INDUSTRY SURVEYS Apparel & Footwear

OCTOBER 5, 2000 / APPAREL & FOOTWEAR THIS ISSUE REPLACES THE ONE DATED APRIL 20, 2000. THE NEXT UPDATE OF THIS SURVEY IS SCHEDULED FOR APRIL 2001.

CURRENT ENVIRONMENT...... 1

INDUSTRY PROFILE ...... 7

Industry Trends ...... 8 How the Industry Operates ...... 13 Key Industry Ratios and Statistics ...... 18 How to Analyze an Apparel or Footwear Company ...... 19

INDUSTRY REFERENCES ...... 23

COMPARATIVE COMPANY ANALYSIS ...... 26

Howard Choe Apparel & Footwear Analyst Editor: Eileen M. Bossong-Martines Copy Editor: Carol A. Wood Production Coordinators: Li Wah Lai, Debby Lee, Susanna Lee, Rose Yung Statistician: Sally Kathryn Nuttall Assistant to Editor: Paulette Dixon

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VOLUME 168, NO. 40, SECTION 1 THIS ISSUE OF INDUSTRY SURVEYS INCLUDES 2 SECTIONS. CURRENT ENVIRONMENT

Optimistic consumers boost apparel, footwear industries

Economic conditions overall were favorable Apparel maintains moderate growth for apparel and footwear manufacturers in the first half of 2000. Modest inflation and Sales of apparel at the retail level to- low unemployment boosted consumer senti- taled $183.9 billion in 1999, up approxi- ment and contributed to healthy spending on mately 3.9% from $177.0 billion in 1998, both apparel and footwear. These conditions according to NPD Group Inc., a market re- have formed a comfortable backdrop for the search firm located in Port Washington, apparel and footwear industries. New York. Year-to-year sales growth was Real gross domestic product (GDP), after slower in women’s apparel (up 3.7%) than rising 8.3% in 1999’s fourth quarter, was in men’s (up 4.1%). Sales of boys’ and up 4.8% in 2000’s first quarter and 5.3% girls’ apparel rose 0.5% and 3.8%, respec- (preliminary) in the second quarter. The un- tively. Standard & Poor’s believes that ap- employment rate remained extremely favor- parel sales will be modestly higher in 2000, able, at 4.1% in the first quarter of 2000 although margin pressures will challenge and 4.0% in the second quarter. For all of profitability. 1999, unemployment came in at 4.2%. Women’s apparel accounted for 52% of Measures of consumer attitudes and finan- total apparel sales in 1999, with $96.0 bil- cial health also remained strong in the first lion in sales. Within this category, large-size half of 2000. The Conference Board’s index apparel (size 16 and over) saw the greatest of consumer confidence reached an all-time growth — 10%. This segment accounted high of 144.7 (1985 = 100) in January for $26 million in sales and 27% of total 2000, before dipping to a still-strong 141.1 women’s apparel sales. in August. Manufacturers of both apparel With $56.5 billion in sales, the men’s seg- and footwear also benefited from an in- ment accounted for 31% of the total apparel crease in offshore manufacturing and favor- market in 1999. The shift toward casual attire able prices for raw materials. in the workplace continues to benefit sales. Nonetheless, the stock price performance The children’s segment accounted for of apparel and footwear manufacturers was 13% of the total apparel market, or $23.4 lackluster in the first half of 2000. The billion. The remainder consists of uniforms S&P Textiles (Apparel) and Footwear in- and professional apparel. dexes declined 12.1% and 10.8%, respec- tively, compared with a 1.0% decline for CONSUMER CONFIDENCE the S&P 500 Composite stock price index. (1985 = 100) INDUSTRY SURVEY Shares benefited modestly from investors’ 145 renewed interest in “old economy” issues following the spring correction for technol- 125 ogy stocks. However, despite generally solid 105 sales performances by apparel and footwear companies, persistent fears of interest rate 85 hikes and slowing consumer spending have & FOOTWEAR APPAREL restrained further enthusiasm for these 65 stocks. And investors remain smitten with 45 high-growth stocks associated with the 88 89 90 91 92 93 94 95 96 97 98 99 00 computing, electronics, and biotechnology Source: The Conference Board. industries, despite their volatility. OCTOBER 5, 2000 /

1 2 OCTOBER 5, 2000 / APPAREL & FOOTWEAR INDUSTRY SURVEY Athletic apparelsalesfalloutofshape but pricingpressurespersist Inventories down, counted for11% oftotal1998salesfor ple, apparelsalesintheUnited Statesac- these goodshasbeenlackluster. Forexam- revenue source,butconsumer demandfor introduced apparellinesas an additional the yearwere$20.4billion. demand in1999.Total wholesalesalesfor 20% shareofallappareldollars. with againof7%thatgaveitmorethan retail channelsinrevenuegrowth1999, to NPDGroup,thediscountsegmentled growth ofoff-priceretailstores.According This trendisevidentinthesuccessful merchandise atthelowestpossibleprice. ly value-conscious—theywantquality ability toraiseprices.Consumersarehigh- n’t bodewellforapparelmanufacturers’ ture, inthatintensifyingcompetitiondoes- pricing pressuretopersistinthenearfu- clines. We expect somedegreeofapparel consecutive monthofyear-over-year de- 2000, withJunemarkingthetwentieth continued tofallinthefirstsixmonthsof 1999, comparedwith1.36ayearearlier. tory-to-sales ratiowas1.30asofDecember the U.S.DepartmentofCommerce,inven- near itslowestlevelsin16years.Accordingto steeply in1996,andthrough1999remained dustry’s inventory-to-sales ratiodeclined idenced byitslowerinventorylevels.Thein- industry isrelativelyhealthieroverall—asev- bankruptcies intheearly1990s,apparel 1.30 1.50 1.70 1.90 2.10 2.30 INVENTORY/SALES RATIO –WHOLESALEAPPAREL Source: U.S.DepartmentofCommerce. Some athleticfootwearcompanies have U.S. athleticapparelsawcontinuedweak Nonetheless, pricesofwomen’s apparel After severaldifficultyearsandmany 988 09 29 49 69 89 00 99 98 97 96 95 94 93 92 91 90 89 1988 that, theoutlook for2000islackluster. for athleticapparelsales.But apartfrom Australia, areexpectedtoprovide aboost Summer Olympics,hostedby Sydney, ever, weredifficultsalesperiods.The2000 summer ofbothyears.What followed,how- Olympic conteststhattookplaceinthe strongly, apparentlystimulatedbythe both 1992and1996,theindustrygrew Games, particularlytheSummerGames.In el iscyclicallysensitivetotheOlympic that growthinathleticfootwearandappar- within fiveyears. ed appareltoaccountfor40%oftotalsales oriented apparel.Thecompanysaiditexpect- back onbasicsandofferingmoresportswear- ferentiate itselffromitscompetitorsbyscaling In mid-1999,Reebokannouncedplanstodif- pany apparelsalesto30%withinthreeyears. women’s apparel businessfrom22%ofcom- nounced thatitwouldfocusonincreasingthe women’s segment. Inearly2000,Nikean- potential ininternationalmarketsandthe component oftheirbusinessmodels.Theysee they continuetoseeapparelasanimportant couraged footwearcompanies,however, as & FitchCo.,andFUBU. companies suchasGapInc.,Abercrombie look tostylesmadepopularbyapparel fashion statementcontinuesasconsumers The shiftawayfromathleticapparelasa reported thatapparelsalesdropped9%. December 31,1999,FilaHoldingS.p.A. $307 million.Forthequarterended Nike’s U.S.apparel salesdeclined10%to cal quarterendingNovember30,1999, dropped to9%in1999.Forthesecondfis- Reebok InternationalLtd.,butthatfigure (4.0) (2.0) Source: BureauofLaborStatistics. change) % (Year-to-year APPAREL PRICEINDEXES 0.0 2.0 4.0 6.0 8.0 One theoryabouttheslowdownholds These disappointingresultshavenotdis- 988 09 29 49 69 89 00 99 98 97 96 95 94 93 92 91 90 89 1988 Consumer priceindex Producer priceindex Footwear salesfollowapparel’s lead try. Intensifyingcompetitionandaprice-con- business arealsofeltbythefootwearindus- the highlypromotionalretailenvironment. view reflectinghigherinventorylevelsand to 124.1in1999,from127.91998,our consumer priceindexforfootweardeclined clined overthesameperiod. 1989, whilewomen’s shoessaleshavede- of shoespurchasedbymenhasgrownsince $18.0 billionforwomen.Theunitvolume compared with609millionpairsworth shoes, spending$16.8billionin1999, and 63%ofthetime,respectively. women purchasedshoeswhileonsale59% environment remainedpromotional:menand er-priced, casualshoes.Theretail dation andhigherconsumerdemandforlow- declined in1999,asaresultofretailconsoli- from 1.101billionpairsin1998. of shoesweresoldin1999,upabout5.6% Tennessee. Anestimated1.163billionpairs and consultingfirmbasedinNashville, Footwear MarketInsights,amarketresearch from $37.6billionin1998,accordingto ket totaled$38.4billionin1999,up2.1% units. RetailsalesintheU.S.footwearmar- slightly in1999termsofbothdollarsand Infants' 54.1 53.0 51.9 50.7 49.1 53.9 53.0 54.8 54.153.0 50.7 49.1 53.9 51.9 59.5 68.3 69.2 59.359.6 58.6 60.6 69.7 59.8 76.1 78.0 74.9 61.162.1 62.9 57.1 73.6 60.4 78.1 Source: A 541.2524.3 538.4 560.9 494.6 511.3 509.1 559.3 256.4272.5 320.1 341.1 300.0 282.1 294.5 308.6 609.0 340.0 0.8 0.90.8 0.8 0.7 0.8 0.8 0.9 Infants' 1.1 1.0 0.9 1.0 1.2 1.0 1.1 Girls' 1.7 1.6 1.5 1.4 1.3 1.7 1.4 1.6 Boys' Women's 16.2 16.8 15.715.4 14.3 15.0 16.3 14.9 16.5 17.4 13.013.7 15.0 14.5 15.4 14.1 18.0 16.8 Men's PAIRS OF MILLIONS Infants' Girls' Boys' Women's Men's DOLLARS OF BILLIONS U.S. NONRUBBERFOOTWEARSALES Many ofthefactorsaffectingapparel Shoe importsroseby1.4%in1999.The Men purchased340millionpairsof However, theaveragepriceoffootwear Compared with1998,footwearsalesrose EAEPRICE VERAGE Total 972.1 971.5 965.5 966.8 970.4 1,065.1 1,057.9 1,100.8 970.41,065.1 1,162.7 966.8 965.5 971.5 972.1 Total 36.3 37.6 32.032.4 32.4 32.5 35.3 32.2 38.4 Total Footwear News Footwear $ 32.9333.36 34.30 34.16 33.56 33.38 33.50 33.13 33.03 ($) ; FootwearMarketInsights. 9119 9319 9519 9719 1999 1998 1997 1996 1995 1994 1993 1992 1991 fortable andruggeddesign—remainsintact. “brown shoes”—casualfootwearwithacom- decline, overallconsumerpreferencefor comfort. With athleticfootwearunitsalesin trends, withthefocusstilloncasualstyleand 0.80% in1998. total PCEdeclinedto0.73%in1999,from ditures (PCE)forfootwearasapercentageof footwear. U.S.personalconsumptionexpen- spending lessoftheirdisposableincomeon mature industry. Inaddition,consumersare scious consumerhaveslowedgrowthinthis Athletic segmentdecelerates price forthisperiodroseto$43.89,from spend morepershoe.Theaverageper-pair suggests thatconsumerswerewillingto declined 3%and5%,respectively. volume formen’s andwomen’s athleticshoes women’s athletic shoeswereunchanged.Unit declined 3%indollarterms,whilesalesof 313 millionpairs.Salesofmen’s athleticshoes billion in1998.Unitvolumedeclined3.8%to $13.7 billionin1999,down0.4%from$13.8 Manufacturers Association,atradegroup. by NPDGroupfortheSportingGoods ued in1999,accordingtoasurveyperformed nual declineinfiveyears.Thecontin- However, in1998,salessufferedtheirfirstan- 1990s, athleticfootwearsawrapidgrowth. Footwear hascloselyfollowedapparel From the1980sthroughmostof That unitvolumedeclinedmorethansales Spending forathleticfootweartotaled

3 OCTOBER 5, 2000 / APPAREL & FOOTWEAR INDUSTRY SURVEY 4 OCTOBER 5, 2000 / APPAREL & FOOTWEAR INDUSTRY SURVEY its Web site. customers tocreatecustomizedsneakerson tion, Nikerecentlyintroducedawayfor cific specifications.Inastepinthisdirec- foot andmanufactureashoetothosespe- companies toquicklymeasureacustomer’s sneakers. Futuretechnologyshouldenable customer moreinthewayofcustom-made gy toboostfuturerevenuesandofferthe sneakers. colors inadditiontothebasicblackorwhite their productdepthbyofferingavarietyof Reebok andSauconyInc.haveenhanced shoe thatwillbeofferedinlimitedsizes. Presto runningshoe,aninnovativestretch points. InMay2000,Nikeintroducedits they’re offeringmorestylesatlowerprice gish saleswithradicalnewstyles—and respectively. Reebok followed,with17.5%and11.1%, retail sales.Adidas-SalomonA.G.and accounted for42%ofthemarketinterms 1999 wereNike,Adidas,andReebok.Nike with 40%formen’s. counted for46%ofretailsales,compared lion in1998.Women’s athleticshoesac- rising 24%to$346millionfrom$279mil- dals enjoyedthehighestgrowthratein1999, 14% from$2.33billionin1998.Sportsan- the marketandsalesof$2.00billion,down Basketball shoeswerethird,with14.6%of category declined7%to$2.16billion. ished second,with15.7%ofsales,butthe rose 11%to$2.61billion.Crosstrainersfin- in theathleticshoecategorythatyear. Sales category, accountingfor19%ofretailsales categories suchaselectronics. ward brownshoesandtospendinginother in saleswasduemainlytothestyleshiftto- $42.42. Standard&Poor’s believesthedrop Embracing aglobaleconomy Representatives approvedgrantingperma- Initiative) bill.Thatmonth, theHouseof known astheAfrica-CBI(Caribbean Basin Development Actof2000(H.R. 434),also May, Congress approvedtheTrade and on theapparelandfootwear industries.In place thatcouldhaveconsiderableimpact Companies arealsolookingtotechnolo- Shoe manufacturersarecombatingslug- The topthreeathleticshoebrandsin In 1999,runningshoesremainedthetop In 2000,severalsignificanteventstook range upto90%. Current importdutiesareat40%andcan about 16%forapparelandtextiles iff woulddropto3%forallproductsand NTR status,inwhichcasetheaveragetar- benefits, Congressmustgrantthenation guarantees. ForVietnam toreceivefull vide investmentandcopyrightprotection other’s goodsandservices,aswellpro- both sideswillopentheirmarketstothe tions. Ingeneral,thisagreementstatesthat 25 yearsofenmitybetweenthetwona- signed asweepingtradeaccordthatended for aSenatevoteinSeptember. to China;thebillisexpectedcomeup nent normaltraderelations(PNTR)status Afro-Caribbean alliance due toimports. which havebeenunderpressure fordecades medium-size U.S.apparelmanufacturers, the billisincreasedcompetition forsmallto dence ontheregion.Thenegative effectof Asian sources,asitcanreduce itsdepen- age forU.S.businessesinnegotiatingwith profitability. Thebillwillalsoprovide lever- improving turnaroundtimeforgarmentsand ster asourcingregionthatisclosetohome, parel makersandretailersisthatitwillbol- amount to$2billion. which couldtripletheannualimport South Africa,Botswana,andNamibia, sub-Saharan countriessuchasMauritius, garment.) Thebillwillalsoincludethe to besewnandassembledintoafinished require sewing,intoshapesthatareready tiles thatarecutandformed,whichcan form fabrics.(Thislattertermreferstotex- the garmentismadefromU.S.cut-and- free fromtheCaribbeanBasinnationsif TA didinMexico. apparel-making boomintheregion,asNAF- yarn andfabric,isexpectedtofuelan and 25CaribbeanBasinnations)usingU.S. apparel madeintheCBInations(48African basically eliminatesallquotasanddutieson Trade Organizationin1994.Thenewbill Agreement (NAFTA) in1993andtheWorld proved theNorthAmericanFreeTrade important freetradelawsinceCongressap- the Africa-CBIbillmayrepresentmost In July, theUnitedStatesandVietnam For theapparelindustry, thepassingof The positiveeffectofthisbillforU.S.ap- Currently, apparelisimportedquota- Breaching theGreatWall United Statesis likelytoshowapreference times andflexibilitythanon price.Thus,the now placemoreemphasison fastturnaround ing partners. competition forChinaaswell asforitstrad- countries, whichwillincreasethelevelof the eliminationofquotasforallmember once. Inaddition,WTOproposalscallfor imports willbeloweredgradually, not allat global producer. Second, quotasonChinese ing laborcosts,Chinaisnotthelowest-cost import restrictionsonrawmaterials,andris- all, withChina’s domesticpricingpressures, nesses are,inourview, exaggerated. First of exports willquicklyeliminatedomesticbusi- businesses. ConcernsthatsoaringChinese caused tosmallmedium-sizeU.S.apparel positive fortheindustry, despitetheangst overall effectofsuchanapprovalwouldbe members byJanuary1,2005. eliminated alongwiththoseofotherWTO parel quotasfromChinawouldbegradually Senate approvesthismeasure,textileandap- an averageof4%tomorethan60%.Ifthe on Chinesegoodscouldjumpfromaround ly bythestate. their borders,whicharenowcontrolledsole- wholesale anddistributionbusinesseswithin agreed toallowU.S.retailersoperate bill isapproved,theChinesegovernmenthas world’s largest marketforU.S.goods.Ifthe for othermarketaccesstopotentiallythe iffs ongoodstheyexporttothatnation,and companies toqualifyforlowerChinesetar- membership. PNTRisnecessaryforU.S. a broadcoalitionsupportingChina’s WTO footwear importersandexportersarepartof businesses purchasingfromthatnation. sis, whichcreateduncertaintiesforU.S. proved China’s tradestatusonanannualba- 20 years,Congresshasreviewedandap- awaiting approvalbytheSenate.Forpast combined 23%ofthemarket.Thebillis and second-placeHonduras,whichhavea the UnitedStates,behindfirst-placeMexico China isthethird-largestapparelsourcefor WTO. With 6.25%oftheimportmarket, the wayforthatnationinitsbidtojoin granting ofPNTRtoChina,possiblypaving Furthermore, U.S.andEuropean retailers Standard andPoor’s believesthatthe Without normaltradestatus,U.S.tariffs U.S. retailers,alongwithappareland Also inMay, theHouseapproved China willbeprimarilycommodityitems. believe thatapparelgoodsimportedfrom borders totheCBIcountriesandMexico.We gin, fashion-orientedbusinessfromwithinits will mostlikelyshiftmoreofthehigher-mar- for productintroductions,theUnitedStates With theopportunitytoincreaseleadtimes Europe topreferIndia,Pakistan,andRussia. for MexicoandtheCBIcountries, U.S./Vietnam tradeaccord Modest growthseenin2000 million to$2billion. to theUnitedStatesfromcurrent$44 eventually increaseannualapparelshipments port ofcapitalinvestment,Vietnam could Vietnam. Itisestimatedthatwiththesup- lion worthofapparelannuallyfrom Europe, whichimportsmorethan$100mil- benefits withregardtoapparelasdoes main sourceoffootwear. reduce theirdependenceonChinaas source wouldpermitU.S.manufacturersto Asia, anditsincreasedavailabilityasa bor costisoneofthelowestinSoutheast to between8.5%and10%.Thenation’s la- proval ofnormaltraderelationswoulddrop range from20%to67%,whichwiththeap- Current U.S.dutiesonVietnamese footwear would beintermsofflexibilityandcost. to Europe. was exportingmorethan100millionpairs have afootwearindustry, butby1999,it cently asthemid-1990s,countrydidnot volume, Vietnam isgrowingrapidly. Asre- pre-eminent footwearproducerintermsof 30% fromChinaandIndonesia,respectively. ume inthatnation,comparedwith40%and around 12%ofitsworldwidefootwearvol- retailers offootwear. Nikecurrentlysources prominent sourceforU.S.manufacturersand annually, Vietnam couldquicklybecomea ing morethan300millionpairsoffootwear frastructure alreadyinplacethatisproduc- footwear andapparelindustries.With anin- signed atradepactthatcouldbenefitthe pricing. Fashion trends,whileimportantfor economic conditions,demographics, and In July, theUnitedStatesandVietnam The UnitedStatescouldenjoythesame The bill’s benefits toU.S.businesses Although Chinaiscurrentlytheworld’s Apparel andfootwearsalesare drivenby

