Workwear

Workwear is clothing worn for work, especially work that involves manual labor.[1] Often those employed within various trade industries elect to be outfitted in various forms of workwear because it is built to provide greater durability and safety.

The workwear clothing industry is growing[2] and consumers have numerous retailers to choose from. Buyers see workwear as the workhorse of the men's apparel business, one currently registering better increases than apparel overall. Chains that have made a commitment to the $1 billion and rising workwear business report steady 6 percent to 8 percent annual gains in men's workwear.[3]

Mass market retailers are wringing incremental sales out of workwear, making their stores destination outlets for the category.[3]

Workwear Clothing can be seen as a crucial element in providing brand awareness for a company. Adding a brand logo to staff workwear is an effective method of increasing brand visibility and exposure at minimal cost to the organisation.[4] The logo is often applied using embroidery, Screen-printing or heat sealing.[5] In the UK, if workwear is provided to an employee without a logo, it may be subject to income tax being levied on the employee for a "payment in kind" However if company clothing is provided with logos on then the employee may be entitled to a tax rebate to help pay for the up keep.[6]

Workwear sector lines up for growing business

28 September 2006

Across the world, the workwear business looks like a good clothing sector to be in, with total growth of 5.4% for corporatewear and 8.1% for workwear being forecast. However, companies that want to get on in the workwear market should focus their efforts on the developing world, according to a recent report from just-style.

Workwear, and corporatewear in general, is completely different from other forms of apparel - not in the way it is constructed but in the way it is sold. For 25% of the population of the developed countries of the world, what they wear to work is what their employers have given them.

In its report 'Global market review of workwear - forecasts to 2012,' just-style estimates the workwear market for 2005 was worth US$4.241bn, with 128m workwear wearers worldwide who are each given an average of 2.9 garments per year.

Corporatewear, on the other hand, is more image-heavy and this is reflected in its market value of around $9.367bn, with 209m wearers worldwide who are each given an average of 2.9 garments per year.

But while the traditional workwear sector has suffered as many countries' industrial bases have continued to decline, corporatewear has flourished in the developed world, as the work market has become privatised, more service-based and more concerned with image.

Growth to 2012
In US dollars at wholesale prices, just-style estimates the world market for workwear for 2012 at US$4.585bn.

This figure is derived from an estimate of 142m workwear wearers worldwide, each of whom are given an average of 2.9 garments per year, which will be no different from 2005. The average value of each garment will be US$11.27, which is lower than in 2005.
 
For the year 2012, just-style estimates that the corporatewear market will be worth US$9.872bn. This figure is derived from an estimate of 240m wearers of any form of corporatewear worldwide. Each will be given an average of 3.2 garments per year.

Geographical differences
The market is also very different geographically, with the percentage of employees given workwear and corporatewear varying from 16% in North America to 1% in the rest of the world.

Volume figures, however, tell a different story. Asia holds a massive 43% of the world's workwear volume, for instance. In fact, just-style predicts that spend-per-adult growth by 2012 will be especially strong in Asia and Latin America.

The overall market is expected to rise by 8.1% between 2005 and 2012, with Asia representing a gigantic 60% of the world growth and Latin America accounting for a substantial 45%.

North America, on the other hand, will witness only small growth, the report suggests, with growth in the European market stagnating.

The biggest winners of all will be India and China, just-style forecasts, while the main losers will be the mature markets of Western Europe.

This is crucial, the report says. It stresses, in fact, that companies operating in developed markets should consider whether there is enough long-term growth here, as the picture at the moment suggests workwear potential is opening up elsewhere.

"The analysis for 2005 and the population projections suggest that the developed world is a mature market for both workwear and corporatewear," it says. "Further growth will be limited, and will lie in the developing world."

Basic workwear garments
Importantly, growth is initially predicted to be for the most basic workwear garments, and will only later become evident in corporate imagewear.

Because market growth, of course, rests on the percentage of employees who are actually given workwear and the price that their employers are prepared to splash out in order to promote a company image.

just-style believes that companies in the developing world will buy into the concept of corporate imagewear, but that this will be a gradual process, with the first step being the purchase of basic workwear as an employment benefit.

