To Victoria’s Secret’s Goliath, Lingerie Start-ups Play David

NEW YORK, United States — Founded in 1977 by Roy and Gaye Raymond and sold to Limited Brands in 1982, Victoria’s Secret changed the way women shop for underwear. The ultra-feminine furnishings and pink walls of the branded boutiques provided a sanctuary for women who dreaded heading to the back corner of a department store to try on the basic and unflattering products they offered. “Mass merchandisers were offering commodity bras,” said David McGoldrick, an analyst at Euromonitor International. “Aesthetically, there wasn’t a lot going on for brands like that. Victoria’s Secret made buying bras another way of dressing up. It offered women a new way to boost confidence.”

Today, Victoria’s Secret is the world’s largest women’s undergarment seller, accounting for about half of lingerie sales in the US, a market estimated at $11.94 billion in 2013 according to research firm IBIS World. But in the shadow of this one-time disruptor and present-day Goliath, a crop of David-like start-ups are attempting to carve out their slice of the global lingerie market. “There’s a space there for more fashion sense than Victoria’s Secret,” said McGoldrick. “And lower prices.”

“I wanted to buy lingerie for my girlfriend but couldn’t find anything nice enough within my budget,” said Morgan Hermand-Waiche, founder and CEO of Adore Me, a New York-based start-up that is applying a fast fashion model to lingerie. While Victoria’s Secret only produces two major collections per year, Adore Me drops a 30- to 40-piece collection each month. A bra and underwear set are priced at $39.95. The company has raised more than $11.5 million in venture funding from Redhills Ventures, Upfront Ventures and others. And though the company would not release exact figures, Hermand-Waiche said the company generated more than $1 million dollars in sales in 2012. “This is the first time in history that Victoria’s Secret is being challenged,” he said. “We’re proud of that.”

San Francisco-based lingerie e-tailer True Co — which sells more than 50 brands, from Spanx to Calvin Klein, alongside its own in-house label — is focused on solving the fit problem. An astounding number of women report that they wear ill-fitting bras; a recent study of 10,000 women by Swiss brand Triumph found that 64 percent of those who participated were wearing the wrong bra size, and, of those women, only 29 percent knew they were wearing the wrong size. “The shopping experience needed to be changed. A lot of bad bras are made for women because the companies that sell them are led by [men] who don’t wear the product,” said Michelle Lam, True Co’s CEO, who founded the company with Aarthi Ramamurthy, now head of product. “In the evaluations we’ve done, 86 percent of bras don’t pass the fit test.”

True Co has developed an online quiz that prompts consumers to share information about the size, styles and brands they currently wear — and the fit problems they have. Their answers help power personalised suggestions on particular products and sizes. Since 2012, when the company first launched, True Co has amassed 7 million data points from about 500,000 women on bras, underwear and loungewear, identifying more than 6,000 breast shapes. “There is an art and science to a bra fitting, and we have tried to capture the science of it,” said Lam. “The team is applying technology in an unexpected way to solve a hard retail problem, leveraging algorithms and data that even the leading brands don’t have access to,” Josh Kopelman, a managing partner at First Round Capital, one of True Co’s investors, said in a statement. “True Co has identified a huge pain point in the $12 billion intimate apparel industry.”

Self-funded New York start-up Negative, launched in February 2014 by Marissa Vosper and Lauren Schwab, promises to deliver uncomplicated, high-quality intimates at affordable prices. “There’s been a movement toward items that don’t need ornamentation to make them cool, like the perfect pair of Rag Bone jeans or a Mansur Gavriel bag. We wanted to make lingerie at a fair and accessible price point that doesn’t compromise on quality.” Vosper and Schwab said they were able to price their product affordably because of their direct retail model.

There are also new players at the high-end of the lingerie market, where Agent Provocateur and La Perla have long dominated. Curriculum Vitae, the brainchild of designer Christina Viviani, launches at Barneys New York, 10 Corso Como, Colette, Shopbop and Moda Operandi this month. “I started CV because I felt there was a void in the market,” said Viviani. “I am a strong, modern working woman who loves being feminine. I see those women around me daily. We aren’t sitting at home wearing pink, frilly, uncomfortable lingerie with garters, thigh-highs, and mules, eating bon-bons waiting for our men to come home.”

