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New Jeans, Please: America Imported $2B+ Worth of Denim Through June

Denim’s had a rip-roaring year so far and the consumer appetite for trendy silhouettes and new wardrobe additions is showing up in the data.

Moving to meet consumer demand and restock shelves, U.S. brands and retailers imported 42.63 percent more denim apparel for a value of $2.05 billion in the first half of the year, according to the Commerce Department’s Office of Textiles & Apparel (OTEXA).

However, executives and economists warn that the consumer purchasing boom could stall in the second half.

Kontoor Brands on Thursday reported revenue for the second quarter ended July 2 increased 25 percent to $613.57 million, reflecting the strength of the U.S. denim market for jeans and other apparel.

Scott Baxter, chair and CEO of Kontoor Brands, said on a conference call with analysts that the Wrangler and Lee brands increased 19 percent and 14 percent, respectively, in the first half of this year compared to pre-pandemic 2019 levels.

“In our largest market, both brands have driven significant share gains in the core men’s denim casual bottoms business over first half ’19, with Wrangler up 80 points and Lee up 60 points,” Baxter said. “Turning to our channel diversification, with the focus on digital, our first half ‘22 global increased 111 percent and our U.S. increased 140 percent compared to 2019.”

But the boom might not last long, noted Kontoor chief financial officer Rustin Welton.

“Our updated outlook now assumes second half global revenue to be relatively flat compared to 2021 driven by two primary factors,” Welton said on the call. “First, we anticipate open-to-buy dollars to be somewhat restricted as actions to rebalance retailer inventory levels are implemented. We expect these issues will weigh on our top line more than originally anticipated, with the third quarter more pressured than the fourth quarter.”

In addition, he said given the ongoing Covid restrictions and lockdowns, the company believes China will remain a challenging market.

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New data from OTEXA showed the first-half flood of denim merchandise came from all major suppliers. Imports from top producer Bangladesh soared 57.06 percent to $445.51 million in the period compared to the first half of 2021, while No. 2 maker Mexico’s shipments reaching U.S. ports of entry rose 26.46 percent to $362.02 million.

No. 3 supplier Pakistan’s imports into the U.S. jumped 60.8 percent year over year in six months to $242.77 million. It was joined by Top 10 Asian manufacturing neighbors, including Vietnam’s 44.57 percent increase to $217.98 million, China’s 26.42 percent gain to $188.25 million, Cambodia’s 45 percent rise to $101.92 million and Sri Lanka’s 14.82 percent hike to $33.98 million.

Rounding out the Top 10 were Egypt, with a 120.38 percent increase to $119.96 million; Nicaragua’s 35.27 percent increase to $73 million and Turkey’s 40.38 percent gain to $40.18 million.

As a whole, blue denim apparel imports from the Western Hemisphere rose 31.05 percent in the first half to $475.16 million. Of that, shipments from Central American Free Trade Agreement countries were up 40.37 percent to $87.23 million.