Americans are buying fewer premium-priced jeans
Blame the leggings and the yoga pants. Americans are buying fewer pairs of jeans these days — when they are, they’re not spending as much as they once did.
Exhibit A: True Religion, which after years of declining sales, filed for bankruptcy protection this week and announced it would be closing at least 27 stores. A decade ago, the brand was riding high, commanding hundreds of dollars a pair for jeans with the company’s signature horseshoes embroidered onto the back pockets. Business nearly tripled between 2007 and 2012, and by 2013, True Religion had annual revenue of $490 million.
But that growth has reversed in recent years. Sales of super premium jeans — brands like 7 For All Mankind, True Religion, Joe’s Jeans and Hudson — fell 8 percent last year, according to market research firm Euromonitor International. Overall, jeans sales grew slightly in 2016 after two years of declines, as Americans traded down to lower-priced brands like Levi’s, H&M and Forever 21.
“The premium denim market has been in decline over the last several years,” Dalibor Snyder, True Religion’s chief financial officer, wrote in a document filed Wednesday with the U.S. Bankruptcy Court in Delaware. “Competition has also increased from emerging and established fast fashion and low-priced apparel retailers.”
Instead, Americans are increasingly filling their closets with yoga pants and leggings, which they’re wearing not just to the gym, but also to run errands and meet up with friends. True Religion’s $319 skinny jeans have been replaced by Lululemon’s $98 yoga pants.
Designer denim took off in the early 2000s, during an era marked by large, flashy logos. True Religion, founded in 2002 in Manhattan Beach, Calif., was among the first to cash in on the wave of premium jeans, with its lineup of funky designs and washes. (True Religion continued to grow during the recession, thanks in part to celebrities like Britney Spears, Kanye West and Mariah Carey, who were routinely photographed wearing the brand’s jeans.
But by late 2012, the outlook had begun to sour. Today, shoppers are more likely to favor low- or moderately priced jeans without large logos and decals, according to Euromonitor. Levi’s — where jeans generally range from about $45 to $90 — continues to be the most popular jeans brand among male consumers, while women tend to favor denim from “economy” brands like H&M, Old Navy and Forever 21, as well as private label brands from Wal-Mart and Target, according to Euromonitor. (Economy jeans made up 39 percent of womens’ denim purchases last year, compared to 9 percent for super premium jeans, Euromonitor found.)
“I don’t think this one is rocket science: The luxury jeans market is getting smaller and will continue to do so,” said Paula Rosenblum, managing partner of Retail Systems Research in Miami. “Why would you spend $300 on ripped jeans, especially if you can get the same thing for $60?”