Women's Accessory and Specialty Stores

SIC 5632

Industry report:

This category includes establishments primarily engaged in the retail sale of women's clothing accessories and specialties, such as millinery, blouses, foundation garments, lingerie, hosiery, costume jewelry, gloves, handbags, and furs (including custom made furs).

Industry Overview

Sales in the United States of women's accessories and specialty items increased substantially in the mid-2000s with an industry trend for bolder, more luxurious accessories as a complement to the apparel trend back toward the classic and versatile. Women looked more toward purchasing clothing that could shift from career wear to leisure wear. Shoppers were still budget conscious, but they were also more fashion savvy, and women looked to accessories to keep their looks current.

Top items contributing to $30.92 billion spent in the United States on women's accessories and specialty items in 2006 were fashion jewelry at $8.6 billion and handbags at $6.9 billion. Those items also showed some of the highest increases over 2005 sales, which also topped $30 billion. The sale of handbags rose 8 percent in 2006 and the sale of fashion jewelry increased 4.5 percent. Belts, which pulled in $706 million in 2006, jumped 8 percent over 2005 sales.

In the mid- to late 2000s, women's accessories and specialty stores reached revenues of $32.5 billion in 2007, unfortunately the economy took a turn for the worse, as did demand for women's accessories. Sales fell to $31.6 billion in 2008 and $30.7 billon in 2009, a three percent decline.

Organization and Structure

Stores in this industry offered a vast selection within limited product lines and therefore were considered specialty retailers. Traditionally, these businesses were small independently owned shops that provided distinctive merchandise and superior customer service, often at premium prices. During the 1990s, however, the women's accessory and specialty store industry experienced structural changes that paralleled changes in the retailing industry as a whole with small traditional retailers being replaced by larger chains that emphasized value and convenience.

Store size was a contributing factor to a retailer's overall profitability. The size of women's accessory and specialty stores tended to be smaller than many other retail outlets. Although the size of larger chain stores in the industry averaged approximately 3,000 square feet of sales space, most accessory stores were smaller than 1,000 square feet. Accessory stores enjoyed relatively low overhead costs due to small store size and the low cost of goods. In fact, Claire's Stores, Inc., one of the larger retail chains, reported that new stores required an initial investment of only $85,000 for leasehold improvements and fixtures and $20,000 for inventory.

Store location often determined store size. Women's specialty and accessory stores, especially fur stores, were deliberately positioned in classy, urban retail centers such as Fifth Avenue in New York. The location of these boutiques in high-rent urban areas often encouraged the small store format. In contrast, chain stores were frequently situated in suburban shopping malls, where larger store size was financially feasible. Store size increased in the 1990s as businesses in this industry followed consumers out of the cities into suburban malls and shopping centers.

Although women's accessory and specialty stores were moving out of trendy, expensive areas, stores were designed to accommodate the fashion and status-conscious shopper. Consumers shopping at these specialty stores were interested in unique versions of basic products. With the exception of furs, the products offered by accessory stores, such as lingerie, hosiery, and handbags, were not particularly expensive and were readily available at department and variety stores. A specialty accessory store, however, offered the consumer distinctive merchandise in a stylish shopping atmosphere.

Competition.
Until the mid-1980s, department stores were the main competitors of women's accessory and specialty retailers. Department stores often leased space to prominent accessory manufacturers such as Crystal Brands, the Monet jewelry manufacturer, and Coach Leather. Like the small independently owned accessory shops, these leased departments are staffed with knowledgeable salespeople and provide strong customer service in a pleasant shopping atmosphere. Competition in this industry shifted, however, from department stores to off-price merchandisers and discount retail stores that carried a variety of accessories and specialty items at prices well below those offered by department stores and specialty shops.

Although competition from discount stores increased in the early 1990s, the industry remained fragmented. Due to the variety of merchandise included in this category, no one company dominated the industry. Nevertheless, in the mid-1990s, the popularity of the "category killer" retail format posed a threat to the women's specialty and accessory business. The lack of market leaders coupled with the small boutique-style store format left the industry vulnerable to attack from large retailers anxious to capitalize on the fragmented industry structure.