Developed world opportunities
The question is where this leaves companies which have already established workwear and corporatewear businesses in the developed world.

The experiences of selected corporatewear companies suggest that:
• Small- and medium-sized companies can pursue a product or industry specialism.
• Medium-sized contract companies must concentrate on design leadership and the added-value of image.
• Large companies must reach out globally, market their brand and source from low-cost countries.

In addition, these companies have highlighted that opportunities exist to partner with local suppliers when marketing imagewear.

"…these seem to be particularly attractive in China, India and parts of the Middle East," the report says.

On the whole, workwear seems to be a healthy sector and a worthwhile one to be in, but the success of an individual company depends on where it is based, its channels of distribution and from where the garments are sourced.

Moreover, those looking to cash in on the sector's opportunities should use their marketing to persuade developing countries of the benefits of corporate image.

What we wear at work

Workwear, within corporate wear in general, is completely different from other forms of apparel. This is not in the way that the garments are constructed, but in the way they are sold. If you are an employed person, your workwear is sold not to you, but to your employer. As a result of this, the wearer only has a limited influence on the choice of his or her work wardrobe.

The blurring of the market

The main theme and contention of the third edition of this report is that the workwear market is ‘blurring’. It has lost the clear product, channel to market, and industry user definitions that made it easy to analyse. The supply chain, which was once also straightforward, is no longer so. Today’s supplier can choose which business function to undertake in-house and which to outsource. The supplier no longer:

designs;

markets and sells;

produces; and/or

distributes.


Workwear market approaches

For workwear, the ‘traditional’ routes to market still predominate. Purchases are likely to be made via garment rental companies, from wholesalers or through a catalogue. This is because the product is basic and often has no image connotations. Career wear, casual wear and uniforms however, do have significant image connotations, while protective wear has to do what it says, namely perform technically. These issues have an important impact on the strategies of companies in the industry.

Estimating the workwear market

The method used for calculating the market value at wholesale prices is a series of linked causal relationships, starting with:

the adult working population;


What we wear at work

Workwear, and corporate wear in general, is completely different from other forms of apparel. This is not in the way that the garments are constructed, but in the way they are sold. Workwear, unless you are self-employed, is sold to your employer, who, in the developed world at least, gives the garments to his employees to wear at work. For xx% of the adult employed population of the developed countries of the world, what we wear to work is what our employers have given us. The reasons that we are given clothes for work are:

necessity;

personal protection (legal or moral obligations);

corporate image.


So, quite unlike any other apparel category, the clothes are not bought by the wearer, and the wearer only has some input into the choice of his or her work wardrobe.

In this, the third workwear sector report from just-style, the emphasis is upon the blurring of the definition of workwear, and the maturing and changing of the workwear market around the world.

Report coverage

Chapter 3 defines the market for workwear within the total corporate wear sector. The workwear market is valued worldwide in Chapter 4 for the calendar year 2007 at US$xxxxxbn.

Chapter 5 then breaks down the market by geographic region. Forecasts are made for overall consumption of workwear and corporate wear to 2014. The forecasts are based on population, employment, the number of workwear wearers, the number of garments and US dollar value. Forecasts are made of the workwear and corporate wear market in 2014, and predictions made of where growth will be seen, and which regions of the world will stagnate.

Chapter 6 addresses and estimates the production of workwear. This is a ‘first’ for just-style, and is based on other consulting work done by the author in this clothing sector.


The disintegration of the supply chain

The main theme and contention of the third edition of this report is that the workwear market is ‘blurring’. It has lost the clear product, channel to market, and industry user analysis that made it easy to analyse, when the author first wrote on the subject nearly 20 years ago, for the British Clothing Industry Association.

In addition, at that time, there was a much clearer understanding of where the various players stood in the workwear supply chain. They had simple and obvious marking and supply positions. Workwear is now far more complex and ambiguous about to whom it is being marketed, and on what consumer or customer need.

