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BIG OPPORTUNITIES

FINALLY, APPAREL RETAILERS ARE STARTING TO CATER TO AMERICA’S PLUS-SIZE MAJORITY

By Joel Groover

If a would-be tycoon on NBC’s The Apprentice were to open a store selling nothing but tiny widgets in a market where up to 60 percent of consumers needed big widgets, the reality show’s infamously gruff host, Donald Trump, might respond by declaring, “You’re fired!” Millions of women who need plus-size apparel (size 14 or above) may feel justified in chanting Trump’s catchphrase while handing the fashion industry a pink slip.

Retail analysts estimate that roughly 50 percent of American women shop for plus-size garments, and yet they struggle to find trend-right clothing that fits, or they feel despised by the sales staff. “The biggest thing about plus-size retail is the lack of respect that these women feel,” said Jeanne Bliss, a corporate consultant in Seattle and the author of Chief Customer Officer: Getting Past Lip Service to Passionate Action. “My mom has always been large, so this is a personal experience for me. We would go into stores, and she would literally be ignored, pushed to the back.”

This lack of respect may be most evident among teen fashionistas working at mall specialty stores, or at fashion shows where gaunt nymphets (size 0 to 4) saunter down the runway to a pulsing beat. There is one place, however, where respect for larger women, or at least for their buying power, is increasing: Wall Street.

Plus-size retail is growing at about 4 to 6 percent yearly, versus 2 to 4 percent for the overall apparel industry, says Paula Kalandiak, a principal and senior retail analyst at New York City-based First Albany Capital. Estimates of the category’s annual sales range from $17 billion to $25 billion, she notes, and more retailers are beefing up their plus-size merchandise lines — Eddie Bauer, Gap, Kohl’s, Old Navy, Ralph Lauren, Stein Mart, Talbots and Wal-Mart among them. “It’s across the board,” said Stevan Buxbaum, executive vice president of the Calabasas, Calif.-based Buxbaum Group, an investment and consulting firm. “It only makes sense that everybody would look at this and say, ‘If we’re looking for some incremental growth, this has to be the spot.’ There’s a big target population there that is underserved.”

Plus-size pure plays like United Retail Group’s 490-store Avenue chain are hanging tough in this increasingly competitive arena, analysts say. United Retail, which opened 10 new Avenue stores last year, has been closing stores in recent years as part of a controlled expansion marked by strict site selection. In December, however, it hired Aaron J. Fleishaker, a former Kimco Realty Corp. executive vice president, as senior vice president of real estate.

“He is hopefully going to help them get more aggressive with their unit growth,” Kalandiak said. “In the past they have opened as many as 50 or 60 stores in a year. The goal would be to get back to that kind of growth.”

Meanwhile, Lane Bryant, the nation’s largest retailer of large-size women’s apparel, with some 700 stores, has extended its line of bridal gowns and is continuing its rollout of Cacique, a lingerie concept that Kalandiak likens to a Victoria’s Secret for sizes 12 to 28.

The plus-size market is a consequence of the dramatic increase in average body weight in the U.S. over the past 20 years. According to studies by the Centers for Disease Control and Prevention in 2003 and 2004, some 66 percent of U.S. adults are classified as being either overweight (a body mass index between 25 and 30) or obese (30 and above). Some predict that this will rise.

The “average size,” meanwhile, is creeping upward all over the globe. Obesity has tripled in many European countries since the 1980s, according to the World Health Organization, and has emerged as a major health issue in India and China. The organization estimates that approximately 1.6 billion people 15 or older were overweight as of 2005, with at least 400 million being obese. By 2015 roughly 2.3 billion adults will be overweight, and more than 700 million obese, the agency says.

International retailers are responding. In Canada Addition Elle, The Bay, Laura and Pennington’s now focus more on plus-size consumers, says Maureen Atkinson, a senior partner at J.C. Williams Group, a Toronto-based retail consulting firm. Like their sisters across the border, larger Canadian women complain of poor treatment by the retail industry. “They feel like they pay more and get less,” said Atkinson, who has conducted focus groups with plus-size shoppers. “There is this feeling that people don’t respect them.”

Their biggest concern is the paucity of merchandise lines relative to what is available to regular-size, or “missy,” consumers, says retail analyst Patricia Pao, CEO of New York City-based Pao Principles. If the garment smacks in any way of a potato sack or muumuu, in other words, it will no longer do, she says.

But a Gap or Old Navy cannot simply super-size existing merchandise lines and expect to win the loyalty of the plus-size lady. Increasingly, this woman demands garments designed specifically for the different curves and shapes of her body. “Looks just don’t transition from the regular sizes into the plus sizes,” said Stuart H. Kessler, partner and president of Clear Thinking Group, a Hillsborough, N.J.-based consulting firm. “The successful brands and chains recognize that not only is being fashion-right critical, but being right from a standpoint of fit and comfort is critical as well.”

And that means chains must invest seriously in separate plus-size lines, says Kessler. Unexpectedly sluggish sales at Hot Topic’s Torrid, an offshoot focused on fashion for plus-size teens that was hailed by many as a stroke of genius when launched in 2001, proves that plus-size consumers can be just as demanding as those who wear 14 or smaller, says Buxbaum. “Torrid was brilliant in identifying the segment, but they haven’t been able to deliver appealing merchandising,” he said. “Ultimately, retailing is about one thing: merchandise.”

For plus-size shoppers, however, retailing may be just as much about the quality of the experience. A mainline retailer might come up with the perfect plus-size line, but if it tucks the display off in a corner of the store, making larger women feel second-class, or if it hires salespeople who actually do regard them as such, those clothes will gather dust. “How do you turn these young, hip kids working in a Gap into people who want to serve this kind of customer? What will make the big difference,” Bliss said, “is not just adding the clothes, but adding the experience.”

By focusing their efforts accordingly, pure plays like Avenue, Cacique or Lane Bryant presumably are experts at responding to such sensitivities. Then again, Chico’s, the retailer that wins some of the most lavish praise for its approach to plus-size apparel, does not focus exclusively on the category. For a decade Chico’s underwent a meteoric expansion, routinely enjoying yearly sales increases of 40 percent or more. “It was an unbelievable run,” Buxbaum said. “They had the greatest compounded growth rate of any retailer for the last decade, because they were really the guys that had more focus on [plus-size] customers and giving them a stylish wardrobe, making them feel they weren’t pushed over in some corner of the store.”

Chico’s FAS, which includes the Chico’s, Fitigues, Soma by Chico’s and White House Black Market names, now operates 907 women’s specialty stores in 47 states. Its innovations include a clever vanity-sizing system based on lower numbers, says Pao. “Women want to be able to say and think that they wear a smaller size,” said Pao. “In particular, this strategy appeals to ‘swing’ plus-size women, who see themselves as regular or missy size but prefer to shop where the ‘regular people’ shop.”

Not only does Chico’s get the fashion and fit right, it also provides a pleasing experience, says Bliss. “It is not enough just to get a pretty pair of pants,” she said. “You want to feel good as a result of buying that, because retail therapy is still a huge experience for women, regardless of what size they are.” Christopher & Banks, Marina Rinaldi and New York & Co. also seem to be doing well at providing such therapy, analysts say. As the fashion world awakens to the sales potential, larger models are showing up more frequently on magazine covers and in marketing campaigns, says Atkinson.

It all makes such good business sense that Trump, despite his public feud with plus-size comedian Rosie O’Donnell, surely would approve.