The Danish underwear market is valued at DKK 890 million annually, growing modestly at a CAGR of 2.4%. Ladies' underwear is driving category growth. Key players include Bjorn Borg, Triumph, JBS, and HB Textil, addressing multiple sales channels. The industry has low profitability and strong competition due to fragmentation among 70 retail chains and 6000 stores. Success requires efficient assortments and logistics, private labels, vertical integration, and relationships with retailers controlling 48% of sales. The grocery channel poses opportunities and threats as a major distribution partner.

1. The Danish Underwear Market
– Industry Analysis
Thomas Blomqvist, EMBA 2009/10

2. The purpose of this presentation is to:
• Describe and analyse the Danish underwear industry
• Describe the players in the market and business
system
• Define the generic strategies pursued in the industry,
and key success factors
•
But first..

3. This presentation adresses 4 questions
What is the
Size & Growth
of the
Underwear
market
in
Denmark?
Who are
the key players
in the market?
Is the industry
attractive?
Which are
the generic
strategies ,
and key
succes factors
in the
industry?
But first..

4. Pierre Robert Group AS
Turnover 350 MSEK
Market Share 87% / 8,6%
Employees 120
Pierre Robert Group AB
Turnover 130 MSEK
Market Share 30 %
Employees 35
Pierre Robert Group
- a Nordic Company
• Brands:
• Products:
• Sales Channel:
• Offices:
• Employees:
• Turnover 08:
• Owner:
Pierre Robert and La Mote
Near Body (Tights, Underwear and Socks)
The Grocery Trade in Norway, Sweden and Finland.
Oslo, Malmoe and Stockholm
Approx. 155
480 MSEK
ORKLA (Norwegian Conglomerate)

5. This presentation adresses 4 questions
What is the
Size & growth
of the
Underwear
market
in
Denmark?
Who are
the players
in the market?
Is the industry
attractive?
Which are
the generic
strategies ,
and key
succes factors
in the
industry?
But first..

6. Market Definition
The apparel and underwear retail industry* in Denmark that
sells underwear for ladies and men.
*Including grocery trade, internet stores and other channels as sport retail.

7. What is the Size & Growth
of the Underwear Market in Denmark?
Total market value DKK 890 million, CAGR of 2,4% 2004–2008

8. What is the Size & Growth
of the Underwear Market in Denmark?
Sales per capita lower in Denmark vs Norway and Sweden.

9. What is the Size & Growth
of the Underwear Market in Denmark?
• A majority of the retailers exclusively sells their own brands,
private labels.
• 48% of the total sales of underwear are private labels.
Total accessible market – DKK 435
million

10. What is the Size & Growth
of the Underwear Market in Denmark?
• Growth 2009-2013 assumed to follow the development of
apparel – a CAGR of 2,1%. (Slightly less than the CAGR 2004-2008)
• Based on earlier trend, ladies underwear expected to ”drive”
the category growth.
Estimated CAGR 2009-
2013
- Ladies underwear, 4,4%
- Mens underwear, 0%

11. This presentation adresses 4 questions
Summary 1
• Total market DKK
890 million.
• PL, large share of
total sales, 48%.
• Accessible market
DKK 435 million.
• Modest growth rate
CAGR 2,4%
• Ladies underwear
”driving” the
growth.
• Forecasted CAGR
2009-2014, 4,4%.
Who are
the players
in the market?
Is the industry
attractive?
Which are
the generic
strategies ,
and key
succes factors
in the
industry?

12. Who are the players in the market?

13. Who are the players in the market?
SOS Sportswear (Bjorn Borg)

14. Who are the players in the market?
Triumph International

15. Who are the players in the market?
Jbs

16. Who are the players in the market?
HB Textil

17. Who are the players in the market?
Competitors

18. Who are the players in the market?
Competitors on the supplier side
SOS Sportswear
• Distributor of Bjorn
Borg in the Danish
market.
• Offers a wider range
of underwear to
ladies and men
• Strong focus on
prod. development &
consumer
communication.
• Integrated forward.
• Turnover DKK 127
millions.
Triumph
• Leading
international
supplier
• Multiple channel
sales strategy
• Several sub brands.
• Wide assortment,
adress different
customer segments
• Integrated forward
• Turnover Nordics,
DKK 582 millions.
• Not profitable, DKK
-61,8 millions 2009.
Jbs
• One of the leading
domestic suppliers
• Focused on mens
underwear.
• Multiple channel
sales strategy
• Selective
distribution/brand
• Turnover DKK 120
million in 2009.
• Negative sales
development.
• Profitable DKK +8,5
million.
HB Textil
• Domestic supplier
with ”house brands”
• Focus on sales to the
grocery channel and
sales of private
labels.
• Provide service to
stores, if needed.
• Turnover DKK 100
million.
• Negative sales
development.
• Low Profitability,
DKK +2,2

19. Functional
Need map Ladies Underwear
Source: MMI 2004
Sporty
8%
Warm &
Robust
4%
Everyday
(Comfortable
& Practical)
35%
Cheap
2%
Everyday+
12%
Exklusive
& sexy
9%
Party
13%
Playful
Impulse
9%
Exiting
3%
Sociable
Unformal
Hold In
5%
Emotional
Who are the players in the market?
Key suppliers offer versus consumer needs in the market
Bjorn Borg
Triumph
Jbs (Ladies underwear)
HB Textil
Positioning of key suppliers
offer needs to be validated.

