Corporate identity apparel has become indispensable for corporations of all sizes and industries. Logo clothing is now a necessity to show legitimacy of a company, rather than a luxury. Of course, branding is also a consideration when it comes to logo apparel, so choosing items that wear well, and carry a company’s logo identity well is crucial. However, with the worst recession in our lifetime still lingering, marketing budget is hard to come by, and buyers of all industries struggle with ever limited resources. The trade off between price and quality is something everyone has to come to grips with. This article will provide information regarding how the corporate apparel industry is segmented, and the differences between these segments.
From my twelve years of industry experience, corporate apparel largely can be grouped into three tiers of price and quality. The first tier consists of economy brands such as Gildan, Jerzees, Fruit of the Loom, Hanes, and others. The second tier consists of private labels from large, national distributors that may or may not also supply the economy brands’ products. Examples of such labels include Devon & Jones, Port Authority, Ultra Club, and others. The third tier consists of prestige lines from large, national distributors as well as brand name products such as Nike, New Era, Cutter and Buck, and others.
For economy brands, margin has been severely squeezed due to skyrocketing cotton prices in the past few years. The rise in cost and the pressure to keep selling price down has forced brands such as Jerzees and Gildan to source new fabrics that are less sensitive to fluctuation in cotton prices. So we are seeing more cotton/poly blended fabric or cotton/performance blend fabric. The tremendous creativity of piece goods (another name for fabric) manufacturers and apparel manufacturers has allowed prices to stay relatively stable. Manufacturers are also moving factory operations of lower end items to Vietnam and other place where labor rate is lower than China. This has also contributed to the relative stability of economy grade logo clothing.
Second tier products have seen few new items made solely of cotton fabric, while performance fabrics have garnered enough support to become some of the best-selling piece goods in the market place today. These second tier products tend to have price points two to three sizes that of the economy tier items, but the fabrication and construction are far superior, making them more durable. And the higher margin has allowed manufacturers to offer better and trendier designs, more fashion forward colors, and better style selections.
The third, or upper tier corporate apparel market has done surprisingly well despite the recession. With companies large and small adopting logo apparel as an essential part of their branding effort, established companies are increasing turning to higher-end products to separate themselves from their peers. Non-iron cotton dress shirts are good examples in this category. Despite the high cotton prices, more distributors are starting to put focus on this product category due to better margin, fewer stock keeping units, and increasing demand. Another reason for the surprising popularity of products in this category is the fact that corporate America is getting more and more casual. Businesses that might have had strict dress code in the past is now allowing its employees to wear more casual, albeit refined clothing to the office, and are buying high-end corporate apparel to reflect this new trend.
In any case, the poor economic environment has brought out the best ingenuity America has to offer in the corporate apparel market. New fabrication, better product selection, and cost cutting have allowed the industry to poise itself for the next wave of growth expected to come.