2010 Aroq Workwear Sample

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Global market review of

workwear forecasts to 2016

2010 edition


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2010 All content copyright Aroq Ltd. All rights reserved.

Global market review of workwear

forecasts to 2016

2010 edition

February 2010

By Malcolm Newbery

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Page iv Table of contents


Table of contents

Single-user licence edition .......................................................................................................... iiCopyright statement ............................................................................................................... iiIncredible ROI for your budget single and multi-user licences ............................................. iijust-style.com membership .................................................................................................... iii

Table of contents ........................................................................................................................ ivList of figures ............................................................................................................................. viiList of tables ............................................................................................................................. viiiChapter 1 Executive summary .................................................................................................... 1

The state of workwear at the end of the decade ...................... .................... ..................... ...... 1Product definitions ................................................................................................................. 1Channels to market definitions ............................................................................................... 1The market quantification methodology ..................... ..................... ..................... ................... 2The workwear market 2004 .................................................................................................... 3The workwear market 2008 .................................................................................................... 4The workwear market, 2009 and 2010 ................................................................................... 4The workwear market, 2010-2016 ..................... ...................... ..................... .................... ...... 5How sellers reach buyers in the workwear market ................... .................... ..................... ...... 6Examples of how sellers reach buyers ...................... ..................... ..................... ................... 7

Workwear manufacturing, regional production estimates ...................... .................... ............. 8Industry views from people in the industry .................... ..................... ..................... ................ 9Some specific strategies ........................................................................................................ 9The nth phase of consolidation ............................................................................................ 10

Chapter 2 Introduction .............................................................................................................. 12Clothing to wear at work ................... ..................... ..................... ..................... ..................... 12The contents of the report .................................................................................................... 12

Chapter 3 Workwear at the end of the decade ...................................... ..................... .............. 13Product definitions ............................................................................................................... 13

Channels to market definitions ............................................................................................. 14Channel routes for sales of workwear .................................................................................. 15The market quantification methodology ..................... ..................... ..................... ................. 19Exchange rates .................................................................................................................... 19

Chapter 4 The workwear market, 2004-2008 ............................................................................ 21The workwear market 2004, world totals and developed world markets ............................... 21The workwear market 2004, rest of the world totals and developing world markets .............. 22The workwear market 2008, world totals and developed world markets ............................... 24The workwear market 2008, rest of the world totals and developing world markets .............. 25
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Page v Table of contents


Chapter 5 The workwear market, 2009 ..................................................................................... 27 The workwear market 2009, world totals and developed world markets ............................... 27The workwear market 2009, rest of the world totals and developing world markets .............. 28The effect of the global downturn on 2009 estimates ..................... .................... .................. 29The effect of the global downturn on the workwear market in 2010 ............................... ....... 30

Chapter 6 The workwear market, 2009-2016 ............................................................................ 31

The forecast scenario .......................................................................................................... 31The workwear market 2010, world totals and developed world markets ............................... 31The workwear market 2010, rest of the world totals and developing world markets .............. 33The workwear market 2012, world totals and developed world markets ............................... 34The workwear market 2012, rest of the world totals and developing world markets .............. 35The workwear market 2016, world totals and developed world markets ............................... 36The workwear market 2016, rest of the world totals and developing world markets .............. 37The workwear market time lines, 2004 to 2016, world totals and developed world markets .. 38The workwear market time lines, 2004 to 2016, rest of the world totals and developing worldmarkets ................................................................................................................................ 40

Chapter 7 How sellers reach buyers in the workwear market ..................... ..................... ....... 44Channels of distribution to the workwear market ..................... .................... ..................... .... 44The image map of fabric decision flow ................................................................................. 45

Direct sale to a garment maker .................................................................................... 46Sale to a wholesaler/importer....................................................................................... 47Sale to a workwear brand ............................................................................................ 48Sale to a mail order catalogue ..................................................................................... 49Sale to a managing agent ............................................................................................ 50Sale to a garment rental company ............................................................................... 52Sale to an end user specifier ....................................................................................... 53

A simple conclusion to a complex decision process flow ................... ..................... .............. 54Examples of how sellers reach buyers ...................... ..................... ..................... ................. 55

Chapter 8 Workwear manufacturing: regional production estimates ................... .................. 58Production around the world ................................................................................................ 58

