, 2011). With this in mind, mid-tier department stores tend to allocate the greatest share of floor space to jeans (Denim Jeans,2011).

RECOMMENDATIONS

Based on this research data, it is recommended that Perry’s department store invest in a women’s denim jeans line, as this segment of the denim market is expected to show growth over the forecast period. In terms of pricing and positioning, it is

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recommended that Perry’s Perfect Pair be positioned as economy jeans for lower ranking stores, such as “C” store, and as premium denim for higher ranking stores, such as “A” and “B” store. By positioning the brand as premium, Perry’s can leverage a growing consumer preference for higher-margin brands that remain within reach of a broad, middle-class consumer base.

TECHNOLOGICAL TRENDSCurrently, the fashion industry operates under a monocultural framework, relying heavily on the cotton agricultural segment, which has developed a demand of almost 25 million tons per year (Ruthorford, 2013). This centralized method of production has had a serious impact on the environment and the fashion industry is responding by introducing new, more sustainable fabrication blends that take the pressure off the cotton industry (Rutherford, 2013). Since denim by nature is derived entirely from cotton, the jean industry is significantly impacted by this cultural shift.

Lenzing AG has produced an innovative fibre that blends Modal, derived from beech trees, and Tencel, made from eucalyptus in a 60-40 blend (Karr, 2012). The fabrication is said to combine the softness, shape retention, and ability to blend with cotton of Modal and the functional aspects of Tencel, such as moisture and temperature control, strength, and antibacterial properties (Karr, 2012). DL1961 is creating the first line of jeans combining 73% ProModal and 27% Lycra to create a skinny jean with stretch and a design that prioritizes great fit (Karr, 2012).

There has also been a movement towards raw denim by companies such as Hudson and Nudie, which involves an untreated jean designed to adapt to the body with wear and intended not to be washed after purchase.

Further technological innovations have emerged with the innovation of “sweatpants jeans.” Diesel has come out with a line entitled “Jogg” that is comprised of cotton, polyester, and elastane to combine the style of jeans and the comfort of sweatpants (Diesel, 2012).

RECOMMENDATIONS

Based on this research data, it is recommended that Perry’s department store address the issue of sustainability in their production plan by using alternative fabrics to cotton to avoid monosaturation of the agricultural fibre industry. This would ensure that the line accommodates current social ideologies and maintains an ethical image in the eye of consumers. It is also recommended that Perry’s heed the efforts of other leading denim brands in their attempt at making jeans that are designed with comfort in mind such as Diesel’s Jogg line and DL1961’s ProModal jean.

FINISHES & TREATMENTS

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Popular denim finishes for women’s jeans include stonewashing, distressing or sandblasting, overdyeing, acid washing, creasing/crushing, fraying, waxing, bleaching, dirty washing, embroidery, screen-printing, destructing/ripping and tinting. Of these finishes, destructed/ripped and waxed denim are currently trending for Fall/Winter 2013 (Stylesight, 2013).

RECOMMENDATIONS

Based on this trend data, it is recommended that Perry’s department store incorporate finishes and treatments that are trending for Fall/Winter 2013 into their private label denim jeans line for women. Both destructed/ripped and waxed denim are on trend and are in between the late introduction and early rise phase of the fashion cycle making them appropriate for “A’ and “B” store consumers.

COLOUR STORYPantone states that the colour of 2013 is Emerald Green (Trend Alerts, 2012). The hue has a wide variety of shades and applications; it has been seen on fashion runways, accessories, furniture, and beauty products. Emerald is paired with such colours as creamy whites, sapphire blues, and multiple shades of orange (Trend Alerts, 2012). Stylesight’s review of the colour of the year states that green-cast treatments are an effective way to incorporate emerald into denim, creating a jade tone (Trend Alerts, 2012).

Stylesight predicts that Fall 2013 will feature a lot of teal and purple tones, purple representing both regal and somber moods and teals conveying a poetic theme and eliciting an emotive response, as well as rich berry tones (Forecast, 2012).

There is also a pattern trend emerging in denim involving photoreal treatments that apply photographic prints to fabric in a variety of hues and themes (Denim Developments, 2013). Some notable styles include galaxy scenes, detailed florals, and “patch and repair” looks imitated in photographic prints (Denim Developments, 2013).

RECOMMENDATIONS

Based on this trend data, it is recommended that Perry’s department store incorporate deep teals and berries into their private label line of denim. Teal incorporates the colour of the year while still keeping the line wearable for the target market, while purple accents and provides a versatile pairing option. It is not recommended that Perry’s adopt the photo real pattern trend seeing as it is in the innovation stage of the diffusion cycle and our target market would not be ready to adopt such a new and emerging trend.

