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Denim Imports Relaxed in First Quarter

After rising 3.4% in 2013 to $4.15 billion, denim imports slowed in the first quarter of 2014, according to data from the Office of Textiles and Apparel (OTEXA).

Imports of blue denim apparel in January through March fell 2.4% to $744 billion compared to the same period in 2013. Total units fell by 1.7% to 7.7 million dozen (92 million units), resulting in an average cost per unit of $8.10, down almost 1 percent from last year.

If the current trend continues, imported denim will decline on both a dollar and a unit volume basis this year, with unit costs continuing to feel the pressure from the value-seeking American consumer.

Almost all (98 percent) of year-to-date imported denim apparel consisted of jeans. Denim jacket imports increased 4.4% in the first quarter of 2014, but remain a tiny part of the overall market.

Imports of men’s and boys’ jeans totaled $397 million, flat with the same period in 2013. Men’s share of total dollar volume was 52  percent, up from 50 percent in the first quarter of last year. The average unit cost of a pair of imported men’s jeans dropped 1.3% to $8.30.

Women’s and girls’ jeans imports were $334 million, down 4.7% from the first quarter of 2013. The women’s jeans share of the total market fell to 46% of total imports, with the average cost per pair flat at $7.91.

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Mexico was the largest source of U.S. denim imports in the first three months of 2014, at 28.7% of total dollar volume. China, despite being the largest source for the full year in 2013, was the second largest in the first quarter of 2014, with sales down 12.4% on a dollar basis from 2013. Both countries have lost share of total U.S. denim imports, with China’s share down by 2.7 percentage points, and Mexico’s off by 0.5 points.

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Among the fastest growing trading partners in denim apparel was Bangladesh, whose jeans are the cheapest at $6.03 per pair. Bangladesh supplies both the fast fashion and value basics business, and saw its share increase 1.1 percentage points to 10.2%. Vietnam, a country that grew its U.S. jeans business by 7.8% in the first three months of the year, gained more than 0.5 percentage points of market share. Imports from Egypt and Lesotho also grew rapidly, while those from Nicaragua and Indonesia declined.

Men’s jeans imports from Mexico were $182 million in the period, or 46 percent of men’s jeans imports, though a 5 percent decline from last year.  Men’s imports from Bangladesh grew the fastest of any top trading partner in the period, up 14 percent to $40 million.

Forty percent of women’s jeans imports, or $133 million, came from China, with Bangladesh a distant second, at $33 million.

The decline of import growth is consistent with a slowing of demand for jeans at retail. Total U.S. jeans sales were $13.8 billion in the 12 months ended March 2014, according to the NPD Group. Sales of women’s jeans fell 5.2%, to $8.4 billion, while the total men’s market shrank 4.1%, to $5.4 billion.

Shifts in fashion trends have some denim makers—particularly those in the premium category—singing the blues these days, as many consumers opt for yoga pants and other “athleisure” looks for their casual dressing. Retail sales of women’s jeans priced at $75 or above fell by almost 33 percent for the 12 months ended March 2014, according to NPD. Jeans have become a promotional item at many merchants, particularly the fast fashion brands like H&M, Forever 21 and Uniqlo. This is putting tremendous price pressure on, and taking share from, middle market mainstays like Calvin Klein, Lee, Levi’s and teen retailers American Eagle and Aeropostale.

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