5 OCTOBER 5, 2000 / APPAREL & FOOTWEAR INDUSTRY SURVEY 6 OCTOBER 5, 2000 / APPAREL & FOOTWEAR INDUSTRY SURVEY strength indesign andmarketing,whichhas graphic trendsaswellfrom itsown segment isbenefitingfromfavorable demo- what fasterthantheoverall industry. This products atattractiveprices will growsome- apparel companiesthatprovide in-fashion favorably receivedbyconsumers. ferings, withlessstructuredlooks,arebeing not enoughsofterlooks.Currentcareerof- structured careerapparelininventoryand dustry washurtbyhavingtoomuch sual trendforthewomen’s segment,thein- believe thatbybeingslowtoreacttheca- encourage spendingbeyondbasicneeds.We pect heightenedconsumerconfidenceto ment needs.Butfortheshortterm,weex- level ofdemandthatsatisfiesbasicreplenish- sales growthinthepastyear. in themen’s segment, whichhasseenhigher believes thistrendhasbeenmorepronounced with thesenewpolicies.Standard&Poor’s replace theirwardrobesinordertocomply Both menandwomenhavehadtorevampor trend favoringcasualclothingcontinues. laxed dresspoliciesintheworkplace, Lauren Corp.,andLizClaiborneInc. Jones ApparelGroupInc.,PoloRalph nies withstrongbrandrecognition,suchas the bestperformancestocomefromcompa- needs willenjoyabove-averagegrowth,with ers thatarecloselyintunewithconsumers’ rise about4%.We believethatclothingmak- gains through2000.Salesfortheyearshould apparel industrytocontinuepostmodest sustain growthforever, weexpecttheoverall pect theeconomyandconsumerspendingto parel andfootwearmanufacturers. spend atahealthyclipisgoodnewsforap- the restof2000.Thatconsumerscontinueto ally optimisticoutlookamongconsumersfor and alowsavingsrateshouldfostergener- unemployment, strongconsumerconfidence, The currentcombinationoflowinflationand benefits ofthecurrenteconomicexpansion. for constantproductinnovation. and pricingpressures,whilefacingtheneed tries areexperiencingintensecompetition industries, theapparelandfootwearindus- overall marketdemand.Aswithmostmature an individualcompany, playalimitedrolein Standard &Poor’s expectsthatbranded Eventually, thecasualtrendwillslowtoa As moreandcompaniesadoptre- However, bothindustriesareenjoyingthe Although Standard&Poor’s doesn’t ex- mately 2%in2000. for thefootwearindustrymayriseapproxi- points. Asaresult,weanticipatethatsales high inventorylevelsandlow-marginprice vironment, however, consideringthestill- serve todevelopahealthierindustry. a greaterdegreeofgrowth.Itshouldalso nies haspositionedthesuccessfulvendorsfor this improvedconditionofapparelcompa- increase sales.Standard&Poor’s believes ways tomaximizeefficiencies,cutcosts,and well. Companiesareconstantlysearchingfor its, notonlyforgrowthbutsurvivalas tion hasforcedcompaniestomaximizeprof- supply, consolidation,andintensecompeti- “Industry Trends” section.) for olderconsumers.(Seealsothisissue’s ting stylesandtrendsthatinfluencethe power. Thisgroupisalsosignificantinset- mographic groupwithconsiderablespending known as“echoboomers”—isalargede- people bornbetween1977and1994,also get thisgroup.GenerationY—comprising have startedtoestablishproductlinestar- nize theimportanceofyouthmarketand apparel companieshavebeenquicktorecog- area, asisarecoveringAsia. many companiesasasignificantgrowth cally Americanbrands.Europeisseenby lifestyle willtranslateintosalesofprototypi- national consumer’s interestintheU.S. growth. Companiesarehopingthattheinter- ingly turntointernationalmarketsfor companies withstrongbrandswillincreas- prospects, Standard&Poor’s expectsthat domestic marketwithslowergrowth part ofkeepingcustomersinterested. apparel, theneedforfreshnessisstillavital cause there’s littlepent-updemandfor mand forbrandedapparel.Nonetheless,be- led toahighconsumerawarenessofandde- The footwearindustryfacesatougheren- The presentenvironmentofabundant While theylaggedwiththecasualtrend, In responsetoachallengingandsaturated ■ INDUSTRY PROFILE

The industry that suits everyone

In 1999, U.S. consumers spent about $184 The U.S. apparel market can be divided billion on apparel, according to NPD Group into two tiers: national brands and other Inc., a consulting firm located in Port apparel. National brands are produced by Washington, New York. They also bought about 20 sizable companies and currently more than 1.166 billion pairs of shoes at a account for some 30% of all U.S. wholesale cost of $38.4 billion, based on data from apparel sales. The second tier, accounting Footwear Market Insights, a market research for about 70% of all apparel distributed, firm based in Nashville, Tennessee. With the comprises small brands and store (private- U.S. population at around 275 million, these label) goods. expenditures equal roughly $800 a year per Apparel is sold through a variety of retail person for apparel and footwear. outlets. Discount stores, off-price retailers, In recent decades, employment levels for and factory outlets accounted for 30% of U.S. manufacturing of apparel and 1999 apparel sales, based on data from NPD footwear have plunged, as companies have Group, a market research firm based in Port sought to lower manufacturing costs by Washington, New York. Specialty stores and moving production overseas. According to department stores accounted for about 22% the U.S. Department of Labor, the number and 19%, respectively. Major chains account- of domestic apparel manufacturing industry ed for 16% and direct mail/catalogs for 9%. employees fell to 658,000 in 1999, down Online sales accounted for 0.6%; the balance 9% from the year-earlier level and down of sales were made through other means. 56% from 1970. The number of domestic In 1998 (latest available), the top 10 retail nonrubber footwear employees declined chains selling apparel accounted for 47% of 12%, year to year, in 1999, to 31,400, ac- apparel sales. Those chains were J.C. Penney cording to the International Trade Co. Inc., Wal-Mart Stores Inc., Dayton Commission (ITC), an independent, non- Hudson Corp., Kmart Corp., May Depart- partisan, fact-finding federal agency. (The ment Stores Inc., Federated Department rubber shoe segment is not as pertinent in Stores Inc., Sears Roebuck & Co., the gauging the general consumption level of Limited Inc., Dillard’s Inc., and Gap Inc. The footwear.) top six department stores (May, Federated, Saks Inc., Dillard’s, Target Corp., and pri- Apparel vately owned Belk Inc.) accounted for 90% of all sales in the department store channel. With respect to both manufacturing and retailing, the U.S. apparel industry is large, U.S. APPAREL INDUSTRY EMPLOYMENT mature, and highly fragmented. On the manu- (Production workers only, in millions) INDUSTRY SURVEY facturing side, apparel sold in the United 1.4 States is made both domestically and interna- tionally; some of the largest producers are list- 1.2 ed in the table, “Major Apparel Companies.” 1.0 Domestic apparel production was worth $41 billion at the wholesale level in 1999, accord- 0.8 ing to estimates from the U.S. Department of & FOOTWEAR APPAREL Commerce. Approximately $46 billion worth 0.6 of apparel (U.S. wholesale value) was import- 0.4 ed into the United States. In addition, $15 bil- 1952 56 60 64 68 72 76 80 84 88 92 96 00 lion in goods were produced jointly in the Source: Bureau of Labor Statistics.

United States and other countries. OCTOBER 5, 2000 /

7 8 OCTOBER 5, 2000 / APPAREL & FOOTWEAR INDUSTRY SURVEY INDUSTRY TRENDS Footwear offshore. date andsearchforlower-cost sourcing has forcedindustryparticipants toconsoli- cent years.Meanwhile,intense competition the apparelandfootwearindustries inre- are amongthesignificanttrends affecting opment oftheyouthandplus-sizemarkets lost marketshare. Inc. andReebokInternationalLtd.,both Inc., andSkechers.Industryleaders,Nike Salomon A.G.,NewBalanceAthleticShoe ufacturers gainingmarketsharewere Kohl’s Corp., andKmart.Someoftheman- ers gainingmarketsharewereWal-Mart, Nashville, Tennessee. Amongthetopretail- search andconsultingfirmbasedin Footwear MarketInsights,amarketre- of thetop15retailersto56%,according consolidation haspushedthemarketshare Industries ofAmerica.Meanwhile,retail cording toindustrytradegroupFootwear mestic footweardeclined16%in1999,ac- footwear salesvolume,consumptionofdo- mented. Despiteaslightincreaseinoverall footwear industryisalsomatureandfrag- MAJOR APPAREL COMPANIES atax0.7 1.2 0.8 2.0 1.3 2.4 2.0 2.2 1.8 Source: Companyreports. †Apparel productsonly. *AsofJuly2000. 2.7 3.0 Hartmarx 2.7 Oxford Industries 5.1 5.6 Russell 7.4 Phillips Van Heusen Tommy (BIL.$) Hilfiger Polo RalphLauren Fruit oftheLoom Warnaco Kellwood Jones Apparel Liz Claiborne Nike Apparel Levi Strauss V.F. Corp. Sara Lee† COMPANY quarters)* 4 recent most on (Based The birthofe-commerceandthedevel- Like theapparelindustry, theU.S. Adidas- SALES Industry enterscyberspace selling directly to consumers,inconjunction viable distributionchannel.Some havebegun seem dividedinrecognizingthe Internetasa ufacturers havedevelopedWeb sites,they with theaveragebeing$1,225. chases (inallcategoriesofgoods)in1999, veyed, 60%spentatleast$500one-tailpur- male orfemale.Ofthoseonlineshopperssur- come of$59,000,andisequallylikelytobe shopper is41yearsold,hasanaveragein- have Internetaccess.ThetypicalU.S.online line, outoftheapproximately97millionwho Daily, reported inJanuary2000 based onasurveyof1,283Internetusersand growing evenfasterthanthoseofapparel. sales inJanuary2000,anditsonlineare Footwear hadaround$42millioninonline this projectionwillproveconservative. on apparelonlinein2000,butbelievesthat has projectedthat$2.6billionwillbespent and ForresterResearch.Research to areportbytheNationalRetailFederation most populare-commercecategory, according Internet technologies. constraints andbenefitfromimproved rapidly, asconsumersfaceincreasingtime Standard &Poor’s expectse-tailingtogrow counted forasmallpercentageoftotalsales, or $163billion.Althoughonlinesalesac- sales. Meanwhile,storesaccountedfor89%, 1999, accountingfor0.6%oftotalapparel online apparelsalesreached$1.1billionin in February2000 bricks-and-mortar retailmodel? what affectwillithaveonthetraditional crease overallsalesordecreasecosts?And apparel andfootwearindustry?Will itin- come amajorchannelofdistributionforthe of questionsandconcerns.Will e-tailingbe- footwear online.Thetrendraisesanumber are increasinglyshoppingforappareland and forreasonsofconvenience,consumers are promotingtheirgoodsontheInternet, business. With growingfrequency, retailers prominent issueintheapparelandfootwear wise knownase-tailing—hasbecomea Internet asadistributionchannel—other- In justthepastyear, theuseof Although manyapparelandfootwear man- According toanErnst&Young study In January2000,apparelwasthefourth According toNPDGroupdatapublished about 39millionAmericansshopon- Women’s Wear Daily, Women’s Wear 5ys vr3,2 1. 3,7 1. 4,3 14.8 12.8 7.0 45,832 39,650 6.3 21,602 12.9 10.4 6.0 19,594 310,134100.0 6.8 36,970 285,981 100.0 29,606 6.1 100.0 274,634 18,726 Source: U.S.DepartmentofCommerce,Population SeriesP-25. 7.7 19,518 12.9 6.5 8.7 18,872 7.8 21,988 All 35,322 6.7 6.3 20,248 23,962 ages 6.9 22,363 65 yrs.&over 7.1 7.2 20,836 17,224 6.4 19,802 55 to64yrs. 6.8 8.2 21,876 19,806 6.3 18,249 50 to54yrs. 8.1 21,194 22,479 7.0 13.2 18,057 45 to49yrs. 7.1 6.8 22,180 7.3 40,795 19,960 40 to44yrs. 6.5 19,511 21,174 20,997 35 to39yrs. 14.0 TOTAL 6.6 17,722 6.7 (THOUS.) 40,147 30 to34yrs. 7.2 18,257 19,127 25 to29yrs. TOTAL 14.6 19,820 (THOUS.) 20 to24yrs. 39,977 6.9 15 to19yrs. TOTAL 18,987 (THOUS.) 5 to14yrs. Under 5yrs. AGE GROUP U.S. POPULATION PROJECTIONS tronic datainterchange(EDI)systems. ing toinvestinprohibitivelyexpensiveelec- link withcustomers(retailers)withouthav- with largercompetitorsbyprovidingadata also allowsmallermanufacturerstocompete bor costsandprices.TheInternetshould allow forhigherproductivityandlowerla- applications, whichinthelongtermshould utilizing theInternetforbusiness-to-business formation, andadvertising. of imagebuilding,distributionproductin- Many arealsousingtheirsitesforpurposes sales throughcross-sellingandsitereferrals. ing behaviorandtoenhancemarketing sites tolearnmoreaboutcustomers’purchas- the consumerdatacollectedfromtheirWeb facturers thatutilizetheInternet.Someuse maintaining aWeb site. facturer isthehighcostofestablishingand distribution. Anotherdeterrenttothemanu- tailers thatconstitutetheirprimarymethodof on theInternetyet,fearingabacklashfromre- manufacturers havedecidednottoselldirectly with theirtraditionalretailchannels.Butmany Consumer wariness a PricewaterhouseCooperssurveyconducted mortar stores. minish theInternet’s threattobrick-and- concerns aboutthepracticethatmaydi- ever andwherevertheywant,manyhave the freedomtoshopatmyriadsiteswhen- UBR%O UBR%O UBR%OF NUMBER %OF NUMBER %OF NUMBER More andmoremanufacturersarenow Yet therearemanyadvantagesformanu- According to Although onlineapparelshoppersenjoy 0020 2015 2005 2000 Daily NewsRecord(DNR), and difficultyinInternetbrowsing(14%). pared withbricks-and-mortarstores(25%), loss ofprivacy(32%),highertotalcostcom- items (45%),thedifficultyofreturns(44%), sons weretheinabilitytotouchandfeel reason fornotpurchasingonline.Otherrea- that theinabilitytotryonitemswastheir apparel online,81%ofthosesurveyedstated U.S. Internetusersthathadnotpurchased in June2000revealedthatofthe44% The Internetaccommodatesapparelsales Courting GenerationY retail relationships. investment withoutdisruptingtheirexisting Internet willprovideareasonablereturnon mine individuallywhethersellingoverthe channel. Manufacturerswillhavetodeter- slightly asaresultofthisnewdistribution sales ofapparelandfootwearwillincrease tially detractfromretailstoresales,overall believes thatwhileInternetsalesmaypar- ment inconsumers’lives.Standard&Poor’s shows thatconvenienceisanimportantele- nological evolution. sumer —areexamplesoftheongoingtech- which simulatethefitofclothingonacon- for electronicpayment),andvirtualmodels, technology, virtualwallets(asecurefileused of use.Recentdevelopmentsinencryption lower hardwareandaccessprices,ease These includeimprovedsecuritysystems, even morepopularasapurchasingmedium. tailers andmanufacturers. contributed totop-linegrowthformanyre- the 1999holidayseason.Internetsaleshave selling categoryforAmericaOnlineduring that apparelsurpassedtoysasthebiggest- footwear sales. tremendous growthinonlineappareland tailers, andconsumershavecontributedto million individuals, or28%oftheU.S.pop- Footwear News, According totheApril1999 issueof 1994, alsoknownasechoboomers. comprising peoplebornbetween 1977and Generation Y—thedemographic group of theapparelandfootwearcompanieson past fewyearshasbeenthemarketingfocus Current concernsaside,manufacturers,re- The growingpopularityofWeb shopping Several factorswillhelpmaketheInternet One ofthemoreapparenttrendsover Women’s Wear Daily this cohortcomprises75 reports

