Harrington Collection

“Better” Active Wear Market Porter’s Six Forces and sizing up the market opportunity.

7.5 million units (.5 hoodie, 1.5 tee-shirts and 1 pants) sold in 2007. This number was expected to double in 2009 – or 15 million units expected (page 6, middle of 3rd passage). By 2009 40% of this number is expected to be “Better” segment or 6 million.

Also, 10% of customers buying in the $100-$200 price range are willing to buy “Better” (“One of superior styling, fabric and fit…” – page 6 second passage).

Potential Competitive Reaction

Competitors are just gaining momentum in the “Better” AW segment. Its high growth would draw significant interest and this is how the “Better” AW market could look like:

1) There are not many new comers and only existing competition is to intensify (Liz Claiborne’s Juicy Couture is to be the main competitor). Probability – 10%.

2) There will be scores of smaller competitors, but no other “big” entries. Probability – 10%.

3) There will be not many small companies entering, but just one big – Jones. Probability – 20%.

4) There will be both many smaller competitors and Jones coming all to the “Better” AW market. Probability – 60%

Competition will be not so much about prices, but rather for brand loyalty and therefore quality and above all – market share through marketing activities. Given that the overall apparel market is mature and actually spending less in recent years, it is obvious that the competition in the AW and the “Better” AW segment will intensify (since option 4 seems most likely), meaning that HC will have to increase marketing spending in the sector and will have to accelerate its own building of brand loyalty.

The support from both department and specialty stores.

Specialty Stores. AW will not be appropriate for all specialty stores – it probably won’t work in the top-end specialty stores selling apparel for 500+, but it will work in independent specialty stores selling for below $500 per...