Denim 2007

Brandix Market Watch 1
INDEX
No. Particulars Page No.
1 Introduction 3
2 History of Denim 4
3 The Denim Jeans Market

3.1 The world jeans market 6
3.2 The support industries 6
3.3 Regional jeans market 7
3.4 Rest of the world consumption 9
3.5 Jeans Market by region- unit consumption 11
4 Import data for USA and Europe

4.1 EU Imports of W/G Denim Trousers in First Half 2006 13
4.2 EU Imports of M/B Denim Trousers in First Half 2006 18
4.3 UK Sourcing of Denim Jeans in 2005-2006 23
4.4 US sourcing of denim jeans in Jan-Feb 2006 29
5 Consumer buying patterns 35
6 Jeans prices by region

6.1 The general pricing methodology for jeans 37
6.2 Price points 38
6.3 Future price points 41
7 The future of the denim jeans market

7.1 Regional markets 42
7.2 Growth in developing regions 43
8 Denim brands
8.1 The Original Three 44
8.2 Designer denim 45
8.3 The top 5 women’s jean brands by sales in US 2006 45
8.4 Leading brands in detail 46
9 Denim trends
9.1 New products 61
9.2 Stores that set trends 64
9.3 Hot new denim destination 67
10 Leading denim weavers 68

1. Introduction
Worn by the 19th century gold miners and the 21st century
gold diggers, the market appeal of denim jeans shows no
signs of fading-YET
The denim market might be showing signs of losing

momentum, but it remains one of the most dynamic areas
of the fashion world.
Sales of premium jeans, predictably, have started to

slacken, but growth is still impressive, from the ultra
pricy zone down to cleaner washes and skinny
silhouettes, are adding interest. Also statistics show a
further shift in the demographics of who is buying more
denim. The 13-17 year old age group represented the
largest segment of the market for the year 2006 at
$1.88billion, in the US. However it was the 55 and older
age group that posted the highest growth rate.
Without a doubt, denim is a global fashion phenomenon.

Visit any international city, and you’re sure to see denim
worn in unexpected and creative ways. With devotees Fast Facts
worldwide, it can truly be said that it is a small world
after all when it comes to denim. • Teens in Asia own eight pairs of jeans
(compared with 11 pairs by U.S. kids, and
seven pairs by those in Europe and South
America).
• Older consumers in Asia (over 45) own

as many pairs of jeans as their age peers in the
U.S. (6.6 pairs), and more than European (5.8
pairs) or South American adults (4.0 pairs).
• Overall, ownership of denim apparel

items remains highest in the U.S., Germany
and Colombia and lowest in India and China.
However, most industry experts expect denim
consumption in Asia (most notably China) to
explode over the next several years as
incomes rise and wardrobe dictates disappear.
• The love of denim is universal:

everywhere in the world most consumers say
they love or enjoy wearing denim. The
highest reading is with 15-24 year-olds in
South America (80%) and the lowest reading
(note that it is still quite high!) is with 45-54
year-olds in Asia with 45%.

2. History
The history of the “jean” is one of constant change and reinvention. As so

often happens, fashion often emerge together in various parts of the world
and are the result of the sudden availability of a new fabric, cloth, dye or
technique.
Jean history would be nothing without Levi Strauss. It was first offered to
the US market by Levi Strauss as “Hard wearing work clothes”. It was
then taken up by cowboys because its good abrasion resistance was
valuable for horse riding.
The real development of the jean came in the fifties as a symbol of youth
rebellion. For many years jeans were only used as work wear clothes, but
by the 1940s they were considered leisure wear in America. Once pop and
film stars like Elvis Presley, James Dean and Marlon Brando sported them
they became desirable internationally and in the 1950s it was associated
with rock and roll and pop music. It was then turned into a fashion
statement in the “swinging sixties” and an even more exaggerated one,
with flairs, loon pants, and denim “hot pants” for women in the seventies.
In the 1970s individuals began to personalize flared bell bottom version of

jeans with bells up the sides of flared jeans legs. Floral and abstract
textural embroidery, metal eyelets and studs, transfers, appliqué and even
anti-war graffiti biro writing were all popular forms of decoration.
The most famous jeans are still probably those produced by Levi as Levi
501s. 501s traditional button fly jeans designed in the Victorian era need
to be shrunk to fit.
By the 1980s ripped, frayed and torn jeans were a normal sight. Colored
jeans from white through to pastels were also popular as were
stonewashed blue jeans. In the 80s designer Jeans like Gloria Vanderbilt,
Calvin Klein and Armani were among the many fashion designers, whose
labeled jeans were craved to be seen in. Stone washed jeans also became a
must.
By the 1990s black jeans were very popular for a while and jeans in
general were seen a lot in the early 1990’s. It was during this time that
denim with an added percentage of Lycra was used to enhance fit and
comfort
In the 1990s denim also faced their recession period, as in these days the
youth market wasn’t particularly interested in the 501s and other
traditional jeans styles. The main reason for denim to be “out of fashion”
amongst the young during this period was because of their parents, the
generation born in blue: since no teenager would be caught dead in
anything their parents were wearing, the latest generation of rebellious
youth turned to other fabrics and other styles of casual pants, such as
khakis, chinos, combat and carpenters and branded sportswear pants. The
youth still wore denims, but they had to be in different finishes, new cuts,
shapes, styles or in the form of aged, authentic, vintage jeans. Due to this
Levi /Strauss & Co., the number-one producer of jeans and the “single
most potent symbol of American style on planet Earth” closed eleven
North American Factories and a nation grieved.
In 2000 designs were crystal beading and silver or gold sprayed jeans with
rips, frayed slashes, fur and feather decoration. Denim was hot again and
was used to make everything from footwear, jackets, bags, Basque corsets
to jeweled cuffs.

3. The Denim Jeans Market
The statistics given below are pertaining to denim jeans only
3.1 The world Jeans market
In 2004 In 2012
Was worth US$49bn

1,715m pairs of Jeans
• Market Worth US$ 53.2bn
Purchased by a population of
• 1,910m pairs
6,372m
One pair bought per 3.7 men, • Population of 6977m
women and children • Average price US$28.00
Average price US$29.00
The above indicates the following

• There is an anticipated volume growth of 11.4%
• The value growth will be lower at 9.5% as denim and jeans production continues
to shift to low cost countries, thus keeping the prices down.
3.2 The support industries

To support a world market that is close to US$50bn, analysts believe the value of the
support industries is as indicated below.
• Wholesale industry of US$15-20bn
• Manufacturing industry of US$10-13bn
• Denim fabric weaving industry of US$5-6.5bn

Cone, the denim weaving giant has gone on record saying that “with sales of around
US$400m, we believe we have 5% of the market value, less by volume”. This would put
the total denim weaving industry at around US$8.0bn.
This is not contradictory to values given above as it is estimated that 20% of denim
production goes into products other than jeans.
3.3 Regional jeans markets
The data given on the regions highlights the vast imbalance of purchasing power.
Figure 1: Jeans market consumption in 2004
Jeans market by region, US$ consumption (%)
14%
35% North America- US$17.15bn
Western Europe-US$16.17bn
18%
Japan and Korea-US$8.82bn
Rest of the world-US$6.86bn
Total-US$49bn
33%
Jeans market 2004 by region, population(%)
Figure 2: Jeans market 2004 by region, population

5% 6%
3% North America
Western Europe
Japan and Korea
Rest of the w orld
8 6%

World consumption is very different in the various main regions. For instance:
• North America has 35% of consumption, but this comes from only 5% of the
world’s population.
• Western Europe has 33% of consumption, from only 6% of the world’s
population
• Japan and Korea have 18% of consumption, from 3% of the world’s population.
• The rest of the world has only 14% of consumption, from 86% of the world’s
population

3.4 Rest of the world consumption
“Rest of the world” consumption is given below to give a broad overview. Parts of the
regions are not capturing the data and there are marked differences in purchasing value.
Regional jeans market 2004 within the rest of world, US$

consumption (%)
1%
5% 1%
7%
29% Eastern Europe-US$1.989bn
Central & S. America-US$1.577bn
8%
South East Asia-US$1.098bn
Australia and NZ-US$0.686bn
Indian Sub-Continent-US$0.549bn
10% China-US$0.480bn
Russia & "Stans"-US$0.343bn
Middle East-US$0.069bn
Africa-US$0.069bn
16% 23%
TOTAL-US$6.86bn

Regional jeans market 2004 within rest of world, population (%)
3%
13% 10%
2% Eastern Europe
Central & S. America
6%
South East Asia
1 6%
Australia and NZ
Indian Sub-Continent
China
0%
Russia & "Stans"
2 4% Middle East
Africa
2 6%
These figures show that:

• Eastern Europe and Turkey has 29% of its region’s value consumption, but only
3% of it’s region’s population
• Central and South America is second only to Eastern Europe and Turkey with
23% of consumption from 10% of the population.
• South East Asia is in a balanced situation having 16% of both consumption and
population
• The Indian sub-continent is a growing powerhouse in the world of clothing (and
jeans) consumption, with 8% from the largest population, which is 26%.
• China closely follows with 7% of consumption from 24% of the region’s
population
• Africa still lags behind with only 1% of value consumption , from 13% of the
region’s population
• Middle East has only 1% of its region’s value consumption, from 2% of it’s
region’s population
 The Indian Market

The Indian Market is estimated at US$430m, with the average jeans price at US$10.00.
This amounted to 43m jeans bought by 35m consumers. The entire India continent, which
included Pakistan, Bangladesh and Sri Lanka is estimated to have jeans to the value of
US$549m in 2004.

3.5 Jeans Market by region- unit consumption
Jeans market 2004 by region, units consumption (%)
29%
North America-686m
40%
Western Europe-360.15m
Japan and Korea-171.5m
Rest of the world-497.35m
10% Total-US$1715m
21%

Jeans market 2004 by region, population(%)
5%
6%
3% North America
Western Europe
Japan and Korea
Rest of the w orld
86%
There is less consumption disparity between different parts of the world by volume, but
the differences are still significant.
The main points are that:

• North America has 40% of unit consumption by, but only 5% of the world’s
population
• Western Europe has 21% of unit consumption, from only 6% of the world’s
population
• Japan and Korea have 10% of unit consumption, from 3% of the world’s
population
• The rest of the world has 29% of unit consumption, from 86% of the world’s
population.
North America has quite a homogeneous market. Western Europe however is made up of
various markets, which have different outlooks towards jeans.

• Northern Europeans buy more jeans than Southern Europeans
• France, Germany, Italy and UK, the big four in Europe constitute of almost 73%
of Western Europe’s population. They purchase 80% of the regions’ jeans per
year.
• Consumers in Germany & UK, buy more than one pair of jeans per year
• In France & Italy it is less than one pair per year that is purchased. Spain is
similar to Italy
• Based on soft information and at best guess by analyst, the rest of the world
consumes just over 500m jeans units per year.
The purchase power can be further broken down as follows:
• Each of; Eastern Europe and Turkey, Central and South America, and South East
Asia and the Pacific buy close to 100m units per year.
• The Indian sub-continent and China have around 50m units each
• Russia and the “Stans” account for 35m units
• Africa has only 15m units from its population of 740m
• The Middle East has less than 10m units.
4. Import Data for USA and Europe
4.1 EU Imports of W/G Denim Trousers in First Half 2006
Prices of women denim trousers imported into the European Union were up 20% in the
first half, after Brussels re-imposed quotas on Chinese jeans. Far from protecting North
African suppliers, the new limits benefited Bangladesh, Vietnam and Indonesia while
Turkey kept its 25% share of EU’s market.
Prices of women’s and girl’s cotton denim trousers sharply increased on EU’s import
market in the first half this year.
Average unit price was up nearly 20% to 6.49 euros per pair.