9 OCTOBER 5, 2000 / APPAREL & FOOTWEAR INDUSTRY SURVEY 10 OCTOBER 5, 2000 / APPAREL & FOOTWEAR INDUSTRY SURVEY and StevenMaddenLtd. tastes, suchasSkechersUSAInc.,Vans Inc., companies thatareintunewiththegroup’s industry stillsupportsthesmallerfootwear Generation Y. Nonetheless,thisfragmented mance-oriented andfashionablefootwearto panies havesuccessfullymarketedperfor- stream” acceptance. aversion toanybrandimagesuggesting“main- a formidabletask,however, consideringits musical events.Appealingtothisgenerationis magazines, andtheyaresponsoringsports Internet, onoutdoorposters,andinskateboard television, companiesareadvertisingonthe traditional advertisingmediums.Inadditionto parel andfootwearcompaniestogobeyond the specialtyretailstores. are attemptingtodrawthisgroupawayfrom rely onthelargercompanies’majorbrands targeting thisgroup.Departmentstoresthat ther acquiredordevelopedproductstostart Inc., andPoloRalphLaurenCorp.haveei- Jones ApparelGroupInc.,Tommy Hilfiger drain away, largerapparelcompaniessuchas content tosimplywatchthosesalesdollars tapped intothisdemographicgroup.Not Eagle OutfittersInc.,andFUBUhavealready companies suchasQuiksilverInc.,American boomers (1946to1964). and 1976)and,tosomeextent,thebaby at GenerationX(peoplebornbetween1965 sign aimednotonlyatitsmembers,butalso lishes trendsthatinfluencefutureproductde- the population.Inaddition,thisgroupestab- because itisthefastest-growingsegmentof Companies aremarketingtothisagegroup ing of)approximately$140billionayear. ulation, andspends(orinfluencesthespend- Star struck concert toursand bydressingstarsfortheir italize onthisphenomenonby endorsing sters. Apparelcompanieshave startedtocap- well asmusicalstyles,especially byyoung- regarded asthetrendsetters for clothingas nies arejoiningin. endorse theirproducts.Now, apparel compa- have longbeenknowntousestarathletes Generation Y. Athleticfootwearcompanies portant advertisingtoolintargeting Some ofthelargerbrandedapparelcom- Marketing toGenerationYhasrequiredap- Smaller specialtyretailersandapparel For sometime,popmusicstars havebeen Celebrity endorsementshavebeenanim- nies havecutbackonendorsements. As aresult,manyathleticfootwearcompa- with someathleteshavebeendisappointing. sales throughmultimillion-dollarcontracts sneakers foryears.Recenteffortstobuild mances spurredthesaleofNikebasketball Michael Jordan,whoseincredibleperfor- celebrity athleteexertsthesameinfluenceas However, itmaybeawhilebeforeanother pay athletestoendorsetheirproducts. wielded itsfashioninfluenceoverGenerationY. fashionable GenerationX-ers,whileMTVhas apparel companiesbydepictingthelivesof screen. TVshowslike by movieandtelevisionactors,onoffthe other artistsareexpectedtofollow. Grammy Award wins;arrangementswith with LaurynHill’s tourfollowingher Strauss launchedaseriesofendorsements tour highlightingwomenartists).Levi Spears toursandtheLilithFair(aconcert sponsored theRollingStonesandBritney public appearances.In1999,Tommy Hilfiger Large sizesgetrespect on apparelandfootwear Boomers spendless the apparelindustry inthepastyearhave apparel orfootwear. ment, families,andthehome,ratherthanon income isbeingspentonleisure,entertain- higher percentageofthiscohort’s disposable trend knownas“cocooning.”Asaresult, comfortable andattractiveaspossible—a and families.Theywanttheirhousestobeas clothing andtowardspendingontheirhomes They havealsoshiftedtheirfocusawayfrom ping forapparelthantheydidinthe1980s. ping enthusiasm. time constraintshavedampenedtheirshop- the babyboomers’changingattitudesand 1998. Despitetheirrisingspendingpower, 25 to44declined3%between1996and to NPDGroup,apparelsaleswomenaged comes onapparelandfootwear. According declining percentagesoftheirdisposablein- the babyboomgenerationcontinuetospend Athletic footwearcompaniescontinueto Consumers arealsoalerttothestylesworn Among thefastest-growingsegments in Unlike theyoungercrowd,membersof Baby boomerstodayspendlesstimeshop- Friends, have benefited years. Actress Delta Burke,whoprovedfash- this segmentofthemarketover thepastfew celebrities havebroughtmore attentionto have thespendingpowertoafford them. fashion asothershoppers— and thatthey want thesamechoicesandhighqualityin (NAAFA) arguethatoverweightconsumers Association toAdvanceFatAcceptance and needs.AdvocacygroupsliketheNational become morevocalinassertingtheirwants weight” increasedfrom44%to54%. 1998. Adultswhowereconsidered“over- 12% ofthepopulationin1991to20% zine article,obesityinadultsincreasedfrom According toaSeptember2000 Americans’ averageweightisontherise. underserved population. try, large-sizecustomersareasignificantand tomers. Longignoredbytheapparelindus- retailers havebeensearchingfornewcus- ing atasnail’s pace,manufacturersand ment’s growth. First,withtheindustrygrow- annual sales. 20.1 millionindividuals),with$5.6billionin as 15%oftheU.S.malepopulation(about men’s bigand tallmarketmakesupasmuch the nation’s female population).Similarly, the live intheUnitedStates(orabout37%of Approximately 52millionlarge-sizewomen for about27%ofwomen’s apparelsales. increasing 10%to$26billion,accounting formed allotherwomen’s segmentsin1999, sales ofwomen’s large-sizeappareloutper- segments. AccordingtotheNPDGroup, men’s big-and-tall(sizesXXLandlarger) been thewomen’s plus(sizes16andup) IMPORTS ANDEXPORTSOFAPPAREL Source: U.S.DepartmentofCommerce. dollars) of billions (In 10 20 30 40 50 60 In linewiththislattertrend, large-size At thesametime,plus-sizeindividualshave Second, currenttrendsindicatethat Several factorsarecontributingtotheseg- 0 999 19 9 49 69 899 98 97 96 94 95 93 92 9091 1989 Imports Exports Time maga- this segment. now providingmorefashionableapparelfor Hilfiger, andPerryEllisamongothersare market. PoloRalphLauren,Nautica,Tommy started tocatermorethelargesizemen’s ties ontheInternet. plus-size marketasoneofitshighestpriori- Me brandandWeb site.Penneyregardsthe a playerinthissegmentaswell,withJust4 to servicethissegmentonline.J.C.Penneyis Realsize.com, andCelebratingsize.comstrive experience. Web sitessuchasAlight.com, parel shoppingamorepleasantandfruitful retail stores,theInternetcanalsomakeap- tomers whofeelignoredoruncomfortableat nience formanyshoppers.Forplus-sizedcus- own homeandatanytimeisanextraconve- shopping forapparelintheprivacyofone’s given thesegmentaboost.Theoptionof contemporary sportswearbearinghername. Revlon spokeswoman—toproducealineof model, cabletelevisionshowhost,and announced alicensingdealwithEmme— manufacturer ofmoderatelypricedapparel, cently, KellwoodCo.,thelargestU.S. cialty storeintheplus-sizesegment.Mostre- 1999 showofLaneBryant,thelargestspe- Practice ing line.CamrynManheimofABC’s Designing Women ionably popularinthetelevisionshow Buy now, wearnow QRC —teams ofdesignersandproduction what itcallsQuickResponse Capsules,or ple, Tommy Hilfiger recentlyestablished from relevantconsumergroups. Forexam- teams orhavehiredfirmsto gatherfeedback ning, companieshaveestablished internal needs andtrendstoaidinproductplan- opment, production,anddistributioncycles. Companies havehadtoshortendesign,devel- sales andcarryingunwantedinventory. has hadtoadjustthistrendorrisklosing in whichtheywillwearthem.Theindustry buy theseitemsclosertoorduringtheseason Times are changing,however;consumersnow merchandise —usuallymonthsinadvance. retail storesdecideditwasbesttocarrythe and footwearfortheupcomingseasonwhen Manufacturers ofmen’s apparelhavealso The Internetdistributionchannelhasalso In thepast,consumerspurchasedapparel In ordertostayintunewithconsumer modeled tomuchfanfareinthefall , nowsellsherowncloth- The 11 OCTOBER 5, 2000 / APPAREL & FOOTWEAR INDUSTRY SURVEY 12 OCTOBER 5, 2000 / APPAREL & FOOTWEAR INDUSTRY SURVEY pattern changinganytimesoon. chase thaneverbefore.We don’t seethis tate price,location,styles,andtimeofpur- They arenowinmoreofapositiontodic- mature apparelandfootwearindustries. now isamanifestationoftheirpowerinthe duction industry. benefit totherapidlyshrinkingdomesticpro- If suchdemandincreases,theremaybesome items mayneedtobeproduceddomestically. to besourcedoffshore,someseasonal/special now arethatmostmerchandisewillcontinue ders forfreshproducts.Althoughindications are usingdomesticplantstofulfillsmallor- distribution points. for productionsitesincloserproximityto garments islengthened.Shortenedcyclescall takes placeoffshore,theturnaroundtimefor facturing processes.Asmoreproduction caused companiestore-evaluatetheirmanu- the “buynow, wearnow”phenomenonhave viated productioncyclesbroughtaboutby Other companiesaredoingthisaswell. sponse divisiontomonitorconsumertrends. apparel division,itcreatedastrategicre- a month.WhenNikerecentlyreorganizedits stores tobringoutfreshnewfashionswithin staff whoworkincollaborationwithretail Consolidation likelytocontinue Industry contoursconstantlychange to improvemargins. Theothermethodisfor boost sales,whileitrestructures operations line expansionandincreased unitvolumeto way, whereby acompanyreliesonproduct efficient intwoways.Organic growthisone ating efficiencies. trend hasforcedcompaniestomaximizeoper- manufacturing andretailingcapacity. This ing continuedpricingpressuresfromexcess average sellingpriceshavedeclined,suggest- overall apparelandfootwearsaleshaverisen, and removalofexcessretailspace.Although consolidation aredevelopmentofmegabrands American apparelcompanies. foreign markets,arechangingthelookof offshore sourcing,andthedecisiontoenter Consumers’ demandtobuynowandwear At themoment,afewapparelcompanies Standard &Poor’s believesthattheabbre- Companies cangrowandbecome more The underlyingthemessupportingongoing Several trends,includingconsolidation, development oracquisitions. diversify theirproductlinesthroughin-house over thenextyear. Companiesareseekingto & Poor’s expects moreacquisitionstooccur pressure toincreasetop-linegrowth,Standard sire topenetratetheyouthmarket. mark, areevidenceofthosecompanies’de- Oldham (ayouth-orienteddesigner)trade- Jones Apparel’s acquisitionoftheTodd nior-oriented FritziCaliforniaand Koret,and in-house. KellwoodCo.’s acquisitionsofju- ing brandratherthandevelopinganewline offerings byacquiringandretaininganexist- Lauren decidedtocomplementitsproduct a companywithmajorbrandlikeRalph lion. Thisacquisitionwassignificantinthat apparel retailerClubMonacofor$81.5mil- was RalphLauren’s purchaseofCanadian its customersfromheadtotoe. megabrand —amanufacturerthatcandress ny wasalsosignificant.Jones’s aimistobea parel companypurchasedafootwearcompa- companies intheUnitedStates.Thatanap- ed inoneofthelargestapparel/footwear proximately $1.4billion.Thismergerresult- footwear companyNineWest Groupforap- Apparel Group’s June1999acquisitionof sitions in1999.ThelargestwasJones exist towarrantthemove. other firm,providedthatsufficientsynergies the companytomergewithoracquirean- Offshore sourcing of tariffs.Apparel assembledinMexicoand Trade Agreement(NAFTA) and thelowering significant duetotheNorth American Free ing inMexicoandtheCaribbean hasbeen stantial, thegrowthofapparel manufactur- turnaround time. manufacture productsthatrequireaquick tained somefacilitiesintheUnitedStatesto ations completelyoffshore,othershavere- while somemanufacturershavemovedoper- among others.However, asnotedabove, the Caribbean,CentralAmerica,andAsia, outside oftheUnitedStates—toMexico, production facilitiestolower-cost locations turers haveincreasinglymovedtheir tively, U.S.apparelandfootwearmanufac- continually lookforwaystocompeteeffec- In lightofintensifyingcompetitionand Another importantacquisitionin1999 The industrysawseveralsignificantacqui- As companiesinthesematureindustries While manufacturinginAsia remainssub- free upinvestmentforbusinessexpansion. that reducecosts,increaseprofitability, and wide. Thenetresultsareoperatingefficiencies smaller andtransformingeconomiesworld- turing systemsareclearlymakingtheworld rials hasalsoaidedthistrend.Bettermanufac- processes. Improvedaccessibilitytorawmate- ment instate-of-the-artmanufacturing facturing andcommunications,invest- use ofhigh-techcomputersystemsinmanu- partly theresultoftechnology—increased any unexpectedeconomicorpoliticaltroubles. pects thistrendtocontinuein2000,barring of U.S.producers.Standard&Poor’s ex- made goodshavepickedup,tothebenefit sult, consumptionandimportingofU.S.- troubles —somefasterthanothers.Asare- have beenrecoveringfromtheireconomic 9% in1990. 29% ofallapparelimportsin1999,upfrom and cutintheUnitedStatesaccountedfor the Caribbeannationsfromfabricformed HOW THEINDUSTRYOPERATES Entering internationalmarkets nies sellbothfootwear andapparel. practice aswellconcept, manycompa- ilar demandprofile.Thetwo areasoverlapin share variouscharacteristics, includingasim- considered astwoseparateindustries, they forming wellinCanadaandSouthAmerica. pany PaylessShoeSourceInc.hasbeenper- lucrative market.Meanwhile,footwearcom- in theprocessofeconomicrecovery, is alsoa to builduptheirbrandsintheregion.Asia, opened flagshipstoresinLondonaneffort Hilfiger andPoloRalphLaurenrecently 350 million,asanattractivemarket.Tommy ers seeEurope,withapopulationofaround companies. therefore becomeafocusofsomeU.S. U.S. products.Internationalbusinesshas economies overseasareinterestedinbuying well internationally, andmanyexpanding opportunities. Americanbrandstranslate increasingly lookingoverseasforgrowth parel andfootwearmarkets,companiesare The trendtowardglobalizationisalso During thepastyear, Asiancountries Although apparelandfootwear canbe Many apparelandfootwearmanufactur- As growthslowsinthematureU.S.ap- and tasteschange, manufacturersmustbe mand forapparelandfootwear. Astrends tudes alsohaveanimportant impactonde- to advancenearly85%. had grownto80%,andby2002 itisexpected developing countries.By1990,thatpercentage two-thirds oftheworld’s populationlivedin countries inthefuture.In1950,approximately will growmuchmorerapidlythandeveloped Commerce, theworld’s developingcountries According totheU.S.Departmentof are lookingoverseasforfutureopportunities. 1% peryear, apparel andfootwearcompanies Because theU.S.populationisgrowingatonly overall demandforapparelandfootwear. increasing numberofbodiestoclothehelps growth anddemographictrends.Obviously, an penditures grew4.9%peryear. rate of5.1%,whileapparelandfootwearex- personal incomeroseatanaverageannual penditures. From1991to1999,disposable come slowedsomewhat,asdidapparelex- the 1990s,however, growthinpersonalin- 6.2% annualrateduringthesameperiod.In footwear expendituresincreasedatastrong age annualrateof7.0%.Appareland able personalincomegrewatahealthyaver- really necessary. may postponepurchasesofitemsthataren’t a whim.Inrecessionaryperiods,consumers wardrobes ortobuythenewestfashionson sumers aremoreinclinedtoupdatetheir during prosperouseconomicperiods,con- Apparel andfootweararenecessities,but confidence, andconsumerspending. in disposablepersonalincome,consumer general economictrends,includingchanges overall industrydemandisalsodrivenby pend onthespecificproductsoffered,but mand ahigherpricefromconsumers. innovative stylesorfeatures—thatcancom- produce attractivenewproducts—featuring tion, theseindustriescontinuallystriveto fashion-conscious membersofthepopula- from yeartoyear. Inaddition,forthemore and unlikelytochangedrasticallyinstyle which isbothaffordabletoamassaudience tries supplyconsumerswithutilitarianattire, mand. Atthemostbasiclevel,theseindus- have tomeetvarioustypesofconsumerde- Both theapparelandfootwearindustries Demographic trendsandconsumer atti- Demand isalsodrivenbypopulation From 1984to1991,forexample,dispos- Sales trendsforindividualcompaniesde- 13 OCTOBER 5, 2000 / APPAREL & FOOTWEAR INDUSTRY SURVEY 14 OCTOBER 5, 2000 / APPAREL & FOOTWEAR INDUSTRY SURVEY their productlines. flexible tomakethenecessaryalterations Apparel Components oftheindustries lower demand forwoolandfleeceproducts. weather inthepastfewyears hascaused be oflowerqualityandprice. Warm winter mand highersellingprices.Wovens tendto represent high-qualityfabrics andcancom- and quality. Ingeneral,woolensandknits better, bridge,and designer. in ascendingorderarepopular, moderate, apparel. Pricepointsintheapparelindustry tional andcasualstyles),dress,athletic wear, careerapparel (comprisingbothtradi- profitable revenuesourceforamanufacturer. in private-labelmanufacturing,thiscanbea result oftheloweroperatingexpensesinherent vate-label productforaretailcustomer. Asa ucts underacompanybrandnameoraspri- its ownretailoutlets). ucts toretailersandconsumers(through Tommy Hilfigerdoesboth,sellingitsprod- solely toretailchannels.Acompanylike like VFCorp.isamanufacturerthatsells its ownapparelandaccessories.Acompany vertical retailer, manufacturesandmarkets tailers, orasboth.Forinstance,GapInc.,a erate asmanufacturers(wholesalers),re- market positionandcostcutting. years, aslargercompaniesgainleveragein prevalent inthisindustrythepastfew ing newtechnologies.Consolidationhasbeen ing tocreateleanerorganizationswhileadopt- profitability, manycompaniesarerestructur- competitive environment.Inordertoimprove and slow-growing,itexistsinadynamic fashion trends. target customersbyforecastingorobserving to 24.Manufacturerscatertheneedsof sportswear apparellineforwomenaged16 ample, acompanymaydecidetodesign for atargetedgroupofconsumers.Forex- price points.Eachlineisspecificallydesigned ages, inawiderangeofstylesatvarious designed formen,women,andchildrenofall Fabrics playanimportantroleinfunction Broad apparelcategoriesincludesports- An apparelmanufacturermaysellitsprod- In theapparelindustry, companiescanop- Although theapparelindustryismature Apparel andfootwearproductlinesare sented 31%and13%,respectively. 1999. Men’s andchildren’s apparelrepre- NPD, thissegment’s sharewasnearly52%in sales atretail.Accordingtoresearchfrom counted formorethanhalfofallapparel Footwear Fierce competition pared witharound$45forwomen. roughly $52forapairofathleticshoes,com- dren. Onaverage,however, menwerepaying 39% wereformen,and14%chil- athletic shoespurchasedwereforwomen, the firstninemonthsin1999,47%of by NPDGroupfortheSGMAfoundthat make afashionstatement.Asurveyconducted ten wornforitsoverallcomfort,orevento solely forathleticactivity, thisfootwearisof- footwear purchases.Ratherthanbeingused footwear accountsforaround35%ofall Manufacturers Association(SGMA),athletic 5%, respectively, roundedoutthetopthree. footwear. BrazilandIndonesia,with7% States, with75%ofallimportednonrubber China wasthemainexportertoUnited in the12monthsendingSeptember1999. purchased intheUnitedStateswereimported mately 1.35billionpairsofnonrubbershoes in Washington, D.C.,94%oftheapproxi- America, thenationalfootwearassociation to improvecomfortandperformance. footwear producersalsodeveloptechnology tomers: fashionorfunction.Athletic determine whatismostimportanttoitscus- man-made. Afootwearmanufacturermust or othermaterialsthatareeithernatural Footwear canbemadeoutofleather, canvas, casual, dress,sandals,andsport/hiking. are undercapitalized andlackbroad-based difficult. Typically, smallstart-upcompanies relatively painless,stayingin ismuchmore sion throughtheuseofcontractors. fixed assetsperemployee,and easeofexpan- characterized bysimpletechnologies,low relatively insignificant.Theseindustriesare ed. Inmanyareas,thebarrierstoentryare extremely competitiveandhighlyfragment- The women’s segmenthastraditionallyac- Various stylesoffootwearincludeathletic, According totheSportingGoods According toFootwearIndustriesof The apparelandfootwearindustriesare Although gettingintothebusiness maybe manufacturers reducecapitalinvestmentre- contractors. Bydoingbusiness thisway, contract outputbyemploying jobbersand finished garments. bundles fromjobbersandprocess theminto ly inthelow-pricesegment. manufacturing isamajorfocus—particular- product isthecheapest.Therefore,low-cost the consumerwilllikelypurchasewhichever ments competestrictlyonprice;inthiscase, costs fortheconsumer. Ofcourse,someseg- flexibility, andcreatesperceivedswitching typically givesamanufacturermorepricing among consumers.Astrongbrandimage awareness andcompeteforbrandloyalty this, manufacturersattempttoraisebrand one brandorproducttoanother. To fight they canreadilyswitchtheirloyaltyfrom over apparelandfootwearmanufacturers,as product labeling. tionship, includingpricing,freight,and tiate favorabletermsinthebusinessrela- retailers areinastrongerpositiontonego- sume moreinventoryrisk.Inaddition,big to need,manufacturersareforcedas- ers shrinktheirinventoriesandordercloser challenge tomanymanufacturers.Asretail- manded bythemajorretailers. have thetechnologicalsystemsnowbeingde- global sourcing.Inaddition,manydon’t Manufacturing: involvementvaries finishing), withtheexceptionofcutting. production operations(thatis,sewingand product. However, theycontractoutmost als, andarrangeforthesaleoffinished quire thenecessaryfabricandrelatedmateri- production, fromdesigningtofinishing. ers, jobbers,andcontractors. types ofapparelcompaniesaremanufactur- gaged inmanufacturing.Thethreebasic which aremoredifficulttopredict. garments tendtodominateseasonalsales, suited tolarge-scaleproduction.Women’s from yeartoandarethereforemore dren’s clothing arelesssubjecttochange Manufacturers canreadilyexpand and Consumers alsowieldconsiderablepower The powerofbigretailersisamajor Contractors Jobbers Manufacturers Not allapparelcompaniesaredirectlyen- Generally, marketsformen’s andchil- design theirowngarments,ac- receive already-cutgarment perform theentirerangeof technological advancements. cluding labor, rawmaterials,and volved inthecostbasisofthisindustry, in- competitors. Thereareseveralfactorsin- battle tolowertheircostsrelative come statement.Firmsareinaconstant up intheprofitmarginsonacompany’s in- footwear companies.Thisefficiencyshows the long-termsuccessofappareland cost ofunusedcapacityduringacontraction. quired forexpansionandavoidcarryingthe Overseas sourcingcutslaborcosts Reduced traderegulation still belowthoseintheUnitedStates. overseas laborrateshavegoneup,theyare ing amanufacturer’s costs.Andalthough edly appreciateagainsttheU.S.dollar, rais- country. However, currenciescanunexpect- ing themanufacturingcostsfromforeign sharply invalueversustheU.S.dollar, lower- 1997, whenseveralAsiancurrenciesdeclined benefit tothedomesticindustry, asin late cern. Attimessuchfluctuationscanbea quality items. pools ofskilledlaborthatcanproducehigh- Many oftheregion’s countrieshavelarge Asia formorecomplicatedapparelproducts. for automaticinventoryreplenishment. ly tofashionchangesandretailers’needs sourcing allowscompaniestorespondquick- itive withlessexpensiveimports.Domestic ing allowsmanufacturerstobeprice-compet- companies indifferentways.Overseassourc- side domesticcontractorsbenefitsapparel mestic sourcesotherthantheirownplants. duction inalloftheseways.Theyalsousedo- footwear companiesestablishoverseaspro- ries. Typically, majorU.S.appareland tract directlywiththeownersofforeignfacto- with factoriesintheforeigncountry, orcon- build aplant,establishagentsthathaveties production inthreeways.Theycanbuyor sourcing. Companiescanestablishoverseas many manufacturerstoturnoverseas that time,theUnited Stateshadjustlowered largely duetoanexpansionof freetrade.At United Stateshasaccelerated since1995, Manufacturing efficiencyiscriticalto U.S. laborcoststendtobehigh,leading However, currency fluctuationsareacon- Generally, U.S.companiesgotoSoutheast Using overseasmanufacturingand/orout- The shiftofclothingjobsaway fromthe 15 OCTOBER 5, 2000 / APPAREL & FOOTWEAR INDUSTRY SURVEY 16 OCTOBER 5, 2000 / APPAREL & FOOTWEAR INDUSTRY SURVEY year toyear, to31,400. domestic employmentdropped12%in1999, ported. Inlinewiththelowerproduction, million pairsin1999,ofwhich28%wasex- of nonrubbershoesdeclined16%to106 1999. Forthesameperiod,U.S.production purchased inthe12monthsendedSeptember accounted foronly7.8%ofthetotalshoes domestically producednonrubberfootwear Asian importstotheUnitedStates. producers, arelikelytorestrictthelevelof ports, plusfinanciallimitationsamongAsian gion. However, U.S.quotasonAsianim- lead toincrementalsourcingfromthatre- rencies) areloweringcoststhereandcould changes inSoutheastAsia( United States.Morerecently, economic lead timesbecauseofitsproximitytothe which offerstheadvantageofmuchshorter duction wasbeingsourcedintheCaribbean, Southeast Asia.Agrowingamountofpro- where laborratesarelowerthanin were outsourcedtolessdevelopedcountries, States withoutincurringimportduties. and toshiptheclothingbackUnited in theUnitedStatestoMexicoforassembly, lowed U.S.companiestoshipfabricproduced went intoeffectonJanuary1,1994,ital- American FreeTrade Agreement(NAFTA) tas onimportedclothing.WhentheNorth Multi-Fiber Agreement,whichimposedquo- Caribbean, andhadagreedtophaseoutthe tariffs onclothingimportedfromthe Raw materialscostsfluctuate meantime, companies canhedgetheirbets duce thevolatilityofcotton prices,inthe While amoreopentradesystem wouldre- eral lawenactedsome60years earlier. to theUnitedStateswererestricted byafed- product. Atthesametime,cotton imports American-grown cottontoexporttheir in otherpartsoftheworldcausedsellers reached recordlevels,ascottoncropfailures set therawmaterialpriceincrease. cutting measurescanbeimplementedtooff- margins willbesqueezedunlessothercost- cotton. Intimesofrisingcottonprices,profit to variationsincommodityprices,especially with yarn.Apparelcompaniesaresusceptible woven andknittextilefabricsorbyknitting According toFootwearMarketInsights, Apparel productsthataresimplertomake For example,in1995thepriceofcotton Apparel ismadebycuttingandsewing e.g., devalued cur- costs oftheserawmaterials. are similarlyaffectedbyfluctuationsinthe ber, andvinyl/plastic.Footwearcompanies footwear, classifiedbymaterial:leather, rub- $1.00 inthespringof1995. a pound,afterhavingclimbedtomorethan 2000, thepricewasapproximately59cents have moderated.AsofearlySeptember years, however, cottonpricefluctuations in thecottonfuturesmarket.Inrecent Technology playsanimportantrole throughout the entiremanufacturingand ploys interconnectedcomputer terminals data interchange(EDI).AnEDI systemem- manufacturers togetheriscalled electronic sponse hasbecomekeytosurvival. possible. Formanufacturerstoday, quick re- tailers buyasclosetothesellingseason retailers’ reorderingheadachesandhelpre- highest costs.Theyalsoalleviatemanyofthe ventory costs,historicallyoneofretailers’ stores, apparelcompanieshelptocarryin- assuming responsibilityforstockingthe want tobuy, whentheywanttobuyit. By that retailershavethemerchandisecustomers stocking, whileatthesametimeensuring maintain leaninventoriesandavoidover- tomers. Thegoalofquickresponseisto ing themselvesindispensabletotheircus- other technologygoalongwaytowardmak- tailers throughquickresponseprogramsand new products. vide themarketplacewithasteadyflowof few months,sofootwearcompaniescanpro- duce thedesign-to-productioncycletoonlya (CAD) systemsenableamanufacturertore- industry, forexample,computer-aided design performance areas.Intheathleticfootwear months, especiallyinthefashion/style/high- development phasefromyearstopractically ogy havehelpedtoshortenthenewproduct costs byreducingmanuallabor. in theapparelindustry—arehelpingtocut such asefficienciesincut-and-sewoperations improvements inmanufacturingprocesses— manufacturers. Inthemanufacturingsector, working relationshipsbetweenretailersand footwear industriesandhavegeneratedcloser the globalexpansionofappareland There arethreegeneralcategoriesof Technological innovationshavefacilitated One suchsystemtolinkretailers and Apparel makersthatarelinkedwithre- Rapid improvementsincomputertechnol- in theCaribbeanorSoutheastAsia. quire morelaborinputandtendtobemade fashion apparel,however, assuchgoodsre- more difficulttoimplementforseasonaland tories intheUnitedStates.Thesesystemsare being manufacturedinhighlyautomatedfac- quire shorterleadtimes,andareincreasingly which arerelativelysimpletoproduce,re- have provensuccessfulwithbasicgoods, ping informationprocessingmoreefficient. ishment, EDImakesdistributionandship- addition toprovidingforautomaticreplen- more thanacomputerforcommunication.In restock aretailer’s shelvesquickly, usingno time) reordering,enablingamanufacturerto tem arealsousedforautomatic(orjust-in- recorded bybarcodescannersinanEDIsys- production toconsumerdemand.Thedata information, themanufacturercantailorits then relayedtothemanufacturer. the-minute reportonagivenstore’s salesis such detailsasitscolorandsize.Thisup-to- record theproductsold,itsprice,andeven read thebarcodeattachedtoeachitemand counter, electronicpoint-of-salescanners sales systems.Attheretailer’s checkout Finding therightdistributionchannels stores accounted forroughly22%;depart- counted for30%ofapparel sales; specialty count, off-price,andfactory outletstoresac- from avarietyofretailoutlets. In1999,dis- dedicated toaparticularproduct category. perstores, whichhavemoresquarefootage sector —havedevelopedformatscalledsu- chains —particularlyintheathleticfootwear Crew). Inrecentyears,severallargeretail ShoeSource), andmailorder(Lands’End,J. Mart), discountstores(DressBarn,Payless general merchandisechains(Sears,Wal- apparel specialtystores(Gap,theLimited), stores (Macy’s andNordstrom,forexample), distribution channelsincludedepartment wards differentretailoutlets.Retail derstand customertrendsandattitudesto- turer isdistribution. success ofanapparelorfootwearmanufac- way toconsumers.Thus,akeyfactorinthe isn’t enough—theproducthastomakeits Quick responseandEDItechnologies With directaccesstodetailedretailsales Consumers buyappareland footwear It isimportantformanufacturerstoun- Of course,manufacturingagreatproduct represents only asmallportionofapparel 0.6% oftotalapparelsales. Although itnow 1999, onlinesalesreached$1.1 billion,or the mostattentionrecentlyis theInternet.In from 6%in1998. through directmail/catalogsin1999,up Group, 9.4%ofapparelretailsaleswere child inthenation.AccordingtoNPD more than50foreveryman,woman,and catalogs wereprintedintheUnitedStates— able), anestimated13.3billiondirectmail pleasant alternative.In1996(latestavail- log shoppingoffersamoreconvenientand to shopthaninthepast,andforsome,cata- distribution. Consumerstodayhavelesstime chased bywomen. men’s apparel items,forexample,arepur- who theactualtargetcustomeris.Many into accountwhenpromotingaproductis discount stores. item andthereforeshopmorefrequentlyat clined tospendalotofmoneyonsingle outgrow theirclothing,parentsarelessin- count stores.Becausechildrenquickly er portionofapparelispurchasedindis- the children’s segment,aconsiderablyhigh- stores andgeneralmerchandisechains.In apparel ismoreprevalentindiscount than isthecaseformen’s apparel.Men’s chased inspecialtyanddepartmentstores For example,morewomen’s apparelispur- for men’s, women’s, andchildren’s items. goods stores,andoutlets. outlets includecatalogs,mailorder, sporting Wal-Mart andKmart.Otherdistribution and third-largestretailersarediscounters million pairsofshoesin1999.Thesecond- Payless ShoeSourcealonesoldaround215 store, whichhadaround16%ofthemarket. include PaylessShoeSource,aself-service through high-endshoestores.Top retailers 19% throughself-servicestores,about11% were soldthroughdiscountstores,nearly months of2000,about25%allshoes Footwear MarketInsights,inthefirstfour sell thelargestvolumeofshoes.Accordingto mail orderandothermeans. Inc. Theremaining13%wassoldthrough 16%, accordingtodatafromNPDGroup ment storesfor19%;andmajorchains The distributionchannelthat hasreceived Catalogs areanotherimportantmethodof Another factorthatretailersmusttake Differences existinthedistributionmix In thefootwearindustry, discountstores 17 OCTOBER 5, 2000 / APPAREL & FOOTWEAR INDUSTRY SURVEY 18 OCTOBER 5, 2000 / APPAREL & FOOTWEAR INDUSTRY SURVEY distribution. Internet willbecomeanimportantmethodof resolved eventually, however, andthatthe tar) customers.We expecttheseissuestobe not toalienatetheirretail(bricks-and-mor- Internet, manyofthemarebeingcautious started toselldirectlyconsumersonthe product. Althoughsomemanufacturershave fact thatconsumerscannotseeandtouchthe Another hindrancetowideracceptanceisthe nological andinfrastructurelimitations. ty, andcostofInternetshoppingduetotech- fully satisfiedwiththespeed,quality, securi- should gainpopularity. future, shoppingforapparelandfootwear hardware, software,anddatapipelinesinthe With expectedtechnologicaladvancesin for marketingandinformationalpurposes. Manufacturers withInternetsitesusethem where andatanytimetheywish. convenience ofbeingabletoshopfromany- potential forgrowth.Consumerslikethe sales, thisdistributionchannelhasthemost Attracting thecustomer ties tocross-sell productsbetweenthetwo pany’s productlinesandcreatingopportuni- strategic moveaimedatbroadening thecom- shoe retailerNineWest GroupInc.wasa footwear. JonesApparel’s 1999acquisitionof glasses, watches,fragrances, wallets,and adding variousaccessorylines,suchassun- are leveragingtheirexistingbrandnamesby Corp., JonesApparel,andLizClaiborneInc. such asTommy Hilfiger, PoloRalphLauren loyalty, whichtranslatesintorepeatbusiness. For manufacturers,brandsbuildconsumer rience easierandfasterformanyconsumers. their qualityimage,maketheshoppingexpe- carefully. Establishedbrandnames,with are spendingtheirdisposableincomemore Many consumershavelesstimetoshopand nificant factorinapparelandfootwear. ing customers. brand nameisapowerfulweaponinattract- slaught oflifestyleandfashionmessages,a marketing campaigns,deliveringanon- sumers arebarragedbyadvertisingand isting customers.Butinamarketwherecon- to greateffortsattractnewandretainex- At present,however, consumersarenot Many establishedbrandmanufacturers, Brands havebecomeanincreasinglysig- Apparel andfootwearmanufacturersgo and servicingofcustomers. the retaileroncompany’s newproducts The merchandisingteamwillalsoeducate shared withdesignersandproductionstaff. ideas tothecompany. Thisinformationis the company’productsorbringnewproduct that providevaluablecustomerfeedbackof usually involvedinconsumerfocusgroups location inthestore. customer becomesfamiliarwiththeproduct sumer productrecognitionandloyalty, asthe with thecompany’s imageandincreasescon- tailer tocreateanenvironmentconsistent cluding fixtures.Thisprocessallowsthere- an in-storeshopfromconcepttodisplay, in- sell theirproducts.Thismayinvolvebringing ships withretailerstoeffectivelypresentand must establishandmaintaingoodrelation- For sellingwholesaleproduct,manufacturers right productinanappropriateretailsetting. bolden thebrandimagebydelivering sunglasses, watches,andmore. broaden productofferingstoincludeapparel, has leverageditssuccessfulbrandimageto Movado. Inthefootwearcategory, NikeInc. hosiery, andmostnotably, watchesthrough new licensingdealstomarketjewelry, Most recently, Tommy Hilfiger announced extend theirproductlinesthroughlicensing. brands. However, mostcompanieschooseto RATIOS ANDSTATISTICS KEY INDUSTRY Standard &Poor’s expects thecurrenteco- since 1991.RealGDPgrew 4.2% in1999. recession. in realGDPindicatethatthe economyisina inition, twoconsecutivequarters ofdecline and contractswiththebusinesscycle.Bydef- tions, hasacyclicaleconomythatexpands (or real)GDP. measured bychangesininflation-adjusted United States.Growthintheeconomyis vices producedbylaborandcapitalinthe is themarketvalueofallgoodsandser- sure ofaggregateU.S.economicactivity. It of Commerce,GDPisthebroadestmea- Reported quarterlybytheU.S.Department A manufacturer’s merchandisingteamis Manufacturers mustthensupportandem- The U.S.economyhasbeen advancing The UnitedStates,likemostmajorna- þ Gross domesticproduct(GDP). rising 5.2%in2000and3.6%2001. nomic expansiontocontinue,withrealGDP several yearsnow. The CPI rose2.2%in as welltheirsuppliers. cisions ofapparelandfootwear companies, of inflationreflectsandinfluences pricingde- the apparelandfootwearindustries. Therate also releasesspecificpriceindexesforboth in thepriceofgoodsandservices.TheBLS Statistics (BLS),thisindexmeasureschanges Released monthlybytheBureauofLabor strong 141.1inAugust. time high.Itslippedabit,however, toastill- index reached144.7(1985=100),anall- likely tobecutbackorpostponed. about thefuture,personalexpendituresare confidence islowbecauseofuncertainty and borrowing.Conversely, whenconsumer usually accompaniedbyincreasedspending prospects. prospects, andtheirfutureearnings ness trends,theirjobsecurityoremployment feel aboutthestrengthofeconomy, busi- sents arelativemeasureofhowconsumers gauge consumersentiment.Theindexrepre- polls 5,000representativeU.S.householdsto zation. Eachmonth,theConferenceBoard Conference Board,aprivateresearchorgani- consumer confidenceiscompiledbythe for apparelandfootwearcompanies. able personalincomeremainsapositivesign 6.5% in2001.Theupwardtrenddispos- & Poor’s expects risesof5.6%in2000and the UnitedStatesincreased5.0%.Standard save theirmoney. sumers aremorelikelytodeferspendingand Conversely, whenincomesaredeclining,con- well forapparelandfootwearsales. sumers arewillingtospendmore.Thisbodes spending. Whenincomesarerising,con- ences thelevelofexpectedconsumer justed forinflation.Disposableincomeinflu- of consumers’after-tax personalincome,ad- Department ofCommerce,thisisameasure Reported eachmonthbytheU.S. Overall inflationhasbeenmoderate for In January2000,theConferenceBoard’s When consumerconfidenceishigh,it’s In 1999,disposablepersonalincomein þ þ þ The consumerpriceindex(CPI). Consumer confidence. Real disposablepersonalincome. An indexof crease of3.3%in2000and2.2%2001. 1999. Standard&Poor’s forecastsanin- Qualitative factors FOOTWEAR COMPANY HOW TOANALYZE ANAPPAREL OR 5.9% for2000and5.7%in2001. Poor’s currently forecaststhelongbondat 1999, from5.6%in1998.Standard& 30-year U.S.Treasury bonds,roseto5.9%in els. Long-terminterestrates,asindicatedby interest ratestodayareatrelativelylowlev- pand manufacturingcapacity. postpone orcancelplanstoupgradeex- and footwearmanufacturersmaychooseto to makeothercapitalexpenditures.Apparel companies lesslikelytoexpandfacilitiesor rates increasethecostofborrowing,making stock repurchases.Highorrisinginterest tions, capitalexpenditures,dividends,and business acquisitions,newproductintroduc- influences managementdecisionsregarding business strategies —andmanagementteams nonetheless. Companiesthat haveeffective sess asquantitativefactors,they arecrucial such qualitativeissuesarenot aseasytoas- position andqualityofmanagement. While company fromanotherareits competitive and quantitativefactors. involves anassessmentofbothqualitative prospects foraspecificcompany. Doing so ated, theanalystcanthenconsider general health. help theanalystgetasenseofindustry’s goods? Theanswerstosuchquestionscan apparel andfootwearrelativetoother Are consumersspendingmoreorlesson debt levelstoohighcomparedwithincome? consumer incomesrising?Are cession? Isconsumerspendingslowing?Are economy growing,orisitheadedforare- prospects fortheoverallindustry. Isthe These areimportantdeterminantsof general economicandconsumertrends. footwear company, it’s essentialtoassess Compared withthelate1970sand1980s, þ Among thetraitsthatdistinguishone Before analyzingaparticularapparelor Once theindustryoutlookhasbeenevalu- Interest rates. The levelofinterestrates 19 OCTOBER 5, 2000 / APPAREL & FOOTWEAR INDUSTRY SURVEY 20 OCTOBER 5, 2000 / APPAREL & FOOTWEAR INDUSTRY SURVEY nies enterinto contractswithwell-known their products(whichiswhy sneakercompa- permit footwearcompaniesto differentiate product launchesareimportant becausethey tend todrivegrowthintheshort run.New fuel sales. ny’s newproductlaunchisontarget,itmay clothing, suchaschildren’s wear. Ifacompa- sportswear; orbyofferingnewcategoriesof tering intootherlinesofapparel,including additional sizes,suchasmissyandpetite;en- nies oftenlaunchnewproductsbyoffering generate brandloyaltyamongconsumers. pany willbeabletochargehigherpricesand of thecustomer. Throughthisstrategy, acom- only aperceivedproductdifferenceintheeyes actually havetocreateadifferentproduct,but petitors. Inreality, thecompanydoesnot entiating itsproductlinefromthatofcom- also createacompetitiveadvantagebydiffer- vorable impressionofitsquality. heard ofthebrandname,butalsohaveafa- a pointwheremostconsumershavenotonly moting brandawareness.Thekeyistoreach of timeandmoneyonadvertisingpro- overnight. Companiesgenerallyspendalot quality orfashionableproduct. sumers automaticallyidentifywithahigh- create awell-knownbrandnamethatcon- Through marketingefforts,companiestryto vide asignificantcompetitiveadvantage. footwear industries,brandnamescanpro- to succeed. that canimplementthem—aremorelikely Assessing acompany’s competitivestance graphics, anddistributionmethods. pany’s manufacturingcosts,customerdemo- new productdevelopment. brand names,productdifferentiation,and line? Areastoconsiderincludethecompany’s ing toattracttheconsumeritsproduct in themarketplace.Whatiscompanydo- industry willgiveitacompetitiveadvantage company anditsproductsfromothersin For footwearcompanies,new products ◆ ◆ But brandloyaltycan’t beestablished ◆ Other competitiveissuesincludethecom- Anything thatfavorablydistinguishesthe Product differentiation. New productpipeline. Brand names. In theappareland Apparel compa- A companycan tribution system? Has itrecentlyexpandedornarroweditsdis- ment stores,theInternet,orothermethods? own retailchain,mailordercatalogs,depart- the companysellitsproductsthrough should alsobeconsidered.Forexample,does for thecompany’s growth. get marketcanhavelong-termramifications zens? Demographictrendsrelatingtothetar- the firmtargetingteenagersorseniorciti- mine whothefirm’s targetcustomersare.Is mine howsuccessfulitisinminimizingcosts. pany, theanalystshouldattempttodeter- countries. Whenlookingataparticularcom- ly lowerintheFarEastandlessdeveloped the UnitedStates.Laborcostsaresignificant- manufacture productsincountriesoutside the apparelandfootwearindustries,isto search anddevelopmentoftechnology. companies commitalotofresourcestore- efficiency ofmanufacturingmethods.Some nological innovationsthatimprovethe cost manufacturingoftencomesthroughtech- order toensurehealthyprofitmargins.Low- on price,it’s criticaltomaintainlowcostsin petitive advantage.Ifacompanyiscompeting dustry’s low-costproducerisapowerfulcom- consumers. athletes) andthuschargehigherpricesto of acompany’s management Assessing thequality Have theybeen abletodigestacquisitions? ous experience?Whatistheir trackrecord? recently tookcontrol,whatwas theirprevi- ing managersbeenwiththe company? Ifthey at itshistory. Howlonghavethehigh-rank- clues aboutthemanagement teambylooking strategies ithasimplemented. tory, howit’s compensated,andthegrowth management, itemstolookatincludeitshis- by management.Inassessingthequalityof After all,competitivestrategiesarecreated can distinguishonecompanyfromanother. ment intheapparelandfootwearbusiness ◆ ◆ Another waytolowercosts,especiallyin ◆ As inmostindustries,superiormanage- ◆ Low-cost manufacturing. Distribution. Customers. Management history. It’s alsoimportant todeter- Channels ofdistribution You candiscover Being thein- company tocompeteinitssegment. determine howdifficultitwillbeforthe petitors? Answeringthesequestionswillhelp loyalty, alreadyexistamongitsmaincom- substitute products,andhowmuchbrand competitors oronlyafewlargefirms?Which competing inasegmentwithmanysmall company’s main competitors.Isthecompany strategy clear, anddoesitmakesense? low priceorhighfashion?Isthegrowth firm planstocompetein.Isitcompetingon Find outwhichsegmentofthemarket to determinemanagement’s growthstrategy. shareholder value. what’s bestfortheshareholders—create that executiveshaveanincentivetodo tions inthecompany. Thiswillhelpensure preferable formanagerstoownstockorop- poor? Fromaninvestor’s viewpoint,it’s even thoughthecompany’s performancewas bonuses. Isitexcessive?Was itincreased important tolookatmanagement’s payand Income statement Quantitative factors Is itpricing,volume gains,oracquisitions?Is tant todeterminewhat’s drivingsalesgrowth. tors andoftheoverallmarket. It’s alsoimpor- should becomparedwiththat ofitscompeti- it’s alsorelative.Acompany’s salesgrowth sales. Obviously, revenuegrowthisgood,but footwear companiesbeginswiththetopline: income statementanalysisforappareland gross margins,andoperatingmargin. the analystshouldexaminearerevenues, footwear company’s incomestatementthat Among themajoritemsonanapparelor tions ofthefirmoveragiventimeperiod. and needtobeanalyzedtogether. cial statements,theyareverymuchinterrelated each. Althoughthesearethreeseparatefinan- of cashflows—andvariouscomponents statement, thebalancesheet,andstatement lyze itsfinancialstatements—theincome competitive position,thenextstepistoana- It’s important toidentifyandanalyzethe ◆ ◆ ◆ The incomestatementrecordstheopera- After gettingagrasponthecompany’s Revenues. Growth strategies. Management payandbonuses. As inmostotherindustries,an Next, it’s important It’s also the company’s operatingexpenses. should beaddedbacktoyourcalculationsof pear quarterafterquarter, perhapsthey tions. However, if suchchargesseemtoreap- should beexcludedfrommargincalcula- on theincomestatement,andtherefore arately. Theseareusuallynonrecurringitems it’s significant, itwillusuallybereportedsep- charge isconsideredan“otherexpense.”If times includedinoperatingmargins,ifthe er extraordinarycharges,whicharesome- pense marginsmaybeawarningsign. volume. Conversely, atrendofnarrowingex- spreading itsfixedcostsacrosshigherlevelsof ment isusingitsresourcesmoreefficiently, and erating marginusuallyindicatesthatmanage- administrative expenses.Anincreaseintheop- margin, whichreflectsselling,general,and sential tolookatthecompany’s operating ates withnetcash outflowsbecauseofwork- to generatecash.Ifafirmcontinually oper- concurrently withitscashflow —itsability pany’s cashpositionneedstobeanalyzed cash onhandtofunditsoperations? Acom- margin andwhetherthosetrendswillpersist. mine whatiscausingfluctuationsingross to chargeapremiumprice?Ifpossible,deter- a productthatisinhighdemand,allowingit particular companywithintheindustryhave sulting inlowergrossmargins?Ordoesa dustry-wide factorssuchasovercapacityre- margin, bothrelativeandabsolute.Arein- analyst shouldalsolookfortrendsingross some degreeofcompetitiveadvantage.An margin isrelativelyhigh,itmayindicate and arelativebasis.Ifcompany’s gross gin shouldbeevaluatedonbothanabsolute utilization, amongotherthings.Grossmar- changes inproductmix,pricing,andfactory profit margincanvarydependingupon ing themarket’s overallgrowth? the companygainingmarketshare,orjustrid- Balance sheet time. and stockholder’s equityataspecificpointin and stateddollarvalueofassets,liabilities, Be aware,however, ofwrite-offsandoth- ◆ ◆ The balancesheetreportsmajorcategories ◆ Operating profitmargin. Gross profitmargin. Cash. Does thecompanyhaveenough A company’s gross Likewise, it’s es- 21 OCTOBER 5, 2000 / APPAREL & FOOTWEAR INDUSTRY SURVEY 22 OCTOBER 5, 2000 / APPAREL & FOOTWEAR INDUSTRY SURVEY on assetsandbookvalue. vides abackgroundforanalyzingitsreturn Understanding acompany’s goodwillpro- nies toassessrelativegoodwillvalues. is tolookatcompetitorsorsimilarcompa- companies canbetricky. Theusualmethod goodwill isn’t ascience,soanalyzingsuch volatile. Andputtingadollarvalueon sults areexpectedtobecomparatively is afashionablebrandname,financialre- worth canbeinitsbrandname. and equipment),mostofthecompany’s n’t havealotoffixedassets(suchasplants total assets.Infact,foracompanythatdoes- marks —canrepresentasizableportionof will —theintangiblevalueplacedontrade- companies withbrandnameproducts,good- the inventoryturnoverratio. of inventorymanagementcanbemeasuredby company’s balance sheet,andtheeffectiveness Inventory levelsaregenerallyavailablefroma order tosellthembeforetheygooutofstyle. company beforcedtodiscountitsproductsin impending grossmargindeclinesshouldthe buildup isnotonlycostlybutmayalsosignal have toomuchinventory. Aninventory season. It’s equallyimportant,however, notto want tobecaughtshortduringapeakselling right amounts.Obviously, acompanydoesn’t tant tohaveonhandtherightproductsin both retailersandmanufacturers.It’s impor- industries, inventorymanagementiscrucialto the capitalmarkets. can fundoperationsbeforeitwillneedtotap sheet todeterminehowlongthecompany should lookatthecashlevelonbalance ing capitalneedsandexpenses,one Statement ofcashflows further growth; typically, aftercapitalex- will pumpcashbackintoits businesstofuel pecting highersalesinthefuture. to boostinventorylevelsifacompany isex- its business?Forexample,cash maybeneeded of commonstock,paydividends,orreinvestin lize itscash.Doesitplantorepurchaseshares needs. Findouthowthecompanyplanstouti- to determineacompany’s cashinflowsand For companieswhoseprimarybusiness ◆ ◆ Generally, acompanyinitsgrowthstage It’s necessarytoprojectcashflowinorder Inventory. Goodwill. In theapparelandfootwear For apparelandfootwear through stockrepurchases. dividends ortoboosttheper-share value may electtopayoutcashshareholdersas high enoughreturnontheirinvestedcapital deficit. Maturecompaniesthatdon’t earna penses, agrowthcompanywillruncash Backlogs andfuturesorders Other factors Retail indicators and bookings. future seasonsarereportedasprebookings enues. Intheapparelindustry, deliveriesin and isanotherwaytoprojectfuturerev- usually overthenextthreetosixmonths, scheduled fordeliverybetweencertaindates, tures orders.”Thismeasurecoversproducts and apparelsegmentreportworldwide“fu- panies reportitseparately. statements, someapparelandfootwearcom- tion doesnotappearinanyofthefinancial the nextfewmonths.Althoughthisinforma- an indicationofwhatitssaleswillbeover lyzing anapparelorfootwearcompany. factors areimportanttoconsiderwhenana- tative factorsoutlinedabove,severalother of makingcomparisonswith prioryears. fall/winter apparel,increasing thedifficulty mal fallweatherwilldampendemandfor ple fromshopping,whilewarmer-than-nor- factor. Forexample, stormsdiscouragepeo- fall inMarchorApril?Weather isalsoa timing ofholidays.Forexample,doesEaster tors beyondtheretailer’s control,suchasthe year-to-year comparisonsareaffectedbyfac- ciency isaverageweeklysalesperstore. new stores.Asimilarmeasureofsaleseffi- sales andresultingfromtheopeningof inates thedifficultyinforecastingsame-store those ofolderstores.Thismeasurealsoelim- stores aregeneratingsalesreturnssimilarto square foot,whichcantellananalystifnew apparel orfootwearstoreisaveragesalesper A company’s inventorybacklogcangive In additiontothequalitativeandquanti- Certain companiesintheathleticfootwear One waytomeasureperformanceofan With anyretailsalesmeasure, however, ■ INDUSTRY REFERENCES