Interestingly, Viviani is also launching with sex toys, which are still taboo in many parts of the world, and will provide “intimacy kits” to hotel properties run by both Andre Balazs and Robert De Niro. “When I would observe shoppers at sex shops, I could tell how mortified they were by so much sex in their face. It felt overwhelming and hard for people to know which products are right for them,” said Viviani. “There’s nothing sexy about a plastic box you have to cut open.  The entire industry needs to be re-branded, elevated and brought to light.”

Claire Chambers, founder and CEO of New York-based boutique lingerie chain Journelle says that since she opened her first store in 2007, the number of niche lingerie labels on the market has increased dramatically. “When I opened the first store, there was innovation going on. It got curtailed because of the recession, but now people are taking very small, specific segments of the industry and targeting them,” she said, citing All Undone, a British brand offering contemporary styles for bigger cup sizes, and Lonely, a New Zealand label with a high-design aesthetic.

This fall, Chambers will launch Journelle’s in-house label with a focus on “everyday, pretty bras.” And perhaps unsurprisingly, her designer Rania Abu-Eid is a Victoria’s Secret alumna (she worked on the brand’s high-end collections). “I think Victoria’s Secret did a great job at building a brand and you cannot talk about them without recognising that,” said Chambers. “[Today] their biggest strength is scale. But if you go into Victoria’s Secret a lot of what you see is padded push-up bras or t-shirt bras. Nothing in between. I have nothing bad to say about them, but I know that when I started this company, part of it was because women told me they didn’t want to shop there anymore.”

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Sourcing Knits in Peru

From high street brands like Super Dry to luxury labels like Tommy Hilfiger, Ralph Lauren and sustainable labels have chosen to source in Peru.

Often leading the way in fashion in terms if production models as well as style Danish and Swedish brands are choosing Peru for knitting placing a value on quality and sourcing sustainably with natural materials.

As a producer of high quality cotton and other fibres with deep experience in circular, flat and fully fashioned garment knitting with unique fibre options such as organic cottons, alpaca and vicuña it’s worth investigating.

Peru is following Brazil and Chile with a rapidly developing economy and a stable government, Perumoda their annual fashion week and sourcing fair has matured into a highly professional and coherent showcase with even the larger companies within the industry choosing to have stands at the show.

The new layout makes sourcing much easier for visitors. Promperu the show organiser which is also the promotional wing for exports reported that of 400 of the buyers came from their direct invitation, 55% were first time visitors and included visitors from Russia, Poland, Taiwan and interestingly China.

So why fly for over 12 hours to source in Peru?

Jessica Rodriguez of successful knitting company remarks that “Peru cannot compete on price, so it competes in other areas:

1. Quality
2. Natural fibres
3. Service- clients receive a very professional service, good rapport and good quality for price
4. Ethical: due to the government regulations workers rights and pay is secure. Workers are well treated throughout the value chain.

Cotton

Peru’s greatest asset is the purity and standard of its cottons including the long staple Pima and Tanguis. The major advantage of Peruvian Pima is that it is still hand picked which means that they are able to guarantee a near 100% level of purity which mechanised harvesting cannot.

The majority of the Pima is processed by Textil Piura who just process and spin and Creditex which is one of the textile heavy-weights.

Built from the acquisition of a number of smaller companies, Creditex covers the complete vertical from raw fibre through circular and flat knitting to fully finished garments.

Organic Cotton

Peru also has been rapidly increasing it’s capacity for Organic Cotton with more companies acquiring GOTS certification and other accreditations and licenses for both environmental standards and Fair Trade.

Organic Cotton company Bergman Rivera, not only supply organic Pima and Tanguis but also have invested in communities to cultivate coloured cotton.

These are a limited palette of cultivars of wild or jungle cotton, which comes in cream, beige, red cotton is a rust/cinnamon brown, also green and a blue cotton. This is particularly popular in baby wear.