This is mostly due to new quotas that were imposed on imports from China.
As a consequence, Chinese suppliers shifted to higher valued products with a 78% jump
in unit prices at 4.86 euros.
Chinese prices had last year fallen to only 2.72 euros.
Embargoes’ impact
2005 embargoes on Chinese jeans resulted in a fall in orders with shipments declining
67% in value terms and82% in volume terms.
Compared with other origins, China still occupies the lower end of the market, along with
Bangladesh (3.98 euros) and Pakistan (4.92 euros).
Indonesian prices even fell from 5.57 euros in the first half last year, down to 2.34 euros.
China’s share of the market has jumped to nearly 50% in the first part of 2006 in volume
terms. It declined to 10.47% in the first half this year.
Vietnam. Indonesia and Pakistan took advantage of China’s difficulties while Morocco
and Tunisia did not enjoy a similar rush in European orders.
Both North African countries already shifted to the higher end of the market with average
prices above 10 euros.
Turkey further raised its prices, reflecting the higher quality of its products. Turkish
suppliers therefore kept 25% of the import market in value terms ranking first before
Bangladesh.
EU W/G Denim Trouser Imports
1 9 .50 % 1 8 .59 %
Bangladesh
Turkey
China
3 .7 5 % Hong Kong
Pakistan
4.1 5 % 1 3 .7 7 %
Indonesia
Vietnam
5 .7 1 %
Tunisia
6 .7 3 %
Morocco
1 0 .47 %
Others
7 .42 %
9 .9 2 %

1st Half 2006 Origins in Volume
EU W/G Denim Trouser Imports
1 3 .69 % 8 .46 %
3 .91 % Bangladesh
1 2 .1 5 %
4.8 7 % Turkey
China
0 .1 5 %
Hong Kong
0 .46 %
Pakistan
5 .0 0 % Indonesia
1 .8 2 % Vietnam
Tunisia
Morocco
Others
49 .50 %
1st Half 2005 Origins in Volume

EU Imports of Women’s/ Girls’ Cotton Denim Jeans- 1st Half 06
Volume Change and Volume Shares
Suppliers Outside the EU
Volume in pairs, value in euros, unit value in euros per pair
Sorted by 1st Half Volume
1H 06 2005 1H 06 1H 05 1H 06
Volume Volume Volume Volume Volume
Change Change Share Share
EU25_EXTRA 91,881,349 68.81% -13.06% 100.00% 100.00%
BANGLADESH 17,084,254 -11.59% 91.09% 8.46% 18.59%

TURKEY 12,648,031 14.25% -1.49% 12.15% 13.77%
CHINA 9,620,678 1004.99% -81.61% 49.50% 10.47%
HONG KONG 9,114,546 10.31% 374.01% 1.82% 9.92%
PAKISTAN 6,813,384 41.92% 29.06% 5.00% 7.42%
INDONESIA 6,181,636 340.24% 1,179% 0.46% 6.73%
VIET-NAM 5,243,410 123.17% 3141.33% 0.15% 5.71%
TUNISIA 3,812,628 3.60% -25.90% 4.87% 4.15%
MOROCCO 3,441,663 -2.13% -16.76% 3.91% 3.75%
MACAO 3,257,951 36.83% 106.01% 1.50% 3.55%
MALASIYA 2,269,770 204.79% 3,025% 0.07% 2.47%
ROMANIA 1,892,804 -26.81% -0.46% 1.80% 2.06%
INDIA 1,684,793 276.24% -1.51% 1.62% 1.83%
SRI LANKA 1,214,230 10.89% 3.82% 1.11% 1.32%
PHILLIPPINES 1,184,042 -58.61% 497.86% 0.19% 1.29%
THAILAND 1,065,202 8.77% 6.75% 0.94% 1.16%
EGYPT 771,264 -31.87% 13.62% 0.64% 0.84%
U.S.A. 589,875 32.38% -1.00% 0.56% 0.64%
U.A.E. 580,505 -58.95% 55.61% 0.35% 0.63%
MYANIMAR 575,541 -58.85% -47.29% 1.03% 0.63%
ALBANIA 369,242 -11.49% 5.87% 0.33% 0.40%
BULGARIA 277,980 -27.22% -25.65% 0.35% 0.30%
BRUNEI 258,359 - - 0.00% 0.28%
SINGAPORE 254,570 25.73% 165.92% 0.09% 0.28%
TURKMENISTAN 218,533 118.48% -14.33% 0.24% 0.24%

Value Change and Value Shares
Sorted by 1st Half Value
1H 06 2005 1H 06 1H 05 1H 06
Value Value Value Value Share Value Share
Change Change
EU25_EXTRA 596,059,543 32.53% 4.01% 100.00% 100.00%
TURKEY 156,600,713 31.88% 7.10% 25.51% 26.27%

BANGLADESH 67,978,087 -13.48% 109.88% 5.65% 11.40%
HONG KONG 59,935,328 -13.47% 363.52% 2.26% 10.06%
TUNISIA 47,590,120 6.82% -14.44% 9.71% 7.98%
CHINA 46,710,114 990.41% -67.18% 24.84% 7.84%
MOROCCO 34,706,823 1.30% -12.10% 6.89% 5.82%
PAKISTAN 33,497,181 19.55% 18.17% 4.95% 5.62%
U.S.A. 32,070,230 76.84% 37.84% 4.06% 5.38%
ROMANIA 23,327,958 -21.20% 6.91% 3.81% 3.91%
INDONESIA 14,463,915 65.16% 437.17% 0.47% 2.43%
MACAO 14,162,656 17.96% 17.96% 2.09% 2.38%
INDIA 9,659,752 205.55% 16.52% 1.45% 1.62%
EGYPT 8,848,050 -12.85% 6.30% 1.45% 1.48%
SRI LANKA 5,569,335 0.82% 26.49% 0.77% 0.93%
THAILAND 5,347,296 20.65% -4.27% 0.97% 0.90%
MALASIYA 3,909,731 9.34% 625.88% 0.09% 0.66%
ALBANIA 3,155,146 -17.15% 6.65% 0.52% 0.53%
VIET-NAM 2,622,420 40.04% 486.38% 0.08% 0.44%
U.A.E. 2,447,863 -48.57% 28.56% 0.33% 0.41%
BULGARIA 2,230,303 -22.75% -19.92% 0.49% 0.37%
PHILIPPINES 1,965,629 -71.72% 86.89% 0.18% 0.33%
MEXICO 1,924,596 -47.05% 161.28% 0.13% 0.32%
TURKMENISTAN 1,416,646 138.51% -9.35% 0.27% 0.24%
MYANIMAR 1,403,916 -75.87% -45.87% 0.45% 0.24%
SERBIA 1,348,563 - 5034.06% 0.00% 0.23%
SINGAPORE 1,285,838 -20.74% 84.03% 0.12% 0.22%

Unit Value Change
Sorted by 1st Half
2004 2005 1H 05 1H 06 2005 1H 06

U.V U.V U.V U.V U.V U.V
Change Change
EU25_EXTRA 7.29 5.72 5.42 6.49 -21.49% 19.63%
TURKEY 10.37 11.97 11.39 12.38 15.43% 8.71%

BANGLADESH 3.95 3.86 3.62 3.98 -2.14% 9.83%
HONG KONG 7.48 5.87 6.72 6.58 -21.56% -2.21%
TUNISIA 10.59 10.91 10.81 12.48 3.11% 15.46%
CHINA 2.92 2.88 2.72 4.86 -1.32% 78.46%
MOROCCO 9.23 9.55 9.55 10.08 3.50% 5.60%
PAKISTAN 5.80 4.89 5.37 4.92 -15.76% -8.43%
U.S.A. 34.04 45.47 39.05 54.37 33.59% 39.23%
ROMANIA 10.90 11.74 11.47 12.32 7.65% 7.41%
INDONESIA 6.03 2.26 5.57 2.34 -62.48% -57.99%
MACAO 7.56 6.51 7.59 4.35 -13.79% -42.74%
INDIA 6.50 5.28 4.85 5.73 -18.79% 18.31%
EGYPT 10.10 12.92 12.26 11.47 27.93% -6.45%
SRI LANKA 4.34 3.95 3.76 4.59 -9.09% 21.83%
THAILAND 5.19 5.76 5.60 5.02 10.92% -10.33%
MALASIYA 7.40 2.65 7.42 1.72 -64.13% -76.77%
ALBANIA 8.90 8.33 8.48 8.54 -6.40% 0.74%
VIET-NAM 3.81 2.39 2.76 0.50 -37.25% -81.91%
U.A.E. 3.92 4.92 5.10 4.22 25.27% -17.39%
BULGARIA 7.17 7.61 7.45 8.02 6.14% 7.70%
PHILIPPINES 6.96 4.75 5.31 1.66 -31.67% -68.74%
MEXICO 11.11 17.90 13.09 28.63 61.11% 118.77%
TURKMENISTAN 5.89 6.43 6.13 6.48 9.17% 5.82%

4.2 EU Imports of M/B Denim Trousers in First Half 2006
EU’s imports of men’s and boy’s cotton denim trousers slightly declined over the first
half after surging last year. By re-imposing quotas on shipments from China, Brussels not
only curbed imports but also triggered a general rise in prices. Bangladesh is taking
advantage of the new situation with Turkey and Tunisia fighting on the higher end of the
market.
EU imports of cotton denim trousers for men and boys are stagnating this year, after
Brussels re-imposed quotas on shipments from China.
After surging 28% in 2005, imports of denim jeans declined 1.36% in volume terms over
the first part of 2006.
In value terms, however, the same shipments were up 7.33%, reflecting a rise of 8.80% in
average unit price.
Not surprisingly, prices rose after barriers were reintroduced on imports from China.
Down 75%
Imports of M/B denim jeans from China dramatically decreased over the first half falling
75% in volume terms. This was partly balanced by a 469% surge in shipments from Hong
Kong.
When combining both sources, however, the China origin still loses less than 10% market
share.
From 27.14% in 2005, China and Hong Kong fell to 14.73%. Although shipments of
cotton denim trousers from Macao also surged, they only account for 2% of EU’s imports
market.
Other suppliers in Asia mostly benefited from China’s decline on EU’s market, with
European buyers being clearly forced to diversify origins.
Bangladesh was by far the main winner, nevertheless, with a 26% rise in shipments from
an already high level.
In volume terms, Bangladesh is back to first place in the list of supplying countries with
26.70% of EU’s imports market.
China was the top seller in the past year and is now raking 6th.

Turkey is a value leader.
In value terms, Turkey remains number one, although its share falls from 26% down to
22%.
Tunisia is still ranking second before Bangladesh with a share falling from 19.3% to
15.6%.
A large number of suppliers raised their prices in absence of competition from China.
Average price of Chinese trousers rose from 3.40 to 5.62 euros per pair, in addition.
Bangladeshi trousers are now the cheapest as a result, although rising 11% at 4.03 euros.
Pakistan is also a major low-cost supplier, ranking third in volume terms with an average
price of 5.04 euros.
At the higher end of the market, Turkey (13.10 euros) is fighting with Tunisia (14.33
euros) and Romania (14.86 euros).
Morocco occupies the in-between space with trousers worth 10.63 euros.

