US BACK-TO-SCHOOL 2016 #3: MORE RETAILERS LOOK TO BECOME THE SHOPPING DESTINATION FOR SCHOOL UNIFORMS
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1 US BACK-TO-SCHOOL 2016 #3: MORE RETAILERS LOOK TO BECOME THE SHOPPING DESTINATION FOR SCHOOL UNIFORMS 1) Though uniforms still constitute just a small piece of the nearly $27 billion US back-to-school market, retailers such as Walmart, Target, Lands End, Old Navy and JCPenney are eager to compete for share of uniform sales and the additional traffic they bring to stores and websites during the second-biggest selling season of the year. 2) The uniform market is extremely dependent on pricing and promotions, with players offering low price points and typically running some sort of deal every week during the back-to-school shopping season. More retailers have entered the category in recent years, and consumers have remained price conscious, so retailers have been particularly aggressive in their promotions this season. 3) Many retailers are even going beyond traditional back-to-school promotions this year, turning to in-store fashion shows, celebrity appearances and social media to capture customers. 1
2 US BACK-TO-SCHOOL 2016 #3: SCHOOL UNIFORMS Highly Promotional Environment The school uniform market is highly fragmented, and the largest manufacturer, French Toast (owned by LT Apparel Group), has a 10% share of the market. Other large players include Elder Manufacturing, School Apparel, Dennis Uniform, Rifle/Kaynee, Flynn & O Hara Uniforms and Young Fashions, all of which are private companies. Though uniforms still constitute just a small piece of the nearly $27 billion US back-to-school market, retailers such as Walmart, Target, Lands End, Old Navy and JCPenney are eager to compete for uniform sales and the additional traffic they bring to stores and websites during the secondbiggest selling season of the year. Offering school uniforms can lead to a spillover effect generating additional in-store traffic. More retailers have entered the category in recent years as well. Boscov s, a regional department store chain, has seen the impact of school uniforms on fashion apparel sales over the last few years. Offering school uniforms can lead to a spillover effect generating additional in-store traffic. In response, Boscov has adapted its assortments according to local customer demand and school uniform adoption. Even stores that one might not think of in connection to school uniforms have begun selling them: for instance, office supply retailer Staples is now selling uniforms online. We think the uniform business is very dependent on price and sensitive to promotion. Some of the promotions we have seen in recent weeks include: Aéropostale: up to 60% off school uniforms 2
3 Figure 1. Selected Retailers: Average School Uniform Prices, Selected Items Sears: 40% off Dockers uniforms for kids Lands End: 20% off sale and clearance using code Walmart: $4.47 for boys and girls uniform shirts Kohl s: up to 60% off school uniforms Old Navy: Pre-Labor Day Sale: 50% off all tees and 30% off jeans for boys; 50% off all tees, 40% off all dresses and 30% off all jeans for girls JCPenney: 40% 50% off kids apparel; 50% off selected Izod school uniforms Target: up to 40% off selected uniform items; deals include buy one, get one 60% off on school uniforms, polos for $7, pants for $15, backpacks starting at $11.19 and 10% off selected uniforms with coupon code Uniforms. Boys Polo Shirt Boys Pants Girls Polo Shirt Girls Pants Walmart $6 $10 $5 $10 Old Navy $6 $11 $7 $11 JCPenney $11 $13 $13 $15 Target $9 $17 $9 $15 Lands End $26 $35 $23 $33 Source: Company websites Retailers Find New Ways to Showcase Uniform Styles Retailers are going beyond traditional back-to-school promotions this year, and are turning to in-store fashion shows, celebrity appearances and social media to capture customers. JCPenney, Costco, Old Navy, Amazon, Kohl s, Lands End, Sears, Target, Walmart, Macy s and others are being creative in order to drive in-store and online sales. Many retailers have set up separate uniform shops online and within stores rather than just displaying uniforms in the apparel section, for example. Retailers are going beyond traditional back-to-school promotions this year, and are turning to in-store fashion