Circular and flat knitted cotton

The majority of this sector if the industry is based in the capital Lima. Companies such as Topy Top, Creditex, Algotex Peru,Pacific Trading Group S.A.C to name but four have extensive experience in knitting high quality t-shirts, sweatshirts, sportswear, you will also find a a number of specialists in lingerie and nightwear.

This manufacturers have deep experience in working for the mid-market and luxury brands. Topy Top supplies SuperDry with T-shirts as they knit the fabric and produce right through to the demanding finishing stages that SuperDry demand which includes special surface finishing, textures as well as embellishments and embroidery.

Brands like Polo Ralph Lauren, Lacoste and Hilfiger choose Peru over China for their T-shirts due to the high quality of cotton, make and finishing.

Cotton knitted garments

With cotton and an increasing amount of organic cotton and blends available, this is becoming an ever more popular yarn for knitted garments such as jumpers, cardigans but also for home wear such as dressing gowns.

Art Atlas are a specialist in organic cotton knit wear, supplying to high end brands, this is a growing area of production.

Alpaca Fibre and Yarns

Alpaca is having a fashion moment attracting knitwear designers from all over Europe, Japan, US, Canada and Central and Latin America as well as home grown Peruvian brands. This formerly misunderstood fibre is now gaining popularity as it has many advantages over cashmere. For this reason the average cost per kilo has risen to $38 due to the increased demand. This now puts alpaca fairly and squarely in the luxury fibre category.

Alpaca fibre yarn Facts:

• A member of the camelid family, a natural noble 
• A hollow fibre, having dynamic thermal properties keeping you warm when it is cold and keeping heat off you in warmer weather
• Absorbs humidity and is breathable
• Strong and very elastic ideal for knitting
• The top three grades offer different texture options.
• Two main breeds of Alpaca: Huacaya, the more wooly looking animal and the Suri whose coat is thinner, appears crimped has a longer staple.
• Alpaca is a good choice for kids clothes as it is very soft and supposed to be hypoallergenic. Alpaca are environmental low impact
• Alpaca blends very well with wool, silk and cotton and LUREX extending the seasons for knitted products
• Alpaca readily takes up dye including vegetable dye. In Arequipa there is a natural dye works creating hand painted yarns called Calicampo. 
• 26 natural colours varying from white to grey, beige/champagne and deep russet browns, chocolate and a natural black as well as white
• Alpaca also felts very well for more structured garments such as coats and skirts.

 

Alpaca Grades:

• Super Baby or Royal Baby starts at 20 microns or less but now can be as low as 15 microns but genetics programmes aim at further micron reduction.
• Baby alpaca 20 -22 microns the most popular grade, very soft springy fibre
• Superfine 22-26 microns which is excellent for highly textured knitting, and patterns such as deep ribbing, cables and 3D effects such as deep waffle patterns. It is machine washable and in fact becomes softer and better with each wash.
• Pilling is less than cashmere

Processing is mostly done in the beautiful white city of Arequipa in Southern Peru by two main companies: Incatops and Michel who offer a stock service in their Lima, Arequipa and Hong Kong shops.

Other Yarns

Michel are also working with their local highland wool in pure yarns and blends. Highland wool is similar to Shetland wool in terms of having a crisp handle but is much softer and has the volume of lambs wool.

Super Lux fibres and Yarns

Guanaco and vicuña are also Peruvian camelids. 70% of all vicuña lives in Peru. Vicuña is as expensive as gold ounce for ounce, vicuña sweaters are very popular in the US, Japan Chinese super lux markets.

Guanaco between vicuña and alpaca and is currently underused, but could be a good alternative to cashmere being low impact environmentally.

Yarn innovation

Large companies such as Michel are constantly innovating with fancy yarns, dying and spinning innovations bit smaller companies like Alpacolca have been experimenting with ombré dying effects and boucle yarns to create yarns and knitwear that are like storm clouds, very light, soft and warm.

Alpaca Knitting

Sweden and this year Denmark have shown collections Perumoda. The combination of Scandinavian design, demands for quality and Peruvian fibres, production design support and manufacturing capability seem to be going from strength to strength, Alpaca is a very popular fibre in Northern Europe where quality, ecological, ethical and design are valued.

