Out From Under
By playing up fashion and performance, smart retailers are growing underwear sales and profits.
The two things that continue to drive underwear sales, says Durand Guion, men’s fashion director at Macy’s, are performance and color. “Guys are thinking about head-to-toe appearance with an emphasis on basic furnishings,” explains Guion. “He’s really thinking, ‘Wow, my underwear could do more than separate me from my pants.’ He’s thinking about wicking properties and keeping cool as he works out or goes to the golf course. He’s starting to understand mesh both as a texture and a cooling element. Cotton stretch is important.”
Says Mitchell Lechner, president of the Dress Furnishings division at PVH, now the dominant player in underwear business, “From the fashion perspective, male consumers are now making intelligent and conscious decisions about what underwear they choose to buy rather than sticking to what they have known.”
“We’re seeing a lot of athletic-inspired designs and colors. Fit continues to be hot, particularly with the comfort waistband,” says Mike Jerkovic of American Essentials. “There’s something for everyone right now: underwear that keeps you cool or warm, smells pretty or controls odor—innovation and performance is driving business. The industry is getting significantly bolder: newer, raunchier brands are showing up with an emphasis on sex. It’s still a niche market, but it’s growing.”
The dominant style continues to be the boxer brief. Many major manufacturers, including PVH, say that boxer briefs (about half of total, including trunks) have now eclipsed briefs and boxers as a percentage of all underwear. For some performance and niche brands the boxer brief is nearly all of the assortment. But don’t count briefs out yet, says Lechner: “The brief is an important silhouette to watch, as it has grown in popularity in Europe as a fashion statement, and the traditional consumer is still loyal to this silhouette.”
With the new emphasis on fashion and performance comes more potential for regular-price selling. Retailers say it has become easier to sell single pairs at price points from $20 to $35. In the multi-pack world, “AURs are up, but so are pack sizes (from two or three per pack to four), and far more packs include at least one fashion color, across most brands,” says PVH Underwear SVP Larry Meltzer.
Color once meant black or gray, but that’s been changing. “Colors have become a main part of the underwear business, a very acceptable part,” says Don Zuidema of LASC, a Los Angeles retailer that has a large underwear business.
Guion at Macy’s notes, “There’s a shift away from basic cotton white three-packs, although there will always be a place for that. White, which was number one for many decades, is no longer number one. For the millennial and post-millennial guy, the next most important thing after performance is color. It’s not over-the-top or full spectrum color, but he really is interested in shades of red and blue.”
At Tommy Hilfiger, a four-pack of boxer briefs was typically all white as recently as three years ago. In the last two years they’ve added blue, black and gray, and now orange. The four-pack that includes both blue and orange is the current best seller. White is now less than 20 percent at Tommy Hilfiger.
In many PVH brands, including Tommy Hilfiger, stripes are becoming important. Pattern is 15 percent of total for PVH’s underwear brands.
The Branded Band
Nearly every pair of boxer briefs has a wide elastic waistband emblazoned with branding.
“Waistband branding is dominant, but there may be a small countermovement, particularly among parts of the business that cater to a luxury customer,” observes PVH underwear designer Khiem Truong. “For the mass and mid-tier customer, the branding is a desirable feature.”
LASC’s Don Zuidema sees the entry of established brands into the underwear market as a natural extension, and opportunity for more logos. “Larger companies are jumping on the bandwagon to have at least some kind of underwear offering—it’s pretty easy branding to put your name on the waistband,” he says.
Then again, that may not always resonate with consumers. “We’re shifting away from the point where it was only about the brand name on the label,” says Guion at Macy’s. “Brands will always play into it, but the consumer is thinking about more than that now. It’s icing on the cake if his favorite patterns and technical aspects come in a brand he loves.”
The New Dominant Player
There are some other changes in the underwear market, too. PVH, which acquired Warnaco (the owner of Calvin Klein Underwear) last year, may now be the largest maker of branded men’s underwear. Under Mitchell Lechner’s Dress Furnishings, the PVH Underwear division started with Izod a few years ago and now counts Tommy Hilfiger, Michael Kors, Chaps and Van Heusen among its brands.
And it’s one of the fastest growing segments of the Dress Furnishings division. Sean John and Joseph Abboud will launch early next year and the existing brands are expanding into more categories, like boys and loungewear.
LASC, which carries major brands like Calvin Klein, 2(x)ist, Emporio Armani and Diesel, has a very successful underwear business. “One of the reasons we’ve always done well with underwear is that we find the smaller brands even as we carry the essentials,” says Zuidema. “Baskit’s Eric Schwers is doing some interesting designs and some American manufacturing. And we’ve added a brand called Antony Morato out of Italy. It’s huge in Europe but smaller here. We’re carrying his underwear, although he has a whole lifestyle collection—and it’s fun with great prints and colors.”
As an independent specialty store with a dedicated underwear section and a long list of brands, LASC is unique. Most men’s specialty stores that carry underwear focus on a couple of key brands. Those brands tend to be either luxe and traditional or innovative and performance-driven, like Tommy John or Saxx.
“We carry boxer shorts from Royal Highnies in white—it’s all they do—and they sell very well,” said Craig Beecroft of Beecroft & Bull. “We also carry Robert Talbott boxers and, in one of our three stores, Saxx.”
For a store like Beecroft & Bull, it’s about stability. At least until a compelling brand like Saxx comes along. “We used to only carry boxer shorts until Saxx. We do well with their athletic-style boxer briefs in two weights. And Saxx has some wacky colors, which have been really fun to sell.”
Asked if he’d ever seek to expand that segment, Beecroft is realistic. “Nah,” he says. “For categories with items under $100, we make sure we’re not ignoring them, but we’re always putting more energy into clothing.”
“We choose to focus on Tommy John because it’s a high quality product that we truly believe in,” said Lisa Slesinger at Larrimor’s. “We love the new cool-cotton product and believe that our clients will wear it all year because, to quote my team, ‘It’s a close, but comfortable fit,’ and, ‘It just feels good.’”
As both niche and mainstream brands embrace performance, those brands, traditionally outside the athletic market, have begun to tackle more performance categories. Like long underwear. Once the territory of outdoor brands, long underwear is finding a place among niche brands like Tommy John and Saxx.
They could be for the guy watching a game in an outdoor stadium, the guy who’s playing golf in wind pants late in the season, or maybe out duck hunting, says Michael Topliss of Saxx. “This could be perfect as an add-on item to a sale, or as a gift item purchased by his wife (who may be buying most of his underwear).”
Saxx offers three models ($60 to $90 retail) in blends of polyester, viscose, modal and wool.
“The majority of the thermal underwear on the market is very bulky, stretches out, lacks a functional fly, absorbs (instead of wicks) moisture, and is designed for skiing or camping,” says Tommy John’s Tom Patterson. “Our long underwear is designed to wear to the office, to the gym, or for a night out on the town when it’s colder than a mother and you’re exposed to the elements.”
Tommy John’s long underwear tops and bottoms each retail for $50. They come in black and white.
“We brought back long johns three years ago,” says Mike Jerkovic of American Essentials. “We looked back to the ‘20s and ‘30s to see what a typical gentleman would wear in the loungwear and sleepwear categories, and we focused on a few key pieces. One was a nightshirt and the other was traditional long johns ($50 retail). We wanted to update them and make them more sophisticated and elegant. So we incorporated silk and some performance features. We offer them all year round. The long johns have done so well that we’ve started adding some prints for holiday. It’s not for everybody but the reaction has been really fun.”