FABRICATION Preferred fabrication blends for women’s denim jeans include 100% cotton, although blended denim fabrics tend to wear better, as the addition of synthetic

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fibres adds strength and durability. Popular cotton/synthetic blends include: cotton/spandex, which adds to the fit and comfort of the jeans; cotton/polyester, which increases strength and softens the hand; cotton/Tencel, which adds strength, softness, and a more luxurious hand; and cotton/rayon or cotton/Lycra for added stretch (Guthrie, 2006). Cotton can also be blended with natural fibres such as cotton/ramie, which reduces wrinkling and softens the fabric and cotton/wool or cotton/silk, which often appear in designer and premium denim, such as Genetic denim (Guthrie, 2006). Approximately 76% of female consumers believe that better quality clothing is made from natural fibres (Denim Jeans, 2011).

Popular today is “raw denim”, denim that is not washed after being dyed during the production stage. It is left untreated so that, during the process of wear, unique and personal fading and demarcation will occur. Another common fabrication, “selvedge denim” is a type of denim that forms a clean natural edge that does not unravel and is made on old-style shuttle looms (Stylesight, 2013).

Additional fibres and fabrics are currently being used to produce women’s jeans and are trending for Fall/Winter 2013. Designers and jeans manufacturers are utilizing leather and the like, wool, plastics, animal skins, compact knits, suede, PVC, and nylon to make innovative and trendy jeans (Stylesight, 2013).

RECOMMENDATIONS

Based on this trend and research data, it is recommended that Perry’s department store utilize a combination of fabric blends in their private label jeans line, depending on the style of jean. For a tighter fitting skinny jean, it is recommended that Perry’s Perfect Pair contain mostly cotton with approximately 2-3% spandex added for increased stretch and a better fit. For a looser fitting boot cut, flare, or “boyfriend” jean, it is recommended that a cotton/polyester blend be used to increase strength and softness. It is important that Perry’s maintain a jean that is composed primarily of natural fibres, as consumer perceptions indicate that this is necessary for a successful denim jeans line. It is not recommended that Perry’s utilize new and trendy fabrics, as these styles are aimed at innovators and early adopters, which do not align with any of the Perry’s customers. As well, fabrics such as leather, animal skins, and suede would drive up production costs and ultimately create a jeans line far above the super premium price platform.

NEWEST STYLESWomen’s denim jeans come in a wide array of silhouettes and styles, from high-waisted to hip huggers, wide-leg to skin tight skinnies. Style trends for denim for Fall/Winter 2013 include trucker jackets, shirtdresses, vests, matching denim sets, overalls, 1940’s slim fit, cropped tulip, supersized leg, culottes, and jumpsuits. Skinny and slim fits remain the popular fashion trend and “jeggings” continue to contribute to women’s jeans sales growth (Stylesight, 2013).

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RECOMMENDATIONS

Based on this trend data, it is recommended that Perry’s department store diversify its styles by incorporating one of each major silhouette, such as the skinny jean, the bootcut jean, the flare jean, and the boyfriend jean. DETAILS, FINDINGS, & TRIMSGarment details in denim jeans can include the style of the fly, and whether it is fastened with a zipper or line of buttons; pocket size, style, and placement; seams and stitching; thread colour; waistband width and style; the waist drop; buttons or snaps; and other adornments. Jean designers may incorporate elaborate designs in stitching or coloured thread to incorporate decoration into the details of the jeans. These decisions are made in the design stage based on the needs and desires of the target market (Guthrie, 2006).

Details trending for Fall/Winter 2013 include embellishments such as: crosses, gold threading in a 1980’s Arabesque fashion, branded, Chanel-inspired trim, bejeweled baroque, costume jewelry, punk, macabre studs, stud medley, spikes, “luxe” studs, pearls, grommets, sequins, psychedelic, rodeo, collar tips, Arizona beadwork, and pom-pom fringe (Stylesight, 2013).

RECOMMENDATIONS

Based on this trend data, it is not recommended that Perry’s department store incorporate embellished or ornate details, findings, and trims. Despite being trendy for Fall/Winter 2013, these denim details are in the introduction phase of the fashion cycle and thus, too early in the diffusion cycle for our target market to adopt. Furthermore, due to the nature of the benefits sought by the target market, the jeans need to be deemed appropriate for office wear and therefore should be relatively plain and understated. Embellished details, findings, and trims add production costs, inevitably increasing retail price points.

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STEP III: THEME & INSPIRATION BOARD

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STEP IV: DESIGN & CONCEPT BOARD

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STEP IV: DESIGN & CONCEPT BOARD

LINE LIST

Sty: P001/Boot cut

Season: FW 13 Sty: P002/ Skinny

Season: FW 13

Sty: P003/ Boyfriend

Season: FW 13

Sty: P004/Flare

Season: FW 13

Price: $60.00 USD

Del: 08/13 Price: $100.00 USD

Del: 08/13 Price: $40.00 USD

Del: 08/13 Price:$60.00 USD

Del: 08/13

Fabric: 60% Cotton 40% Polyester

Fabric: 97% Cotton 3% Spandex

Fabric: 100% Cotton Fabric: 97% Cotton 3% Spandex

Colors: Indigo, Vintage Blue, Black

Colors: Indigo, Burgundy, Teal, Mint, Black, White, Floral Print, Light Blue, Vintage Blue