PERIODICALS The Conference Board 845 Third Ave., New York, NY 10022-6679 Apparel Industry Magazine (212) 759-0900 Bill Communications Web site: http://www.conference-board.org 1115 Northmeadow Pkwy., Roswell, GA 30076 A not-for-profit, nonadvocacy business membership and (770) 569-1540 research organization that calculates the consumer Web site: http://www.aimagazine.com confidence index and leading economic indicators. Monthly magazine reporting on the apparel industry. Footwear Industries of America The Apparel Strategist 1420 K St. NW, Suite 600, Washington, DC 20005 Philip Black (202) 789-1420 P.O. Box 406, Fleetwood, PA 19522 Web site: http://www.fia.org (610) 944-5995 A national association providing information and ser- Web site: http://www.apparelstrategist.com vices to footwear manufacturers, distributors, and-sup- Monthly and annual publications containing apparel in- pliers. dustry statistics, news, and trends. Footwear Market Insights DNR 2244 Metrocenter Blvd., Nashville, TN 37228-1320 Fairchild Publications (615) 256-9781 7 W. 34th St., New York, NY 10001-8191 A market research and consulting organization provid- (212) 360-1700 ing manufacturers, producers, and distributors with data related to the footwear industry. Daily publication covering the men’s apparel industry.