EU Imports of Men’s/Boy’s Cotton Denim Jeans-1st Half 2006
Volume Change and Volume Share
Volume in pairs, value in euros, unit value in euros per pair.
Sorted by 1st Half Volume
1H 06 2005 1H 06 1H 05 1H 06
Change Change Share Share
EU25_Extra 91,167,890 28.20% -1.36% 100.00% 100.00%
BANGLADESH 24,294,168 5.83% 26.15% 20.84% 26.65%

TURKEY 11,340,629 0.22% -13.92% 14.25% 12.44%
PAKISTAN 9,929,526 9.07% 16.90% 9.19% 10.89%
HONG KONG 7,426,236 36.31% 468.91% 1.41% 8.15%
TUNISIA 7,334,382 11.80% -16.90% 9.55% 8.04%
CHINA 6,003,352 861.63% -74.76% 25.73% 6.58%
MOROCCO 4,097,628 2.44% -1.06% 4.48% 4.49%
VIET-NAM 3,142,980 19.98% 1728.49% 0.19% 3.45%
MACAO 1,812,811 55.65% 168.95% 0.73% 1.99%
ROMANIA 1,760,354 -24.84% -11.41% 2.15% 1.93%
THAILAND 1,548,735 15.66% 48.44% 1.13% 1.70%
INDONESIA 1,360,351 19.23% 79.41% 0.82% 1.49%
ALBANIA 1,261,505 -14.14% -8.81% 1.50% 1.38%
INDIA 1,090,044 288.64% 31.02% 0.90% 1.20%
MAURITIUS 987,622 -18.77% 101.96% 0.53% 1.08%
CAMBODIA 830,120 -17.75% 32.48% 0.68% 0.91%
PHILLIPHINES 804,326 -35.55% 198.87% 0.29% 0.88%
SOUTH KOREA 647,633 101.98% 489.38% 0.12% 0.71%
U.A.E 619,461 -71.67% 47.05% 0.46% 0.68%
SRI LANKA 598,226 23.31% 57.01% 0.41% 0.66%
EGYPT 575,590 -31.02% -6.42% 0.67% 0.63%
TAJIKISTAN 473,501 134,558% 145.18% 0.21% 0.52%
MADAGASCAR 342,505 14.96% -22.36% 0.48% 0.38%
BULGARIA 338,233 -3.98% 93.19% 0.19% 0.37%
MALASIYA 310,180 70.42% 3291.43% 0.01% 0.34%
MYANMAR 300,565 -79.80% 3.35% 0.31% 0.33%
RUSSIA 285,506 -2.81% 67.17% 0.18% 0.31%
SERBIA 263,685 - 76.49% 0.16% 0.29%
LAOS 198,840 -3.40% -10.95% 0.24% 0.22%

Value Change and Value Share
Value in euros
1H 06 2005 1H 06 1H 05 1H 06
Value Value Value Value Value Share
Change Change Share
EU25_Extra 672,476,519 19.39% 7.33% 100.00% 100.00%
TURKEY 148,509,548 13.74% -8.59% 25.93% 22.085

TUNISIA 105,091,768 24.11% -13.51% 19.39% 15.63%
BANGLADESH 97,920,732 6.87% 39.73% 11.18% 14.56%
HONG KONG 51,463,203 13.82% 449.64% 1.49% 7.65%
PAKISTAN 50,043,215 0.67% 17.75% 6.78% 7.44%
MOROCCO 43,564,039 13.13% 0.31% 6.93% 6.48%
CHINA 33,709,064 795.75% -55.39% 12.06% 5.01%
ROMANIA 26,167,403 -27.38% 15.63% 3.61% 3.89%
MACAO 12,754,244 44.47% 124.89% 0.91% 1.90%
THAILAND 8,862,426 28.98% 53.60% 0.92% 1.32%
INDONESIA 8,457,122 10.12% 56.18% 0.86% 1.26%
INDIA 8,445,491 195.42% 68.01% 0.80% 1.26%
MAURITIYS 7,796,655 -13.46% 95.11% 0.64% 1.16%
EGYPT 6,981,519 -23.16% 3.82% 1.07% 1.04%
PHILIPPINES 6,668,782 -24.66% 205.14% 0.35% 0.99%
UNITED STATES 5,949,307 45.95% -3.22% 0.98% 0.88%
ALBANIA 5,184,874 -10.40% -17.80% 1.01% 0.77%
BULGAIRA 4,661,715 4.38% 111.38% 0.35% 0.69%
SRI LANKA 4,596,216 15.01% 91.78% 0.38% 0.68%
CAMBODIA 4,351,631 -20.62% 9.42% 0.63% 0.65%
SOUTH KOREA 4,057,962 67.66% 505.20% 0.11% 0.60%
VIET-NAM 3,769,303 6.60% 343.16% 0.14% 0.56%
RUSSIA 2,533,080 -0.07% 44.92% 0.28% 0.38%
TAJIKSTAN 2,244,921 186,159% 83.65% 0.20% 0.33%
COLOMBIA 1,988,870 450.69% 110.02% 0.15% 0.30%
SWITZERLAND 1,941,608 11.99% -19.82% 0.39% 0.29%
U.A.E 1,776,137 -74.13% 9.66% 0.26% 0.26%
MADAGASCAR 1,698,564 3.09% -25.18% 0.36% 0.25%

Unit Value change
Value in euros
2004 2005 1H 06 2005 1H 06
U.V U.V U.V U.V U.V
Change Change
EU25_EXTRA 7.38 6.87 7.38 -6.87% 8.80%
TURKEY 10.86 12.32 13.10 13.50% 6.19%

TUNISIA 12.67 14.07 14.33 11.01% 4.09%
BANGLADESH 3.85 3.89 4.03 0.98% 10.76%
HONG KONG 8.12 6.78 6.93 -16.50% -3.39%
PAKISTAN 5.38 4.96 5.04 -7.71% 0.73%
MOROCCO 9.52 10.51 10.63 10.43% 1.38%
CHINA 3.64 3.40 5.62 -6.85% 76.71%
ROMANIA 13.00 12.56 14.86 -3.38% 30.52%
MACAO 9.10 8.44 7.04 -7.18% -16.38%
THAILAND 5.41 6.03 5.72 11.52% 3.48%
INDONESIA 7.06 6.52 6.22 -7.64% -12.95%
INDIA 7.96 6.05 7.75 -23.99% 28.23%
MAURITIUS 7.29 7.77 7.89 6.54% -3.40%
EGYPT 9.79 10.91 12.13 11.39% 10.94%
PHILIPPINES 6.82 7.98 8.29 16.90% 2.10%
UNITED STATES 23.47 31.04 38.04 32.27% 32.75%
ALBANIA 4.33 4.52 4.11 4.36% -9.86%
BULGAIRA 12.12 13.17 13.78 8.71% 9.42%
SRI LANKA 7.42 6.92 7.68 -6.73% 22.15%
CAMBODIA 5.98 5.77 5.24 -3.49% -17.41%
SOUTH KOREA 7.59 6.30 6.27 -16.99% 2.68%
VIET-NAM 6.29 5.59 1.20 -11.16% -75.76%
RUSSIA 8.04 8.27 8.87 2.82% -13.31%
TAJIKSTAN 4.62 6.39 4.74 38.32% -25.10%
COLOMBIA 8.97 9.70 11.25 8.07% 31.11%
SWITZERLAND 43.12 43.11 34.38 -0.04% -29.89%
U.A.E 4.10 3.74 2.87 -8.67% -25.42%
MADAGASCAR 5.84 5.24 4.96 -10.32% -3.64%

4.3 UK Sourcing of Denim Jeans in 2005-2006
Bangladesh became the leading supplier of men's and boys' denim jeans to the UK
in 2006, replacing China which is now limited by quotas. Overall volumes from
all suppliers have however fallen indicating that previous orders placed with China
have not fully been redirected elsewhere. At the same time, prices rose 13
per cent.
After falling to 16.5 per cent last year, Bangladesh's share of the UK market for
men's and boys' denim trousers rose to 24.63 per cent in volume terms during
February 2006.
With Chinese competition restricted by quotas, Bangladesh became the UK's top
supplier in this product line following an increase in volume of 21.5 per cent
compared to February last year.
At the same time, shipments arriving from Pakistan in second place decreased 36.6
per cent while those from Belgium were also down, 23 per cent.
This will be disappointing for Pakistan who had actually increased its imports into
the UK in 2005.
Volume falls overall

The total volume from all suppliers in this period dropped by 21.7 per cent
indicating UK importers have not entirely replaced China which has subsequently
slipped down the table.
Supplies from China were 92 per cent fewer than one year ago when its shipments
had been surging.
A sign of the impact of quotas has seen jean imports from Hong Kong increase by
20 per cent.
Italian jeans entering the UK continued to increase at a steady rate and Singapore
has now increased its exports after performing weakly last year.
Other countries boosting their imports into the UK included Sri Lanka, Dubai and
Mauritius.
Prices rise

Prices were up by 13 per cent overall in February mainly due to the leading
suppliers increasing their unit values.
Bangladeshi exporters charged an extra 7.5 per cent (£4.34 per pair) and Pakistani
producers raised prices by 4.4 per cent (£4.69 per pair).
Italian jeans were still expensive at £39.93 per pair although this was 7.66 per
cent lower than one year earlier.
At the other end of the price scale, a pair of jeans from the Philippines cost UK
importers just £1.27 per pair and suppliers from Dubai reduced their values by
72 per cent costing £3.37 per pair.
China's jeans have risen by a massive 129 per cent which could be due to the
cost of incorporating quota prices.
But it could equally be due to Chinese manufacturers concentrating on higher

quality to maximize the value of their restricted exports.

UK Imports of Men’s and Boy’s Denim Trousers
Volume and Value Change
February 2006 vs. February 2005
Volume in pieces, value in British Pounds
Sorted by Feb 06 Volume
Feb 06 Feb 06 Feb 06 Feb 06

Volume Value Volume Value
Change Change
TOTAL 1,663,116 16,605,312 -21.71% -11.56%
BANGLADESH 409,667 1,777,206 21.50% 30.56%

PAKISTAN 220,094 1,032,113 -36.59% -33.775
BELGIUM 201,335 2,634,082 -22.96% -18.84%
HONG KONG 164,730 1,302,079 20.24% 2.07%
SINGAPORE 107,318 497,178 23.01% 18.95%
ITALY 83,107 3,318,798 14.09% 5.35%
RUSSIA 59,488 301,246 - -
TURKEY 49,248 721,697 -28.40% -28.63%
SRI LANKA 34,613 272,455 124.61% 110.28%
DUIBAI 33,650 113,476 471.89% 60.90%
MAURITIUS 32,326 280,173 135.94% 216.98%
CHINA 32,206 242,232 -92.06% -81.83%
PHILIPPINES 29,187 36,984 27.29% -64.78%
POLAND 25,691 771,198 107.77% 513.03%
NETHERLANDS 20,446 819,029 18.25% 31.16%
MALTA 20,137 113,474 27.20% -5.51%
S. KOREA 19,986 100,503 3750.87% 171.62%
FRANCE 19,095 620,667 -63.59% -42.80%
INDIA 15,469 126,602 -71.21% -62.93%
MOROCCO 12,246 158,537 161.89% 140.44%
USA 7,986 336,808 0.58% 202.05%

Volume and Value Change
Sorted by Feb 06 Volume
Feb 05 Feb 06 Feb 05 Feb 06

Volume Share Volume Share Value Share Value
Share
TOTAL 100.00% 100.00% 100.00% 100.00%
BANGLADESH 15.87% 24.63% 7.25% 10.70%

PAKISTAN 16.34% 13.23% 8.30% 6.22%
BELGIUM 12.30% 12.115 17.29% 15.86%
HONG KONG 6.45% 9.90% 6.79% 7.84%
SINGAPORE 4.11% 6.45% 2.23% 2.99%
ITALY 3.43% 5.00% 16.78% 19.99%
RUSSIA 0.00% 3.58% 0.00% 1.81%
TURKEY 3.24% 2.96% 5.39% 4.35%
SRI LANKA 0.73% 2.08% 0.69% 1.64%
DUIBAI 0.28% 2.02% 0.38% 0.68%
MAURITIYS 0.64% 1.94% 0.47% 1.69%
CHINA 19.10% 1.94% 7.10% 1.46%
PHILIPPINES 1.08% 1.75% 0.56% 0.22%
POLAND 0.58% 1.54% 0.67% 4.64%
NETHERLANDS 0.81% 1.23% 3.33% 4.93%
MALTA 0.75% 1.21% 0.64% 0.68%
S. KOREA 0.02% 1.20% 0.20% 0.61%
FRANCE 2.47% 1.15% 5.78% 3.74%
INDIA 2.53% 0.93% 1.82% 0.76%
MOROCCO 0.22% 0.74% 0.35% 0.95%
USA 0.37% 0.48% 0.59% 2.03%

Unit Value Change
Unit values in British Pounds per piece
Feb 05 Feb 06 Feb 06

Unit Value Unit Value Unit Value Change
TOTAL 8.84 9.98 12.97%
BANGLADESH 4.04 4.34 7.46%