Background and Development

Traditionally, the women's specialty and accessory store industry has been dominated by fur retailers. Fur coats and accessories were widely coveted luxury items and status symbols in the United States where fur retailers were tremendously successful throughout much of the twentieth century. It appeared that the fur business peaked in 1987 when sales reached $1.8 billion. In the late 1980s and early 1990s, however, cultural and economic forces caused fur sales to plummet, and many fur retailers faced bankruptcy. Some large department stores such as Nordstrom and Lord and Taylor dropped their fur departments. The industry was also adversely affected by a luxury tax imposed on furs, jewelry, and other costly nonessentials. In early 1992, a group of Senate democrats argued that fur merchants could not withstand the combined effects of recession and additional taxation when they sought a repeal of certain sections of the luxury tax legislation. The luxury tax on furs valued at more than $10,000 was repealed the following year.

Threats to the fur industry, however, were not only economic and legislative. Widespread negative perceptions of this business and changing cultural values also resulted in significant sales declines for fur retailers. In fact, the animal rights movement, once on the periphery of the mainstream American consciousness, saw sweeping acceptance by the mid-1980s. Heightened regard for animal rights and the growing perception that fur coats were symbols of greed and cruelty, drastically decreased demand for fur coats and accessories.

The setbacks suffered by the fur industry during the late 1980s caused changes in the mix of businesses in the women's specialty and accessory industry. However, they did not slow its development. While fur retailing suffered losses, other categories such as hats, scarves, and lingerie flourished. These categories gained popularity during the 1980s and fueled the growth of the industry in the early 1990s.

Despite a poor economic climate, the women's accessory and specialty store industry experienced solid growth in the early 1990s. While the women's clothing industry struggled to keep pace with inflation, the accessory and specialty store industry grew more than 8 percent annually during the early 1990s. The growth of specialty stores made this industry one of the few bright spots in the otherwise bleak retailing sector. Accessory retailers benefited from promotional campaigns launched by manufacturers and positive buying patterns. Some observers noted that the relative prosperity of the industry was a result of indulgence buying and pent-up demand. Additionally, national statistics revealed that specialty retail stores generally outperformed department stores during the early 1990s.

Fearing that demand would soften, sales and marketing strategies for accessories were re-evaluated in the early 1990s. In addition to improving merchandise presentation, some retailers implemented trend shop concepts, whereby merchandise was grouped into a single fashion trend and sold in one shop. At larger accessory and specialty stores, management used dedicated sales staffs to promote particular product lines. These retailer-based strategies were augmented by increased marketing efforts by manufacturers. Promotional resources, such as videos describing different ways to wear scarves, also supported salespeople's efforts. Often these sales and marketing strategies were similar to successful approaches used by cosmetics departments.

According to the Fur Information Council of America, an industry trade organization, U.S. fur retail sales jumped in the late 1990s and hit a decade-long high of $1.69 billion in 2000 before falling to $1.53 billion in 2001. The renewed interest in furs pushed designers to incorporate fur into new lines that featured contemporary styling, as well as making use of new treatment and shearing techniques that allow the fur to be used unlined. In 2000, the average age of the fur customer was 48, but in 2002 that age had dropped to 35. Despite the industry's seemingly successful attempts to ignore the anti-fur movement, some shops also carried synthetic versions for customers who might be turned off by natural furs.

This industry lagged behind many retailers in its use of technology. Although computerized inventory management became a major strategic priority in the early 1990s, the small accessory and specialty retailers did not embrace automation. The structure of the industry accounted for the resistance to using technology. Most of the small independent business owners considered the cost of automation to be prohibitive. Moreover, since inventory was not expensive and turned over quickly, the effect of poor inventory management was not as pronounced in this industry as it was in others. Accessory and specialty retailers, nevertheless, faced increasing pressure from manufacturers and vendors to adopt automated systems to ease administrative tasks. In the competitive 1990s, retailers were forced to adopt computerized cost-saving systems.