The NPD Group Inc. Footwear News 900 W. Shore Rd., Port Washington, NY 11050 Fairchild Publications (516) 625-0700 7 W. 34th St., New York, NY 10001-8191 Web site: http://www.npd.com (212) 360-1700 A market research and consulting organization provid- Weekly publication reporting on current trends and is- ing manufacturers, producers, and distributors with data sues in the footwear industry. related to the various industries.

Shoe Stats Sporting Goods Manufacturers Association (SGMA) Footwear Industries of America 200 Castlewood Dr., North Palm Beach, FL 33418 1420 K St. NW, Suite 600, Washington, DC 20005 (561) 842-4100 (202) 789-1420 Web site: http://www.sportlink.com Web site: http://www.fia.org A national association providing manufacturers, produc- Annual publication of footwear industry statistics. ers, and distributors with information and statistics re- lated to the sports apparel, athletic footwear, and sport- Women’s Wear Daily ing goods equipment industries. Fairchild Publications 7 W. 34th St., New York, NY 10001-8191 GOVERNMENT AGENCIES (212) 630-3500 Daily newspaper covering the women’s apparel industry. Bureau of the Census

U.S. Department of Commerce INDUSTRY SURVEY TRADE ASSOCIATIONS/MARKET RESEARCH FIRMS 14th St. NW, Washington, DC 20230 Web site: http://www.census.gov American Apparel Manufacturers Association (AAMA) One of the agencies under the Commerce Department; 250 Wilson Blvd., Suite 301, Arlington, VA 22201-3848 its mission is to be the pre-eminent collector and (703) 524-1864 provider of timely, relevant, and quality data about the Web site: http://www.americanapparel.org people and economy of the United States.

A national association providing apparel manufacturers & FOOTWEAR APPAREL with industry statistics and information. OCTOBER 5, 2000 /

23 24 OCTOBER 5, 2000 / APPAREL & FOOTWEAR INDUSTRY SURVEY U.S. commerce. ety ofgovernmentagenciesthatmonitorandregulate A cabinet-leveldepartmentresponsibleforawidevari- Web site:http://www.doc.gov 14th St.NW, Washington, DC20230 Department ofCommerce tics. ment inthebroadfieldoflaboreconomicsandstatis- The principalfact-findingagencyofthefederalgovern- Web site:http://www.bls.gov 2 MassachusettsAve. NE,Washington, DC20212 U.S. DepartmentofLabor Bureau ofLaborStatistics its mandateistocollecteconomicdata. One oftheagenciesunderCommerceDepartment; Web site:http://www.bea.doc.gov 14th St.NW, Washington, DC20230 U.S. DepartmentofCommerce Bureau ofEconomicAnalysis such as10Ksand10Qs. site, whichprovidesaccesstocorporatedocuments, The SecuritiesandExchangeCommission’s (SEC)Edgar http://www.sec.gov/cgi-bin/srch-edgar Edgar Web site panies, information,products,andservices. Provides morethan1,500linkstoapparel-relatedcom- http://www.apparel.net Apparel.net ADDITIONAL WEBSITES DEFINITIONS FOR COMPARATIVE COMPANY ANALYSIS TABLES

Operating revenues Price/earnings ratio Net sales and other operating revenues. Excludes The ratio of market price to earnings, obtained by interest income if such income is “nonoperating.” dividing the stock’s high and low market price for the Includes franchised/leased department income for year by earnings per share (before extraordinary items). retailers and royalties for publishers and oil and mining It essentially indicates the value investors place on a companies. Excludes excise taxes for tobacco, liquor, company’s earnings. and oil companies. Dividend payout ratio Net income This is the percentage of earnings paid out in dividends. Profits derived from all sources, after deductions of It is calculated by dividing the annual dividend by the expenses, taxes, and fixed charges, but before any earnings. Dividends are generally total cash payments discontinued operations, extraordinary items, and per share over a 12-month period. Although payments are dividend payments (preferred and common). usually calculated from the ex-dividend dates, they may also be reported on a declared basis where this has been established to be a company’s payout policy. Return on revenues Net income divided by operating revenues. Dividend yield The total cash dividend payments divided by the year’s Return on assets high and low market prices for the stock. Net income divided by average total assets. Used in industry analysis and as a measure of asset-use efficiency. Earnings per share The amount a company reports as having been earned for the year (based on generally accepted accounting Return on equity standards), divided by the number of shares outstanding. Net income, less preferred dividend requirements, Amounts reported in Industry Surveys exclude divided by average common shareholder‘s equity. extraordinary items. Generally used to measure performance and to make industry comparisons. Tangible book value per share This measure indicates the theoretical dollar amount Current ratio per common share one might expect to receive should Current assets divided by current liabilities. It is a liquidation take place. Generally, book value is measure of liquidity. Current assets are those assets determined by adding the stated (or par) value of the expected to be realized in cash or used up in the common stock, paid-in capital, and retained earnings, production of revenue within one year. Current liabilities then subtracting intangible assets, preferred stock at generally include all debts/obligations falling due within liquidating value, and unamortized debt discount. This one year. amount is divided by the number of outstanding shares to get book value per common share. Debt/capital ratio Long-term debt (excluding current portion) divided by Share price total invested capital. It indicates how highly “leveraged” This shows the calendar-year high and low of a stock’s a company might be. Long-term debt are those market price. debts/obligations due after one year, including bonds, notes payable, mortgages, lease obligations, and industrial revenue bonds. Other long-term debt, when In addition to the footnotes that appear at the bottom of reported as a separate account, is excluded; this account each page, you will notice some or all of the following: INDUSTRY SURVEY generally includes pension and retirement benefits. Total NA—Not available. invested capital is the sum of stockholders’ equity, long- NM—Not meaningful. term debt, capital lease obligations, deferred income NR—Not reported. taxes, investment credits, and minority interest. AF—Annual figure. Data are presented on an annual basis. Debt as a percent of net working capital CF—Combined figure. In this case, data are not available APPAREL & FOOTWEAR APPAREL Long-term debt (excluding current portion) divided by the because one or more components are combined with difference between current assets and current liabilities. other items. It is an indicator of a company’s liquidity. OCTOBER 5, 2000 /

25 26 OCTOBER 5, 2000 / APPAREL & FOOTWEAR INDUSTRY SURVEY

COMPARATIVE COMPANY ANALYSIS — APPAREL & FOOTWEAR Operating Revenues

Million $ Compound Growth Rate (%) Index Basis (1989 = 100) Company Yr. End 1989 1994 1995 1996 1997 1998 1999 1-Yr. 5-Yr. 10-Yr. 1995 1996 1997 1998 1999 TEXTILES (APPAREL) § ASHWORTH INC OCT 2.1 60.8 74.5 75.4 89.1 107.3 107.9 0.5 12.1 48.0 3,479 3,521 4,162 5,011 5,038 COLUMBIA SPORTSWEAR CO DEC NA NA NA 299.0 353.5 427.3 470.5 10.1 NA NA NA ** ** ** ** DONNA KARAN INTL INC DEC NA NA 510.1 612.8 649.6 622.6 656.8 5.5 NA NA NA ** ** ** ** § HAGGAR CORP SEP NA 493.9 451.6 440.6 408.1 405.4 437.6A 8.0 -2.4 NA NA ** ** ** ** § HARTMARX CORP NOV 1,297.0F 717.7F 595.3D,F 610.2A,F 718.1F 725.0A,F 726.8A,F 0.2 0.3 -5.6 46 47 55 56 56 † JONES APPAREL GROUP INC DEC NA 641.7 786.7 1,034.1 1,387.5 1,685.2A 3,150.7A 87.0 37.5 NA NA ** ** ** ** § KELLWOOD CO # JAN 779.9A 1,364.8A 1,466.0 1,521.0 1,781.6 2,151.1A 1,565.3H -27.2 2.8 7.2 188 195 228 276 201 * LIZ CLAIBORNE INC DEC 1,410.7 2,162.9 2,081.6 2,217.5 2,412.6 2,535.3 2,806.5 10.7 5.3 7.1 148 157 171 180 199 § NAUTICA ENTERPRISES INC # FEB 95.3F 247.6F 302.5F 386.6 484.8 552.7 621.3 12.4 20.2 20.6 317 405 508 580 652 § OSHKOSH B'GOSH INC -CL A DEC 315.1 363.4 432.3 444.8 395.2 423.2 429.8 1.5 3.4 3.2 137 141 125 134 136 § OXFORD INDUSTRIES INC # MAY 550.4 657.0 664.4 703.2 774.5 862.4 839.5 -2.7 5.0 4.3 121 128 141 157 153 § PHILLIPS-VAN HEUSEN # JAN 732.9 1,255.5 1,464.1A 1,359.6 1,350.0 1,303.1 1,271.5 -2.4 0.3 5.7 200 185 184 178 173 POLO RALPH LAUREN CP -CL A # MAR NA NA 1,019.9 1,180.4 1,470.9C 1,726.9 1,955.5A,C 13.2 NA NA NA ** ** ** ** § QUIKSILVER INC OCT 70.7 127.1 173.8 194.6 233.2 317.6 445.9 40.4 28.5 20.2 246 275 330 449 630 * RUSSELL CORP DEC 688.0 1,098.3A 1,152.6 1,244.2 1,228.2 1,180.1 1,142.2 -3.2 0.8 5.2 168 181 179 172 166 ST JOHN KNITS INC OCT NA 128.0 161.8 203.0 242.1 282.0 NA NA NA NA NA ** ** ** ** TOMMY HILFIGER CORP # MAR NA 321.0 478.1 661.7 847.1 1,637.1A 1,977.2 20.8 43.9 NA NA ** ** ** ** * VF CORP DEC 2,532.7 4,971.7A 5,062.3A 5,137.2A 5,222.2A 5,478.8A 5,551.6A 1.3 2.2 8.2 200 203 206 216 219 † WARNACO GROUP INC -CL A DEC 516.4D 788.8 916.2 1,063.8 1,435.7A 1,950.3 2,114.2A 8.4 21.8 15.1 177 206 278 378 409

FOOTWEAR § BROWN SHOE INC # JAN 1,820.5 1,464.6D 1,458.9 1,527.8 1,569.3 1,539.9 1,594.1 3.5 1.7 -1.3 80 84 86 85 88 § K-SWISS INC -CL A DEC 69.4 154.9 120.3 106.8 116.2 161.5 285.5 76.7 13.0 15.2 173 154 167 233 411 * NIKE INC -CL B # MAY 2,235.2 4,760.8 6,470.6 9,186.5 9,553.1 8,776.9 8,995.1 2.5 13.6 14.9 289 411 427 393 402 * REEBOK INTERNATIONAL LTD DEC 1,822.1A 3,280.4 3,481.4 3,478.6A 3,643.6 3,224.6 2,899.9 -10.1 -2.4 4.8 191 191 200 177 159 § STRIDE RITE CORP NOV 454.4D 523.9 496.4 448.3 515.7 539.4 572.7 6.2 1.8 2.3 109 99 114 119 126 § TIMBERLAND CO -CL A DEC 156.1 637.5 655.1 690.0 796.5 862.2 917.2 6.4 7.5 19.4 420 442 510 552 587 § WOLVERINE WORLD WIDE DEC 323.6 378.5D 414.0 511.0A 665.1A 669.3 665.6 -0.6 12.0 7.5 128 158 206 207 206 § TIMBERLAND CO -CL A DEC 156.1 637.5 655.1 690.0 796.5 862.2 917.2 6.4 7.5 19.4 420 442 510 552 587

Note: Data as originally reported. * Company included in the S&P 500. † Company included in the S&P MidCap. § Company included in the S&P SmallCap. # Of the following calendar year. ** Not calculated; data for base year or end year not available. A - This year's data reflect an acquisition or merger. B - This year's data reflect a major merger resulting in the formation of a new company. C - This year's data reflect an accounting change. D - Data exclude discontinued operations. E - Includes excise taxes. F - Includes other (nonoperating) income. G - Includes sale of leased depts. H - Some or all data are not available, due to a fiscal year change.