PAKISTAN 4.49 4.69 4.44%
BELGIUM 12.42 13.08 5.34%
HONG KONG 9.31 7.90 -15.11%
SINGAPORE 4.79 4.63 -3.31%
ITALY 43.25 39.93 -7.66%
RUSSIA - 5.06 -
TURKEY 14.70 14.65 -0.33%
SRI LANKA 8.41 7.87 -6.38%
DUIBAI 11.99 3.37 -71.86%
MAURITIUS 6.45 8.67 34.35%
CHINA 3.29 7.52 128.79%
PHILIPPINES 4.58 1.27 -72.33%
POLAND 10.17 30.02 195.05%
NETHERLANDS 36.12 40.06 10.91%
MALTA 7.59 5.64 -25.72%
S. KOREA 71.29 5.03 -92.95%
FRANCE 20.69 32.50 57.09%
INDIA 6.36 8.18 28.74%
MOROCCO 14.10 12.95 -8.19%
USA 14.04 42.17 20.31%

Volume and Value Change in 2005
Sorted by 2005 Volume
2005 2005 2005 2005

Volume Value Volume Value
Change Change
TOTAL 25,518,764 212,971,402 10.00% 5.68%
CHINA 4,538,989 17,724,284 840.09% 493.71%

BANGLADESH 4,202,613 17,424,884 0.61% -1.16%
PAKISTAN 4,048,702 17,642,892 15.57% 7.14%
HONG KONG 2,822,595 19,489,024 44.45% 22.82%
BELGIUM 2,424,490 32,049,182 -15.21% 0.32%
TURKEY 1,084,255 15,664,511 -33.26% -25.12%
SINGAPORE 877,805 3,752,177 -24.25% -28.43%
ITALY 672,148 25,648,368 13.68% 13.48%
INDIA 506,574 3,672,851 125.09% 173.78%
FRANCE 450,390 10,679,149 -58.50% -45.36%
MAURITIUS 382,941 2,822,106 -22.20% -7.67%
TUNISIA 330,160 5,334,745 -52.52% -28.34%
MALTA 323,446 2,253,287 -47.17% -45.04%
SRI LANKA 285,582 2,135,689 86.19% 109.19%
NETHERLANDS 221,141 7,694,402 58.65% 62.66%
CAMBODIA 177,880 644,254 208.76% 2.19%
GERMANY 165,675 7,276,731 38.46% 41.80%
USA 138,757 2,880,274 -16.14% 20.53%
S. KOREA 134,463 709,161 1285.65% 1257.48%
THAILAND 132,687 580,364 61.69% -3.88%
MOROCCO 110,507 1,117,704 55.73% 4.89%
IRELAND 106,594 1,636,249 61.11% 48.38%
POLAND 104,124 997,969 -28.80% -2.53%
RUSSIA 89,646 445,840 125.16% 132.05%
SPAIN 75,683 3,479,808 102.02% 229.35%
DUBAI 63,568 565,061 -78.79% -53.72%
N. ZEALAND 63,549 30,546 35.50% -35.93%
MALASIYA 62,076 461,990 31.28% 60.24%
DENMARK 61,156 1,366,541 10.34% -7.41%
INDONESIA 50,161 408,155 -1.84% 1.42%
MACAO 47,424 443,990 48.32% 22.25%
VIETNAM 42,987 211,236 -17.57% -38.61%

BRAZIL 40,327 677,925 243.62% 242.46%
PHILIPPHINES 38,999 210,057 -61.98% -59.26%
TURKMENISTRAN 34,376 174,580 302.25% 316.54%
EGYPT 30,040 289,509 -62.49% -51.32%
PORTUGAL 27,499 763,371 85.45% 380.01%
4.4 US sourcing of denim jeans in Jan-Feb 2006
US imports of men’s and women’s cotton denim trousers have fallen 11 per cent in
volume during the first two months of the year. Imports from China decreased heavily
while Hong Kong and Macau shipments surged. Bangladesh, Vietnam and Nicaragua
were other origins favored by US buyers. Prices were stable.
US imports of men’s and women’s denim trousers have fallen 11 per cent in volume
during the first two months of the year with shipments from China significantly lower.
As a consequence of new US quotas, exports from China have declined 77 per cent in
volume terms while those from Hong Kong were rising 68 per cent.
Quotas’ Impact
With China restricted by US limits until 2009, Hong Kong and Macau have seen exports
increase at high rates far exceeding growth for 2005.
Another result of US quotas, imports of denim jeans from Asian producers outside China
surged in the first two months of the year.
Shipments from Bangladesh were up 153 percent while imports from Indonesia and
Vietnam were rising 63 and 57 percent, respectively.
There also was a large increase in imports from Pakistan and the Philippines
As expected, Jordanian exports are clearly slowing down while shipments from Egypt are
now surging.
Egypt’s lower costs

Jordan enjoyed a duty-free access to the United States for years while Cairo was just
granted the same treatment in the last year.
As a consequence of lower wages in Egypt, denim jeans production could rapidly be

transferred from Jordan to Egypt.
Production of denim fabrics in Egypt could also be boosted by the recent agreement with
Washington.
In Central America, a similar shift in results is apparent with US imports from Nicaragua
now surging while shipments from Guatemala are dramatically falling.

Shipments of jeans from Honduras, the Dominican Republic, Colombia, Brazil, Turkey
and Lesotho were all in Sharp decline at the same time.
Unchanged prices
Prices paid by US importers were stable compared with one year ago, only increasing by
0.6 per cent.

US Imports of Denim Trousers in January- February 2006
Volume Change
Volume in Dozen: Sorted by Jan-Feb 2006 Volume
2005 Jan-Feb 05 Jan-Feb 06 2005 Jan-Feb 06
Change Change
WORLD 38,036,683 5,043,399 4,505,166 14.23% -10.67%
MEXICO 16,286,647 2,260,040 1,656,153 -1.16% -26.72%

HONG KONG 2,613,526 263,552 443,541 43.62% 68.29%
BANGLADESH 847,667 89,507 226,318 126.03% 152.85%
COSTA RICA 1,387,715 172,835 184,961 -5.99% 7.02%
CAMBODIA 1,400,584 141,612 156,230 23.10% 10.32%
GUATEMALA 1,514,305 228,282 129,949 -3.89% -43.08%
INDONESIA 636,086 79,347 129,735 94.87% 63.50%
NICARAGUA 517,042 65,650 110,855 -28.17% 68.86%
MACAU 552,792 55,753 102,370 14.10% 83.61%
VIETNAM 565,367 64,963 101,782 46.86% 56.68%
PAKISTAN 688,448 66,521 99,669 54.00% 49.83%
CHINA 2,454,236 386,392 87,098 342.16% -77.46%
EGYPT 520,030 48,827 86,276 -33.65% 76.70%
COLOMBIA 829,613 117,450 85,844 159.33% -26.91%
JORDAN 690,682 83,043 77,630 73.18% -6.52%
SRI LANKA 278,240 55,067 71,467 4.46% 29.78%
MADAGASCAR 595,134 50,121 65,322 2.40% 30.33%
LESOTHO 630,714 90,438 62,016 70.36% -31.43%
DOM REP 613,823 86,550 59,020 62.93% -31.81%
KENYA 526,440 63,950 58,566 17.19% -8.42%
HONDURAS 544,189 97,263 57,892 93.40% -40.48%
PHILIPPINES 401,994 30,802 50,192 0.02% 62.95%
BAHRAIN 187,253 30,163 46,381 -44.08% 53.77%
INDIA 161,410 21,411 31,383 -3.05% 46.57%
BRAZIL 388,704 48,208 30,637 49.24% -36.45%
HAITI 184,105 11,150 29,874 225.37% 167.93%
TURKEY 308,148 65,146 28,030 112.20% -56.97%
S. KOREA 38,449 7,108 27,125 -69.12% 281.61%
TAIWAN 124,032 11,982 25,842 141.20% 115.67%
CANADA 120,980 22,626 22,461 -35.35% -0.73%
MALASIYA 106,624 7,734 19,397 55.23% 150.80%
THAILAND 104,563 16,064 16,609 -61.21% 3.39%
SWAZILAND 168,344 22,232 15,042 160.74% -32.34%
UAE 97,707 17,543 14,593 236.23% -16.82%
ITALY 73,386 10,368 11,925 55.97% 15.02%

OMAN 19,841 10,904 1,257 -92.80% -24.28%
MAURITIUS 125,815 6,385 8,217 61.17% 28.69%
ISRAEL 165,915 11,779 6,911 138.58% -41.33%
TURKMENISTAN 37,153 5,502 6,260 25.35% 13.78%
US Imports of Denim Trousers in January- February 2006

Value Change
Value in US$: Sorted by Jan-Feb 2006 Volume
2005 Jan-Feb 05 Jan-Feb 06 2005 Jan-Feb 06
Value Value Value Value Change Value Change
WORLD 3,882,979,603 496,891,184 446,411,741 14.52% -10.16%
MEXICO 1,754,550,440 227,570,525 168,531,574 0.06% -25.94%

HONG KONG 336,010,448 31,756,907 54,042,388 52.25% 70.18%
BANGLADESH 65,575,034 6,110,959 17,654,318 22.16% 188.90%
GUATEMALA 203,698,102 30,423,112 16,930,824 120.75% -44.35%
CAMBODIA 131,024,078 14,059,141 14,768,360 13.15% 5.04%
INDONESIA 63,938,815 7,914,069 13,162,732 150.01% 66.32%
MACAU 67,804,660 8,153,016 12,076,986 62.85% 48.13%
COSTA RICA 79,582,849 9,979,014 10,532,216 -55.10% 5.54%
COLOMBIA 89,885,329 11,001,323 9,235,137 241.74% -16.05%
CHINA 212,330,415 36,423,986 8,668,195 331.09% -76.20%
VIETNAM 46,472,775 4,810,242 8,552,895 56.50% 77.81%
PAKISTAN 52,020,124 5,468,492 8,484,284 7.67% 55.15%
NICARAGUA 40,315,482 5,241,134 7,719,547 -40.49% 47.29%
EGYPT 42,087,827 3,581,913 7,262,416 -39.82% 102.75%
JORDAN 58,750,623 6,402,128 6,762,647 90.67% 5.63%
CANADA 29,091,609 4,881,528 6,583,248 45.51% 34.86%
PHILIPHINES 47,890,127 3,336,826 6,537,084 35.75% 95.91%
TURKEY 60,443,504 10,561,749 6,219,142 539.78% -41.12%
DOM REP 56,680,808 7,613,214 5,439,413 116.66% -28.55%
SRI LANKA 21,832,935 4,074,964 5,371,477 -43.06% 31.82%
LESOTHO 51,403,244 7,331,454 4,956,873 66.13% -32.39%
MADAHASCAR 47,412,910 3,908,521 4,935,901 33.92% 26.29%
ITALY 34,708,192 5,700,233 4,352,657 912.87% -23.64%
KENYA 42,047,147 4,822,330 4,266,235 14.67% -11.53%
BAHRAIN 16,946,759 3,339,824 4,223,153 -67.49% 26.45%
HONDURAS 33,385,457 5,611,276 3,533,050 4.50% -37.04%
INDIA 13,462,982 1,701,544 3,044,540 0.06% 78.93%
BRAZIL 39,533,593 4,453,654 2,561,802 121.54% -42.48%
THAILAND 12,754,706 1,668,655 2,543,176 -78.89% 52.41%
HAITI 15,328,071 994,587 2,433,526 218.80% 144.68%
TAIWAN 8,786,015 1,141,509 1,808,903 64.36% 58.47%
MALASIYA 10,971,695 1,011,700 1,698,301 75.16% 67.87%
S. KOREA 2,380,858 521,139 1,338,404 -77.76% 156.82%
TUNISIA 4,996,714 532,125 1,302,919 -40.87% 144.85%
U.A.E 6,053,961 1,135,949 1,015,169 82.12% -10.63%

SWAZILAND 10,920,124 1,435,396 911,180 66.64% -36.52%
MAURITIUS 12,344,278 663,575 781,788 -62.75% 17.81%
ISRAEL 13,661,660 1,067,190 684,719 360.88% -35.84%
TURKMENISTAN 2,754,604 432,223 562,223 -20.17% 30.08%
US Imports of Denim Trousers in January –February 2006
Volume and Value Shares
Value in US$, volume in dozen, sorted out by Jan-Feb 2006 volume
2004 2005 Jan-Feb 06 2004 2005 Jan-Feb 06

Value Share Value Share Value ShareVolume Volume Volume
Share Share Share
WORLD 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
MEXICO 51.71% 45.19% 37.75% 49.49% 42.82% 36.76%

