Australia Apparel Market

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Apparel

Industry Sector Analysis [ISA] ID: 117740

Regions

Countries

Divisions [State]

Industry: Apparel & Textiles Sector: Apparel

by: Annette Ahern

approver: Nasir Abbasi

Report Date: 08/25/2004

Expires: 08/30/2005

INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND U.S. DEPARTMENT OFSTATE, 2004. ALL RIGHTS RESERVED OUTSIDE OF THE UNITED STATES.

Provides an overview of the apparel sector and likely opportunities for the U.S. exporter

APPAREL IN AUSTRALIA

PREPARED BY:

Contact: Annette Ahern, Commercial Specialist Organization: U.S. Commercial Service, Melbourne

Telephone: 61-3-9526-5928

Fax: 61-3-9510-4660

Email: [email protected]

The apparel market in Australia is well developed, with consumers knowledgeable,discriminating and selective. Opportunities for U.S. firms are likely to be in niche markets for brand name products and upper/ mid range to high-end fashion.

SUMMARY:

MARKET OVERVIEW:

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• The total market for apparel is estimated at US$1.869 million with expected annualgrowth for the sector estimated at 1.5 percent for the period 2005 – 2006.

• Trends in Australia are current with global fashion trends.

• Australian buyers attend major international collection releases and purchase directlyfrom the shows. Australia is in step with the leading fashion countries, as manysuppliers travel to Europe and the USA to view fashion trends.

Usually formal and working fashion trends are sourced from Europe, and leisure andsports fashion from the U.S., and appear here at the same time.

• China is Australia’s largest supplier of apparel, followed by Italy, Hong Kong and NewZealand. China and Italy remain the primary origins of imported apparel, however thegap between China and Italy is huge. Whilst Italy, Hong Kong and New Zealand areexporters of apparel, the Chinese have a 73% import share, holding an overwhelminglevel over Italy, with a share of just 4%.

• An increasing number of Australian firms are developing links with manufacturersoverseas and/or establishing offshore subsidiaries, which is particularly prevalent infirms with strong brand names.

• The current tariff level is 25 percent, which will reduce to 17.5 percent in January 2005.• As industry players are taking advantage of the government assistance to upgrade

machinery and technical equipment, there are niche opportunities for manufacturers of textile machinery in the Australian market.

• Though imports are expected to increase annually 1.5 percent, the demand for apparelis moderated by population growth trends.

Australian Market Share for U.S. and Major Competitors

• The U.S. is a significant supplier of high fashioned branded apparel.

• U.S. medium range products tend to be top range here mainly due to price differentials.

• The main factors contributing to the continual success of U.S. apparel are the highquality of workmanship linked with U.S. brands, as well as the popularity of well

U.S. POSITION:





e.g. Levi Strauss and Columbia.

Some U.S. Brands in Australia include:

• Australian designers produce top quality fashion at competitive prices and are able tocompete successfully, many of which are significant international labels.

• Local designers are well established within the industry and are up-to-date with thelatest trends based on those developed in both the U.S. and Europe, as well as thoseunique to Australia.

• Designer imports, particularly from Italy, are well received in this market, with Italyconsidered a traditional supplier in the high-end sub-sector.

China is the major source of garments being offered at the lower to mid end of themarket, with imports from China valued at US$1.171 million.

Low cost, offshore production in China has almost completely taken over the supply of cheaper (basic and low mid range) garments.

Economic ties between Australia and the Asian region continue to strengthen asevidenced by the growing number of regional trade agreements.

Other sources of apparel imports are from Italy, Hong Kong and New Zealand, with principal imports from Italy being high-end leather garments. Hong Kong imports are primarily at the lower end of the market and imports from New Zealand consist predominantly of leather and outdoor clothing.

• The Australian apparel manufacturing sector contains a varied range of companies, witha few large and many small companies in the sector.

• Along with designer wear, the three main product areas that Australian companiesspecialize in are:

o Industrial workwear o Socks and hosiery, especially pantyhose

o Female outerwear, such as dresses and skirts.

• The textile, clothing and footwear industries are heavily concentrated in the states of Victoria and New South Wales with nearly 80% turnover and value added occurring in

these two states. • The apparel industry has become a modern, well-equipped sector that is highly

specialized, with particular firms concentrating on particular market segments.

• Major local suppliers include Hard Yakka (workwear) and Pacific Brands, a consumer goods conglomerate offering numerous brands including “Bonds” underwear.

DKNY Liz Claiborne Calvin Klein Tommy Hilfiger Levi

Timberland Columbia Wrangler Lee Jeans Oshkosh B’gosh

COMPETITON:

DOMESTIC PRODUCTION:

MARKET ENTRY:





• Apparel is distributed by using the services of fashion agents to handle apparel sales or by selling directly to buyers of department stores, specialist stores and smaller retailers.

• Fashion agents manage their ranges by showing samples to retailers, taking orders and passing them to the company they represent.

• Fashion agents, generally to not import and hold stock themselves, preferring tooperate by “indent selling”, taking orders from retailers on behalf of the companies they

represent. • There are a number of different markets for apparel products. By far the largest market

group is private households, which directly purchase apparel usually from retailers.Markets and non-retail factory shops are also important outlets. Retail stores fall intothree main categories:

• Department stores (e.g. Myer, David Jones)

• Specialist stores, which concentrate on a particular range merchandise (e.g. Fletcher Jones, Mansours, and small boutiques)

• Mass merchandisers (e.g. K-Mart, Target, Big W)

• Certain apparel items such as pantihose, underwear and socks can also be found insupermarkets

• The apparel market is divided into the following segments:

Boy’s, girl’s, infant’s, men’s and women’s clothing with 52.3% of total market share.

• Future growth is forecast for high-end niche apparel, e.g. internationally accepted brandname products.

• U.S. companies looking to export to Australia should consider the opportunities in thismarket, particularly in the sportswear, lifestyle fashions and women’s designer segments.

• Greatest success will be achieved from participating in the mid to upper price ranges inAustralia, with a quality product that offers consumers a point of difference.

PRINCIPAL EXISTING SUBSECTORS:

COMMERCIAL OPPORTUNITIES:





• Australasian Textiles and Fashion (textile and clothing business magazine):www.apparelb2bcentral.com

Council of Textile and Fashion Industries of Australia (textile and clothing trade

association): www.tfia.com

Impex, Australian Import/Export Opportunities Expo, including TCF International,Furniture and Interiors international and Gift and Homeware International trade event:www.ausexhibit.com.au

If you would like to discuss your apparel concept or would like any other information on theAustralian market, we would love to hear from you. Please contact Annette Ahern,Commercial Specialist responsible for apparel sector at: [email protected]. In

addition, please visit our website to discover latest commercial developments in the apparelsector in Australia: www.buyusa.gov/australia

OTHER RESOURCES:

CONTACT US:

For additional information regarding market research specific to your products and services, ask about our FlexibleMarket Research and Customized Market Analysis programs by contacting us at 1-800-USA-TRAD(E) or www.export.gov or www.buyusa.com. Both reports provide timely, customized, reliable answers to your inquiriesabout a market and its receptivity to your products and services.

To the best of our knowledge, the information contained in this report is accurate as of the date published.However, The Department of Commerce does not take responsibility for actions readers may take based on theinformation contained herein. Readers should always conduct their own due diligence before entering into businessventures or other commercial arrangements. The Department of Commerce can assist companies in theseendeavors.


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Documents

Australia Apparel Market