May 04, 2021

U.S. Fashion Trends - RL, NKE - Changing Fashion Trends Buoy New Brands

By Lois Sakany
The fashion winds are shifting, ushering in a new cycle for denim and preppy looks like collared shirts, letterman jackets and sweaters, which is a trend that presents opportunities for some brands while creating headwinds for others.

The retail sector is experiencing a cyclical silhouette and textile shift, which is likely to be further boosted this year by a post-pandemic move away from athletic lifestyle looks rooted in part by pandemic-driven work- and school-from-home trends. Much of the current chatter has been centered around the embrace of looser denim silhouettes as marked by Gen Z’s takedown of millennials on ByteDance Ltd.’s TikTok, where they mocked their older peers about their attachment to skinny jeans and center hair parts. While Gen Z’s videos began to be covered by the press this year, an uptick in demand for updated denim silhouettes can be traced as far back as early 2019, with men embracing embellished or distressed straight-leg silhouettes and women adding wider fits designed to sit at either the waist or hips. This particular look was epitomized in the visual for “Drivers License,” a wildly popular song written by 18-year-old Olivia Rodrigo, who styled her own looks for the video. An urban retailer said, “Denim has been big for us for the past 18 months. The biggest winners are private-label vendors that do embellishment really well. The trend was strong all summer and never slowed down.” Still, while much has been made about the move away from skinny, the same retailer noted while the look of denim has changed among men, much of the business is still centered around skinny silhouettes. He said, “We’re still skinny and for spring, short shorts.” A boutique buyer said, “Our denim numbers are up five times.”

The shift appears to have plenty of runway. While the trend is already prominent among East Coast retailers and boutiques, it is only beginning to take root among West Coast retailers. One California-based buyer said, “We’re buying more [Levi Strauss & Co.’s] Levi’s, but my fear is that the silhouette is too basic for our customer. Just from being in the market and observations on social, I’m seeing more fashion denim. Still, though, the athletic jogger silhouette is what dominates for our customer.”

Beyond just denim, the shift is also ushering in preppy silhouettes, including long and short-sleeve polo shirts, letterman jackets, cardigans and fitted caps. And while crewneck sweatshirts and hoodies remain popular, at elevated streetwear labels like New York-based Leon Dore Aimé Inc.’s Aimé Leon Dore, they have increasingly been swapped out for sweaters and cardigans. Commenting on the sweater trend, a boutique buyer whose merchandise is centered by high-priced streetwear labels said, “We were worried about selling through a $400 Human Made sweater, and it sold out in less than 24 hours.” At the same boutique, the shift has benefited newly added brand Ralph Lauren Corp.’s Polo (also see OTR Global’s May 4 Ralph Lauren report), whose offerings “evaporated” upon arrival. The buyer said, “We didn’t buy enough, and now everything is sold out. We’re doubling our planned buy for fall, which is the earliest we can get it back in.”

At the same time, the preppy look is only starting to take hold on the West Coast, where the buyer bringing in denim for the first time in the fall is also testing varsity jackets. He said, “We will carry varsity in a small way in the fall. The varsity [jackets have] the potential to become as big as the bomber jacket.”

Impact on Athletic
With denim and various knit tops expanding their share, buyers said they will make room by pulling back on sweatshirt and jogger buys from private-label and lower-tier athletic brands. One buyer said, “Tracksuit sets will slow down, which will take away from Adidas [AG] and Puma [SE]. So much more excitement is in apparel right now. Our units per transaction have gone up because apparel is so hot.”

Meanwhile, all three buyers said demand for Nike Inc.’s shoes and apparel continue to outstrip supply (also see OTR Global’s March 12 report and March 25 note on Nike). “We can’t get enough Nike Tech Fleece; it’s like crack for our customer. And Nike is limiting everyone; so much of its focus is direct.” Commenting on low Nike footwear stock, the buyer said, “Jordan is still stupid hot. We can’t get enough. Nike shoes that never mattered like Court Royale and [Court] Vision are selling like crazy.”

And while denim silhouettes are shifting, buyers said among men, especially, high-top silhouettes remain popular with straight-leg denim worn over the shoe’s collar or loosely tucked into the shoe’s tongue. Commenting on sneaker silhouettes, the West Coast buyer said, “Since the beginning of February, mid- and high-tops are selling through faster. [VF Corp.’s] Vans Sk8-Hi is crushing it right now.”

Despite sales challenges in China (see OTR Global’s April 20 note on Nike and Adidas in China), all three buyers said Nike had not approached them with offers of additional inventory from China going forward.