Cost-saving systems were not the only new technologies in this category, however. In the 1990s, retailers became increasingly dependent on video marketing and computerized self-help systems. One such technology was available in Japan in the early 1990s. Developed by Wacoal, a leading Japanese lingerie manufacturer, this software package helped a woman enhance her figure by identifying her correct size of lingerie. Customers stripped down to their underwear and then stood in front of a video camera that displayed their outline on a computer screen. The screen allowed the customer to compare her figure with what the store consultants considered ideal for her age. Next, the customer tried on lingerie designed to enhance her figure and then returned to the computer screen for a look at her improved outline. Japanese stores using the system reported a 10 percent increase in lingerie sales.

The women's accessory industry typically follows trends similar to the women's clothing industry, which saw a good growth rate beginning in 2003, as the economy rebounded. Upscale items saw considerable growth, as women began to splurge on the "little things" again. Louis Vuitton's Murakami handbag, for example, brought in an estimated $345 million in 2003 alone.

As fashion began to return to the workplace, retailers were hoping the new trend toward dressy rather than casual business attire would fuel the return of hosiery. In the mid-2000s, only 25 percent of women under 25 years old wore sheer hosiery. New trends included interest in patterned, colored, and fishnet hosiery, as part of a general trend toward bolder accessories. To attract the younger customer base to hosiery, a category that produces $6 billion in annual sales, manufacturers were accentuating the bare, natural look and repackaging products to add new appeal to shoppers.

In 2003, $1.2 billion in bra sales, $74 million in girdles and corsets, $541 million in panties, and $159 million in other underwear such as camisoles and undershirts, was reported by the American Apparel and Footwear Association.

With an uncertain U.S. economy because of high energy costs and difficulty in the housing and mortgage industries heading into the late 2000s, the mantra for accessory and specialty shops has become "When the dollars get tight, the tight get accessories." Following strong years for accessories sales in 2005 and 2006, 2007 was mostly positive in the industry and the forecast for 2008 was favorable as well.

Growth appeared mostly at the moderate and upper tiers as consumers in many instances opted to update wardrobes with accessories rather than replace them. The lower part of the market suffered somewhat with shoppers having to bypass some smaller impulse purchases in favor of gasoline.

Handbags remain strong as luxury items, including those that cost in excess of $1,000. Moving further into the late 2000s, the premium range of handbags priced $200 to $500. In 2007, department stores garnered 28 percent of the roughly $7 billion spent on handbags. Specialty department stores took in more than $1.3 billion for 22 percent of the handbag market, and specialty store chains claimed 18 percent with $932 million in sales. The projection for handbags overall was for an increase of 4 percent in 2008 after increases of 8 percent and 6.5 percent in 2006 and 2007, respectively. However, moderate handbags, particurly in leather, struggled in 2007. Wilsons Leather announced in February 2008 that it would close up to 160 stores, leaving it with approximately 100 mall locations.

Fashion/bridge jewelry shows continued strength into the late 2000s with a 4 percent increase in sales in 2006, a 3.5 increase in 2007, and a projection for a 5 percent increase in 2008. Of the nearly $9 billion in sales in 2007, department stores reaped $2.7 billion for 30 percent of the market. At $1.8 billion, specialty department stores grabbed 22 percent of the market. Specialty chains had 15 percent of the market with $1.1 billion.

Current Conditions

Despite improved upon faux leather technologies and other fabrics spurring new customers, handbag sales fell 5 percent and unit sales by 8 percent in 2009. Of the $9.2 billion spent on handbags, nearly 20 percent of sales were in the $200 and higher price range with $367 being the average.

Fashion/bridge jewelry sales reached $11.2 billion in 2007; however, as the economy struggled sales fell to $9.4 billion in 2008 and $9.3 billion in 2009. Specialty stores surpassed department stores as the retail channel of choice when it came to jewelry purchases with 23 percent of the market or nearly $2.2 billion followed by national chains and mass-merchandisers who commanded 10 percent each, a reflection of the stagnant economy. Online jewelry and watch purchases have been rising as well.

