Peek No: 21  
Dec 10, 2003 

Hello!

Christmas is round the corner. Our streets and malls are all dressed up. As our country gets ready to sport the Christmas attire, we thought it would be apt to do a peek into the apparel sector. We have delved into the finer aspects governing the sector. A look at the imports revealed the value pay-offs underlying the garments we wear.

All this, after our weekly economy brief.

Factory Orders
Orders to U.S. factories increased 2.2 % in October. Shipments increased 0.7 %, while inventories remained unchanged. This growth was spurred by durable goods, which increased 3.4 %, and new orders for transportation equipment.

Farm Prices
The U.S. Department of Agriculture has announced an increase in the All Farm Products Index of Prices. The index stands at 117 (1990-92=100) for the month of November, up 4 points (3.5%) over October's index. The Food Commodities Index has increased by 5 points and stands at 121. The Food Index is at its highest since it debuted in 1975.

Happy peeking!

Editor
Marketspeek
Executive Editor - Dr. Sharon Livingston
Editor - Vijay

 Week's Peek


Marketspeek - U.S. – Apparel sector
All Dressed Up

  • Wholesale market for apparels has grown to reach 17 billion in the U.S.
  • The personal consumption of clothing (including footwear) has grown into a $ 325 billion market.
  • Imports of apparel dominate the American apparel scene, with over 95% of the market flooded by imports.
  • In square meter equivalent (SME) terms, the size of the market is estimated to be 17.3 billion SME.
  • U.S. imports from Mexico and the Caribbean Basin countries have been steadily declining. Imports from Mexico have experienced a decrease while imports from Cabribbean Basin have seen a slower growth.
  • On the other hand, imports from ASEAN (Association of South East Asian Nations) countries have been growing in recent years.
  • The advent of 2002 witnessed the end of quota systems on import of items like gowns and undergarments. As a result, these segments witnessed massive jumps in imports.
  • Imports from China have been primarily products that went off quota, such as brassieres, dressing gowns, etc., apart from cotton and man-made fiber shirts and women’s cotton shirts.


Vital Statistics

  • In value terms, the imports of the various categories are as under:
    • Cotton - 57.3%
    • Man-made Fiber - 32.0%
    • Wool - 7.8%
    • New MFA - 2.8%

  • The high SME value enjoyed by wool is a glaring feature in the above listing. This is because, wool occupies a healthy 8% on the value proposition, as against a volume share of merely 1%.
  • Also, the low SME value is evident for man-made apparels. Against a volume share of 39%, this segment occupies 32% of the value.
  • In value terms, the shares of the respective textile categories are:
    • Made-up - 55.3%
    • Fabric - 36.1%
    • Yarn - 8.6%

Analysis

  • The apparel market is set to move in line with the macro-economic trends. The business apparel segment (comprising formal wear), for both men and women, is the segment to watch. Demand for these segments move in line with the sentiments like job-searches, business expansion and increasing attendance to interviews.
  • With the dismantling of the quota system, the apparel market is all set to invite new countries to join the fray. These new players would invest in knowing market needs and in assessing local trends that govern preferences in the U.S. There would be need for more such services in the coming years.
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   Wish I Were

Fran's Healthy Helpings, Inc.

Healthy Ideas

Adversity brings out the best in people, they say. For, Lent this was true. Stuck with having to create a new dish every day to satisfy the palates of her children, she thought she must find a way out. Soon enough, the dynamic Lent hit upon an idea - to produce healthy frozen meals for children.

Buoyed by her ideas, she discussed them with her husband, Bobby. The business plan seemed to set him on fire and after being thoroughly convinced about the market potential, Lent and her husband invested their savings of $100,000 into the new company. The rest, as they say, is history.

They founded the company in 1995. But, not before she took the proven route of surveys and focus groups. The research lent insights into:

  • Food and nutrition requirements
  • Food choices of children
  • Market for healthy foods


The company offered healthy, tasty, and fun meals of the highest quality. The key differentiator was the ‘all-natural ingredients’ tag on the foods. The kid-friendly names of products - Lucky Ducky Chicken, Twinkle Star Fish, etc., were a welcome innovation. Moreover, the meals acquired fun shapes and were an instant hit with the kids.

Fran's Healthy Helpings was one of 13 finalists in the Working Woman National Entrepreneurial Excellence awards program. So much for innovative ideas that work!

For further reading:

http://eastbay.bizjournals.com/eastbay/stories/2001/01/01/smallb1.html

http://www.newhope.com/naturalcategorybuyer/ncb_backs/Jan-Feb_03/baby.cfm

http://www.nasbic.org/success/stories/fran.cfm

http://www.allbusiness.com/lessons/LL_Article24.asp
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   BrandFact

Cadillac – the car company bears the name of the founder of Detroit, Le Sieur Antoine de la Mothe Cadillac.
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  This Week that Age

7th December, 1926 - The gas-operated, home refrigerator was patented by The Electrolux Servel Corporation.
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  Make us Work for You

Our research team will be glad to work on a research assignment for you. Download the proposal requisition form and commission our cost-effective research services.

Click to download the proposal requisition form.
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  Insight

The best way to predict the future is to create it.
-- Jason Kaufmann
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