HONG KONG 6.51% 8.65% 12.11% 5.46% 6.87% 9.85%
BANGLADESH 1.58% 1.69% 3.95% 1.13% 2.23% 5.02%
COSTA RICA 5.23% 2.05% 2.36% 4.43% 3.65% 4.11%
CAMBODIA 3.42% 3.37% 3.31% 3.42% 3.68% 3.47%
GUATEMALA 2.72% 5.25% 3.79% 4.73% 3.98% 2.88%
INDONESIA 0.75% 1.65% 2.95% 0.98% 1.67% 2.88%
NICARAGUA 2.00% 1.04% 1.73% 2.16% 1.36% 2.46%
MACAU 1.23% 1.75% 2.71% 1.45% 1.45% 2.27%
VIETNAM 0.88% 1.20% 1.92% 1.16% 1.49% 2.26%
PAKISTAN 1.42% 1.34% 1.90% 1.34% 1.81% 2.21%
CHINA 1.45% 5.47% 1.94% 1.67% 6.45% 1.93%
EGYPT 2.06% 1.08% 1.63% 2.35% 1.37% 1.92%
COLOMBIA 0.78% 2.31% 2.07% 0.96% 2.18% 1.91%
JORDAN 0.91% 1.51% 1.51% 1.20% 1.82% 1.72%
SRI LANKA 1.13% 0.56% 1.20% 0.80% 0.73% 1.59%
MADAGASCAR 1.04% 1.22% 1.11% 1.75% 1.56% 1.45%
LESOTHO 0.91% 1.32% 1.11% 1.11% 1.66% 1.38%
DOM REP 0.77% 1.46% 1.22% 1.13% 1.61% 1.31%
KENYA 1.08% 1.08% 0.96% 1.35% 1.38% 1.30%
HONDURAS 0.94% 0.86% 0.79% 0.85% 1.43% 1.29%
PHILIPPINES 1.04% 1.23% 1.46% 1.21% 1.06% 1.11%
BAHRAIN 1.54% 0.44% 0.95% 1.01% 0.49% 1.03%
INDIA 0.40% 0.35% 0.68% 0.50% 0.42% 0.70%
BRAZIL 0.53% 1.02% 0.57% 0.78% 1.02% 0.68%
HAITI 0.14% 0.39% 0.55% 0.17% 0.48% 0.66%
TURKEY 0.28% 1.56% 1.39% 0.44% 0.81% 0.62%
S. KOREA 0.32% 0.06% 0.30% 0.37% 0.10% 0.60%
TAIWAN 0.16% 0.23% 0.41% 0.15% 0.33% 0.57%
CANADA 0.59% 0.75% 1.47% 0.56% 0.32% 0.50%
MALASIYA 0.18% 0.28% 0.38% 0.21% 0.28% 0.43%
THAILAND 1.78% 0.33% 0.57% 0.81% 0.27% 0.37%
SWAZILAND 0.19% 0.28% 0.20% 0.19% 0.44% 0.33%
UAE 0.10% 0.16% 0.23% 0.09% 0.26% 0.32%
ITALY 0.10% 0.89% 0.98% 0.14% 0.19% 0.26%

OMAN 0.65% 0.03% 0.10% 0.83% 0.05% 0.18%
MAURITIUS 0.98% 0.32% 0.18% 0.23% 0.33% 0.18%
ISRAEL 0.09% 0.35% 0.15% 0.21% 0.44% 0.15%
TURKMENISTAN 0.10% 0.07% 0.13% 0.09% 0.10% 0.14%

US Imports of Denim Trousers in January-February 2006
Unit Value Change
Unit Value numbers in US$/dozen. Sorted out by Jan-Feb 2006 volume
Jan-Feb 05 Jan-Feb 06 Jan-Feb 06 Jan-Feb 05 Jan-Feb 06

Unit Value Unit Value Unit Value Advantage to Advantage to
Change China China
WORLD 98.52 99.09 0.57% 44.31% 27.03%
MEXICO 100.69 101.76 1.06% 47.48% 30.45%

HONG KONG 120.50 121.84 1.12% 76.49% 56.20%
BANGLADESH 68.27 78.01 14.26% 0.00% 0.00%
COSTA RICA 57.74 56.94 -1.38% -15.43% -27.00%
CAMBODIA 99.28 94.53 -4.78% 45.41% 21.18%
GUATEMALA 133.27 130.29 -2.24% 95.20% 67.02%
INDONESIA 99.74 101.46 1.72% 46.09% 30.06%
NICARAGUA 79.83 69.64 -12.77% 16.93% -10.73%
MACAU 146.23 117.97 -19.33% 114.19% 51.24%
VIETNAM 74.05 84.03 13.49% 8.45% 7.72%
PAKISTAN 82.21 85.12 3.55% 20.41% 9.12%
CHINA 94.27 99.52 5.58% 38.07% 27.58%
EGYPT 73.36 84.18 14.75% 7.45% 7.91%
COLOMBIA 93.67 107.58 14.85% 37.20% 37.91%
JORDAN 77.09 87.11 13.00% 12.92% 11.67%
SRI LANKA 74.00 75.16 1.57% 8.39% -3.65%
MADAGASCAR 77.98 75.56 -3.10% 14.22% -3.13%
LESOTHO 81.07 79.93 -1.40% 18.74% 2.46%
DOM REP 87.96 92.16 4.77% 28.84% 18.15%
KENYA 75.41 72.84 -3.40% 10.45% -6.62%
HONDURAS 57.69 61.03 5.78% -15.50% -21.77%
PHILIPPINES 108.33 130.24 20.23% 58.67% 66.96%
BAHRAIN 110.73 91.05 -17.77% 62.18% 16.73%
INDIA 79.47 97.01 22.07% 16.40% 24.36%
BRAZIL 92.38 83.62 -9.49% 35.31% 7.19%
HAITI 89.20 81.46 -8.68% 30.65% 4.43%
TURKEY 162.12 221.87 36.85% 137.46% 184.43%
S. KOREA 73.32 49.34 -32.70% 7.39% -36.75%
TAIWAN 95.27 70.00 -26.53% 39.54% -10.27%
CANADA 215.75 293.10 35.85% 216.01% 275.73%
MALASIYA 130.81 87.55 -33.07% 91.60% 12.24%
THAILAND 103.88 153.12 47.41% 52.15% 96.29%
SWAZILAND 64.56 60.58 -6.18% -5.43% -22.35%
UAE 64.75 69.57 7.43% -5.16% -10.82%
ITALY 549.79 365.00 -33.61% 705.28% 367.91%
OMAN 56.94 52.34 -8.08% -16.60% -32.90%
MAURITIUS 103.93 95.14 -8.45% 52.22% 21.97%
ISRAEL 90.60 99.08 9.35% 32.70% 27.01%
TURKMENISTAN 78.56 89.81 14.33% 15.06% 15.13%

5. Consumer buying patterns
From the volume and population numbers for 2004 the consumption of people/ regions
are estimated as follows:-
• North America, each man, woman, child buys just over two pairs of jeans per
year
• Western Europe, each man, woman, and child buys one pair of jeans per year
• Japan and Korea, the figure is similar, each man, woman and child buys one
pair of jeans per year.
• The rest of the world, the combined consumption is 0.1 pairs of jeans per
year. There are however wide differences between sub-regions.
The future of consumption

Jeans consumption per person changes quite slowly, on a macro economic basis. From
the growth projected for 2012, the following can be assumed:-
Reason No: of pairs purchased/ Comments

year
North America 2 pairs No change
Western Europe Less than 1 pair Caused by an aging population
Japan & Korea 1 pair No change
Rest of the world 0.11 pair Seems minute but the figures
show that it is substantial in terms
of units & growth.
The American consumer

• The average American has 8.3 pairs of jeans in their closet
• US men’s market accounts for 43% of total denim sales
• US women’s market accounts for 32% of total denim sales
• US children’s & others market accounts for 25% of total denim sales
• Teens and young men/women are the heaviest buying age group
• Females spend less money on jeans than males
• In terms of brand loyalty; 31% say they buy the same brand
• Denim ownership is increasing even higher with strong growth in 1st quarter 2006
Female respondents 2005 Q1 2006 Q1 Unit Change

No. of denim jeans 7.85 9.11 +1.26
No. of denim shorts 2.86 3.4 +0.54
No. of denim dresses 0.76 0.78 +0.02
No. of denim skirts 1.48 1.58 +0.10

Attitude towards denim (% of who love/enjoy wearing denim)
Given below is the attitude towards denim between different age groups in different
regions.
Region 15-24 25-34 35-44 45-54

Asia 68% 66% 58% 45%
South America 80% 71% 66% 50%
Europe 75% 70% 67% 51%
US 79% 74% 77% 65%

6. Jeans prices by region
The average prices of jeans in 2004, can be broken down as follows by region
Region Average prices

North America $26.00
Western Europe $45.00
Japan & Korea $50.00
Rest of the world $14.00
In the developed world, a denim jean is sold at three completely different price points.
• As a commodity discount jean at prices around US$30
• As a mainstream brand at prices below and above US$50
• As a fashion brand or designer label at anything from US$60 right up to US$500,
probably averaging US$150.
6.1 The general pricing methodology for jeans

The concept of the value and unit pricing has been developed individually for each
product sector, in order to understand how pricing works in the fashion industry. Broadly
speaking, it follows a hierarchical theory that is based on the Pareto principle. This says
that:
• 80% of your sales will come from 20% of your products
• 80% of your product purchases will come from 20% of your suppliers
Price ranges Median price points

US$ US$% Units%
Absolute top 500 7 1
High 300 12 3
Upper brands 160 24 11
Lower brands, better own label 100 18 14
Mass brands, own label 60 22 28
Discounters 30 17 42
The table can be explained as follows:

• The absolute top end of any garment product group can only ever capture 1% of
the volume. However this accounts for 7% of the value.
• At the opposite extreme, the discounter (low end) can capture 42% of the volume
but only 17%of the value
• In the middle, the mass brands and own label have 28% by volume and 22% by
value

6.2 Price points
Given below are a few price indications of the leading brands and retailers
US retail prices
Brand Price Point

Faded Glory US$10-20
Levi Signature US$20-30
Wrangler US$30-40
Lee (core) US$50-70
Levi 501 US$50-70
Gap US$50-70
Polo Ralph Lauren US$60-90
Earl Jean US$90-120
DKNY US100-150
7 For all Mankind US$280-500
As brands are priced higher in Western Europe than in the US. Hence jeans bought in the
US are considered a “bargain”.
• Levi 501 in USA- US$40.00
• Levi 501 in UK- US$60 (₤40)
(Based on a exchange rate of US$1.5=₤1)

UK- retail prices
Brand Price point

Falmer at Matalan US$25-35
Easy US$25-40
H&M US$25-40
BhS US$25-40
Wrangler Basics US$45-60
Gap US$30-70
Marks & Spencer US$40-60
Ben Sherman US$50-80
Spy US$75-90
Lee (core) US$75-110
Levi 501 US$75-110
LTB US$90-120
Mustang US$80-120
Diesel US$100-140
Lee101 US$150-200
Nudie US$160-320
Edwin E-Tab US$200-320
David Bitton US$200-350
Bluebell US$250-350
7 For All Mankind US$280-550
Lee Originals US$350-450
Edo from Edwin US$500-550
US women’s Jeans- Percentage growth by price points-2006

Women’s jeans priced between $80-$99.99 grew by 20.3% for the year ended March
2006 to $149.6mn, a decline of 408.5% from the sales reported in the same period in
2005.The largest segment in the women’s jeans has been the $20-$39.99 price range. For
the year 2006 women’s sales in that range grew by 5.2% to$3.48bn. the next largest price
segment is jeans priced under $20,which swung to a 9.8% growth rate in 2006 after
posting a 2.4% decline in 2005.
Price-fashion matrix
The table below adds the concept of fashionability to the pricing lists to derive a two-
dimensional price-fashion matrix.
Although an authentic jean can look just like a basic or mainstream one, in the world of
denim its authenticity and “honesty” commands a premium price. In contradiction to this,
a celebrity jean would be regarded by a connoisseur as a fake. Yet that fake also
commands a premium price.

