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Denim Imports On The Rise

After declining 5% in 2012, total blue denim apparel imports are up 1.2% so far in 2013. A slight drop in the men’s segment has been more than offset by strength in women’s.

Import data from the Office of Textiles and Apparel, or OTEXA, show that in the first seven months of 2013, imports of denim totaled $2.27 billion. Total units rose 1.4% to 23.8 million dozen (286 million units), resulting in an average cost per unit of $7.94, virtually flat with last year. If the current trend continues, imported denim will have a winning year on a dollar volume basis, although unit cost will no doubt be under pressure due to the value-seeking behavior of the American consumer.

A full 98% of year-to-date imported denim apparel is jeans. Denim jacket imports doubled in the period, but remain a very small factor in the overall market.

Men’s (including boy’s) jeans imports were $1.1 billion (144 million units), a 2.2% drop compared to 2012. Men’s share of total dollar volume was 51%, down from 53% at this point last year. The average unit cost of a pair of imported men’s jeans dropped 2.2% to $8.06.

Women’s and girl’s jeans imports were $1.07 billion (137 million units), up an impressive 5% from 2012. The women’s share of the total market rose by 1.8 percentage points (equal to the men’s segment share loss) to 45% of total imports.  The average cost per pair rose 1.7% to $7.85.

China and Mexico are the largest sources of U.S. denim imports, with 29.7% and 25.8% of total dollar volume, respectively. So far this year, China’s share has increased by .1 percentage points, while Mexico’s has grown by .5 points. The fastest growing trading partners in denim apparel are Bangladesh, whose jeans are also the cheapest, and serve the fast fashion business, and Indonesia, which has grown its U.S. jeans business by 7.8% in the first seven months of the year. Imports from Pakistan are also growing rapidly, while those from Nicaragua, Cambodia, Egypt and Lesotho have fallen.

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Men’s and boy’s jeans imports from Mexico were $507 million so far this year, or 44% of men’s jeans imports, making it the largest source of men’s jeans, up 3.6% from last year.  Mexico’s 2.4 percentage point share gain in men’s jeans this year is a reversal of fortunes compared to 2011-2012, in which it lost .7 points of share.  China and Bangladesh were the second largest sources of men’s jeans in the period.

Over 48% of women’s jeans imports, or $590 million worth, come from China, with Bangladesh a distant second, at 8$, or $89 million.

Jeans are big business in the U.S. Retailers sold a total of $13.3 billion worth of the denim garments last year, according to the NPD Group. Sales of women’s jeans gained 11%, to $8.6 billion, while the total men’s market shrank .3%, to $5.65 billion. Colored denim, which was very strong in the last two years, is losing ground to indigo in a record number of washes, finishes and shades.

Shifts in fashion trends have some denim makers singing the blues these days, while others are whistling all the way to the bank. Although many premium and designer brands have been consistently strong over the past year or two, in the past year fast fashion retailers like H&M, Forever 21 and Uniqlo have gained momentum at much lower price points. The momentum enjoyed by fast fashion brands is putting tremendous price pressure on and taking share from middle market mainstays such as Calvin Klein, Lee, Levi’s and teen retailers American Eagle and Aeropostale.

Although many mainstream brands have reported a difficult and highly competitive denim environment, the data indicate not so much a slowing of denim demand, but a trading up/trading down phenomenon, with sales at the very high end and value end of the market gaining share at the expense of the middle.