Net Income Million $ Compound Growth Rate (%) Index Basis (1989 = 100) Company Yr. End 1989 1994 1995 1996 1997 1998 1999 1-Yr. 5-Yr. 10-Yr. 1995 1996 1997 1998 1999 TEXTILES (APPAREL) § ASHWORTH INC OCT 0.0 4.9 1.4 1.4 4.8 5.3 3.8 -28.0 -4.7 NM NM NM NM NM NM COLUMBIA SPORTSWEAR CO DEC NA NA NA 21.0 39.3 32.7 33.0 0.8 NA NA NA ** ** ** ** DONNA KARAN INTL INC DEC NA NA 53.7 25.0 -81.4 0.1 10.0 7740.6 NA NA NA ** ** ** ** § HAGGAR CORP SEP NA 25.7 9.8 -2.4 3.7 8.0 9.4 17.1 -18.2 NA NA ** ** ** ** § HARTMARX CORP NOV 17.4 20.0 21.4 23.8 25.2 14.6 1.6 -89.2 -39.8 -21.3 123 137 145 84 9 † JONES APPAREL GROUP INC DEC NA 54.9 63.5 80.9 121.7 154.9 188.4 21.7 28.0 NA NA ** ** ** ** § KELLWOOD CO # JAN 14.0 11.1 28.0 37.6 42.7 2.0 41.0 1999.3 29.9 11.3 200 268 305 14 292 * LIZ CLAIBORNE INC DEC 164.6 82.8 126.9 155.7 184.6 169.4 192.4 13.6 18.4 1.6 77 95 112 103 117 § NAUTICA ENTERPRISES INC # FEB 5.8 24.0 32.0 44.0 56.4 58.7 46.2 -21.4 14.0 23.1 556 765 980 1,020 802 § OSHKOSH B'GOSH INC -CL A DEC 37.6 7.0 10.9 1.1 22.6 29.3 32.4 10.6 35.7 -1.5 29 3 60 78 86 Net Income

Million $ Compound Growth Rate (%) Index Basis (1989 = 100) Company Yr. End 1989 1994 1995 1996 1997 1998 1999 1-Yr. 5-Yr. 10-Yr. 1995 1996 1997 1998 1999 § OXFORD INDUSTRIES INC # MAY 7.9 10.6 2.2 19.6 24.6 26.4 23.4 -11.2 17.3 11.4 28 247 310 332 295 § PHILLIPS-VAN HEUSEN # JAN 24.2 30.0 0.3 18.5 -66.6 12.9 16.9 30.9 -10.9 -3.5 1 77 -275 53 70 POLO RALPH LAUREN CP -CL A # MAR NA NA 98.8 117.3 147.6 90.6 147.5 62.9 NA NA NA ** ** ** ** § QUIKSILVER INC OCT 7.0 7.1 10.0 11.7 12.6 18.0 26.6 48.0 30.1 14.3 143 167 181 257 380 * RUSSELL CORP DEC 64.7 78.8 54.1 81.6 54.4 -10.4 8.4 NM -36.1 -18.5 84 126 84 -16 13 ST JOHN KNITS INC OCT NA 14.9 19.6 27.1 34.4 33.4 NA NA NA NA NA ** ** ** ** TOMMY HILFIGER CORP # MAR NA 40.7 61.5 86.4 113.2 173.7 172.4 -0.8 33.5 NA NA ** ** ** ** * VF CORP DEC 176.0 274.5 157.3 299.5 350.9 388.3 366.2 -5.7 5.9 7.6 89 170 199 221 208 † WARNACO GROUP INC -CL A DEC -7.9 63.3 49.6 -8.2 23.0 14.1 97.8 593.7 9.1 NM NM NM NM NM NM

FOOTWEAR § BROWN SHOE INC # JAN 30.8 33.6 0.7 20.3 -20.9 23.7 35.5 50.0 1.1 1.4 2 66 -68 77 115 § K-SWISS INC -CL A DEC 4.8 14.9 1.9 0.7 4.2 12.5 34.3 173.3 18.2 21.8 39 15 88 264 721 * NIKE INC -CL B # MAY 243.0 399.7 553.2 795.8 399.6 451.4 579.1 28.3 7.7 9.1 228 328 164 186 238 * REEBOK INTERNATIONAL LTD DEC 175.0 254.5 164.8 138.9 135.1 23.9 11.0 -53.8 -46.6 -24.1 94 79 77 14 6 § STRIDE RITE CORP NOV 46.2 19.8 -8.4 2.5 19.8 21.1 26.4 25.5 5.9 -5.4 -18 5 43 46 57 § TIMBERLAND CO -CL A DEC 6.4 17.7 -11.6 20.4 47.3 59.2 75.2 27.2 33.6 28.0 -182 320 742 927 1,179 § WOLVERINE WORLD WIDE DEC 7.3 18.0 24.1 32.9 41.5 41.7 32.4 -22.3 12.4 16.1 330 451 570 572 444 § TIMBERLAND CO -CL A DEC 6.4 17.7 -11.6 20.4 47.3 59.2 75.2 27.2 33.6 28.0 -182 320 742 927 1,179

Note: Data as originally reported. * Company included in the S&P 500. † Company included in the S&P MidCap. § Company included in the S&P SmallCap. # Of the following calendar year. ** Not calculated; data for base year or end year not available. Return on Revenues Return (%) on Assets Return (%) on Equity (%)

Company Yr. End 1995 1996 1997 1998 1999 1995 1996 1997 1998 1999 1995 1996 1997 1998 1999 TEXTILES (APPAREL) § ASHWORTH INC OCT 1.9 1.9 5.4 4.9 3.5 2.7 2.5 7.8 7.0 4.7 4.0 3.7 10.5 8.8 5.6 COLUMBIA SPORTSWEAR CO DEC NA 7.0 11.1 7.7 7.0 NA NA 25.3 14.8 11.5 NA NA 38.8 25.2 19.8 DONNA KARAN INTL INC DEC 10.5 4.1 NM 0.0 1.5 NA 9.7 NM 0.0 3.4 NA 17.6 NM 0.1 7.9 § HAGGAR CORP SEP 2.2 NM 0.9 2.0 2.1 3.4 NM 1.4 3.1 3.6 6.0 NM 2.3 4.9 5.7 § HARTMARX CORP NOV 3.6 3.9 3.5 2.0 0.2 5.6 5.9 5.6 3.1 0.3 16.3 16.1 14.2 7.3 0.8 † JONES APPAREL GROUP INC DEC 8.1 7.8 8.8 9.2 6.0 17.7 18.2 22.8 17.5 9.5 22.5 23.4 30.0 30.1 20.5 § KELLWOOD CO # JAN 1.9 2.5 2.4 0.1 2.6 3.6 4.5 4.5 0.2 3.8 8.8 11.2 11.7 0.5 9.2 * LIZ CLAIBORNE INC DEC 6.1 7.0 7.7 6.7 6.9 9.7 11.5 13.7 12.6 13.7 12.9 15.5 19.0 17.8 20.4 § NAUTICA ENTERPRISES INC # FEB 10.6 11.4 11.6 10.6 7.4 16.9 19.1 20.1 18.3 13.5 20.5 23.4 24.8 23.2 17.8 § OSHKOSH B'GOSH INC -CL A DEC 2.5 0.3 5.7 6.9 7.5 5.1 0.6 12.2 17.4 22.2 7.1 0.8 18.0 27.1 51.3 § OXFORD INDUSTRIES INC # MAY 0.3 2.8 3.2 3.1 2.8 0.7 6.9 8.2 8.2 7.0 1.7 14.5 16.3 16.8 14.7 § PHILLIPS-VAN HEUSEN # JAN 0.0 1.4 NM 1.0 1.3 0.0 2.6 NM 1.9 2.5 0.1 6.6 NM 5.7 7.2 POLO RALPH LAUREN CP -CL A # MAR 9.7 9.9 10.0 5.2 7.5 NA 20.6 21.1 9.4 10.8 NA 47.1 34.9 14.6 20.6 § QUIKSILVER INC OCT 5.8 6.0 5.4 5.7 6.0 11.1 10.9 9.5 9.9 11.2 16.2 15.6 14.4 16.9 19.7 * RUSSELL CORP DEC 4.7 6.6 4.4 NM 0.7 5.0 7.1 4.5 NM 0.7 8.6 12.4 8.1 NM 1.4 ST JOHN KNITS INC OCT 12.1 13.4 14.2 11.9 NA 26.3 26.8 25.5 19.9 NA 32.7 32.6 30.2 22.9 NA TOMMY HILFIGER CORP # MAR 12.9 13.1 13.4 10.6 8.7 20.6 21.0 20.9 12.3 7.5 24.1 24.7 24.7 21.6 14.5 * VF CORP DEC 3.1 5.8 6.7 7.1 6.6 4.5 8.6 10.2 10.7 9.2 8.8 15.8 18.0 19.4 17.0 † WARNACO GROUP INC -CL A DEC 5.4 NM 1.6 0.7 4.6 5.8 NM 1.6 0.8 4.3 13.4 NM 3.6 2.0 17.1

FOOTWEAR § BROWN SHOE INC # JAN 0.0 1.3 NM 1.5 2.2 0.1 2.9 NM 3.5 5.4 0.3 8.7 NM 11.4 15.2 § K-SWISS INC -CL A DEC 1.5 0.7 3.6 7.8 12.0 1.8 0.7 4.1 11.6 26.1 2.2 0.9 5.4 15.8 35.1 * NIKE INC -CL B # MAY 8.5 8.7 4.2 5.1 6.4 15.6 17.1 7.4 8.5 10.4 25.2 28.5 12.5 13.7 17.9 * REEBOK INTERNATIONAL LTD DEC 4.7 4.0 3.7 0.7 0.4 10.0 8.1 7.6 1.4 0.7 17.5 21.8 30.4 4.6 2.1 § STRIDE RITE CORP NOV NM 0.6 3.8 3.9 4.6 NM 0.7 5.6 6.2 7.8 NM 0.9 7.9 8.6 10.7 § TIMBERLAND CO -CL A DEC NM 3.0 5.9 6.9 8.2 NM 4.7 10.9 13.3 15.6 NM 13.3 24.9 24.6 27.9 § WOLVERINE WORLD WIDE DEC 5.8 6.4 6.2 6.2 4.9 9.4 10.2 10.2 8.6 6.1 14.3 14.8 15.9 14.3 10.2 § TIMBERLAND CO -CL A DEC NM 3.0 5.9 6.9 8.2 NM 4.7 10.9 13.3 15.6 NM 13.3 24.9 24.6 27.9 Note: Data as originally reported. * Company included in the S&P 500. † Company included in the S&P MidCap. § Company included in the S&P SmallCap. # Of the following calendar year. 27 OCTOBER 5, 2000 / APPAREL & FOOTWEAR INDUSTRY SURVEY 28 OCTOBER 5, 2000 / APPAREL & FOOTWEAR INDUSTRY SURVEY

Current Debt Ratio / Capital Ratio Debt (%) as a % of Net Working Capital

Company Yr. End 1995 1996 1997 1998 1999 1995 1996 1997 1998 1999 1995 1996 1997 1998 1999 TEXTILES (APPAREL) § ASHWORTH INC OCT 2.8 4.1 5.4 6.7 9.5 12.3 11.9 7.5 4.8 3.8 17.8 16.8 9.7 6.1 4.8 COLUMBIA SPORTSWEAR CO DEC NA 2.5 2.1 2.2 2.6 NA 3.1 2.5 15.1 12.4 NA 5.0 4.1 24.9 18.5 DONNA KARAN INTL INC DEC 2.2 2.4 1.5 1.8 1.8 36.2 0.0 0.0 0.0 5.8 49.4 0.0 0.0 0.0 8.3 § HAGGAR CORP SEP 3.5 2.8 2.9 3.0 2.2 32.1 20.6 16.2 13.1 11.4 43.9 30.9 25.1 20.2 23.0 § HARTMARX CORP NOV 3.1 2.7 3.0 3.5 3.0 53.2 47.8 45.1 44.6 45.1 80.4 74.0 66.8 65.5 67.6 † JONES APPAREL GROUP INC DEC 4.7 4.1 4.0 3.6 1.7 3.1 3.1 5.9 41.1 40.2 3.9 4.1 8.3 90.5 177.8 § KELLWOOD CO # JAN 1.8 1.7 2.2 2.4 3.3 25.7 22.1 36.4 31.9 41.5 52.7 44.4 58.3 48.9 60.1 * LIZ CLAIBORNE INC DEC 3.5 3.5 3.2 3.0 2.4 0.1 0.1 0.0 0.0 11.1 0.1 0.1 0.0 0.0 22.9 § NAUTICA ENTERPRISES INC # FEB 4.7 4.3 4.2 3.3 2.9 0.1 0.1 0.0 0.0 0.0 0.1 0.1 0.1 0.0 0.0 § OSHKOSH B'GOSH INC -CL A DEC 3.3 3.4 2.7 2.6 1.4 0.0 0.0 0.0 0.0 55.3 0.0 0.0 0.0 0.0 106.1 § OXFORD INDUSTRIES INC # MAY 2.4 2.6 2.7 2.2 2.3 25.6 22.4 20.2 20.4 19.5 32.8 27.7 24.4 26.3 24.9 § PHILLIPS-VAN HEUSEN # JAN 2.4 3.0 2.9 2.8 3.4 45.5 39.5 52.2 52.1 50.7 87.8 78.7 95.8 105.7 82.5 POLO RALPH LAUREN CP -CL A # MAR 2.3 1.9 2.8 2.0 2.1 32.4 21.6 0.0 6.3 30.7 43.4 33.8 0.0 13.3 76.7 § QUIKSILVER INC OCT 2.7 2.7 2.5 2.4 2.3 4.6 3.2 9.7 19.0 13.9 7.0 4.7 15.1 30.0 22.4 * RUSSELL CORP DEC 4.5 3.2 4.4 3.9 4.0 29.7 26.1 33.5 33.2 39.1 65.7 62.0 71.9 74.1 82.1 ST JOHN KNITS INC OCT 3.3 3.6 4.1 5.5 NA 0.0 0.0 0.0 0.3 NA 0.0 0.0 0.0 0.5 NA TOMMY HILFIGER CORP # MAR 5.5 5.4 4.7 2.7 2.7 0.6 0.4 0.0 31.3 28.1 0.8 0.6 0.0 137.5 107.7 * VF CORP DEC 1.9 2.2 2.1 1.8 1.7 24.9 20.3 21.4 19.8 19.0 76.8 55.2 61.8 64.0 67.8 † WARNACO GROUP INC -CL A DEC 2.3 1.5 2.0 1.0 1.4 28.0 31.2 35.5 47.1 69.6 62.8 102.5 101.7 NM 405.7

FOOTWEAR § BROWN SHOE INC # JAN 1.7 2.1 1.9 2.0 2.2 30.3 44.4 48.9 43.5 38.5 50.4 65.5 75.7 68.6 60.0 § K-SWISS INC -CL A DEC 9.7 8.1 5.7 5.5 7.5 0.5 0.2 0.1 0.0 0.0 0.6 0.3 0.1 0.0 0.0 * NIKE INC -CL B # MAY 1.9 2.1 2.1 2.3 1.7 0.4 8.6 10.4 10.4 13.0 0.8 15.1 20.7 21.2 32.3 * REEBOK INTERNATIONAL LTD DEC 3.1 2.8 2.5 2.2 2.0 20.8 67.3 54.2 49.2 41.2 27.9 90.3 72.1 74.0 59.8 § STRIDE RITE CORP NOV 3.3 3.1 2.8 3.0 2.8 0.3 0.0 0.0 0.0 0.0 0.4 0.0 0.0 0.0 0.0 § TIMBERLAND CO -CL A DEC 4.8 3.6 3.5 4.0 3.7 56.7 49.4 31.2 26.8 26.2 74.4 63.7 41.2 34.3 33.1 § WOLVERINE WORLD WIDE DEC 5.7 3.8 4.7 6.7 7.2 12.9 14.6 23.9 33.9 28.1 17.3 21.2 37.6 54.2 44.8 § TIMBERLAND CO -CL A DEC 4.8 3.6 3.5 4.0 3.7 56.7 49.4 31.2 26.8 26.2 74.4 63.7 41.2 34.3 33.1

Note: Data as originally reported. * Company included in the S&P 500. † Company included in the S&P MidCap. § Company included in the S&P SmallCap. # Of the following calendar year.

