The Skinny on Plus-Size Apparel

Retailers specializing in women's sizes 14 to 32 are ringing up big sales gains, and their stocks are rising, too

You know that things must really be revving up in plus-size clothing if Jessica Simpson wants in on the action. The pop diva, whose shrinking waistline has been a popular topic in the supermarket tabloids, recently launched a fashion denim line at Avenue, a store that caters to women's sizes 14 to 32.

Yes, fashion designers and fashionistas, wake up. The handful of retailers that sat up, took notice of America's expanding waistlines, and started offering hip and trendy clothes are ringing up big sales gains. Today the plus-size category is one of the fastest-growing in women's retail.

DOWDY DUDS. "These smart retailers are listening to girls who are saying they don't want to look like a shower curtain, and are offering up trendy clothes that don't necessarily come in animal prints," says Kat Fay, retail analyst at the Chicago research group Mintel. Fay estimates that the plus-size clothing market hit $32 billion last year, up a total of 50% in the past five years.

These retailers are seeing plus-size returns, both in sales and stock-market gains. In the past year, Charming Shoppes (CHRS ), which owns the Lane Bryant stores, saw its stock double, to $14. Dress Barn's (DBRN ) stock almost tripled, to $47. And shares of United Retail (URGI ), which owns the Avenue brand of stores, quadrupled, to $19.

And why not? Profits and sales at these retailers have been hopping. For instance, same-store sales at Avenue jumped 15% in January, following a stellar 16% in December. And in the latest quarter ending Jan. 28, 2006, Charming Shoppes' net income increased 294%, to $19.2 million.

STEPPING OUT. Charming Shoppes is plenty confident that the strong demand will continue. It's opening up 60 stores of its intimates line in the plus category this year called Cacique, pegged to be a Victoria's Secret competitor. There are only 12 Cacique stores today.

Some mainstream lines are jumping on the bandwagon. Kohl's (KSS ), for instance, has extended two of its private-label lines, Apt. 9 and Daisy Fuentes, to include extended sizes. The plus-size customer is "eager to look good and if you can satisfy her at all levels, she will come back for more," says Wendy Liebmann, president of WSL Strategic Retail, a retail consultant.

Clearly, demographics have a lot to do with it. The Centers for Disease Control & Prevention has said that more than 62% of American women were likely to be overweight or obese between 1999 and 2002, and the trend is being reflected in clothing sales in the category (see BW Online, 12/27/05, "No Feast for Food Marketers").

CURTAIN CALL. In the past few years, research has shown that the average size of an American woman is 14, which is the entry point for the plus size. But nobody really addressed it, because of the stigma associated with plus-size clothing. Indeed, most department stores traditionally relegated plus-size clothing to the rear end of the store, where there isn't much foot traffic.

But, in the last year, there has also been a marked shift in popular culture, towards more acceptance of the more plentiful. Plus-size icon Mo'Nique just finished screening plus-size women in New York on Mar. 20 for a second reality-based beauty show called Miss FAT or fabulous and thick. Last year, the show gave the Oxygen cable channel its highest-rated original program in the network's history.

At the same time, mainstream companies like Nike (NKE ) and Dove have begun using plus-size models in their advertisements. A recent Nike ad featured a woman who claimed to have "thunder thighs" and was cheered in marathons. And the popular Dove campaign last year featured six "real women" who were not professional models, and showed them in their "real curves." (See BW Online, 11/9/05, "From Reality TV to Reality Ads".)

SWELL BUSINESS. More important, retailers like Lane Bryant have recognized that plus-size fashion doesn't necessarily mean that they can just have larger sizes of the hour-glass shaped figure. Rather, research shows that most plus-size women have pear shaped bodies, with larger waists.

In the past year, Lane Bryant and Avenue has gotten bolder with its offerings of higher-priced clothing. It introduced rhinestone-encrusted denim pants that retail for a cool $375. "If it's fashionable, even plus-size people will pay for it, retailers are discovering," says Christopher Kim, analyst at JPMorgan.

Given that Americans aren't that likely to shed those pounds any time soon, the plus-size segment may be just getting started (see BW Online, 11/9/05, "Fat Times for Fast Food"). As clothing in the segment grows even more fashionable, it won't be surprising to see sales and profits continue to swell.

READER COMMENTS

Gogoi is a reporter for BusinessWeek Online in New York

BW MALL SPONSORED LINKS

Mutual Funds at Fidelity Benefit from years of mutual fund management experience.
Hot Careers in Internet Marketing Get prepared for your new career with online degrees from Full Sail University!
Master HR Compentencies Online w/ Villanova U. Earn a HR Master Certificate & Gain the Skills to Execute Effective Employee Relations - Enroll Now!
Business Skills Training Integrate Learning into Business w/ SkillSoft's Learning Solutions
e-learning Solutions e-Learning Certification Courses, Books, Services & More at SkillSoft

Buy a link now!

Get BusinessWeek directly on your desktop with our RSS feeds. XML

Add BusinessWeek news to your Web site with our headline feed.

Click to buy an e-print or reprint of a BusinessWeek or BusinessWeek Online story or video.

To subscribe online to BusinessWeek magazine, please click here.

Learn more, go to the BusinessWeekOnline home page