shows, celebrity appearances and social media to capture customers. JCPenney hosted a back-to-school fashion show at its store in Ross Park Mall in Pittsburgh, Pennsylvania, on August 19. Kids ages 4 12 modeled the store s back-to-school lineup. The company also sponsored a YouTube channel to an audience of 20 million followers in which social media celebrities discussed fashion trends and their favorite styles at JCPenney. Target has partnered for the second year with School List Assist. Target has nearly 1 million school supply lists on its School List Assist page on its website; site visitors can shop for all of their back-to-school supplies. This year, Target improved its online shopping tool by partnering with TeacherLists. Now parents can search for their local school s supply list by entering the school s zip code. Walmart added uniforms to Classrooms by Walmart, an online tool that allows parents and teachers to access school supply lists from thousands of schools. 3
4 Boscov s, Macy s and JCPenney recently participated in a fashion show accompanied by a karate demonstration and live magic show at the Beaver Valley Mall in Pennsylvania. JCPenney Back-to-School Fashion Show at the Ross Park Mall in Pittsburgh Traditionally favored by private and religious institutions, school uniforms are being adopted by an increasing number of US public schools. Source: Triblive.com Public Schools Increasingly Favor Uniforms Figure 2. Percent of Parents Who Say Their Children Wear School Uniforms 30% 25% 20% 15% 15.8% 17.8% 19.2% Traditionally favored by private and religious institutions, school uniforms are being adopted by an increasing number of US public schools. Many schools cite the positive impact uniforms have with regard to issues such as peer pressure, leveling socioeconomic disparities, classroom discipline, student safety and bullying. According to the National Retail Federation s 2016 Back-to-School Spending Survey, 25% of parents polled said their children wear a school uniform. That was the second-highest percentage recorded in the survey s 13-year history (last year s was the highest, at 28%). In addition, more students are expected to be enrolling in primary and secondary schools in the coming years. According to the National Center for Education Statistics (NCES), total enrollment in public schools (prekindergarten through grade 12) is projected to increase from 49.8 million students in the school year to 51.1 million students by 2020, which bodes well for uniform sales. 20.2% 18.4% 22.5% 20.2% Source: National Retail Federation and Prosper Insights & Analytics, Back-to-School Spending Survey (2016) 24.1% 28.1% 25.2% E 4
5 The NCES data suggest that more schools are adopting a casual uniform policy rather than enforcing a strict dress code. The definition of school uniforms has changed over the years: uniforms no longer consist of only pleated skirts or pants, button-down shirts, ties and sport jackets; they are now more likely to include casual polos, khakis and dresses. The definition of school uniforms has changed over the years: uniforms no longer consist of only pleated skirts or pants, buttondown shirts, ties and sport jackets; they are now more likely to include casual polos, khakis and dresses. Figure 3. Public Schools: Uniform and Dress Code Policies Source: NCES Require Students to Wear Uniforms 13% 19% Enforce a Dress Code 49% 49% According to the NCES, a higher proportion of schools located in cities made uniforms mandatory in 2012 than did schools in suburban, town and rural areas. In urban areas, nearly 40% of schools had a uniform requirement of some type in place, while just under 9% of schools in rural areas made uniforms mandatory. The cities with the highest number of public schools mandating uniforms were Philadelphia (100% of schools), New Orleans (95%), Cleveland (85%), Chicago (80%), Boston (65%) and Miami (60%). 5
6 Deborah Weinswig, CPA Managing Director Fung Global Retail & Technology New York: Hong Kong: China: Steven Winnick Research Associate HONG KONG: 8 th Floor, LiFung Tower 888 Cheung Sha Wan Road, Kowloon Hong Kong Tel: LONDON: Marylebone Road London, NW1 6JQ United Kingdom Tel: 44 (0) NEW YORK: 1359 Broadway, 9 th Floor New York, NY Tel: FBICGROUP.COM 6
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