Fashion price US$
Upper Basic Authentic Mainstream Fashion Celebrity
Lower
1000 Edo
Absolute Lee Originals True Religion
Top End Bluebell 7 for All Mankind
200 Levi Vintage Dolce e Gabbana
Nudie Versace
Daivid Bitton
200 Edwin E-Tab Joop
High Lee 101 DKNY
Diesel Juicy Couture
100 Earl Jean
100 Hugo Boss Wale Adeyemi

Upper Firetrap
Polo Ralph
Brands Lauren Replay
60 Mustang Edwin
LTB
60 Lee Core Ben Sherman
Lower Levi 501 Miss Sixty
Brands and Wrangler Basics Gap Spy
Own Labels 40 Swade Mavi
Sonetti
40
Marks &
Mass Spencer
Market Levi Signature Wrangler Joe Bloggs
Own Label 20 Falmer,Matalan
C&A Germany
20 Faded Glory H&M

Low Signature
Carrefour
10

To the undiscerning amateur, the actual look of Faded Glory or a Falmer jean may appear
quite similar to an Edo from Edwin or a Lee Original. This however is heresy to the
connoisseur; the connoisseur is keenly aware of all the authentic details that make an
Edwin or a Nudie jean; what they are, or say they are. Therefore authenticity, although it
looks like basic tradition, is something completely different.
At the other end of the spectrum, recent celebrity jeans such as 7 For All Mankind, Earl
Jean and most of the designer labels would be seen by the connoisseur as fakes, a
deliberate act of deceit by the brand on the true denim grasp but, it gets a lot of purple
prose from the marketing writers of the brands.
6.3 Future price trends
The world average price point on jeans is said to lower by almost US$1 to US$ 27.86 by
2012
Within that, and by region:
Region Price Comment

North America $26.00 Unchanged
Western Europe $45.00 Unchanged
Japan & Korea $50.00 Unchanged
Rest of the world $15.00 Increase by $1.00

7. The future of the denim jeans market
Denim jeans, based on population growth, on spending power and on the lure of the
Western Jean is anticipating to grow as follows by 2012.
Retail worth- US$53.2 bn
Number of units- 1,910m pairs
From a world population of- 6,977 m
Volume growth of 11.4% equivalent to world population growth of 9.5%

Value growth will be lower at 7.7%, as denim and jeans production continues to shift to
low cost countries. Prices will keep reducing and the growing markets will have lower
retail markets than the western world.
7.1 Regional markets – growth by 2012

Market US$ consumption Unit consumption Population
North America 35% 18.62bn 38% 725.8m 5% 348.85m
Western Europe 30% 15.96bn 18% 343.8m 5% 348.85m
Japan & Korea 16% 8.51bn 9% 171.9m 3% 209.31m
Rest of the world 19% 10.11bn 35% 668.5m 87% 6069.99m
Total 100% 53.2bn 100% 1910 m 100% 6977 m
Comparison between 2004 and 2012

• North America consumption remains at 35% of the world total. Its population also
remains at 5% of the world’s population
• Western European consumption is down by a massive three percentage points,
from 33% to 30%. Its population has also slipped from 6% to 5% of the world’s
population.
• Japan and Korea have also seen a decline in their share of consumption, from
18% to 16%, whilst their combined populations remain at 3% of the world’s
population
• The rest of the world has grown its value consumption from 14% to an
astonishing 19% with 87% of the world’s population
The disparities in units between different parts of the world are less striking than they
were by value, but are still significant.
The main points are that
• North America will have 38% of unit consumption in 2012 but still from only 5%
of the world’s population
• For the same period, Western Europe will have 18% of world consumption (down
from 21%) but from 5% of the world’s population
• Japan and Korea will have 9% of unit consumption ( it was 10%) from 3% of the
world’s population
• The rest of the world will have grown by 2012 to 35% of unit consumption ( up
from 29% in 2004) from 87% of the world’s population

7.2 Growth in developing regions
Given the dramatic increase in the market share held by the rest of the world, the table
below highlights the growth in the country/region within the segment. The total US$
value of the market within the rest of the world will grow from US$6.86bn in 2004 to
US$10.11bn by 2012. This is a 47.5% growth.
Rest of the world, jeans value% growth, 2012 over 2004
2012 2004
% growth
US$m US$m
Indian Sub-Continent 1116 549 103
China 891 468 90
South East Asia 1680 1080 56
Australia and NZ 990 660 50
Middle East 151 102 48
Russia & “Stans” 469 337 39
Eastern Europe 2880 2088 38
Africa 93 74 26
Central & S America 1623 1584 2
The main points to be highlighted from these line charts are, that those regions growing
most over this period are:-
• The Indian sub-continent, up 103%, which raises its share of the rest of world
consumption from 8% to11%
• China, up 90%, which raises its share of rest of world consumption from 7% to
9%
• South East Asia, up 56%which raises its share of rest of world consumption from
16% to17%

8. Denim brands
In jeans clothing, the main retailer brands are to be found in those countries where there
is a concentrated retail power. These start with US and UK where developed distribution
and economies of scale, have led to retail jeans brand leaders.
8.1 The original three

The original big three brands were American, by geography, ownership and attitude.
They were:
• Levi Strauss
• Lee
• Wrangler
These three are the only real global jeans brands. For most countries in the world their
brand share cannot be quantified, except to say it is substantial. They have an estimate
themselves, but are not keen to share it. However from their financial accounts, their
geographic sales in major markets can be summarized in value terms as follows:
• VF in total (Lee and Wrangler, plus smaller brands) has 18% of the total US
market
• Levi has around 17% of the total US market
In the UK the position is that:

• Levi has 21% of the market but a massive 49% of the branded market
• Wrangler has 7% of the market and around 19% of the branded market
• Lee has only 5% of the market, which is about 12% of the branded market
While many new “aspirational” denim brands have tried to take away their market share,
the belief is that it has only caused a small dent in sales for the “big three”. Though the
dent was not significant, these three iconic brands spent the last five years living in the
shadows of the much smaller, much flashier, premium denim segment.
The years in the shadows were spent overhauling their denim business and now with the
premium momentum waning, they are looking to take back some of the lost market share.
VF has been re-energizing not just Lee, but the company’s entire jeans wear division in
2005, while Levi Strauss was able to break an eight year streak of declining sales results
in 2005.

8.2 Designer denim
Internationally recognized designers are also putting their names on jeans, usually
without adding any significant design content. Only a handful of designers, especially in
the US have succeeded in building any large scale sales, like Calvin Klein and Tommy
Hilfiger. Outside America these businesses are all high price, low volume, high visibility
operations.
These labels overall tend to be either “street cred” or “fashionista”. None have any scale
and their time in the spotlight is likely to be short.
The new kids on the block are:

• 7 For All Mankind; at an aspirational retail price of US$450
• Von Dutch; was the US fashion snappers favorite at an absurd price of over
US$600
• David Bitton (Buffalo), the celebrity butt-lift jean at US$350
• Edwin, the Japanese toy boy: authenticity at US$450
• Nudie, the Scandinavian honest jean; an honest price of US$150-300
8.3 The top 5 women’s jean brands by sales in US: 2006

Given below are the top 5 women’s jean brands by sales in the US:
1. Levi’s
2. Old navy
3. Gloria Vanderbilt
4. Lee
5. Gap
8.4 Leading brands in detail

Given below is a brief overview of the leading companies in detail.
1. Levis Strauss & Co (LS&CO)

Headquartered at California, in the US, Levi Strauss & Co is one of the largest branded
apparel providers in the world. LS&CO is privately held by the Levi Strauss family.
The company product portfolio consists of jeans and related apparel such as pants, tops,
casual and dress pants, jackets and associated accessories for adults and children. Its three
main brands are Levi’s, Levi Strauss Signature and Dockers, with each brand
encompassing several product lines.
Key competitions by market

• VF Corporation – In North America, Europe and Asia Pacific
• Polo Ralph Lauren – In North America and European markets
• Liz Claiborne- In North America
• Tommy Hilfiger- In the European market
LS&CO distributes its products through a combination of channels including retail,

franchises, department stores, multi brand specialty stores and its own company operated
stores. It also sells product through its website www.levistore.com . The company
currently sells through 55,000 retail locations in over 110 countries.
Net sales of LS&CO across geographic locations
FY 2003/04
Asia Pacific,
14.8%
Europe, 25.6%
North America,
59.6%
FY 2004/05
Asia Pacific,
16.7%
Europe, 23.8% North America,

59.5%

Region FY 2003/04 FY 2004/05
North America 59.6 59.5
Europe 25.6 23.8
Asia Pacific 14.8 16.7
Total 100.0 100.0
Of the company’s total net sales in FY 2004/2005:

• 34% sales were generated from the company’s top five customers
• 43% sales were generated from its top ten customers
• LS & CO’s largest customer is the US based J.C. Penny which contributed nearly
9% of the total sales in 2004/2005
• Levi’s brand products, account for nearly 71% of sales in 2004/2005.
• Dockers brand accounts for nearly 19% of net sales in 2004/2005.
Key customers of LS&CO across brands and location
Brands Country Customers

Levis , Dockers US J.C. Penney
Sears
Federated Department Stores
Mervyn’s
Mexico Liverpool
Canada Hudson’s Bay
Spain El Corte Ingles
France Galeries Lafayette
Germany Kaufhof
Japan Eiko Shoji
Korea Lotte Department Stores
Levi’s Vintage Clothing US Barney’s
Fred Segal
Urban Outfitters
Levi Strauss Signature US Wal-Mart
Target
Kmart
France Carrefour
UK ASDA-Wal-Mart
Switzerland Migros
Germany Wal-Mart
Australia Big W
Lowes
Japan Aeon
Product Development
The company has 200 merchandisers and designers and uses trend forums to identify
emerging trends and develop commercially viable style products.
Levis products range includes the flagship 501 button-fly jeans, Levi’s Engineered Jeans,
Levi’s Red Tab product line, Levi’s Blue line, Levi’s Red Loop, Levi’s LadyStyle, Levi’s
Vintage Clothing line, Levi’s Red and Capital E products.
Some of the new products under the Levi’s brand launched in the US market include 514
slim straight, 569 loose straight, 527 low rise boot cut jeans clothing, Levi’s Eco and
Levi’s Redwire.
Financial Analysis
LS&CO key consolidated performance, FY 2000/2001-FY 2004/2005

(Figures are given in million of $)
FY FY FY FY FY
2000/01 2001/02 2002/03 2004/05
2003/04
Net sales 4,276.0 4,145.9 4,090.7 4,072.5 4,125.2
Gross Profit 1,783.8 1,689.7 1,574.2 1,784.0 1,888.2
Operating Income 442.4 254.1 313.3 361.1 589.3
Operating Income 10.3 6.1 7.7 8.9 14.3
Margin
Interest expense 220.0 186.5 254.3 260.1 263.7
Net income/ (loss) 93.7 7.3 (349.3) 30.4 155.9
Capital expenditure 22.5 59.1 68.6 16.3 41.9
Cash and cash 65.1 64.4 143.4 299.6 239.6
equivalents
Working capital 683.1 582.9 778.3 609.7 657.4
Total assets 2,951.3 3,000.9 2,923.3 2,886.0 2,813.6
Total debt 1,958.4 1,847.0 2,316.4 2,323.9 2,326.7
Fiscal years ended
November
The main reasons for the sales increase in 2004/05 were attributed to the following
• Growth in sales in Asia Pacific Region and Mexico

• Improved performance of the US Levi Strauss Signature brand.
• Lower cost due to better product sourcing and better management of product
transition costs
Regional Performance
• Sales in North America increased by 1.2% to 2,455.1m due to:
• 7.4% increase in sales of the US Levi Strauss Signature brand
• 6.1% increase in sales from Canada & Mexico
• Sales in Europe declined by 5.9% to $981.1m due to:

• Soft consumer demand
• Unfavorable impact of restructuring of the company’s Dockers European
business
•Sales in Asia Pacific region increased by 14.1% to $689.0m due to:

•Strong performance in Levi’s LadyStyle products, Premium and Super Premium
products
• Expanded retail presence
• Launch of new fits and finishes
SWOT analysis