Western Europe ........................................................................................................... 60North America.............................................................................................................. 61Eastern Europe ............................................................................................................ 61Indian Sub-continent .................................................................................................... 62Southeast Asia ............................................................................................................ 62China ........................................................................................................................... 62Russia and the Stans ................................................................................................... 62Japan and Korea ......................................................................................................... 62Latin America .............................................................................................................. 62Africa and other countries ............................................................................................ 63

The value-added chain for a garment .................... ..................... ..................... ..................... 63Chapter 9 Views from people in the industry ................... ..................... ..................... .............. 67

Thejust-styleinterviews ....................................................................................................... 67Interview with Tom Roehricht, managing director, Sunlight Direct ................................ 67Interview with Lotte Dobell, editor, Company Clothingmagazine ................................. 70
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Page vi Table of contents


Interview with David Hill, Richmond Consulting Ltd ................... ..................... .............. 71Chapter 10 Some specific strategies ........................................................................................ 75

Strategies in context ............................................................................................................ 75Dominate the domestic market .................................................................................... 76Specialise by product ................................................................................................... 76Specialise by industry sector ....................................................................................... 77Build sales regionally or globally ................... ..................... ..................... ..................... 77Franchise or license the brand internationally .................... ..................... ..................... 78Concentrate entirely on a service model ..................... ..................... ..................... ....... 78Control manufacturing ................................................................................................. 78Try every strategy ........................................................................................................ 79Stick to one strategy, but go nowhere ...................... ..................... ..................... .......... 80

Chapter 11 The nth phase of consolidation ............................................................................. 81
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Page vii List of figures


List of figures

Figure 1: Direct sale to a garment maker ..................................................................................... 46Figure 2: Sale to a wholesaler/importer ........................................................................................ 47Figure 3: Sale to a workwear brand ............................................................................................. 48Figure 4: Sale to a mail order catalogue .................... ...................... ..................... .................... .... 49Figure 5: Sale to a managing agent ............................................................................................. 50Figure 6: Sale to a garment rental company ...................... ..................... ..................... ................. 52Figure 7: Sale to an end user specifier ................... ..................... ..................... ..................... ....... 53
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Page viii List of tables


List of tables

Table 1: Corporatewear product definitions ................... ..................... ..................... ..................... 14Table 2: Corporatewear channels to market ...................... ..................... ..................... ................. 15Table 3: Twenty five potential product/channel approaches ............................. ..................... ....... 18Table 4: Currency exchange rates, as of 30 October 2009 ..................... .................... .................. 20Table 5: The workwear market 2004, world totals and developed world markets (m people, m

units, US$ and %) .................................................................................................. 21Table 6: The workwear market 2004, rest of the world totals and developing world markets (m

people, m units, US$ and %) ................................................................................. 22Table 7: The workwear market 2008, world totals and developed world markets (m people, m










people, m units, US$ and %) ................................................................................. 37Table 17: The workwear market 2004-2016, world totals and developed world markets .......... .... 38
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Page ix List of tables


Table 18: The workwear market 2004-2016, rest of the world totals and developing world markets

.............................................................................................................................. 41Table 19: Estimates of world workwear production by region, 2009 (m units and %) .................... 59Table 20: The value added chain, for a representative garment and in total ................... .............. 64Note: data may not sum in some tables due to rounding
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Page 1 Chapter 1 Executive summary


Chapter 1 Executive summary

The state of workwear at the end of the decade

The theme and contention of this report is that the workwear market is a

mess. It has lost its shape; the clear product, channel-to-market, and industry

user structure that made it easy to analyse, and profitable to work in, up to ten

years ago. In addition, at that time, there was a much clearer understanding of

where the various players stood in the workwear supply chain. They had

simple and obvious marketing and supply positions. It has also suffered from

becoming commoditised, as a result of irrevocable and irreversible changes in

the supply chain. Consequently the market has become fixated on price to its

own detriment.

Product definitions

The corporatewear market can still be split into five segments. These are:

workwear;

careerwear;

corporate casualwear;

uniforms;

protective clothing.

But the dividing lines between them are becoming ever more blurred. It is no

longer possible to be categorical about where workwear ends and

protectivewear begins. To most people a standard boilersuit made of

poly/cotton is workwear. But if the fabric is impregnated with chemical dyes

which make it reflect light, and it therefore becomes a high visibility boilersuit,

has it transformed into protectivewear?

Channels to market definitions

The fundamental principle to grasp about channels is that workwear is

primarily a business-to-business (B2B) transaction. It is bought by company

buyers for their employees, but it can be bought in a number of different ways.