Price / Earnings Ratio (High-Low) Dividend Payout Ratio Dividend (%) Yield (High-Low, %) Company Yr. End 1995 1996 1997 1998 1999 1995 1996 1997 1998 1999 1995 1996 1997 1998 1999 TEXTILES (APPAREL) § ASHWORTH INC OCT 91-42 65-38 32-14 50-11 22-12 0 0 0 0 0 0.0-0.0 0.0-0.0 0.0-0.0 0.0-0.0 0.0-0.0 COLUMBIA SPORTSWEAR CO DEC NA-NA NA-NA NA-NA 19-7 17-9 NA NA NA 0 0 NA-NA NA-NA NA-NA 0.0-0.0 0.0-0.0 DONNA KARAN INTL INC DEC NA-NA 22-10 NM-NM NM-NM 24-12 0 0 NM 0 0 NA-NA 0.0-0.0 0.0-0.0 0.0-0.0 0.0-0.0 § HAGGAR CORP SEP 23-14 NM-NM 41-26 18-11 12-8 18 NM 45 21 16 1.3-0.8 1.7-1.1 1.7-1.1 2.0-1.2 2.1-1.4 § HARTMARX CORP NOV 10-6 9-5 14-7 21-9 NM-65 0 0 0 0 0 0.0-0.0 0.0-0.0 0.0-0.0 0.0-0.0 0.0-0.0 † JONES APPAREL GROUP INC DEC 17-9 25-12 24-14 25-10 22-13 0 0 0 0 0 0.0-0.0 0.0-0.0 0.0-0.0 0.0-0.0 0.0-0.0 § KELLWOOD CO # JAN 17-12 12-8 19-10 NM-NM 19-11 45 34 32 914 43 3.6-2.6 4.4-2.9 3.3-1.7 2.8-1.7 3.9-2.2 * LIZ CLAIBORNE INC DEC 18-9 21-12 22-14 21-10 13-10 27 21 17 17 14 3.1-1.5 1.7-1.0 1.2-0.8 1.8-0.8 1.5-1.1 § NAUTICA ENTERPRISES INC # FEB 30-11 36-16 21-13 21-9 13-8 0 0 0 0 0 0.0-0.0 0.0-0.0 0.0-0.0 0.0-0.0 0.0-0.0 § OSHKOSH B'GOSH INC -CL A DEC 21-14 NM-NM 18-7 16-9 11-6 33 311 14 11 10 2.4-1.6 2.0-1.5 2.1-0.7 1.2-0.7 1.5-0.9 § OXFORD INDUSTRIES INC # MAY 88-64 11-6 14-8 12-7 10-6 320 36 29 26 28 5.0-3.6 5.6-3.3 3.5-2.1 3.6-2.2 4.4-2.8 § PHILLIPS-VAN HEUSEN # JAN NM-NM 22-14 NM-NM 32-14 17-9 NM 22 NM 32 24 1.6-0.8 1.6-1.0 1.3-0.9 2.3-1.0 2.8-1.4 POLO RALPH LAUREN CP -CL A # MAR NA-NA NA-NA 22-15 34-17 17-11 NA 0 0 0 0 NA-NA NA-NA 0.0-0.0 0.0-0.0 0.0-0.0 § QUIKSILVER INC OCT 25-10 29-11 22-11 25-10 26-11 0 0 0 0 0 0.0-0.0 0.0-0.0 0.0-0.0 0.0-0.0 0.0-0.0 * RUSSELL CORP DEC 23-16 16-11 26-17 NM-NM NM-49 35 24 36 NM 224 2.2-1.5 2.2-1.5 2.1-1.4 3.1-1.7 4.6-2.2 Net Income

Million $ Compound Growth Rate (%) Index Basis (1989 = 100) Company Yr. End 1989 1994 1995 1996 1997 1998 1999 1-Yr. 5-Yr. 10-Yr. 1995 1996 1997 1998 1999 § OXFORD INDUSTRIES INC # MAY 7.9 10.6 2.2 19.6 24.6 26.4 23.4 -11.2 17.3 11.4 28 247 310 332 295 § PHILLIPS-VAN HEUSEN # JAN 24.2 30.0 0.3 18.5 -66.6 12.9 16.9 30.9 -10.9 -3.5 1 77 -275 53 70 POLO RALPH LAUREN CP -CL A # MAR NA NA 98.8 117.3 147.6 90.6 147.5 62.9 NA NA NA ** ** ** ** § QUIKSILVER INC OCT 7.0 7.1 10.0 11.7 12.6 18.0 26.6 48.0 30.1 14.3 143 167 181 257 380 * RUSSELL CORP DEC 64.7 78.8 54.1 81.6 54.4 -10.4 8.4 NM -36.1 -18.5 84 126 84 -16 13 ST JOHN KNITS INC OCT NA 14.9 19.6 27.1 34.4 33.4 NA NA NA NA NA ** ** ** ** TOMMY HILFIGER CORP # MAR NA 40.7 61.5 86.4 113.2 173.7 172.4 -0.8 33.5 NA NA ** ** ** ** * VF CORP DEC 176.0 274.5 157.3 299.5 350.9 388.3 366.2 -5.7 5.9 7.6 89 170 199 221 208 † WARNACO GROUP INC -CL A DEC -7.9 63.3 49.6 -8.2 23.0 14.1 97.8 593.7 9.1 NM NM NM NM NM NM

FOOTWEAR § BROWN SHOE INC # JAN 30.8 33.6 0.7 20.3 -20.9 23.7 35.5 50.0 1.1 1.4 2 66 -68 77 115 § K-SWISS INC -CL A DEC 4.8 14.9 1.9 0.7 4.2 12.5 34.3 173.3 18.2 21.8 39 15 88 264 721 * NIKE INC -CL B # MAY 243.0 399.7 553.2 795.8 399.6 451.4 579.1 28.3 7.7 9.1 228 328 164 186 238 * REEBOK INTERNATIONAL LTD DEC 175.0 254.5 164.8 138.9 135.1 23.9 11.0 -53.8 -46.6 -24.1 94 79 77 14 6 § STRIDE RITE CORP NOV 46.2 19.8 -8.4 2.5 19.8 21.1 26.4 25.5 5.9 -5.4 -18 5 43 46 57 § TIMBERLAND CO -CL A DEC 6.4 17.7 -11.6 20.4 47.3 59.2 75.2 27.2 33.6 28.0 -182 320 742 927 1,179 § WOLVERINE WORLD WIDE DEC 7.3 18.0 24.1 32.9 41.5 41.7 32.4 -22.3 12.4 16.1 330 451 570 572 444 § TIMBERLAND CO -CL A DEC 6.4 17.7 -11.6 20.4 47.3 59.2 75.2 27.2 33.6 28.0 -182 320 742 927 1,179

Note: Data as originally reported. * Company included in the S&P 500. † Company included in the S&P MidCap. § Company included in the S&P SmallCap. # Of the following calendar year. ** Not calculated; data for base year or end year not available. Return on Revenues Return (%) on Assets Return (%) on Equity (%)

Company Yr. End 1995 1996 1997 1998 1999 1995 1996 1997 1998 1999 1995 1996 1997 1998 1999 TEXTILES (APPAREL) § ASHWORTH INC OCT 1.9 1.9 5.4 4.9 3.5 2.7 2.5 7.8 7.0 4.7 4.0 3.7 10.5 8.8 5.6 COLUMBIA SPORTSWEAR CO DEC NA 7.0 11.1 7.7 7.0 NA NA 25.3 14.8 11.5 NA NA 38.8 25.2 19.8 DONNA KARAN INTL INC DEC 10.5 4.1 NM 0.0 1.5 NA 9.7 NM 0.0 3.4 NA 17.6 NM 0.1 7.9 § HAGGAR CORP SEP 2.2 NM 0.9 2.0 2.1 3.4 NM 1.4 3.1 3.6 6.0 NM 2.3 4.9 5.7 § HARTMARX CORP NOV 3.6 3.9 3.5 2.0 0.2 5.6 5.9 5.6 3.1 0.3 16.3 16.1 14.2 7.3 0.8 † JONES APPAREL GROUP INC DEC 8.1 7.8 8.8 9.2 6.0 17.7 18.2 22.8 17.5 9.5 22.5 23.4 30.0 30.1 20.5 § KELLWOOD CO # JAN 1.9 2.5 2.4 0.1 2.6 3.6 4.5 4.5 0.2 3.8 8.8 11.2 11.7 0.5 9.2 * LIZ CLAIBORNE INC DEC 6.1 7.0 7.7 6.7 6.9 9.7 11.5 13.7 12.6 13.7 12.9 15.5 19.0 17.8 20.4 § NAUTICA ENTERPRISES INC # FEB 10.6 11.4 11.6 10.6 7.4 16.9 19.1 20.1 18.3 13.5 20.5 23.4 24.8 23.2 17.8 § OSHKOSH B'GOSH INC -CL A DEC 2.5 0.3 5.7 6.9 7.5 5.1 0.6 12.2 17.4 22.2 7.1 0.8 18.0 27.1 51.3 § OXFORD INDUSTRIES INC # MAY 0.3 2.8 3.2 3.1 2.8 0.7 6.9 8.2 8.2 7.0 1.7 14.5 16.3 16.8 14.7 § PHILLIPS-VAN HEUSEN # JAN 0.0 1.4 NM 1.0 1.3 0.0 2.6 NM 1.9 2.5 0.1 6.6 NM 5.7 7.2 POLO RALPH LAUREN CP -CL A # MAR 9.7 9.9 10.0 5.2 7.5 NA 20.6 21.1 9.4 10.8 NA 47.1 34.9 14.6 20.6 § QUIKSILVER INC OCT 5.8 6.0 5.4 5.7 6.0 11.1 10.9 9.5 9.9 11.2 16.2 15.6 14.4 16.9 19.7 * RUSSELL CORP DEC 4.7 6.6 4.4 NM 0.7 5.0 7.1 4.5 NM 0.7 8.6 12.4 8.1 NM 1.4 ST JOHN KNITS INC OCT 12.1 13.4 14.2 11.9 NA 26.3 26.8 25.5 19.9 NA 32.7 32.6 30.2 22.9 NA TOMMY HILFIGER CORP # MAR 12.9 13.1 13.4 10.6 8.7 20.6 21.0 20.9 12.3 7.5 24.1 24.7 24.7 21.6 14.5 * VF CORP DEC 3.1 5.8 6.7 7.1 6.6 4.5 8.6 10.2 10.7 9.2 8.8 15.8 18.0 19.4 17.0 † WARNACO GROUP INC -CL A DEC 5.4 NM 1.6 0.7 4.6 5.8 NM 1.6 0.8 4.3 13.4 NM 3.6 2.0 17.1

FOOTWEAR § BROWN SHOE INC # JAN 0.0 1.3 NM 1.5 2.2 0.1 2.9 NM 3.5 5.4 0.3 8.7 NM 11.4 15.2 § K-SWISS INC -CL A DEC 1.5 0.7 3.6 7.8 12.0 1.8 0.7 4.1 11.6 26.1 2.2 0.9 5.4 15.8 35.1 * NIKE INC -CL B # MAY 8.5 8.7 4.2 5.1 6.4 15.6 17.1 7.4 8.5 10.4 25.2 28.5 12.5 13.7 17.9 * REEBOK INTERNATIONAL LTD DEC 4.7 4.0 3.7 0.7 0.4 10.0 8.1 7.6 1.4 0.7 17.5 21.8 30.4 4.6 2.1 § STRIDE RITE CORP NOV NM 0.6 3.8 3.9 4.6 NM 0.7 5.6 6.2 7.8 NM 0.9 7.9 8.6 10.7 § TIMBERLAND CO -CL A DEC NM 3.0 5.9 6.9 8.2 NM 4.7 10.9 13.3 15.6 NM 13.3 24.9 24.6 27.9 § WOLVERINE WORLD WIDE DEC 5.8 6.4 6.2 6.2 4.9 9.4 10.2 10.2 8.6 6.1 14.3 14.8 15.9 14.3 10.2 § TIMBERLAND CO -CL A DEC NM 3.0 5.9 6.9 8.2 NM 4.7 10.9 13.3 15.6 NM 13.3 24.9 24.6 27.9 Note: Data as originally reported. * Company included in the S&P 500. † Company included in the S&P MidCap. § Company included in the S&P SmallCap. # Of the following calendar year. 27 OCTOBER 5, 2000 / APPAREL & FOOTWEAR INDUSTRY SURVEY 28 OCTOBER 5, 2000 / APPAREL & FOOTWEAR INDUSTRY SURVEY

Current Debt Ratio / Capital Ratio Debt (%) as a % of Net Working Capital

Company Yr. End 1995 1996 1997 1998 1999 1995 1996 1997 1998 1999 1995 1996 1997 1998 1999 TEXTILES (APPAREL) § ASHWORTH INC OCT 2.8 4.1 5.4 6.7 9.5 12.3 11.9 7.5 4.8 3.8 17.8 16.8 9.7 6.1 4.8 COLUMBIA SPORTSWEAR CO DEC NA 2.5 2.1 2.2 2.6 NA 3.1 2.5 15.1 12.4 NA 5.0 4.1 24.9 18.5 DONNA KARAN INTL INC DEC 2.2 2.4 1.5 1.8 1.8 36.2 0.0 0.0 0.0 5.8 49.4 0.0 0.0 0.0 8.3 § HAGGAR CORP SEP 3.5 2.8 2.9 3.0 2.2 32.1 20.6 16.2 13.1 11.4 43.9 30.9 25.1 20.2 23.0 § HARTMARX CORP NOV 3.1 2.7 3.0 3.5 3.0 53.2 47.8 45.1 44.6 45.1 80.4 74.0 66.8 65.5 67.6 † JONES APPAREL GROUP INC DEC 4.7 4.1 4.0 3.6 1.7 3.1 3.1 5.9 41.1 40.2 3.9 4.1 8.3 90.5 177.8 § KELLWOOD CO # JAN 1.8 1.7 2.2 2.4 3.3 25.7 22.1 36.4 31.9 41.5 52.7 44.4 58.3 48.9 60.1 * LIZ CLAIBORNE INC DEC 3.5 3.5 3.2 3.0 2.4 0.1 0.1 0.0 0.0 11.1 0.1 0.1 0.0 0.0 22.9 § NAUTICA ENTERPRISES INC # FEB 4.7 4.3 4.2 3.3 2.9 0.1 0.1 0.0 0.0 0.0 0.1 0.1 0.1 0.0 0.0 § OSHKOSH B'GOSH INC -CL A DEC 3.3 3.4 2.7 2.6 1.4 0.0 0.0 0.0 0.0 55.3 0.0 0.0 0.0 0.0 106.1 § OXFORD INDUSTRIES INC # MAY 2.4 2.6 2.7 2.2 2.3 25.6 22.4 20.2 20.4 19.5 32.8 27.7 24.4 26.3 24.9 § PHILLIPS-VAN HEUSEN # JAN 2.4 3.0 2.9 2.8 3.4 45.5 39.5 52.2 52.1 50.7 87.8 78.7 95.8 105.7 82.5 POLO RALPH LAUREN CP -CL A # MAR 2.3 1.9 2.8 2.0 2.1 32.4 21.6 0.0 6.3 30.7 43.4 33.8 0.0 13.3 76.7 § QUIKSILVER INC OCT 2.7 2.7 2.5 2.4 2.3 4.6 3.2 9.7 19.0 13.9 7.0 4.7 15.1 30.0 22.4 * RUSSELL CORP DEC 4.5 3.2 4.4 3.9 4.0 29.7 26.1 33.5 33.2 39.1 65.7 62.0 71.9 74.1 82.1 ST JOHN KNITS INC OCT 3.3 3.6 4.1 5.5 NA 0.0 0.0 0.0 0.3 NA 0.0 0.0 0.0 0.5 NA TOMMY HILFIGER CORP # MAR 5.5 5.4 4.7 2.7 2.7 0.6 0.4 0.0 31.3 28.1 0.8 0.6 0.0 137.5 107.7 * VF CORP DEC 1.9 2.2 2.1 1.8 1.7 24.9 20.3 21.4 19.8 19.0 76.8 55.2 61.8 64.0 67.8 † WARNACO GROUP INC -CL A DEC 2.3 1.5 2.0 1.0 1.4 28.0 31.2 35.5 47.1 69.6 62.8 102.5 101.7 NM 405.7

FOOTWEAR § BROWN SHOE INC # JAN 1.7 2.1 1.9 2.0 2.2 30.3 44.4 48.9 43.5 38.5 50.4 65.5 75.7 68.6 60.0 § K-SWISS INC -CL A DEC 9.7 8.1 5.7 5.5 7.5 0.5 0.2 0.1 0.0 0.0 0.6 0.3 0.1 0.0 0.0 * NIKE INC -CL B # MAY 1.9 2.1 2.1 2.3 1.7 0.4 8.6 10.4 10.4 13.0 0.8 15.1 20.7 21.2 32.3 * REEBOK INTERNATIONAL LTD DEC 3.1 2.8 2.5 2.2 2.0 20.8 67.3 54.2 49.2 41.2 27.9 90.3 72.1 74.0 59.8 § STRIDE RITE CORP NOV 3.3 3.1 2.8 3.0 2.8 0.3 0.0 0.0 0.0 0.0 0.4 0.0 0.0 0.0 0.0 § TIMBERLAND CO -CL A DEC 4.8 3.6 3.5 4.0 3.7 56.7 49.4 31.2 26.8 26.2 74.4 63.7 41.2 34.3 33.1 § WOLVERINE WORLD WIDE DEC 5.7 3.8 4.7 6.7 7.2 12.9 14.6 23.9 33.9 28.1 17.3 21.2 37.6 54.2 44.8 § TIMBERLAND CO -CL A DEC 4.8 3.6 3.5 4.0 3.7 56.7 49.4 31.2 26.8 26.2 74.4 63.7 41.2 34.3 33.1

Note: Data as originally reported. * Company included in the S&P 500. † Company included in the S&P MidCap. § Company included in the S&P SmallCap. # Of the following calendar year.

Price / Earnings Ratio (High-Low) Dividend Payout Ratio Dividend (%) Yield (High-Low, %) Company Yr. End 1995 1996 1997 1998 1999 1995 1996 1997 1998 1999 1995 1996 1997 1998 1999 TEXTILES (APPAREL) § ASHWORTH INC OCT 91-42 65-38 32-14 50-11 22-12 0 0 0 0 0 0.0-0.0 0.0-0.0 0.0-0.0 0.0-0.0 0.0-0.0 COLUMBIA SPORTSWEAR CO DEC NA-NA NA-NA NA-NA 19-7 17-9 NA NA NA 0 0 NA-NA NA-NA NA-NA 0.0-0.0 0.0-0.0 DONNA KARAN INTL INC DEC NA-NA 22-10 NM-NM NM-NM 24-12 0 0 NM 0 0 NA-NA 0.0-0.0 0.0-0.0 0.0-0.0 0.0-0.0 § HAGGAR CORP SEP 23-14 NM-NM 41-26 18-11 12-8 18 NM 45 21 16 1.3-0.8 1.7-1.1 1.7-1.1 2.0-1.2 2.1-1.4 § HARTMARX CORP NOV 10-6 9-5 14-7 21-9 NM-65 0 0 0 0 0 0.0-0.0 0.0-0.0 0.0-0.0 0.0-0.0 0.0-0.0 † JONES APPAREL GROUP INC DEC 17-9 25-12 24-14 25-10 22-13 0 0 0 0 0 0.0-0.0 0.0-0.0 0.0-0.0 0.0-0.0 0.0-0.0 § KELLWOOD CO # JAN 17-12 12-8 19-10 NM-NM 19-11 45 34 32 914 43 3.6-2.6 4.4-2.9 3.3-1.7 2.8-1.7 3.9-2.2 * LIZ CLAIBORNE INC DEC 18-9 21-12 22-14 21-10 13-10 27 21 17 17 14 3.1-1.5 1.7-1.0 1.2-0.8 1.8-0.8 1.5-1.1 § NAUTICA ENTERPRISES INC # FEB 30-11 36-16 21-13 21-9 13-8 0 0 0 0 0 0.0-0.0 0.0-0.0 0.0-0.0 0.0-0.0 0.0-0.0 § OSHKOSH B'GOSH INC -CL A DEC 21-14 NM-NM 18-7 16-9 11-6 33 311 14 11 10 2.4-1.6 2.0-1.5 2.1-0.7 1.2-0.7 1.5-0.9 § OXFORD INDUSTRIES INC # MAY 88-64 11-6 14-8 12-7 10-6 320 36 29 26 28 5.0-3.6 5.6-3.3 3.5-2.1 3.6-2.2 4.4-2.8 § PHILLIPS-VAN HEUSEN # JAN NM-NM 22-14 NM-NM 32-14 17-9 NM 22 NM 32 24 1.6-0.8 1.6-1.0 1.3-0.9 2.3-1.0 2.8-1.4 POLO RALPH LAUREN CP -CL A # MAR NA-NA NA-NA 22-15 34-17 17-11 NA 0 0 0 0 NA-NA NA-NA 0.0-0.0 0.0-0.0 0.0-0.0 § QUIKSILVER INC OCT 25-10 29-11 22-11 25-10 26-11 0 0 0 0 0 0.0-0.0 0.0-0.0 0.0-0.0 0.0-0.0 0.0-0.0 * RUSSELL CORP DEC 23-16 16-11 26-17 NM-NM NM-49 35 24 36 NM 224 2.2-1.5 2.2-1.5 2.1-1.4 3.1-1.7 4.6-2.2 Price / Earnings Ratio (High-Low) Dividend Payout Ratio Dividend (%) Yield (High-Low, %)

Company Yr. End 1995 1996 1997 1998 1999 1995 1996 1997 1998 1999 1995 1996 1997 1998 1999

ST JOHN KNITS INC OCT 23-12 33-14 27-18 24-7 NA-NA 8 6 5 5 NA 0.7-0.4 0.4-0.2 0.3-0.2 0.8-0.2 NA-NA TOMMY HILFIGER CORP # MAR 29-11 27-14 20-11 19-9 23-12 0 0 0 0 0 0.0-0.0 0.0-0.0 0.0-0.0 0.0-0.0 0.0-0.0 * VF CORP DEC 24-19 15-10 17-12 17-11 18-9 57 31 28 26 28 3.0-2.4 3.1-2.1 2.4-1.6 2.4-1.5 3.1-1.5 † WARNACO GROUP INC -CL A DEC 24-14 NM-NM 81-61 NM-80 18-6 19 NM 75 157 21 1.4-0.8 1.3-0.9 1.2-0.9 1.9-0.8 3.6-1.2