Colors: Light Blue, Vintage Blue Colors: Light Blue

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APPENDIX A

IMAGE A

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JEN

APPENDIX A

IMAGE B

MIRANDA

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APPENDIX A

IMAGE C

HOLLY

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APPENDIX B

FIGURE 1.1

CONSUMER SEGMENTATION

EVENING GLAM BUSINESS CASUAL

WEEKEND WEARERS

UTILITARIANS FAST FASHIONISTAS

DEMOGRAPHIC 25-35Students, young professionals

30-40Professionals, entrepreneurs

35-50Mothers/wives, singletons, pink-collar workers

40-65Retirees, hobbyists, blue-collar workers

18-35Students, young professionals

PSYCHOGRAPHI

C

Style-conscious, narcissistic, highly sociable

Conservative, intelligent, self-motivated

Easy-going, family-oriented, leisurely

Practical, loyal, simple, dependable, value oriented

Fashion-forward, fun-loving, high autonomy

VALS

™Experiencer Achievers Makers Makers Strivers

PRODUCTS J Brand J Crew Levi’s George H & M

FEATURES Trendy, status symbol

Office-appropriate, classics

Comfort, clean-cut

Durability, functionality

Self-expressive, stylish

OUTLETS Boutiques Better department stores

Department stores

Discount department stores

Chain retailers

FREQUENCY 3-4 pairs per year 3-4 pairs per year 1-2 pairs per year 3-4 pairs per year 2-3 pairs per year

PRICE PAID High High Low Low Low

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APPENDIX B

FIGURE 2.1.1

SALES OF WOMEN’S JEANS: VOLUME 2006-2011

(Euromonitor International, 2012)

FIGURE 2.1.2

SALES OF WOMEN’S JEANS: VALUE 2006-2011

(Euromonitor International, 2012)

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APPENDIX B

FIGURE 2.1.3

FREDERICKSBURG, VA CENSUS DATA

(U.S. Census Bureau, 2010)

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APPENDIX B

FIGURE 2.1.4

WOMEN’S SIZE CHART

(Country Outfitter, 2013)

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APPENDIX B

FIGURE 2.1.5

COTTON PRICES

(Salmon, 2011)

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APPENDIX B

FIGURE 2.1.6

SALES OF JEANS: VOLUME 2006-2011

(Euromonitor International, 2012)

FIGURE 2.1.7

SALES OF JEANS: VALUE 2006-2011

(Euromonitor International, 2012)

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APPENDIX C

GLOSSARY

Acid washing – Uses pumice stones soaked in bleach to create contrast colours (Fashionary, 2009)

Bleaching – The use of liquid bleach to fade parts of denim; similar to acid wash, but has an allover effect (Fashionary, 2009)

CAGR – Compound Annual Growth Rate; “the year-over-year growth rate of an investment over a specified period of time” (Investopedia)

Cropped tulip – Jeans with a rounded loose fit and a curved outseam; rolled or cropped hems with straight inseams and concave out-seam (Stylesight, 2013)

Crushing/creasing – A textured effect achieved through special fabric construction and wet processing; weft yarns are over-twisted so that when the jeans are washed, they shrink (Fashionary, 2009)

Culottes – Volume is achieved through pin-tucking, pleating, and gathering with ultra-wide leg openings and hems combined with a shortened inseam to create a skirt-like silhouette (Stylesight, 2013)

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Dirty washing – A finish that creates the look of stained, dirty jeans (Fashionary, 2009)

Economy jeans – Lowest price range; will include some private label and unbranded products; examples include Forever 21 (Euromonitor International, 2011)

Overdyeing – The yarns that make up the fabric are dyed one colour after which the fabric is “over dyed” another colour; often done with black as the original dye colour to create a saturated secondary colour or a deeper black (Guthrie, 2006)

Premium jeans – Higher price range; higher quality positioning; examples include Diesel, G-Star, Jaeger (Euromonitor International, 2011)

Sandblasting – A laundry process that involves shooting denim jeans with sand to create a distressed or worn look (Fashionary, 2009)

Screen-printing – A printing technique that uses woven mesh to allow ink or dye through; since denim is primarily made of cotton it is very suitable for screen printing (Fashionary, 2009)

Standard jeans – Priced between economy and premium; usually the most popular; positioning is based on

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the leading brand; examples include Levi’s, Wrangler, and Lee (Euromonitor International, 2011)

Stonewashing – Addition of pumice stones, enzymes, sand, or ceramic balls (Guthrie, 2006)

Super premium jeans – Highest price range; considered fashion and status symbols; sold through high-end department stores or high fashion boutiques; examples include 7 For All Mankind, True Religion, and Rock & Republic (Euromonitor International, 2011)

Tinting – Dyeing denim jeans a second time, usually with a khaki hue to create a vintage look; similar to overdyeing, yet is not as opaque or saturated (Fashionary, 2009)

Waxing – Coating denim jeans with paint or wax to create a wet, almost leather-like look; may make the denim waterproof (Fashionary, 2009)

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