These are:

from garment rental companies, which charge per week for the use

and usually the cleaning of the garment;


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Page 12 Chapter 2 Introduction


Chapter 2 Introduction

Clothing to wear at work

Workwear, within the context of all types of corporate clothing worn specifically

for work, is different from other forms of apparel. This difference is not

displayed in the way that the garments are constructed, but in the way they are

sold. Workwear, unless you are self-employed, is sold to the employer, who

gives the garments to his employees to wear at work . For nearly xx% of the

adult employed population of the developed countries of the world, what we

wear to work is what our employers have given us. The employers make the

choices.

In this, the fourth workwear sector report from just-style, the main point made

is that the market is in a mess, as workwear changes, and the industry

struggles with the problems of maturity.

The contents of the report

Following this introduction, in Chapter 3, the reasons are given for why, at the

end of the decade, the marked has blurred, and why this is bad for the

workwear business. In Chapters 4-6, the value of the market is estimated for

key dates, and broken down by major geographic regions. Forecasts are made

for the overall consumption of workwear within corporatewear up to 2016. The

forecasts are based on population, employment, and the number of workwear

wearers. They are given in garment numbers and US dollar values.

Chapter 7 addresses the manner in which businesses reach their customers,

and what drives the purchasing decision. As this has a big impact upon thechoice of production source, Chapter 8 looks at where in the world these

garments are and will be made, and estimates the production of workwear.

Finally, in Chapters 9-11, opinions are given by people in the industry on what

will shape the specific strategies of companies in this embattled sector, and

the author considers what will happen next in the apparently endless rounds of

sector consolidation.


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Page 13 Chapter 3 Workwear at the end of the decade


Chapter 3 Workwear at the end of

the decade

The market is a mess

In this, the fourth edition of this report, the authors main theme and contention

is that the workwear market is a mess. It has lost its shape; namely the clear

product, channel-to-market, and industry user analysis that made it easy to

analyse, and profitable to work in, when the author first wrote on it 20 years

ago for the British Clothing Industry Association.

In addition, at that time, there was a much clearer understanding of where the

various players stood in the workwear supply chain. They had simple and

obvious marketing and supply positions. Workwear is now far more complex

and ambiguous about to whom it is being marketed, and on what consumer or

customer need, other than on pure price.

It has also suffered from becoming commoditised, as a result of irrevocable

and irreversible changes in the supply chain. The supply chain, which was

once straightforward, is no longer so. At some point in the past 20 years, the

supplier did all or some of the following:

design the product;

market and sell the product;

produce the product;

distribute the product.

It is no longer that simple. As a consequence, it is now the right time toreconsider and question the historically accepted definitions of product,

channels to market and workwear industry users.

Product definitions

The definitions given in Table 1 below are those that were created for the

original British Clothing Industry Association 1989 sector report. At that time,

there were only four categories. The corporate casualwear (polo shirts, and

jeans or chino trousers) category was added later.


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Page 21 Chapter 4 The workwear market, 2004-2008


Chapter 4 The workwear market,

2004-2008

The workwear market 2004, world totals and developed world markets

The figures for 2004 up to 2007 are taken from the third edition of this just-

style report. The commentary, in this and all subsequent sections of this and

the next two chapters, is given in as much a standardised and consistent

format as possible, so as to allow readers to create their own comparisons.

Table 5: The workwear market 2004, world totals and developed world markets (m people,

m units, US$ and %)

World totalNorth

AmericaEurope and

TurkeyJapan and

KoreaRest of the

worldEmployable adult population(m)

xxxxx xxx xxx xx xxxxx

Adults employed (m) xxxxx xxx xxx xx xxxxx

Employment rate (%) xx xx xx xx xx

Workwear market value(US$m)

xxxxx xxxxx xxxxx xxx xx

Workwear market volume (m) xxx xx xxx xx xxx

Workwear average prices(US$)

xxxxx xxxxx xxxx xxxxx xxxx

Workwear wearers (m) xxx xx xx xx xx

Percentage given workwear(%)

x xx xx xx x

Corporatewear market value(US$m)

xxxxx xxxxx xxxxx xxxxx

Workwear percentage ofcorporatewear (%)

xx xx xx xx xx

Source: just-style

This table, and all the subsequent tables (Tables 6-16) are created using the

methodology explained towards the end of Chapter 3. That is to say, it is a

calculation which develops:

from the employable adult population to adults employed;

from adults employed to workwear wearers, via the percentage of

employees given workwear;

from wearers to garments via the number of garments issued per

wearer per year;


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Page 27 Chapter 5 The workwear market, 2009



2009


All estimates of the state of the workwear market in 2009 are inevitably

influenced by the global credit crunch. But too much should not be read into

this in the short term. Because of the nature of the workwear market, and in

particular the long-term nature of rental, direct contract and catalogue

business-to-business deals, it will take months and indeed years for the

slowdown to take effect. Accordingly, the approach taken in this edition is to

make a current estimate of the workwear market for 2009, and then consider

by how much that estimate has been revised downwards from previously.

