The retail clothing business is a tough market, especially for small businesses with tight budgets. Like any other market, the Goliaths of the apparel retail business — the big department store conglomerates — present stiff competition to small businesses in terms of pricing, merchandise variety, service capabilities, advertising, and economies of scale.
For a small business to succeed in the retail clothing market, it must fill a niche that does not exist in the local marketplace. Small businesses have found that for them to be different and gain customer recognition, they need to focus on a smaller segment while building brand identity. It is tough to try to beat Macy’s or Nordstroms, but it may be easier for a small business to make its mark by specializing in a smaller clothing retail market such as children’s wear, maternity clothes, men’s clothes, teen’s wear, among others.
When Starting Your Own Specialized Clothing Retail Store
When starting an apparel retailing business, you need to think of the kind of merchandise that you will sell. You have two choices: either to create your own brand or sell other brands. Own brands definitely offer higher margins over non-store brands, although average margins in apparel retailing could be anywhere between 40 and 50 percent.
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You can offer couture or designer lines at premium prices. You can also offer bridge lines, which are usually made by designers but are of lower quality compared to the designer labels and are sold at lower prices.
You can also choose to create your own store from scratch, or buy an existing store. Buying a store that has been in business for years is easier since you will already have a known location and existing customer base. However, you may also have to work hard to undo the previous image of the store, if you are not satisfied with it.
Niches in Apparel Retailing
The first step to starting a clothing retail store is to develop its concept. This involves picking a very specific niche market that is not being filled and has the potential to sustain your store.
You may want to conduct some market research to help you narrow the focus of your store. Look at the population of the area where your specialized retail clothing store will be located. Learn the age range of your customers’, their spending habits, the frequency of purchases. Look at the other clothing stores in the marketplace. Also, consider what type of service you will offer and the price range of your goods.
Below are some of the profitable niches in apparel retailing:
1. Children’s Clothing Boutique Retailer
The study made by NPDFashionworldSM showed that infants and toddlers’ clothing was the only apparel segment in 2001 to show dollar growth across all market segments. The growth is spurred by the increase in the purchasing power of the parents and the need to provide the best for their children, as well as the increasing sophistication of the children’s apparel.
If you will focus on this niche, make sure that you keep up with trends. Your licensed products must always be fresh as consumers are demanding clothes that are both fashionable and with real benefits for young children. Children today are more mobile and autonomous, and they need clothes that respond well to their activities.
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As a retailer, however, you will be faced with stiff competition from imports and the declining birth rates in the western world.
2. Large-Size Apparel Retailer
A plus-sized clothing retailer sells clothing and fashion accessories “for individuals whose weight is above average for their particular build.” These women often find it difficult to find plus size clothing styles they want and with the same level of quality as regular sized clothing, resulting in a more stressful shopping experience.
Plus-sized clothing is one of the biggest growth opportunities in the apparel market. In the United States alone, a study conducted by NPD Group, Inc. and the market research firm HealthFocus®, Inc called “The Skinny on Women, Health, and Diet” found that 54 percent of all U.S. women over the age of 18 are overweight. As a result, the market has responded to the clothing needs of the large sized group, as boutiques and retail shops for plus-sized women, tall and heavy men, full-figured women have proliferated. Designers who have previously ignored this market are now providing larger versions of their chic outfits. More retailers are carrying whole lines of outfits geared for the plus-sized set.
The retail clothes market for plus-sized women alone has enjoyed tremendous growth in the past few years, posting $16.2 billion in sales for the year ended November 2013, up by 7.2% from the previous year. This proves that there is a substantial market for larger women. Hence, several niches within this market have emerged, including:
- plus-size businesswomen’s clothes
- plus-size lounge wear
- plus-size casual wear
- plus-size evening wear
- plus-size active wear
- teens 13-17 who need plus-sized clothing
- plus-size men’s clothes
With more than 4 million babies born annually, the maternity clothing market is buzzing. Hence, clothing designers from high-end maternity designers A Pea in the Pod to newcomers The Gap have recognized the potential of this growing market.
The maternity retail business has come a long way from offering dowdy, muumuu style maternity clothes to those that helps women celebrate their style and look sexy even as their body changes. Clothes offered for pregnant women in the market now include hip and sexy maternity clothing, athletic wear and corporate clothes. After all, as pregnant women’s waistlines balloon, their lives, and careers go on as usual. Professional women, for example, used to wearing smart career outfits would still want to wear suits and clothing suitable for work.
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What kinds of clothes can you offer in your maternity retail store? First, it is important to remember that pregnant women want good fit in clothes. A pregnant woman needs clothes that fit her growing belly, without looking like she’s wearing her husband’s clothes all the time. You may also want to choose merchandise that provides maximum versatility. Most retailers offer starter sets that contain matching shirt or blouse, skirt, pants, and shorts. Others include suits. These clothes are designed for lots of occasions, from office to receptions and dinners.
Choose clothing that lasts the life of a pregnancy. Pregnant women are looking for clothes that could last into the last month and look good post-pregnancy.
4. Closeouts and discontinued items
One possible retail clothing niche small businesses can tap is to offer closeouts & discontinued clothes. These are clothes sold by manufacturers or retailers at the end of the season or will not be carried the next year.
Another alternative is to offer factory seconds or irregulars, which are clothes that do not meet the manufacturers’ requirements in quality (color not right or some flaws in production).
5. Other special sizes
Aside from the plus-size market, there are other specific niches to consider with regards to size, such as:
Customers that fall under the above categories often find it hard to find styles that match their figures and body structures. There is often a limited selection of merchandise available in the stores for these special sizes.
For a specialized clothing store business to succeed, make consumers with specific needs feel comfortable shopping in the store. The key is to strive to improve customer experience, sell quality merchandise and offer the latest fashions.
Recommended Books on Starting a Specialized Clothing Retail Store Business:
- Fashion Entrepreneurship: Retail Business Planning
- The Complete Idiot’s Guide to Starting and Running a Retail Store
- Retail Buying: From Basics to Fashion
- Start Your Own Clothing Store and More (StartUp Series)
- Retail Buying: From Basics to Fashion (3rd Edition)