Tradition and Innovation in yarns and knitting

Art Atlas owner Jessica Rodriquez notes that the reason buyers should look to Peru not just for the fibre but because, “this comes from our ancestors, from the Incas,” Peru has an unusually rich textile tradition. There are techniques and stitches in Peru you will not find anywhere else including Frivolite which looks like Spanish lace.

To be competitive as well as quality and service Peru has to work hard at innovation and offering styles and techniques not available in knitting competitor counties such as Turkey and China MFH knits, part of the Michel group showed some truly innovative types of knits and dyes, notably denim style indigo dyed knits that had both texture but also a washed denim and multi colour layers.

This could be a very interesting option as denim is making a major come back in fashion.

Knitting production:

• Knitting companies are mainly sited in Lima, Arequipa Huancayo.
• Capacity is flexible with most knitting companies, but there is a wide range if companies to suit different types of orders.
• Knitting capacities: Larger companies such as Corceli, which have capacities of up to 15,000 pieces per month and re-order times of 45 – 60 days to much smaller enterprises which work with boutique brands.

Flexibility on small orders

The variety of companies in Peru means that you can shop around for small orders which given the changing landscape of fashion will be very useful for young brands and companies who have smaller premium and luxury lines or ecol-lines. Many knitting companies have their own boutique brand lines so they understand the problems of getting the production right and getting a design from drawing to final production.

Danish buyer said that they sourced from Arequipa based Alpacolca because they could work directly with a manufacturer who was also a designer, it was the fact that they could meet at Perumoda and go to Arequipa to work directly. Small order quantities, their personal service were also key. The detractors were the time difference and the language.  However,  you will   Usually find at least person in a company will be an English speaker.

Quality suppliers

In the middle of the market are companies like Art Atlas in Arequipa and Sumy Kujon in Lima, both work mainly in alpaca, Art Atlas has expertise in organic cotton and blends. Art Atlas has been supplying to Eileen Fisher in the US and also Prada. Incalpaca as a weaver and knitter supply to Hermes and Saks. Sumy Kujon supplies throughout Latin America including Mexico and Brazil, into Europe and also Japan.

Knitting companies range of gauges vary from 3 to 12 guage. 

Smaller companies can take on small orders of as little as 80 pieces at Sumy Kujon and 150 at Art Atlas. With hand looming the orders can be significantly lower in volume and hand knitting down to 12 pieces minimum. They often work with remote workers on hand looms giving additional flexibility but for Art Atlas this is part of their policy of wealth creation for ritual communities.

Hand knitting

Hand knitting is a traditional indigenous craft. Communities are receiving more and more investment from NGOs to set up cooperatives such as Mujeres Ayamaras.

The women and often men of these communities are immensely skilled in a whole range of textile crafts and now are powered by mobile technology, solar electricity and are more inclined to visit Lima themselves and travel than in the past so there is greater potential to work with overseas customers directly in a professional way.

The other major centre of knitting is the city of huancayo in Central Peru. This city has a long heritage of knitting and is a strongly industrialised town. 

Sportswear and swim wear

Sportswear is a huge sector of the manufacture industry in Peru, mostly based in Lima.

Swimwear is relatively small but Peru is home to luxury swimwear brand Applauzi which has very high level design, fit and quality. and producers the Pacific Trading Group,

Children’s wear

Peru has a huge children’s wear capacity as this is linked to the he cotton industry. The show regular attracts specialist journalists in children’s wear.

The natural yarns and expertise make Peru and excellent sourcing destination for quality kids and baby wear. The natural cottons and organic cotton are further attractions.

Elastic Knitting and notions

This sector of the market is dominated by Rey, who after YKK make the best zips. They are thoroughly tested both in the lab and due to South America’s love affair with denim. Above this they are also suppliers of embroidery for embellishments, labels and knitted accessories most notably the elastic waistbands for Calvin Klein men’s briefs.

A list of companies can be obtained by contacting PromPeru

Monica Chavez

mchavez@promperu.gob.pe

PeruModa and The Peru Gift Show is held every April in Lima, Peru.

www.perumoda.com

Author: Billy Hunter

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