The supply chain, which was once also straightforward, is no longer so. Then the supplier did all or some of the following:

design it;

market and sell it;

produce it; and/or

distribute it.


It is not that simple any more. As a consequence, it is now the right time to reconsider the historically-accepted definitions of product, channels to market and workwear industry users.

Product definitions

The definitions given in Table 1 below are those that were created by the author for the original British Clothing Industry Association 1989 sector report entitled The UK Corporatewear Market. At that time, there were only four categories. Corporate casual wear (polo shirts, and jeans or chino trousers) was added later.


Market sources and methodology

The corporate wear market operates as a B2B transaction between various suppliers, using a variety of routes to market, and a number of industries that need to put work clothes on the backs of their employees.

The method used for calculating the market value at wholesale prices is a series of linked causal relationships, starting with:

the adult working population;

the proportion of that population that is employed (as distinct from self-employed);

the percentage of those working that are given workwear.


This derives the number of workwear wearers.

Then the number of wearers is multiplied by the number of garments issued per annum per wearer to give the number of garments issued per annum.

Finally the number of garments issued per annum is multiplied by the wholesale US dollar price per garment to derive the wholesale value of garments issued per annum.

just-style commented earlier on the fundamental difference between the wholesale value of garments sold and the income made by renting them. Rental income comes from delivering a service, which is collection/laundry/return to client. This has no logical or numerical connection to the wholesale value of the garments themselves. The fact that many of the suppliers of garments are also renters, and that many of the big laundries have integrated backwards into garment supply, merely complicates the evaluation of the industry. This will become apparent in Chapters 7 to 10, when some of the largest companies are profiled, and their industry strategies reviewed


Workwear market history, 2004-2007

In US dollars at wholesale values the world market for workwear for the year 2007, is estimated at US$xxxxxm. This value represents xxxm workwear garments, bought for an estimated xxxm workwear wearers worldwide. Each workwear wearer is given an average of xxx garments per year.

Table 7 compares world figures for workwear for 2007 and its growth since 2004. It also provides quantified estimates for the share of workwear within corporate wear for the two years.


All the players in the workwear market are interested to understand the nature and dynamics of the production route to market. This applies not only to the companies (often referred to as managing agents that specialise in selling workwear contracts, but also to the whole of the production chain. It is of considerable importance for fabric and other trim suppliers (zips, buttons, packaging, etc) to know the trends in the locations around the world where garments are manufactured, because the garment manufacturers are their customers.

Having said that, it is not always the case that the garment manufacturers are directly their customers. The purchasing decision-makers may be different people from the garment manufacturers. This will be considered in Chapter 9.

All parties are, however, interested in the location of workwear production. Unfortunately, this is not easy to quantify. Although much workwear is made of poly/cotton fabrics, these are not the only fabric types used. Consequently, production estimates cannot be made based upon the trade in particular fabrics. Nor is it possible to make estimates based on import and export figures for two reasons:

import and export trade figures do not contain ‘domestic’ production for domestic consumption, so a large part of a region or country’s production is omitted;

standard industrial classifications (SIC codes) merge workwear garments with other poly/cotton and cotton High Street garments.


Consequently, production estimates for workwear have to be based on specific and individual knowledge of the major sources of various workwear garments. Estimates using this approach have been made by the author in research project work undertaken for major players in the workwear supply chain. Some of the conclusions are given below.

China has become the world’s leading producer of workwear over the last ten years. It is widely believed that China accounts for nearly one-third of total


In previous editions of this report, the evolution of workwear and corporate wear garment companies was charted:

in the early 1980s, garment suppliers were product manufacturing specialists who sold to wholesalers or rental companies;

in the late 1980s, many of these suppliers were bought by the garment renters who were integrating backwards down the supply chain;

in the early 1990s, the garment companies added design, marketing and distribution skills and became either contract management or catalogue specialists;

at the same time, the concept of corporate image took hold, in which the image of the business was reflected in the style of employees’ clothing;

also in the 1990s, smaller design-led companies became sector specialists.