Overall sales for women's accessories fell 3 percent in 2009, whereas their counterpart, women's apparel reported a 5 percent decline in sales. Of all accessory items, small leathergoods, belts, scarves, and umbrellas were the only accessories that experienced strong sales in 2009, with fashion sport watches and hats sales with improved sales over 2008 at 10 percent and 16 percent, respectively.

The 2010 forecast for various accessory items based on market share according to Accessory Magazine include: slippers (2.27 percent); belts (1.22 percent); umbrellas (.64 percent); handbags (29.02 percent); scarves (2.59 percent); hosiery (9.61 percent); hats (2.99 percent); jewelry (30.18 percent); sunglasses (5.29 percent); leathergoods (8.84 percent); watches(4.96 percent); and gloves (1.40 percent).

Industry Leaders

Although the women's accessory and specialty store market was quite fragmented, a few larger companies were gaining market share. While the small, boutique-style stores competed on their superior customer service and unique product offerings, the larger companies focused on rapid expansion of their chains, enhanced store design, and national advertising.

Victoria's Secret Stores, a subsidiary of Intimate Brands, Inc., which in turn is owned by Limited Brands, Inc., discovered success in the 1980s by introducing a new approach to lingerie sales. The Victoria's Secret concept was originated by Roy Raymond in San Francisco. After studying the lingerie market, Raymond saw an opportunity to target men who liked to buy lingerie for their wives or girlfriends, yet were embarrassed to venture into the intimate apparel section of a department store. Victoria's Secret stores were designed to provide a comfortable and provocative environment in which men could shop.

The business was started in 1977 with $40,000 and grew quickly. By 1982, Raymond operated five stores and generated $6 million in sales. In addition to the Victoria's Secret Stores, Raymond developed a successful lingerie catalog service. The concept saw tremendous success and rapid growth. In 1982, The Limited, Inc. offered Raymond the backing to expand the company to more than 700 stores. Raymond, however, did not want to be involved in such a large operation and ultimately sold his business for $1 million in The Limited, Inc. stock and other undisclosed benefits.

Dubbed "The Intimate Category Killer" by Women's Wear Daily in 1995, Victoria's Secret Stores continued to grow. Although Raymond had sold expensive designer fashions, under The Limited, Victoria's Secret Stores offered a moderately priced product line of lesser quality. The change in merchandise did not inhibit Victoria's Secret's success as demonstrated by sales doubling from $600 million in 1990 to $1.2 billion in 1994, when it was Intimate Brands' most profitable division. For 2007, Victoria's Secret stores posted $3.7 billion in sales. Through its 1,040 Victoria's Secret mall-based operations and about 250 La Senza lingerie stores scattered throughout the U.S. and Canada sales grew to $5.6 billion in 2010.

Claire's Stores, Inc., of Florida, a leading retailer of costume jewelry and fashion accessories typified the multi-product accessory store concept, with a price range of $2.50 to $20. This company operated 3,000 boutiques in 2007, primarily located in malls in the United States, the Caribbean, Canada, Great Britain, and Japan under various names. Sold to the New York-based private equity firm Apollo Advisors for $3.1 billion in 2007, Claire's Stores posted sales of $1.5 billion that year. The company reported sales of $1.3 billion in 2010 with 16,400 employees.

In the 1990s, Claire's Stores underwent a reorganization which included a company-wide refocus on its core business. All non-accessory businesses were sold, and stores were redesigned. The company also launched a national magazine advertising campaign targeting customers who were 13 to 40 years old. These changes rejuvenated the chain, which grew from about 1,000 stores in 1992, to nearly 1,500 by the end of 1995, and to 2,900 by the end of 2002. Claire's launched its European development that same year with the acquisition of 50 stores of the bankrupt British Bow Bangles chain.

