Over the last year and a half we’ve talked about the impressive momentum we’ve seen in menswear sales, in part because women’s wear usually outpaces men’s. Women tend to buy more frequently, keeping sales revenue churning. But, at the end of 2022, menswear had posted a 22% gain on the previous year, while women’s wear was up by 18%. Let’s take a closer look at what is happening in both categories, and why.
First, we need to talk about turn. The turn rate measures how fast your inventory is sold, and has to be replaced. Women tend to buy more frequently than men with the average turn rate for women being 3.5 versus 2.5 in menswear.
Last year, we planned a turn rate of 3.4 on average across our women’s wear clients, but their actual turn at the end of the year came in around 2.6. This means that women were buying less frequently than we expected based on historic data. So this is one important factor in looking at why menswear outperformed women’s wear last year.
Another key factor is price. Menswear is generally priced higher than women’s in our specialty stores, so even though women buy more times per season, the average transaction rate for menswear is higher. And recently, we have seen strong sales in more expensive men’s categories, such as Suits and Special Order items. In fact, men’s special order was up by 35% last year, versus women’s 11% gain.
The third factor is margin. Women’s wear tends to generate a lower margin than men’s. Over the last 12 months menswear posed an average margin of 57%, versus 54% for women’s. When you add these factors together it’s easy to see why menswear performed so well last year.
But as we mentioned at the top, frequent buying usually keeps women’s wear in the lead. So, what has changed in the last couple of years?
Our research suggests two reasons — one economic, and one social.
First, there’s hard data that shows that over the course of the pandemic, and subsequent recovery, the rich tended to get richer, while the middle and lower income earners lost ground to inflation and soaring rent prices. That meant that middle income earners had to cut back on discretionary spending, which is why we are seeing a downturn in many budget and big box stores.
The wealthy, on the other hand, were less affected by inflation. In fact, for the first time in many years they are making money on their savings due to increased interest rates.
Another interesting social trend emerged from the pandemic lockdowns, and that was a renewed interest in dressing up and dressing well among men. We are not sure exactly why this occurred, but the sales data shows two straight years of men investing in Clothing categories,which is unusual.
While wealthy women’s wear shoppers are also benefiting from higher interest rates, they were already frequent buyers so unless they increased their seasonal shopping frequency above and beyond historical patterns, we wouldn’t see the huge gain we saw menswear.
So, looking ahead, it does appear that both categories will continue to see growth, but we are going against steeper numbers over the last two years, amid a slowing economic cycle.
At this point it looks like a soft landing is more likely than a recession, so retailers in the upper end of the market should continue to benefit from wealthy consumers.
And, in additional good news for women’s wear merchants, new fashion trends have finally emerged and we have new looks to keep customers coming back in. Currently, dress and jacket categories have the most momentum, but we are also seeing a wider variety of denim looks and other casual trends.
In terms of menswear, it will be interesting to see if this new approach to dressing continues. We will certainly keep on top of the numbers, and let you know.