As reporters started digging into their assignments, it became apparent that our fears of putting out a dirge on denim were misplaced. There were plenty of success stories despite the industry enduring the most challenging retail environment in decades. The growth in women's denim came as a surprise considering there have been a number of retail bankruptcies and that brands consistently told us of many of the boutiques with which they did business were closing their doors.
While these things did hurt segments of the market, it turns out consumers were taking advantage of sales at department and specialty stores. While shoppers may have cut back their spending on apparel overall, it's clear that when they did spend, it was denim that often made the most sense. The value proposition of denim shined in a time of economic difficulty. Even if it cost upward of $100, it would last longer than any other item of apparel and could be worn in a number of social situations.
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The men's market proved equally resilient, maintaining stable sales at a time when broader sportswear sales declined. Many men responded to the poor economy by trading down on their denim, spurring an almost 40 percent surge in jeans priced under $100. However, there appears to still be ample opportunity to expand in the premium segment of the market.
Brands were undoubtedly battered by the steep discounting in department stores leading into the holiday season and on through the winter. Once again, branded stores proved to be the remedy to falling wholesale sales, and nobody proved the case better than True Religion. It had 49 stores at the end of the first quarter and plans to open 18 more this year. While True Religion's U.S. wholesale business fell 11 percent overall and 3 percent at major department stores in the first quarter, its consumer direct business shot up 96 percent.
With department stores continuing to struggle to find their footing and boutiques grappling with credit issues, branded stores are proving to be the best option for denim labels.