20. This presentation adresses 4 questions
Summary 1
• Total market DKK
890 million.
• PL, large share of
total sales, 48%.
• Accessible market
DKK 435 million.
• Modest growth rate
CAGR 2,4%
• Ladies underwear
”driving” the
growth.
• Forecasted CAGR
2009-2014, 4,4%.
Is the industry
attractive?
Which are
the generic
strategies ,
and key
succes factors
in the
industry?
Summary 2
• Strong competition.
• Framented trade –
with 70 different
retail chains, more
than 6000 stores.
• Suppliers adressing
several sales
channels and
customer needs.
• Low profitability
• Grocery trade large
share of total sales
• Backward/forward
intergration.

21. Is the industry attractive?
PESTanalysis
• Macroeconomic impact
- Low profitability makes the industry vulnerable to currency fluctuations.
- Non-cyclical industry – less risk.
- The economic downturn may affect consumers choice of sales channel,
from fashion retail to grocery channel.
• Socio cultural and technological impact
- More sophisticated and demanding consumers than before
- Increased demand of ”new” products – continous release of new products,
which increase the risk.
- Demand for ”functional underwear” predicted to increase
- Increasingly higher expectations of comfort
- ”Plus size” apparel will continue to grow

22. Is the industry attractive?
Porters 5 forces
Bargaining power
of buyers.
• Centralized
decisions regarding
listing.
• Speciality stores
operates locally.
• 70% of turnover
generated from
organized chains,
makes access
difficult.
• Low switching costs
• Bargaining power is
high.
Bargaining power
of suppliers.
• Large number of
supliers.
• Low cost products.
• Low level of
differentiation.
• Low switching costs
of suppliers.
• Bargaining power of
suppliers is low.
Threat of new
Entrants.
• Easy to enter –
many speciality
stores.
• Economies of scale
difficult.
• Grocery trade
increasing, reduces
the threat of new
entrants.
Threat of new
entrants is moderate
Threat of
Substitutes
• Few substutites.
• Threat is more
shifting trends, and
shifting consumer
beahviours.
• Threat of substutites
low.
Bargaining power of buyers Rivalry among suppliers is high.
• Low market growth rate increases competition.
• Grocery trade increases their market share significantly.
• There is no dominant player in the market.
• Low level differentiation.

23. This presentation adresses 4 questions
Summary 1
• Total market DKK
890 million.
• PL, large share of
total sales, 48%.
• Accessible market
DKK 435 million.
• Modest growth rate
CAGR 2,4%
• Ladies underwear
”driving” the
growth.
• Forecasted CAGR
2009-2014, 4,4%.
Which are
the generic
strategies ,
and key
succes factors
in the
industry?
Summary 2
• Strong competition.
• Fragmented trade –
with 70 different
retail chains, more
than 6000 stores.
• Suppliers adressing
several sales
channels and
customer needs.
• Low profitability
• Grocery trade large
share of total sales
• Backward/forward
intergration.
Summary 3
• The underwear
market is stabile.
• Consumers are
more demanding,
have higher
expectations on
comfort.
• ”Fast fashion” will
challenge the
players abiltity to
adapt to new
”rules” of the
industry.
• ”Easy” to acccess
the market, but
challenging to
achieve economies
of scale.
• Grocery trade has a
significant share of
the total market.
• The profitability
among the key
suppliers is low

24. Which are the Generic Strategies and
Key Success Factors in the Industry?

25. Generic strategies and Key Success Factors
in the industry
Key Success Factors
• Suppliers have control of their assortment and knowledge of
what kind of products to sell and when.
• Balance between seasonal and more fashion related products
vs. their basic assortment.
• Suppliers have an efficient logistic system.
• Capital
• Vertical integration.
• Private labels and strong brands.
• Relationships

26. This presentation adresses 4 questions
Summary 1
• Total market DKK
890 million.
• PL, large share of
total sales, 48%.
• Accessible market
DKK 435 million.
• Modest growth rate
CAGR 2,4%
• Ladies underwear
”driving” the
growth.
• Forecasted CAGR
2009-2014, 4,4%.
Summary 4
• Suppliers have
control of their
assortment and
knowledge of what
kind of products to
sell and when.
• Balance between
seasonal and more
fashion related
products vs. their
basic assortment.
• Suppliers have an
efficient logistic
system.
• Capital
• Vertical integration.
• Private labels and
strong brands.
• Relationships
Summary 2
• Strong competition.
• Framented trade –
with 70 different
retail chains, more
than 6000 stores.
• Suppliers adressing
several sales
channels and
customer needs.
• Low profitability
• Grocery trade large
share of total sales
• Backward/forward
intergration.
Summary 3
• The underwear
market is stabile.
• Consumers are
more demanding,
have higher
expectations on
comfort.
• ”Fast fashion” will
challenge the
players abiltity to
adapt to new
”rules” of the
industry.
• ”Easy” to acccess
the market, but
challenging to
achieve economies
of scale.
• Grocery trade has a
significant share of
the total market.
• The profitability
among the key
suppliers is low

27. Opportunities and Threats
Opportunities
• Competition within ladies
underwear less intense.
• Distribution within the grocery
trade – large volumes.
• Distribution agreement with
existing suppliers in the market.
• Launch of new products/concepts
that match emerging consumer
needs.
• Offer other value adding activities
in the value chain, as
merchandising.
Threats
• Distribution in the grocery trade
disqualifies sales to the fashion
trade chains and the independant
stores.
• The profitability in the industry is
low.
• Largest players in the market
operates with high share of private
labels, which increase buyer power.
• The sales of mens underwear has
stagnated.
• The grocery trade has gained
significant market shares, may
increase focus on price