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IBISWorld sees healthy growth for Aussie lingerie market
10
Jul '13
The Lingerie Stores industry has strengthened after poor growth during the years immediately following the global financial crisis. During these years, expenditure on lingerie fell as consumers increased their level of savings. Some of the industry's products, such as bras and underpants, are considered necessities.

According to IBISWorld industry analyst Kosta Lev, “consumers do not cease purchasing these items during economic downturns, but they switch to inexpensive basic lingerie items.” This reduces industry revenue as consumers begin shopping at large discounted retailers, mass merchandisers and online sites rather than in specialist lingerie stores. The Lingerie Stores industry has a moderate level of market share concentration. The two major players in the industry are Bras N Things and Cotton on Body.

Revenue declined by 1.5% over 2010-11 and grew by a weak 0.4% over 2011-12 as a result. However, as the economy picked up, consumers returned to specialist lingerie stores. According to Lev, “over the five years through 2013-14, industry revenue is expected to grow at a compound annual rate of 0.8% to total $188.6 million.” This includes revenue growth of 1.8% over 2013-14.

The Lingerie Stores industry has been further assisted by the growing consumer trend towards high-end, luxury fashion. An increasing number of small, independent boutique establishments are entering the industry to take advantage of this trend. As consumer preferences shift toward luxury lingerie, industry expansion is expected to accelerate and profit margins are expected to widen.

Over the next five years, healthy conditions are forecast for the Lingerie Stores industry. The Australian industry is still very small when compared with other countries, such as the United States. However, it is rapidly expanding, along with Australia's booming luxury retail market. Sales of lingerie generally generate higher margins compared with general apparel products.

This will be even more prominent as consumer preferences shift towards more expensive, luxury lingerie. However, increasing levels of competition from online shopping, as well as the constant threat from large discount retail stores, is expected to place downward pressure on profit and industry revenue over the next five years.

IBISWorld

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