Table 9: The workwear market 2009, world totals and developed world markets (m people,

m units, US$ and %)

World totalNorth

AmericaEurope and

TurkeyJapan and

KoreaRest of the

worldEmployable adult population(m)

xxxxx xxx xxx xx

Adults employed (m) xxxxx xxx xxx xx xxxxx

Employment rate (%) xxxx xxxx xxxx xxxx xxx

Workwear market value(US$m)

xxxxx xxxxx xxxxx xxx xxx

Workwear market volume (m) xxx xx xxx xx xxxx

Workwear average prices(US$)

xxxxx xxxx xxxxx xxxxx xxxx

Workwear wearers (m) xxx xx xx xx xx

Percentage given workwear(%)

xxx xxxx xxx xxx xxx

Corporatewear market value(US$m)

xxxx xxxxx xxxxx xxxxx xxx

Workwear percentage ofcorporatewear (%)

xxxx xxxx xxx xxx xxxx

Source: just-style

The key points from this current year table estimate are that:

The workwear market in 2009 is worth US$xxxxxm. This is a very

minor fall (less than xxx%) from 2008.

Of that world total, developed countries account for US$xxxxx, which

is xx%. The developed countries total has fallen by onl y US$xxm


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Page 31 Chapter 6 The workwear market, 2009-2016



2009-2016

The forecast scenario

In this chapter, the workwear market is forecast from the current base year of

2009 through to 2016. Three key years are forecast in detail. They are:

2010, which will almost certainly be a bad year for the workwear

market, as a result of the time-lagged effect of the 2008 credit crunch;

2012, which will hopefully be a good year for workwear, through a

combination of economic recovery and the stimulus of an Olympic year

for London, the UK and Europe;

2016, the long term future for workwear.

Top-level time lines are also produced for each year from 2004 to 2016. They

create a comprehensive review and forecast of the performance of workwear

worldwide.


As was mentioned in Chapter 5:

the world work wear market will be worth US$xxxm less (xxx%) in 2010

than in 2009;

North America will be down by US$xxxm, (x%);

Europe and Turk ey will be down by US$xxm (x%), with Western

Europe suffering more than Eastern Europe and Turkey.

Detailed forecasts for 2010 are given in Tables 11 and 12.


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Page 44 Chapter 7 How sellers reach buyers in the workwear market


Chapter 7 How sellers reach buyers

in the workwear market

Channels of distribution to the workwear market

In Chapter 3, and specifically in the channels of distribution analysis section of

that chapter, five channels of distribution were identified. These were:

garment rental;

wholesale;

tender;

direct response to a catalogue offer;

direct negotiation.

The channels of distribution approaches provide the first step to understanding

how the workwear buying decision is made. They also explain the work

necessary for sellers to identify and reach buyers. However, in many, perhaps

in the majority of cases, the primary and most crucial decision is actually about

the choice of fabric. As one workwear fabric brand, Carrington, used to put it in

its trade advertising, the fabric comes first.

By looking at the workwear sector through the channels of distribution

analysis, a view can be obtained of the different types of customer there are,

which make the decision about garments and fabrics. These are:

manufacturers;

wholesalers/importers;

workwear brands;

mail order (catalogue) specialists;

contract (managing agent) manufacturers and distributors;

garment rental companies;

end user specifiers.

Understanding who is making the fabric decision provides insight into who is

choosing the workwear garments and what critieria they are using to make this

decision. It has already been established that the buying decision is rarely

made by the wearer.


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Page 58 Chapter 8 Workwear manufacturing: regional production estimates


Chapter 8 Workwear manufacturing:

regional production estimates

Production around the world

It is both natural and inevitable that all the players in the workwear market are

keen and concerned to understand the nature and dynamics of the production

route to market. This applies not only to the managing agents of workwear

contracts, but also to the whole of the production chain. This is particularly the

case as the role of intermediaries in the supply chain diminishes. It is of

considerable importance for fabric and other trim suppliers (zips, buttons,

packaging, etc) to know the trends in the locations around the world where

garments are manufactured, because the garment manufacturers are their

customers.