Claire's entered the twenty-first century by recognizing key demographic patterns, especially that teenage girls love to shop, but they do not tend to spend much cash on their mall trips. Claire's tapped this growing demographic market by launching in 1998 its "just nikki" catalog. Teens could peruse the catalog at home and then have a parent call in an order with a credit card. Orders averaged $70, compared to the $9 average sales at stores.

Another industry leader was Gucci Group N.V., with upscale products from handbags to clothing to watches in 425 stores worldwide. For the MTV crowd, Hot Topic, Inc., had more than 700 stores across the country, with licensed products ranging from concert t-shirts to makeup. The company reported 2007 sales of $751.6 million.

Workforce

According to the U.S. Department of Labor, Bureau of Labor Statistics, women's accessory and specialty stores employed more than 55,000 people in 2001. Like much of the retail industry, accessory and specialty stores provide low-paying sales jobs, which are sometimes supplemented with a commission based on sales. There is heavy use of part-time employees. Management occupations accounted for roughly 2.5 percent of all jobs.

© COPYRIGHT 2018 The Gale Group, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. For permission to reuse this article, contact the Copyright Clearance Center.

News and information about Women's Accessory and Specialty Stores

Card spending during Toronto International Film Festival rises nearly 10%.
CNW Group; September 28, 2006; 700+ words
...Apparel stores increased 15% overall; - Men's and women's clothing stores jumped 20%; and - Women's accessory and specialty stores increased 15%. - Health and beauty spas saw a 10% gain; and - Jewelry stores were up 9%. Sparkling...
Filene's basement plans to refinance buyout debt. (Filene's Basement Inc.; men's, women's specialty clothing store chain)
Daily News Record; June 15, 1989; 574 words
...May Department Stores, and which acquired the Filene's Basement trademark...Boston-based specialty store chain that offers men's and women's apparel and accessories at discount prices, operates 22 stores in New England...
New women’s specialty store opens at Waukegan Plaza
The News Sun - Waukegan (IL); June 27, 2012; 320 words
...WAUKEGAN— Dots, a womens specialty retailer, has...area.“It’s always positive to...club apparel, and accessories for women.“The...the retailer’s 37th store in Illinois. Currently...has more than 400 stores in 28 states.
Better goods the prey for accessories buyers at shows. (Designers' Collective, Accessorie Circuit)
Daily News Record; August 18, 1987; 700+ words
...Goods the Prey for Accessories Buyers at Shows Men's accessories buyers...But as the men's better business...resources and store executives said...accessories for their stores, others complained...executive noted U.S. accessories...accessories firms big in ...
Upscale women't clothier Chico's set to open first store in High Point, N.C.
Knight Ridder/Tribune Business News; August 4, 2004; 536 words
...clothing women's retailer...its first store in High Point...Properties. The store will occupy...already has stores in Greensboro...Chico's doesn't...private-label women's clothing and related accessories. The retailer...women's specialty ...
DJ. CFA Retail:Insider Review For Week Ended Dec. 5.
FWN Select; December 8, 2003; 700+ words
...Apparel & Accessories $ 0 (51) (51) | 0 0 0 Children's Clothing $ 0...Family Clothing Stores $ 0 (13,602...28,783) Women's Accessories & Specialty Stores $ 0 0 0...268) Women's Footwear $ 0 0...
DJ. CFA Retail:Insider Review For Week Ended Dec. 12.
FWN Select; December 15, 2003; 700+ words
...Apparel & Accessories $ 0 (8,650...51) Children's Clothing $ 0 0...Family Clothing Stores $ 1,689 (21...43,053) Women's Accessories & Specialty Stores $ 0 (96...0 0 0 Women's Footwear $ 0...
DJ. CFA Retail:Insider Review For Week Ended Dec. 19.
FWN Select; December 23, 2003; 700+ words
...Apparel & Accessories $ 0 0 0 | 0 (8...650) Children's Clothing $ 0...Family Clothing Stores $ 0 (21,940...48,182) Women's Accessories & Specialty Stores $ 0 0 0...96) Women's Footwear $ 0 0...

Search all articles about Women's Accessory and Specialty Stores