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Denim Receives Glowing Reviews In Recent Earnings Reports

It’s no secret that executives at denim brands are excited about the category’s recent surge. Levi Strauss & Co. president and CEO Chip Bergh, Guess CEO Carlos Alberini and Kontoor Brands’ CEO Scott Baxter have all called out denim’s fruitful future in their past few earnings calls with investors.

Denim’s new wave of relaxed fits—mostly fueled by younger consumers ditching skinny jeans and a move to more casual clothing—has also been a driver of optimism for pure players and other apparel companies where denim is a smaller focus.

The segment is bright spot for Abercrombie & Fitch Co., which addressed investors last week with hopeful news about the denim category across the Abercrombie and Hollister labels.

Abercrombie & Fitch Co. CEO Fran Horowitz reported that jeans remained “one of the best-performing categories” at Hollister and Abercrombie & Fitch—the latter of which saw sales of women’s jeans double in Q4.

“There’s so much fashion and exciting new things happening, particularly in the denim area, that the more newness and the more fashion we keep sending out to our consumer, the hungrier and excited they are about the product,” she said.

Abercrombie & Fitch Co. saw success in its denim business in recent years, including during the height of the pandemic, though Horowitz noted she “couldn’t tell you exactly where everybody was wearing it to,” and pledged to expand the company’s denim offering.

“Even though jeans are already a top three sales driver on an annual basis, we believe there’s opportunity for more growth, and look forward to sharing additional details on our plans as the year progresses.”

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“What a difference a year makes,” Jennifer Foyle, president, executive creative director for American Eagle and Aerie & Aerie, said about the company’s 30-plus percent revenue increase in 2021 compared to 2020. In the company’s Q4 earnings call last week, the exec owed the brand’s success to new product assortments, stronger advertising and messaging, and inventory and real estate optimization.

“Our men’s business has seen tremendous growth as we’ve refocused the assortment in our core best-selling items. The women’s business also had a great quarter, supported by our signature denim category and focused on outfitting,” she said, noting that American Eagle’s bottoms reached “the $2 billion mark.”

With customers returning to pre-Covid purchasing behaviors, Gap Inc. is pivoting to more versatile fashion like dresses, work pants and denim with new leg shapes. “It’s a pretty radical change from last year, which was driven by cozy, active and fleece,” said Sonia Syngal, Gap Inc. CEO.

The company is also leaning into its Yeezy Gap and now Yeezy Gap Engineered by Balenciaga partnerships to further extend its reach and relevance around the globe. The partners recently bowed their first denim pieces—a pair of straight fit jeans and a moto-inspired jean jacket. “Now that Gap has landed these big partnerships, the year ahead will be about scaling them to drive sales,” Syngal said.

At Chico’s FAS Inc.—owner of Chico’s, White House Black Market and Soma—denim was the catalyst for its best fourth-quarter performance in four years. The company saw a fourth-quarter sales jump of 28.5 percent and a gross margin rate of 34.5 percent in 2021 compared to 2020.

During a call with investors on Tuesday, Chico’s FAS Inc. CEO Molly Langenstein reported that White House Black Market denim saw “explosive growth” from Q3 into Q4, and the business nearly doubled from last year and was up around 60 percent from 2019.

Similarly, she said Chico’s denim more than doubled for the quarter and grew 14 percent from 2019, nodding to product enhancement and innovation as the drivers moving the brand forward. The label’s So Slimming denim, which features Hidden Fit technology that slims and trims, as well as its recently launched DefineMe denim with similar qualities have performed especially well. The newer construction features a waistband that sits higher in the back to flatter the figure and prevent gaps, along with a deep yoke and specially engineered back pockets that create a lifting effect.

Nordstrom is reaping the rewards of denim’s comeback, too. During a recent earnings call, Nordstrom president and chief brand officer Pete Nordstrom called out women’s denim as a “great example of the potential in [its] category management work.”

The company has been using a data-driven, customer-centric approach to provide the best assortment for customers at Nordstrom and Nordstrom Rack. As a result of the research, it decided to increase inventory depth for the most highly sought-after jeans to make sure they’re always in stock. It also piloted a dedicated in-store women’s denim shop for easier access to its full collection and planned a denim campaign aligned with Earth Month in April, in which the company will showcase a curated assortment of denim brands with a focus on sustainability.

In the past, the department store worked with a number of denim brands on special, interactive product displays to encourage engagement. In September, the Pop-In@Nordstrom x Levi’s centered on exclusive collections from designers Collina Strada, Melody Ehsani and Thompson Street Studio, all of which were promoted alongside a curated selection of Levi’s Authorized Vintage and Levi’s Red.

Last May, Nordstrom partnered with premium denim brand Rag & Bone to launch Rag & Bone Deli, a month-long popup concept at its New York City flagship featuring men’s and women’s Summer 2021 ready-to-wear and accessories.

“Denim has always been an important category for our customers and a strong performer for us too,” Nordstrom said. “But our analysis highlighted an opportunity to lean into it as more of a destination category.”