Throughout this time period, the capacity for manufacturing in the developed world reduced as the new ‘image marketing’ businesses looked for low-cost production elsewhere in the world. In addition, company closures and mergers and acquisitions reduced the number of suppliers to the industry. By 2003, the author was on record as estimating that in the UK, the number of ‘meaningful’ suppliers had shrunk from xxx to fewer than xx. It is now probably of the order of xx as of 2008.

The maturing of the market also led to fierce price competition and low margins, and in the last five years, this has prompted companies in the workwear sector to reconsider their strategies. The strategies that are relevant depend, to some degree, on scale. As a consequence it is valuable for companies to be classified by size and type. Taking the latter first, workwear can be supplied in three ways:

through a contract managed by the supplier;

ex stock available from stock as viewed in a catalogue, and ordered by mail order, telephone or the internet;

through a garment rental and laundering company.


Workwear history

Throughout the last 20 years, the corporate wear sector in the developed world has consolidated. This has happened primarily as a result of company closures and mergers and acquisitions. In a B2B industry like workwear, ‘buying’ sales and market share by buying a competitor or complementary business has always been attractive.

More recently, however, companies have started looking at their strategies and asking negative as well as positive questions, such as:

Why am I in this business?

What unique proposition, expertise or added value does my company bring to the market?


Questions like these are symptomatic of a maturing market, one in which the players have lost their youthful exuberance and enthusiasm. An understanding of the characteristics of a maturing market helps to explain some specific decisions made by companies, which are reviewed in Chapter 10.

The five phases theory

Most products (and most industry sectors) go through a process of being born, growing, aging, declining and dying. This process is called the product life cycle (PLC). The PLC describes product sales evolution through time, and is usually expressed in the form of five phases. These are:

introduction;

growth;

maturity;

decline;

death (or resurrection).


In the case of workwear, as a set of products, which have to meet standards of performance and durability in the industry, external factors are also important. The PESTEL theory of the effect of external forces on a business system also


Customers for workwear

In Chapter 3 (in the channels to market definitions section), five channels of distribution were identified. These were:

garment rental;

wholesale;

tender;

direct response to a catalogue offer;

direct negotiation.


The channel methods provide the first step to understanding how the workwear buying decision is made. However, in many – perhaps in the majority of – cases, the primary and most crucial decision is actually about the choice of fabric. As one workwear fabric brand, Carrington, puts in its trade advertising, the fabric comes first”.

By looking at the workwear sector through the channels of distribution analysis, a view can be obtained of the different types of customer there are for fabrics. These are:

end-user specifiers;

contract (managing agent) manufacturers and distributors;

mail order (catalogue) specialists;

garment rental companies;

workwear ‘brands’;

manufacturers;

wholesaler/importers.


Understanding who is making the fabric decision provides an insight into who is choosing the workwear garments, and on what criteria such decisions are based. It has already been established that the buying decision is rarely made by the wearer.

The image map

What follows as Figure 3 is an ‘image map’ of how each prospective buyer of garments and fabrics makes that buying decision.


Over the last decade, the structure and characteristics of workwear and corporate wear companies has changed significantly. In the workwear industry in the developed world, there are no big manufacturers left. As just-style has noted, they may still control production – but it is not being done in developed economy factories. Nor are most of them showing any inclination to own or control factories dedicated to supplying them from low-cost countries around the world. Their offer to the market is a service offer based around:

design;

sales;

after-sales service;

distribution.


Workwear companies now regard themselves as having a wider business strategy of providing a number of services to business and industry, such as:

washroom consumables;

general sanitation and pest control;

health and safety services.


As a result, the profiles given below are of major and substantial workwear industry companies, which provide workwear within the context above, by concentrating on the skills of:

delivering service;

renting workwear garments;

providing a total contract management speciality.


But, although manufacturing as such is not part of their business, they still have to be attractive to their existing and potential customers through one or a mix of the approaches that were outlined in Chapter 7 as their potential unique selling proposition. These were to:

dominate their domestic market;

specialise by product;

specialise by industry sector;

add image through accessories;