To better understand the company position in the market place, a SWOT was done to
gauge the brands positioning.
Strengths Weaknesses
• Brand is strongly associated with the • Its dependence on a few customers
authentic and original jeans concept (retailers) for a greater portion of its
• It’s three flagship brands represent an revenues.
entire gamut of clothing, suited for a • With increasing consolidation in the
variety of consumers and have a strong US retail space, the retailers are likely
global appeal to gain better bargaining power, which
• Ability to leverage its brand equity in could result in price pressure.
conjunction with its design and • Increased debt resulting in high levels
marketing capabilities, to launch of interest exposure could be a
innovative and trendy products for additional burden
specific retail segments. • Weak market conditions in Europe and
• Owing to its brand value it is in a its poor customer service in the region
position to take advantage of the have affected sales
consumer recognition for its brands by
extending them to multiple product
categories, consumer segments and boost
its profitability
• Well established and wide distribution
network
Opportunities Threats
• Asia Pacific region is seen as a key • Retail consolidation in the US, could
market for the company in the future lead to the merged retails
• Men aged 15-24 yrs is expected to implementing centralized purchasing
register the highest growth rate in the US and store rationalization measures,
market which could threaten LS&CO’s
• The growing women’s jeans market in revenue performance
the US • The company operates in an industry
that is highly dependent on factors
such as general economic condition
and consumer spending patterns.
• As the company derives close to 45%
of its revenue, from international
markets it is prone to risks such as
currency fluctuations and taxes and
tariffs.
Future prospects

In FY 2005/06, the company planned to focus on driving growth thru,
• Growing the Levi Strauss Signature line in foreign markets
• Develop products that are closely aligned with consumer and retail customer
requirements in the Dockers women’s range
• Improve profitability and reduce high debts
• Enhance productivity and implement cost cutting measures in its European
operations
• Position Levi’s as an up market brand in Europe
• Launch Levi’s Redwire DLX Jeans and the Levis Eco Line
• Capitalize growth momentum in the Asia Pacific market

2. VF Corporation
Based in Greensboro USA, VF Corporation is a leading apparel company that designs,

manufacturers and sells branded apparel.
VF operates its business through five segments, namely
• Jeanswear
• Intimate apparel
• Imagewear
• Outdoor
• Sportswear
The company manufactures some of the world’s best brands including Lee and Wrangler.
The company is focused on expanding its business predominantly through acquiring
brands that have an appeal at a global level.
VF’s shares are listed on the New York Stock Exchange
Key competitors
• Levi Strauss & CO
• Gap Inc
• Guess
• Hanes brands
• Calvin Klein
• The Warnaco Group
• Fruit of the Loom
• Diesel
Retail distribution/customers
VF offers its products in majority of the countries across America, Asia and Europe
through its sales force, distributors and independent sales agents. The company’s
customer base includes specialty stores, department stores, discount stores and retail
chains in the US and in select global markets. VF also sells select product through the
internet.

Sales VF across geographic regions (as a % of total revenues)
2004
Rest of the world

(mainly Europe) ,
22.8%
US,
77.2%
Region 2005 2004 2005

US 77.2 75.1
Rest of the world (mainly Europe) 22.8 24.9
Total 100 100
Rest of the world
VF’s sales to customer(mainly
(as a % of total
Europe) , revenues)
24.9%
US,
75.1%

2004
Wal-Mart,
15.0%
Others,
85.0%
2005
Wal-Mart,
15.7%
Others,
84.3%
Customer 2004 2005

Wal-Mart 15.0 15.7
Others 85.0 84.3
Total 100.0 100.0

• The company’s single largest customer is Wal-Mart stores which accounted for
15.7% of VF total revenues in 2005
• Their top ten customers (all US based) account for 34.0% of VF total revenues
in 2005
• The top five customers in 2005 constituted 29.0% of the company’s total
revenues.
Product development
VF is focused on providing consumers and retailers with innovative and technologically
advanced products; the company conducts market research studies and surveys among
consumers with a view to understanding the prevailing and emerging consumer fashion
trends.
VF’s key brands across segments
Segment Product Type Brands

Jeanswear Casual and denim bottoms & tops Wrangler, Rustler, Lee, and
Riders
Casual tops and bottoms Timber Creek by Wrangler
Denim bottoms Wrangler Hero
Intimate apparel Women’s lingerie Bestform, Curvation, Lily
of France, Vanity Fair, and
Vassarette
Imagewear Occupation apparel Bulwark and Red Kap
Licensed sports apparel Lee Sport
Licensed athletic apparel NFL, and MLB
Licensed apparel Harley-Davidson
Outdoor Surf-inspired apparel and footwear Reef
Outdoor sportswear Napapijri
Backpacks Eastpak
Luggage, backpacks and apparel JanSport
Skateboard-inspired apparel and Vans
footwear
Backpacks, handbags, and Kipling
accessories
The North Face Apparel, outdoor gear, and
footwear
Sportswear John Varvatos Luxury apparel
Nautica Fashion sportswear
Revenues of VF across business segments (as a % of total revenues)

2004
Other, 1.8%
Sportsw ear, 10.1%
Imagew ear, 12.6%
Jeansw ear, 44.2%
Outdoor, 16.5%
Intimate Apparel,
14.8%
2005
Other, 0.7%
Sportsw ear, 10.0%
Imagew ear, 12.4%

Jeansw ear, 41.5%
Outdoor, 22.4%
Intimate Apparel,
13.0%
Financial Performance

VF’s key consolidated performance, 2001-2005
(Figures are given in million of $)
2001 2002 2003 2004 2005
Revenues 5,243.5 5,108.1 5,245.4 6,124.6 6,502.4
Cost of goods sold 3,504.2 3,254.0 3,262.4 3,644.3 3,785.2
Operating income 454.4 621.9 644.9 777.8 828.2
Net income/ (loss) 137.8 (154.5) 397.9 474.7 506.7
Cash & cash equivalents 332.0 496.4 514.8 485.5 296.6
Capital expenditure 78.3 64.5 86.6 81.4 110.3
Working capital 1,217.6 1,199.7 1,419.3 1,006.4 1,213.2
Total assets 4,103.0 3,503.2 4,245.6 5,004.3 5,171.1
Common stockholder’s 2,112.8 1,657.8 1,951.3 2,513.2 2,808.2
equity
No of employees 71,000 56,000 52,300 53,200 52,300
Fiscal years ended 31
December
Highlights
• VF recorded a 6.2% year on year increase in 2005, mainly due to
- Acquisition of brands made by VF
- Organic growth, predominantly from its outdoor business operations
• VF’s jeanswear accounted for 41.5% of total revenues in 2005. With net
revenues at $2,697m, it reflected a 0.3% negative.
The jeanswear segment experienced a drop in revenues due to the following:
- Sales decline in the US following consolidation among mid tier distribution
channels
- Poor performance of newly introduced Lee brand extensions
- However the international markets (including Asia, Canada, Europe, Mexico &
Latin America) performed well.
• A decline of 6.5% in intimate apparel revenue due to poor performance of the

companies private label products
• Growth in its outdoor business with revenues up 43.8% in 2005
• VF’s Imagewear recorded a 4.7% increase for the year
• Its sportswear division recorded a 5.2% revenue increase due to better
performance of the Nautica and Kipling brands.

Product breakup for 2005
Segment Percentage Value
Jeanswear 41.5% $ 2,697m
Intimate apparel 13.0% $848m
Outdoor business 22.4% $1.455m
Imagewear 12.4% $806m
Sportswear 10.0% $651m
2006 performance in Jeanswear -2nd Quarter

For the second quarter of 2006, VF recorded revenues of $1,566.8m, an increase of 7.9%
over the previous year. The increase in revenues were due to better performance of its
jeanswear, outdoor, sportswear and imagewear business
The jeans segment recorded a 6% increase in revenue. The jeanswear segment

experienced a turnaround particularly in its performance in the US, where it recorder an
11% growth in revenues. The segment recorded a significant increase in revenues from
mass market business for its Riders and Wrangler Hero brands.

SWOT analysis
To determine the positioning of the brand a SWOT analysis was carried out, indicating
the key areas.
Strengths Weaknesses
• Dominant player in the branded lifestyle • Sales of one of their leading brands Lee,
apparel market across a diversified has declined due to soft market
portfolio conditions in the mid-tier department
• Strong portfolio of brands stores in the US.
• Holds the largest market share in the • Despite Lee men’s strong market
global jeanswear market through Lee position since its launch, the brand has
and Wrangler recorded stagnant performance
• One of the two leading intimate apparel • Although the company added many new
marketers in the US, number two player ventures under its “Lee women” range,
in Spain and number three in France it failed to build up increased sales due
• Has a network of own stores to inadequate marketing support.
• Largest selling brand in department • Lost floor space as well as programs
stores due to increased consolidation activities
• Continuously broadening its portfolio of among major retailers
customers • A few customers (stores) of VF
• Having a well diversifies product contribute to a considerable share of the
portfolio, mitigates the risk associated company’s revenues.
with select product categories in the
market
• Strong market positioning
Opportunities Threats
• The company plans to make new • Ability to retain its market share
product launches under recently depends on its ability to track emerging
acquired brands. fashion trends
• Plans for further strategic acquisitions • Competes against global and local
in the future brands
• Growth of the Nautica brand by • Price cuts due to competition could
launching it in Europe further erode their margins
• Licensing the Nautica brand to retail • Vulnerable to others infringing on its
stores in India, Middle East and China trademarks and IP.
is in the pipelines.
• Plans to launch a women’s sportswear
line under the Nautica brand in 2006
• Significant new product launches in its
jeanswear line was introduced.
• International expansions – China/ India
• Look out for global brands, having
growth potential in the US market.

Future prospects
• Targets an annual revenue growth in the range of 6-8%.
Organic growth is expected to contribute about half of the revenue growth and
acquisitions expected to contribute the rest
• Pursue brand acquisition strategy- particularly those that have a strong global
appeal.
• The company is also expected to witness a major shift in its business mix.
Sportswear and outdoor contribute just 30% of VF revenues at present but with
the new strides taken by these two segments, the contribution is expected to
grow to approximately 60%.
• Repositioned its Nautica brand by introducing a new market campaign. Growth
will also come through Europe and the potential licensee agreements in Asia &
the Middle East.
• Lee and Wrangler brands will have strong growth opportunities in developing
markets
• Considering expansion initiatives in the Indian market
• Increasing its own stores to 900 by 2010
• Cost reductions through better procurement-by 2005 only 1% of the company’s
US sales were produced in its domestic plants, balance was manufactured in low
cost countries.
• The Lee brand is positioned for a turnaround performance. Initiatives started for
same in 2005
• Wrangler- expanding into other product categories such as shirts
• While the Wrangler and Lee brands are still favored by customers in Europe,
Asia and Germany, plans are to extend its presence in the French and
Scandinavian markets.

9. Denim trends
9.1 New products
Levis Eco Jeans in Europe

Levi’s launched the first fully environmentally friendly jean from a major denim brand.
Made from 100% certified organic cotton and using sustainable product components and
production processes.
Prices Start at $85.00

Fabric 100% organic cotton
Finish • Natural Indigo
• Use of vegetable ingredients such as potato starch,
mimosa flower and Marseille soap
Fit Launched in a straight fit for guys and girls for the first
Season
Sundries • Coconut shell waistband button
• Rivets replaced by “bartacks” to minimize to use of
metal
• Non-galvanized metal fly buttons (galvanization uses
• chemicals)
• Thread: two shades of green cotton/ polyester thread
• Green and ecru cotton/ polyester tab
• Printed cotton back waistband patch
• 100% organic cotton pocketing
Promotional Material Hang tag made of recycled pocketing

Available across Europe at Levi’s stores and independent retailers from December 1st
2006
Levi’s Strauss iPod-compatible jeans

The Levi’s Redwire DLX jean, launched worldwide in fall 2006, merges both fashion
and technology, providing consumers with the most innovative way to enhance their
portable, digital music lifestyle.
Designed for both men and women, the jeans seamlessly integrate iPod plug and play
technology giving music enthusiasts the most innovative and fashionable way to enjoy
music on the go. The jean is designed to be compatible with most iPod systems and
features include a special joystick incorporated in to the jeans watch pocket to enable
easy operation of the iPod
The pants retail for US$250.00
Design features include:

• Easy Pocket Storage- An iPod docking cradle is built into the jeans and is
“invisibly” housed within a side pocket. The Levi’s design team has taken
special care to ensure that the iPod unit remains neatly and securely stored in
the jean, while the iPod “bump” in the pocket is virtually eliminated. The cradle
is equipped with sophisticated technology housed in a red conductive ribbon
that allows users to quickly and easily remove their iPod from the pocket to
view its screen while staying connected. The jean is machine washable once the
iPod is removed.
• “Hip” Controls- A special joystick remote control is externally designed into the
jeans’ watch pocket to enable operation of the iPod. Four-way controls allow
the wearer to easily play/pause, track forward, track back and adjust the volume
control without ever removing the iPod from the pocket.
• Handy Wire Retractor- A handy retractable headphone unit has been built
directly into the jean to help prevent tangles and efficiently manage the iPod
earphone wires.