FOOTWEAR § BROWN SHOE INC # JAN NM-NM 20-10 NM-NM 15-9 11-6 NM 87 NM 30 20 10.4-3.9 8.4-4.3 6.8-4.2 3.2-2.0 3.2-1.8 § K-SWISS INC -CL A DEC 75-35 NM-70 28-14 14-7 19-3 29 73 11 3 2 0.8-0.4 1.0-0.6 0.8-0.4 0.5-0.3 0.6-0.1 * NIKE INC -CL B # MAY 19-9 24-12 55-27 33-19 32-18 15 13 32 30 23 1.6-0.8 1.1-0.5 1.2-0.6 1.5-0.9 1.2-0.7 * REEBOK INTERNATIONAL LTD DEC 19-12 23-13 22-11 79-30 NM-39 14 11 0 0 0 1.2-0.8 0.9-0.5 0.0-0.0 0.0-0.0 0.0-0.0 § STRIDE RITE CORP NOV NM-NM NM-NM 40-25 35-15 24-9 NM 400 50 44 35 4.8-2.5 3.3-1.7 2.0-1.3 3.0-1.3 3.9-1.5 § TIMBERLAND CO -CL A DEC NM-NM 22-9 20-9 17-5 15-6 NM 0 0 0 0 0.0-0.0 0.0-0.0 0.0-0.0 0.0-0.0 0.0-0.0 § WOLVERINE WORLD WIDE DEC 24-11 26-14 31-19 31-8 18-11 10 9 9 11 15 0.9-0.4 0.7-0.4 0.5-0.3 1.4-0.4 1.4-0.8 § TIMBERLAND CO -CL A DEC NM-NM 22-9 20-9 17-5 15-6 NM 0 0 0 0 0.0-0.0 0.0-0.0 0.0-0.0 0.0-0.0 0.0-0.0

Note: Data as originally reported. * Company included in the S&P 500. † Company included in the S&P MidCap. § Company included in the S&P SmallCap. # Of the following calendar year. Earnings per Share Book ($) Value per Share Share ($) Price (High-Low, $)

Company Yr. End 1995 1996 1997 1998 1999 1995 1996 1997 1998 1999 1995 1996 1997 1998 1999 TEXTILES (APPAREL) § ASHWORTH INC OCT 0.12 0.12 0.37 0.37 0.27 3.06J 3.20J 3.95J 4.77J 5.04J 10.88-5.00 7.75-4.50 11.88-5.25 18.38-4.13 6.00-3.13 COLUMBIA SPORTSWEAR CO DEC NA 1.24 2.09 1.38 1.30 NA 4.83 5.84 5.91J 7.27J NA-NA NA-NA NA-NA 25.69-9.63 21.69-11.50 DONNA KARAN INTL INC DEC 3.36 1.34 -3.78 0.01 0.46 7.62J 9.50 5.67 5.65 6.15J NA-NA 30.13-13.38 17.75-8.88 16.75-5.06 11.00-5.56 § HAGGAR CORP SEP 1.14 -0.28 0.44 0.94 1.26 19.46 19.00 19.24 20.55 18.89 26.25-15.75 19.00-11.50 18.00-11.50 16.63-10.19 14.50-9.56 § HARTMARX CORP NOV 0.66 0.72 0.74 0.42 0.05 4.11J 4.85J 5.62J 6.06J 6.43J 6.88-4.25 6.50-3.75 10.13-5.00 9.00-3.94 6.00-3.25 † JONES APPAREL GROUP INC DEC 0.60 0.75 1.17 1.52 1.65 2.76 3.37 3.96 2.33 -0.77 9.91-5.66 18.69-8.91 28.72-16.06 37.75-15.88 35.88-21.50 § KELLWOOD CO # JAN 1.32 1.78 2.00 0.07 1.49 9.65 11.08 12.96 15.98 14.43 22.88-16.50 20.88-13.63 38.56-19.63 36.69-22.50 28.88-16.25 * LIZ CLAIBORNE INC DEC 1.69 2.15 2.65 2.59 3.13 13.41J 14.37J 13.70 14.64 11.38 30.00-14.38 45.13-26.25 57.94-38.13 54.88-25.00 40.69-30.88 § NAUTICA ENTERPRISES INC # FEB 0.75 1.02 1.44 1.53 1.33 4.31 5.08 6.25 6.73 7.61 22.75-8.17 37.00-16.25 30.00-18.63 32.50-13.25 17.31-10.50 § OSHKOSH B'GOSH INC -CL A DEC 0.43 0.05 1.02 1.54 2.01 6.02J 5.86J 5.74 5.75 1.86 9.00-5.75 9.38-6.88 18.75-6.75 24.88-13.63 22.75-13.00 § OXFORD INDUSTRIES INC # MAY 0.25 2.25 2.79 3.15 3.04 14.65J 16.12 18.11 19.46 21.48 22.00-16.00 24.38-14.38 38.75-23.00 37.69-22.50 29.75-19.00 § PHILLIPS-VAN HEUSEN # JAN 0.01 0.69 -2.46 0.47 0.62 5.76 6.28 3.82 4.23 5.79 18.00-9.13 15.13-9.50 15.88-11.50 15.13-6.50 10.63-5.38 POLO RALPH LAUREN CP -CL A # MAR NA 1.27 1.47 0.91 1.49 NA NA 5.83 6.60 5.08 NA-NA NA-NA 33.00-21.75 31.38-15.88 25.38-16.06 § QUIKSILVER INC OCT 0.48 0.54 0.60 0.85 1.20 2.54 3.13 3.57 4.60 5.97 12.04-4.67 15.79-6.21 13.17-6.83 20.83-8.58 30.83-12.94 * RUSSELL CORP DEC 1.38 2.11 1.48 -0.29 0.25 15.39 16.95 17.35 16.95 16.39 31.25-22.00 33.75-23.13 38.50-25.00 33.88-18.00 25.13-12.13 ST JOHN KNITS INC OCT 1.19 1.59 2.01 2.00 NA 4.20 5.85 7.86 9.75 NA 27.13-14.31 51.75-22.75 54.50-36.94 48.31-13.00 29.88-25.81 TOMMY HILFIGER CORP # MAR 0.82 1.14 1.51 1.88 1.82 4.09 5.34 6.90 -1.94 0.39 23.69-9.25 30.56-16.31 29.56-16.50 35.19-17.13 41.06-22.13 * VF CORP DEC 1.21 2.32 2.76 3.17 3.04 6.97 8.68 8.68 9.33 10.08 28.56-23.38 34.94-23.81 48.25-32.25 54.69-33.44 55.00-27.44 † WARNACO GROUP INC -CL A DEC 1.10 -0.16 0.44 0.23 1.75 9.67J 9.17J 13.05J 9.78J 10.58J 26.88-14.88 32.00-21.25 35.56-26.63 44.44-18.50 30.63-10.13

FOOTWEAR § BROWN SHOE INC # JAN 0.04 1.15 -1.19 1.34 1.99 12.92 13.19 11.04 11.95 13.69 33.38-12.50 23.38-11.88 20.13-12.44 20.00-12.44 21.75-12.69 § K-SWISS INC -CL A DEC 0.14 0.05 0.35 1.15 3.12 6.00 6.13 6.36 7.34 10.04 10.50-4.88 6.44-3.88 9.94-4.94 15.63-8.00 59.81-10.81 * NIKE INC -CL B # MAY 1.88 2.68 1.38 1.59 2.10 6.81 9.30 9.85 10.30 NA 35.19-17.19 64.00-31.75 76.38-37.75 52.69-31.00 66.94-38.75 * REEBOK INTERNATIONAL LTD DEC 2.07 2.00 2.41 0.42 0.20 11.97J 6.83J 8.99J 9.27J 9.40J 39.63-24.13 45.25-25.38 52.88-27.63 33.19-12.56 22.75-7.81 § STRIDE RITE CORP NOV -0.17 0.05 0.40 0.45 0.57 5.29 5.20 5.04 5.20 5.54 13.25-7.00 11.88-6.00 15.88-9.88 15.75-6.63 13.44-5.19 § TIMBERLAND CO -CL A DEC -0.26 0.45 1.05 1.29 1.75 2.67 3.20 4.27 5.56 6.17 9.16-4.38 10.03-4.13 20.72-9.16 21.94-7.02 27.06-10.38 § WOLVERINE WORLD WIDE DEC 0.63 0.77 1.00 1.00 0.80 4.98 5.46 6.20 6.88 7.65 15.17-6.85 19.75-10.56 31.13-18.58 30.94-8.06 14.25-8.88 § TIMBERLAND CO -CL A DEC -0.26 0.45 1.05 1.29 1.75 2.67 3.20 4.27 5.56 6.17 9.16-4.38 10.03-4.13 20.72-9.16 21.94-7.02 27.06-10.38

Note: Data as originally reported. * Company included in the S&P 500. † Company included in the S&P MidCap. § Company included in the S&P SmallCap. # Of the following calendar year. J-This amount includes intangibles that cannot be identified.

Information has been obtained from sources believed to be reliable, but its accuracy and completeness and that of the opinions based thereon are not guaranteed. Printed in the United States of America. Industry Surveys is a publication of Standard & Poor's Equity Research Department. This Department operates independently of and has no access to information obtained by S&P's Corporate Bond Rating Department, which may, through its regular operations, obtain information of a confidential nature. 29 OCTOBER 5, 2000 / APPAREL & FOOTWEAR INDUSTRY SURVEY Price / Earnings Ratio (High-Low) Dividend Payout Ratio Dividend (%) Yield (High-Low, %)

Company Yr. End 1995 1996 1997 1998 1999 1995 1996 1997 1998 1999 1995 1996 1997 1998 1999

ST JOHN KNITS INC OCT 23-12 33-14 27-18 24-7 NA-NA 8 6 5 5 NA 0.7-0.4 0.4-0.2 0.3-0.2 0.8-0.2 NA-NA TOMMY HILFIGER CORP # MAR 29-11 27-14 20-11 19-9 23-12 0 0 0 0 0 0.0-0.0 0.0-0.0 0.0-0.0 0.0-0.0 0.0-0.0 * VF CORP DEC 24-19 15-10 17-12 17-11 18-9 57 31 28 26 28 3.0-2.4 3.1-2.1 2.4-1.6 2.4-1.5 3.1-1.5 † WARNACO GROUP INC -CL A DEC 24-14 NM-NM 81-61 NM-80 18-6 19 NM 75 157 21 1.4-0.8 1.3-0.9 1.2-0.9 1.9-0.8 3.6-1.2

FOOTWEAR § BROWN SHOE INC # JAN NM-NM 20-10 NM-NM 15-9 11-6 NM 87 NM 30 20 10.4-3.9 8.4-4.3 6.8-4.2 3.2-2.0 3.2-1.8 § K-SWISS INC -CL A DEC 75-35 NM-70 28-14 14-7 19-3 29 73 11 3 2 0.8-0.4 1.0-0.6 0.8-0.4 0.5-0.3 0.6-0.1 * NIKE INC -CL B # MAY 19-9 24-12 55-27 33-19 32-18 15 13 32 30 23 1.6-0.8 1.1-0.5 1.2-0.6 1.5-0.9 1.2-0.7 * REEBOK INTERNATIONAL LTD DEC 19-12 23-13 22-11 79-30 NM-39 14 11 0 0 0 1.2-0.8 0.9-0.5 0.0-0.0 0.0-0.0 0.0-0.0 § STRIDE RITE CORP NOV NM-NM NM-NM 40-25 35-15 24-9 NM 400 50 44 35 4.8-2.5 3.3-1.7 2.0-1.3 3.0-1.3 3.9-1.5 § TIMBERLAND CO -CL A DEC NM-NM 22-9 20-9 17-5 15-6 NM 0 0 0 0 0.0-0.0 0.0-0.0 0.0-0.0 0.0-0.0 0.0-0.0 § WOLVERINE WORLD WIDE DEC 24-11 26-14 31-19 31-8 18-11 10 9 9 11 15 0.9-0.4 0.7-0.4 0.5-0.3 1.4-0.4 1.4-0.8 § TIMBERLAND CO -CL A DEC NM-NM 22-9 20-9 17-5 15-6 NM 0 0 0 0 0.0-0.0 0.0-0.0 0.0-0.0 0.0-0.0 0.0-0.0

Note: Data as originally reported. * Company included in the S&P 500. † Company included in the S&P MidCap. § Company included in the S&P SmallCap. # Of the following calendar year. Earnings per Share Book ($) Value per Share Share ($) Price (High-Low, $)

Company Yr. End 1995 1996 1997 1998 1999 1995 1996 1997 1998 1999 1995 1996 1997 1998 1999 TEXTILES (APPAREL) § ASHWORTH INC OCT 0.12 0.12 0.37 0.37 0.27 3.06J 3.20J 3.95J 4.77J 5.04J 10.88-5.00 7.75-4.50 11.88-5.25 18.38-4.13 6.00-3.13 COLUMBIA SPORTSWEAR CO DEC NA 1.24 2.09 1.38 1.30 NA 4.83 5.84 5.91J 7.27J NA-NA NA-NA NA-NA 25.69-9.63 21.69-11.50 DONNA KARAN INTL INC DEC 3.36 1.34 -3.78 0.01 0.46 7.62J 9.50 5.67 5.65 6.15J NA-NA 30.13-13.38 17.75-8.88 16.75-5.06 11.00-5.56 § HAGGAR CORP SEP 1.14 -0.28 0.44 0.94 1.26 19.46 19.00 19.24 20.55 18.89 26.25-15.75 19.00-11.50 18.00-11.50 16.63-10.19 14.50-9.56 § HARTMARX CORP NOV 0.66 0.72 0.74 0.42 0.05 4.11J 4.85J 5.62J 6.06J 6.43J 6.88-4.25 6.50-3.75 10.13-5.00 9.00-3.94 6.00-3.25 † JONES APPAREL GROUP INC DEC 0.60 0.75 1.17 1.52 1.65 2.76 3.37 3.96 2.33 -0.77 9.91-5.66 18.69-8.91 28.72-16.06 37.75-15.88 35.88-21.50 § KELLWOOD CO # JAN 1.32 1.78 2.00 0.07 1.49 9.65 11.08 12.96 15.98 14.43 22.88-16.50 20.88-13.63 38.56-19.63 36.69-22.50 28.88-16.25 * LIZ CLAIBORNE INC DEC 1.69 2.15 2.65 2.59 3.13 13.41J 14.37J 13.70 14.64 11.38 30.00-14.38 45.13-26.25 57.94-38.13 54.88-25.00 40.69-30.88 § NAUTICA ENTERPRISES INC # FEB 0.75 1.02 1.44 1.53 1.33 4.31 5.08 6.25 6.73 7.61 22.75-8.17 37.00-16.25 30.00-18.63 32.50-13.25 17.31-10.50 § OSHKOSH B'GOSH INC -CL A DEC 0.43 0.05 1.02 1.54 2.01 6.02J 5.86J 5.74 5.75 1.86 9.00-5.75 9.38-6.88 18.75-6.75 24.88-13.63 22.75-13.00 § OXFORD INDUSTRIES INC # MAY 0.25 2.25 2.79 3.15 3.04 14.65J 16.12 18.11 19.46 21.48 22.00-16.00 24.38-14.38 38.75-23.00 37.69-22.50 29.75-19.00 § PHILLIPS-VAN HEUSEN # JAN 0.01 0.69 -2.46 0.47 0.62 5.76 6.28 3.82 4.23 5.79 18.00-9.13 15.13-9.50 15.88-11.50 15.13-6.50 10.63-5.38 POLO RALPH LAUREN CP -CL A # MAR NA 1.27 1.47 0.91 1.49 NA NA 5.83 6.60 5.08 NA-NA NA-NA 33.00-21.75 31.38-15.88 25.38-16.06 § QUIKSILVER INC OCT 0.48 0.54 0.60 0.85 1.20 2.54 3.13 3.57 4.60 5.97 12.04-4.67 15.79-6.21 13.17-6.83 20.83-8.58 30.83-12.94 * RUSSELL CORP DEC 1.38 2.11 1.48 -0.29 0.25 15.39 16.95 17.35 16.95 16.39 31.25-22.00 33.75-23.13 38.50-25.00 33.88-18.00 25.13-12.13 ST JOHN KNITS INC OCT 1.19 1.59 2.01 2.00 NA 4.20 5.85 7.86 9.75 NA 27.13-14.31 51.75-22.75 54.50-36.94 48.31-13.00 29.88-25.81 TOMMY HILFIGER CORP # MAR 0.82 1.14 1.51 1.88 1.82 4.09 5.34 6.90 -1.94 0.39 23.69-9.25 30.56-16.31 29.56-16.50 35.19-17.13 41.06-22.13 * VF CORP DEC 1.21 2.32 2.76 3.17 3.04 6.97 8.68 8.68 9.33 10.08 28.56-23.38 34.94-23.81 48.25-32.25 54.69-33.44 55.00-27.44 † WARNACO GROUP INC -CL A DEC 1.10 -0.16 0.44 0.23 1.75 9.67J 9.17J 13.05J 9.78J 10.58J 26.88-14.88 32.00-21.25 35.56-26.63 44.44-18.50 30.63-10.13

FOOTWEAR § BROWN SHOE INC # JAN 0.04 1.15 -1.19 1.34 1.99 12.92 13.19 11.04 11.95 13.69 33.38-12.50 23.38-11.88 20.13-12.44 20.00-12.44 21.75-12.69 § K-SWISS INC -CL A DEC 0.14 0.05 0.35 1.15 3.12 6.00 6.13 6.36 7.34 10.04 10.50-4.88 6.44-3.88 9.94-4.94 15.63-8.00 59.81-10.81 * NIKE INC -CL B # MAY 1.88 2.68 1.38 1.59 2.10 6.81 9.30 9.85 10.30 NA 35.19-17.19 64.00-31.75 76.38-37.75 52.69-31.00 66.94-38.75 * REEBOK INTERNATIONAL LTD DEC 2.07 2.00 2.41 0.42 0.20 11.97J 6.83J 8.99J 9.27J 9.40J 39.63-24.13 45.25-25.38 52.88-27.63 33.19-12.56 22.75-7.81 § STRIDE RITE CORP NOV -0.17 0.05 0.40 0.45 0.57 5.29 5.20 5.04 5.20 5.54 13.25-7.00 11.88-6.00 15.88-9.88 15.75-6.63 13.44-5.19 § TIMBERLAND CO -CL A DEC -0.26 0.45 1.05 1.29 1.75 2.67 3.20 4.27 5.56 6.17 9.16-4.38 10.03-4.13 20.72-9.16 21.94-7.02 27.06-10.38 § WOLVERINE WORLD WIDE DEC 0.63 0.77 1.00 1.00 0.80 4.98 5.46 6.20 6.88 7.65 15.17-6.85 19.75-10.56 31.13-18.58 30.94-8.06 14.25-8.88 § TIMBERLAND CO -CL A DEC -0.26 0.45 1.05 1.29 1.75 2.67 3.20 4.27 5.56 6.17 9.16-4.38 10.03-4.13 20.72-9.16 21.94-7.02 27.06-10.38

Note: Data as originally reported. * Company included in the S&P 500. † Company included in the S&P MidCap. § Company included in the S&P SmallCap. # Of the following calendar year. J-This amount includes intangibles that cannot be identified.

Information has been obtained from sources believed to be reliable, but its accuracy and completeness and that of the opinions based thereon are not guaranteed. Printed in the United States of America. Industry Surveys is a publication of Standard & Poor's Equity Research Department. This Department operates independently of and has no access to information obtained by S&P's Corporate Bond Rating Department, which may, through its regular operations, obtain information of a confidential nature. 29 OCTOBER 5, 2000 / APPAREL & FOOTWEAR INDUSTRY SURVEY TOPICS COVERED BY INDUSTRY SURVEYS Aerospace & Defense Homebuilding Agribusiness Household Durables Airlines Household Nondurables Alcoholic Beverages & Tobacco Insurance: Life & Health Apparel & Footwear Insurance: Property-Casualty Autos & Auto Parts Investment Services Banking Leisure Products Biotechnology Lodging & Gaming Broadcasting & Cable Metals: Industrial Capital Goods Metals: Precious Chemicals: Basic Movies & Home Entertainment Chemicals: Specialty Natural Gas Distribution Communications Equipment Oil & Gas: Equipment & Services Computers: Commercial Services Oil & Gas: Production & Marketing Computers: Consumer Services & Paper & Forest Products the Internet Publishing Computers: Hardware Restaurants Computers: Networking Retailing: General Computers: Software Retailing: Specialty Electric Utilities Savings & Loans Environmental & Waste Management Semiconductor Equipment Financial Services: Diversified Semiconductors Foods & Nonalcoholic Beverages Supermarkets & Drugstores Healthcare: Facilities Telecommunications: Wireless Healthcare: Managed Care Telecommunications: Wireline Healthcare: Pharmaceuticals Transportation: Commercial Healthcare: Products & Supplies

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