Having said this it is not always the case that the garment manufacturers are

directly their customers. The purchasing decision makers may be different

people from the garment manufacturers. This was considered in Chapter 7.

All parties are, however, interested in the location of workwear production.

However, this is by no means easy to quantify. Although the majority of

workwear is made of poly/cotton fabrics, these are not the only fabric types. As

a result, production estimates cannot be made based upon the trade statistics

for particular and specific fabrics. Nor is it possible to make estimates based

on import and export figures. This is because:

import and export trade figures do not contain domestic production for

domestic consumption, so a large part of a region or a countrys

production is omitted;

standard industrial classifications (SIC codes) merge workwear

garments with other poly/cotton and cotton High Street fashion retail

garments.

Consequently, production estimates for workwear have to be based on specific

and individual knowledge of the major sources of various workwear garment

types. Estimates using this approach have been made by the author in

research project work undertaken for major players in the workwear supply


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Page 67 Chapter 9 Views from people in the industry


Chapter 9 Views from people in the

industry

The just-style interviews

In just-style reports, we try wherever possible to add up-to-date and expert

opinion on the issues facing the clothing sector being reviewed. Nowhere is

this more important than in workwear. This is so, because of the nature of its

business-to-business (B2B) operations, which were discussed in Chapter 7.

This clothing sector is uniquely affected by wider economic factors, in

particular, the state of employment in different industries in various economies.

For this report, three interviews have been conducted with:

Tom Roehricht, the recently appointed (in spring 2009) managing

director of the UK company Sunlight Direct, which is a division of the

Sunlight textile rental operation;

Lotte Dobell, the editor of Company Clothing magazine, the trade

press of the sector;

David Hill, of supply chain consultants Richmond Consulting Ltd, andwho is also an adviser to Raymond Europe, a subsidiary of Raymond

India, a major global manufacturer of uniform and uniform fabrics.

Interview with Tom Roehricht, managing director, Sunlight Direct

Tom Roehricht has had a long and distinguished career in the corporatewear

industry. His current position is managing director, Sunlight Direct. Sunlight

Direct is the contract selling division of the major UK workwear and textile

laundry rental business Sunlight, which is itself a subsidiary of The Davis

Service Group Plc. just-style started by asking him about the effect of the

credit crunch on the workwear industry.

just-style: Has there been an impact from the 2008 credit crunch on direct

contract sales to both the public and private sector in the context of growing

unemployment?

Tom Roehricht: Undoubtedly yes. Although most contracts contain minimum

activity levels, they are usually couched using the word estimated. So, if

requirement levels fall off as a result of a slowdown in the work or in


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Page 81 Chapter 11 The nth phase of consolidation

Chapter 11 The nth phase of

consolidation

The analysis of potential strategies for players in the workwear market, taken

from the previous chapter, suggests that the industry is mature, and in decline

in the developed world. A feature of decline, as expressed in the theory of

industry life cycles, is that early explosive growth is followed by nave

enthusiasm, which encourages new supply entrants, which is dampened

when supply exceeds demand and reality bites, leading to falling prices and

also to consolidation of the players in the sector.

just-styles view is that the workwear industry has had more than one period of

consolidation. It is now in its nth, where nis a number between three and six.

The history of the phases of consolidation follows a pattern of:

the introduction of workwear and its acceptance as a result of the hard

wearing and easy to launder Klopman 65/35 poly-cotton fabric, during

the late 1960s and early 1970s;

garment suppliers becoming workwear manufacturing specialists in the

1970s and the early 1980s, selling to wholesalers or rental companies;

in the late 1980s, many of these suppliers being bought by the

garment renters who were integrating backwards down the supply

chain, because of a shortage of supply;

in the early 1990s, the garment companies adding design, marketing

and distribution skills and becoming either contract management or

catalogue specialists;

at the same time, the concept of corporate image taking hold, driven

by privatisation, and leading to a scenario in which the image of thebusiness was reflected in the style of employees clothing;

also in the 1990s, smaller design-led companies becoming sector

specialists.

But then, the sector became affected by an imbalance between supply and

demand. Too many ordinary clothing businesses, both suppliers and

designers, got into workwear and other image clothing, sold on a B2B basis.

The sector consolidated as a result of company closures and mergers and

acquisitions. In a business-to-business industry like workwear, buying sales

Documents

2010 Aroq Workwear Sample