Denim Design
Lab- DIY
denim finishing kit

A do-it-yourself “distresser kit” was launched by the Denim Design Lab, so that everyone
can give their store bought jeans, a “personalized” vintage look.
The kit is a combination of tools, helpful guides and a history of denim. Included are
things like sandpaper, a seam ripper, a grinder, a paint dropper and more. Also included
is a “denim encyclopedia” entitled Denim Design Lab: a tribute to the beauty of vintage
denim. The book covers everything from tips for treating and distressing denim, to a
history of the clothing and the culture surrounding it. The book was compiled with the
help of experts at Levi Strauss & Co, Lee and Cone Denim.
The kit retails for $300.

9.2 Stores that set the trends
Key retailers from California to Germany that specialize in denim
US West Coast
1. Kiston
Location Robertson Boulevard in Los Angeles
Target consumer Lindsay Lohan
Current bestsellers Slim-cut models from Stitch’s and 1921
Next hot trend Wide-leg jeans for the fashionista and Goldsign’s wides are
already flying off the shelves
Next hot brand Kitson denim
2. Villains and Villains Vault

Location Neighboring stores on Haight Street in San Francisco
Target consumer 20 to 35-year-old label conscious women
Current bestsellers Skinny-leg jeans and gray (washes) are really strong and
brand wise the best sellers are Rock & Republic, True
Religion and Diesel
Next hot trend Fabric blends. “Melting Pot did a cashmere/denim blend”
Next hot brand Tsubi, Genetic and Odyn
3. Blake
Location Portland, Ore
Target consumer Hip, up-wardly mobile Portland-ites
Current bestsellers The Laurel Canyon boot-cut jean from Paige
Next hot trend J-Brand-which has less branding
Next hot brand J-Brand, Z-Brand, Rag & Bone , Lee
4. Planet Flunk
Location Thirteen stores in greater Los Angels
Target consumer The UCLA set
Current bestsellers True Religion skinny and boot-cut varieties
Next hot trend High-waist jeans
Next hot brand Paige and Antik Denim

Italy
1. D Event Store
Location Adriatic seaside town of Riccione, at Galleria Croce del
Sud, 3
Target consumer Young, trendy residents who frequent Riccione’s
discotheque-soaked shoreline; weekend visiting out-of-
towners with style
Current bestsellers Straight and tight Diesel model in plain wash for 100 euros
Next hot trend Clean, pared down, straight-leg looks that include white
washes and plain darker blue washes for men, and tighter,
low-front-waist seafoam blue washes for women
Next hot brand Italian brands Nolita and Rare
2. Jam store
Location Via Santa Redegonda, 10 Milan, a stone’s throw away from
the central site of the Duomo
Target consumer From teenagers to 25-year-olds
Current bestsellers Meltin’s Pot model Nicole, Diesel’s Keate and Levi’s
Engineered model 136
Next hot trend Ultra lightweight denims, tight-fitting styles modeled on
jodhpurs in white and dark blue
Next hot brand Meltin’s Pot couture line Take Two
Germany
1. Galaxie Lafayettte
Location Franzosische Strasse 23, 10117 Berlin
Target consumer Fashionable women between 18 and 25 with high buying
power
Current bestsellers Diesel and Meltin’ Pot
Next hot trend Drainpipes and jeans in slim fit combined with Victorian
elements such as ruched blouses. Also drainpipes combined
with seventies rock-chic elements, such as striped or
checked tops and pull-overs
Next hot brand Cheap Monday and Acne Jeans
2. Jades
Location Heinrich-Heine-Allee 53,40213 Dusseldorf
Target consumer Women of all ages whop are interested in fashion and open
to new trends
Current bestsellers Victoria Beckham for Rock & Republic and True Religion
Next hot trend Skinny jeans will remain the trend for a while

Superfine and Sass & Bide
Next hot brand
Paris
1. Spree
Location 16 Rue de la Vieuville, Pairs
Target consumer Chic Parisians of all ages
Current bestsellers Acne’s silver like jeans, a mix of black and blue weaving
that give a shimmer effect
Next hot trend Skinny jeans and ultra-high waists as well as corduroy pants
in five pocket formats
Stockholm
1. Weekday
Location Stockhom, Sweden
Target consumer Die-hard denim heads
Current bestsellers Cheap Monday, Acne, April 77, Pace and Evise
Next hot trend Soaring waists with a hint of Seventies style
Next hot brand Ijin, a high-end Italian label made from Japanese denim
London
1. Start-London
Location Shoreditch, East London
Target consumer Fashion forward, young men and women
Current bestsellers PRPS and Acne Jeans
Next hot trend Elegant denim. “Dark and smartened up. Slim. Classic”
Next hot brand Acne Jeans
2. Harvey Nichols
Location Knightsbridge, Leeds, Manchester, Edinburghy,
Birmingham and Dublin, Dubai, Riyadh and Hong Kong
Target consumer Varied consumer segment
Current bestsellers “Frayed misfit from Sass & Bide, Blondie from superfine
skinny. Goldsign straight fit called Envy in a dark indigo
Typhoon wash
Next hot trend Dark Skinnies
Next hot brand Mid rise skinny in inky blue denim

9.3 Hot New Denim Destination
Sweden
Their clean, cutting edge styles from niche brands such as Nudie and Acne Jeans are
topping best seller lists across the globe. While the rest of the world is just starting to
squeeze into skinny fits, the slim look has been a Swedish staple for more than five years.
Denim brands here are already on to the next wave, such as Japanese clean selvage
denim, with waistlines soaring above the navel and slightly looser legs.
Sweden’s textile heritage, industrial design sensitivity, love of American post war culture
and acceptance of conceptual ideas have all fed its strength in denim design,, making
Swedish labels hot tickets all over the world.
Hot picks:
• Acne
• Nudie
• Cheap Monday
• Dr. Denim Jeansmakers
• Julian Red
Stockholm, with its reputation as the “Tokyo of Europe”, is one of the leading cities to
Cheap Monday
watch in Europe for directional denim styling and attitude.
Acne Jeans
Dr. Denim
Jeansmakers
Nudie Jeans
Nudie Jeans 10. Leading Denim Weavers
Arvind
Arvind Mills Limited is the flagship company of the Lalbhai Group, an
Indian conglomerate with a total turnover of US$500m.

Today, Arvind is an international force to be reckoned with across the entire textile chain
from yarns through fabric to garments and retail. The company is one of the top three
producers of denim worldwide.
Readymade garments are managed by Arvind brands, which cover both the owned brands
and the licenses of some of the best international brands like Arrow, Lee, Wrangler and
Tommy Hilfiger for the Indian subcontinent.
Turnover- US$180m
Capacity- 110m meters of denim per year
70m meters of slasher
40m meters of rope
Arvinds seasonal collections are trail blazers in the international market and they offer
two collections per year. Arvind has around 2.5% of the world denim production.
ORTA
A Turkish denim supplier founded in 1950. ORTA today produces 36m square meters,
operates out of a 150,000 square meter mill and employs nearly 1,000 people. It is the
first denim manufacturer in Turkey and the second in Europe.
Working with a team of denim experts, famous fashion designer “Adriano Goldschmied”
and many fabric gurus, ORTA has set a new target for the future: To be the top denim
producer in the world.
Customer base- Levi, Lee, Wrangler, Diesel, Replay, Gap, Next, Polo, Ralph Lauren,
Calvin Klein and Tommy Hilfiger
Travex
A Spanish company, it now claims to be the largest denim producer, in Europe exporting
80% of its production to over 50 countries.
Until the 1960’s, Travex primarily produced fabric for industrial clothing and the armed
forces, although it used indigo dyes from its inception. At that time a strategic decision
was made to concentrate on denim and significant investments were made in dyeing
machinery in Spain.
Legler
One of the Rolls Royce of the European denim industry is Legler. This Italian company
started in 1863 and has a high reputation for technical know how. It is based in Italy and
is vertically integrated with:
• Product development
• Spinning in two plants in Sardinia
• Weaving in Sardinia

• Dyeing and finishing in Bergamo
• Central warehousing and distribution
Total production capacity is around 50m meters per annum.
Kaihara
Kaihara is something of an icon to true Jeans connoisseurs. The company was founded in
1893. They employ 450 people in a number of plants which are situated in and around
Hiroshima. The sales output is $175m.
Major customers include Levi, Lee, Edwin and Nudie, who state in their book,
The Naked Truth about Denim; “The denim used by Nudie to make Regular Ralf Dry
Selvage is made in Japan by Kaihara. It is slubby, uneven denim, with cream filling,
ring/ring in 13.5 oz weight, pre-shrunk rope dye double dip indigo denim, with a red
lined selvage. The denim is hand dyed with real vegetable indigo. This traditional and
natural way of dyeing with vegetable indigo is still practiced in the South West of Japan,
where you find fields of indigo plants and small indigo dye houses. Hand hank dyeing
and old traditional narrow shuttle looms give the selvage denim fabric an authentic and
unique look”.

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Brandix Market Watch 1

3 The Denim Jeans Market

4 Import data for USA and Europe

5 Consumer buying patterns 35

6 Jeans prices by region

7 The future of the denim jeans market

10 Leading denim weavers 68

Brandix Market Watch 2

The denim market might be showing signs of losing

Sales of premium jeans, predictably, have started to

Without a doubt, denim is a global fashion phenomenon.

• Older consumers in Asia (over 45) own

• Overall, ownership of denim apparel

• The love of denim is universal:

Brandix Market Watch 3

The history of the “jean” is one of constant change and reinvention. As so

In the 1970s individuals began to personalize flared bell bottom version of

Brandix Market Watch 5

The statistics given below are pertaining to denim jeans only

3.1 The world Jeans market

Was worth US$49bn

The above indicates the following

3.2 The support industries

Brandix Market Watch 6

3.3 Regional jeans markets

Figure 1: Jeans market consumption in 2004

Jeans market by region, US$ consumption (%)

35% North America- US$17.15bn

Rest of the world-US$6.86bn

Jeans market 2004 by region, population(%)

Figure 2: Jeans market 2004 by region, population

Japan and Korea

Rest of the w orld

Brandix Market Watch 7

Brandix Market Watch 8

Regional jeans market 2004 within the rest of world, US$

Brandix Market Watch 9

These figures show that:

 The Indian Market

Brandix Market Watch 10

Jeans market 2004 by region, units consumption (%)

Japan and Korea-171.5m

Rest of the world-497.35m

Brandix Market Watch 11

Japan and Korea

Rest of the w orld

The main points are that:

Brandix Market Watch 12

The purchase power can be further broken down as follows:

4. Import Data for USA and Europe

4.1 EU Imports of W/G Denim Trousers in First Half 2006

Brandix Market Watch 13

Chinese prices had last year fallen to only 2.72 euros.

EU W/G Denim Trouser Imports

Brandix Market Watch 14

EU W/G Denim Trouser Imports

1st Half 2005 Origins in Volume

Brandix Market Watch 15

EU25_EXTRA 91,881,349 68.81% -13.06% 100.00% 100.00%

BANGLADESH 17,084,254 -11.59% 91.09% 8.46% 18.59%

Brandix Market Watch 16

EU25_EXTRA 596,059,543 32.53% 4.01% 100.00% 100.00%