Hefty Profits

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In Los Angeles, where wispy starlets and lingerie models regularly slip into skimpy dresses that are size 0 or 2, it’s easy to lose perspective.


But even Angelenos are coming to grips with this reality: about 40 percent of American women wear a size 14 or larger. So-called plus-size clothing has become a $32 billion industry, and it is growing faster than any other market segment.


Inspired by such full-figured celebs as Kirstie Alley and Tyra Banks, plus-sized women are demanding more fashion-forward merchandise and designers and retailers are beginning to respond. And it’s not just Target Corp. and Wal-Mart Stores Inc. that are emphasizing larger sizes. Trendy brands such as Apple Bottoms and Kellwood Inc.’s Baby Phat recently launched plus-size lines. City of Industry-based Hot Topic Inc., which has seen sales of its primary brand slide, has posted better results with Torrid, its line of stores for curvy women.


“It’s a real recognition on the part of the fashion industry that there’s a whole segment of the market that’s ignored,” said retail consultant Richard Giss, a partner at Deloitte & Touche LLP, “and the success of the early entrants to the marketplace have caused emulation.”


He attributes the growth of fashionable plus-size sales in part to the nation’s increasing waistline, the number of young women shopping for larger sizes, and the success of professional attire in plus sizes.


The trend is affecting nearly every segment of the industry, even mom-and-pop outfits.


Yul Kwon joined his parents in 2002 in their business Gemix Inc., which manufactures plus-sized clothing for women. He’d just finished his master’s degree in finance, but didn’t know much about fashion. His parents, Onoh In and Young Kwon, started Gemix in 1987. When Yul joined the company, which is downtown, he hung out after the company’s weekly sample sales to get a feel for his clientele. He also asked them to fill out surveys. He learned that the market was shifting.


Customers didn’t want regular clothes that were simply bigger. They wanted clothes that were cut and styled differently, in a way to fit their curves.


“It was pretty clear they were tired of the style of clothes that didn’t fit,” he said. “With the right fit, shaped to the curve, you’d look younger, slimmer; it makes a lot of difference.”


Kwon’s customers were also looking for more fashionable duds. He decided to launch Missphit, a new label for Gemix, using higher-quality fabric, hipper styles and more attention to detail. He set the average wholesale price at about $20, roughly double that of the company’s Gemini house brand.


Shortly after last summer’s launch, Missphit was picked up by Dillard’s Inc. department stores, which are concentrated in the Sunbelt and central U.S.


The big box chain’s orders have increased steadily from an initial trial order. And Gemix was flooded with calls from customers who couldn’t make it to a Dillard’s store. The problem has been temporarily fixed by selling Missphit on Dillards.com. But he expects demand to keep growing.


The $6 million company has had to increase output 40 percent to keep up with orders. Gemix made 6,000 garments per month last year, but is planning to grow that to 10,000 units per month this year. The downtown factory is doing so well that Kwon’s parents expect to retire by year-end and leave their 31-year-old son at the helm.


“I’d like to say I have someone like my mother or wife who is a plus-size woman and I noticed their frustration,” Kwon said. “But this is something I’ve been immersed in, and I saw this market wasn’t served.”


Torrid growth

Another factor in the growth of the fashion-forward plus-size market is the increasing number of young women with more generous proportions.


“We used to make basic items aimed at women in their late 30s to 50s,” Kwon said. “However, as the years passed, we have seen a strong demand for younger, trendier looks. Now it has gotten to the point where customers are kicking and screaming at us to make fashion-forward designs.”


In 2001, Hot Topic, the edgy chain targeted directly to teens, noticed a dramatic growth in requests from women for larger sizes. The company tested a few items on the company Web site and was bowled over by the response. Hot Topic added a permanent plus-size section to the Web site, but more research revealed it wasn’t enough. The customers wanted a separate store that offered the same sort of fashionable merchandise that their slimmer friends might be wearing.


Hot Topic opened its first Torrid store in Brea in April 2001. Torrid serves young women sized 12 to 26. The chain now has 131 stores and expects to open 20 this year. Torrid’s store merchandise is 50 percent house brand and 50 percent fashion brands like Paris Blues, Dickies and l.e.i.


Delia Douglas, Torrid’s marketing manager, said the company estimates that the chain could eventually grow to the size of Hot Topic, currently about 700 stores. The sub-brand has been a bright spot for Hot Topic, which has been underperforming since last summer, according to Giss, the Deloitte consultant.


“The market that Torrid caters to has definitely been underserved,” Douglas said. “Young girls, in their teens and early 20s, have not had many places to shop unless they wanted to mirror the outfits their mother was wearing.”


Giss said teenage girls are as safe a bet as exists in today’s retail environment.


“You only need to look at the success of Forever 21 and Wet Seal to see the amount of disposable income available and being spent by teenagers,” Giss said. “Plus-size kids are looking for where they can go to spend their dollars.”


And for many shoppers, the need for plus-size proportions is a family affair.


“We have always had an overwhelming response from our customers,” said Douglas, “and their mothers as well.”

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