To survive in the highly competitive market, the participants are expected to:
• Anticipate and respond to changing consumer trends in a timely manner
• Fix the price of the products appropriately
• Maintain favorable brand recognition
• Develop attractive and high quality new products
• Ensure product availability and optimize supply chain efficiencies
• Provide effective marketing support
• Obtain sufficient retail floor space and effectively present its products at retail
The failure to compete effectively or to keep pace with the rapidly-changing markets and trends is likely to have an adverse effect on business, financial condition and results of operations. Moreover, if the competitors misjudge fashion trends and market conditions, then they are likely to be faced with significant excess inventories for some products that they are expected to have to sell at a loss or miss opportunities that is to result in lost sales.
Competitive Structure
The principal methods of competition are the quality of the products, the quality of the service and price. Top four companies in uniform rental segment account for 73.5 percent of the revenues. The remainder of the market is served by more than 400 smaller businesses; many of them are regional market participants. Top four companies in the direct sales market account for 57.2 percent of the revenues. The uniform selling companies are also giving tough competition to the rental companies. The competition is also there for acquisitions and mergers. The top 5 companies are competing for acquiring existing companies in various territories to gain distribution and facilities advantages. The average inorganic growth for these companies in the last 5 years was around 2 to 4 percent.
There are approximately 700 to 750 companies in North America. Over the coming years, the number of companies in the market is likely to drop. Small local companies on the workwear market can survive by supplying a small regional customer. The demand for local service is expected to continue as well. The market is crowded and many companies jostle for a few contracts. However, the situation is not as bleak as many people think. The number of workwear companies is not falling at a great rate and many companies are growing as well. Finding and winning the business are the problems that most companies are experiencing.
The workwear market is controlled by a mix of manufacturers, distributors, and rental companies operating throughout the region. There are about 750 companies operating in this market. However, the market is very well controlled by the top five participants who enjoy a combined market share of 66.2 percent. The top market participants are driving the market by adding more and more new customers across the region. They also look for strategic mergers and acquisitions to lead the market. The largest workwear rental company in North America is Cintas Corporation and its policy of entering new markets and acquiring new key customers are the main reasons of its dominance in the region. Other workwear rental companies include the Aramark Corporation, G&K Services and Unifirst Corporation. Williamson Dickies, VF Imagewear, and Carhartt are amongst the group of the leading direct-sale companies.
There are a large number of companies, such as Superior Uniform group, Gateway International, Uniforms manufacturing Inc, Ameripride, Coyne, Prudential, Mission uniforms, Fecchimer brothers, Big front uniforms are in the mid-range market. Asian workwear manufacturers, who make very inexpensive unbranded workwear, are competing with the largest workwear manufacturers throughout North America. Some companies have started distributing garments of Asia Pacific origin enhancing the competition in the market.
Over the forecast period, the average price of workwear is expected to be affected by both the increased popularity of high-end manufacturers and by the decreasing price of the low-end imports from Asia Pacific.
Figure 1-2 shows the competitive structure for the North American Workwear market in 2008.
Figure 1-2
North American Workwear Market: Competitive Structure (North America), 2008
| Number of Companies in the Market | 700-750 |
| Types of Competitors | Workwear direct sale companies Rental and leasing companies Laundering companies |
| Tiers of Competition | 3 |
| Notable Acquisitions, Mergers | In 2008, Edwards Garment Co. manufacturer and supplier of casual and uniform apparel has acquired HMB Inc. Andrew Rohan in a cash deal. |
| In 2008, G&K Services, Inc. has acquired the assets of Best Uniform Rental, Inc., a uniform and facility services company serving customers in New Jersey, Pennsylvania and Delaware. The acquisition increases G&K’s market share and service network in the Mid-Atlantic region and will contribute approximately $7 million in annual revenue. |
|
| Key End-User Group | Manufacturing, healthcare, hospitality, retail |
| Competitive Factors | Customer service |
| Product quality | |
| design | |
| consistency of product supply | |
| price, | |
| product customization | |
| distribution capability |
Part Two: Competitive Factors
The workwear industry is highly competitive, and the companies’ success depends on their ability to respond to constantly changing consumer demand and fashion trends. The reduction in sales or price because of the competition is likely to affect the companies’ financial status directly.
Not all the companies are forecast to dominate the market. The market place is filled with numerous brands and manufacturers of workwear. Some of the companies are likely to be larger and have more resources than others in certain product categories.
To survive in the highly competitive market, the participants are expected to:
• Anticipate and respond to changing consumer trends in a timely manner
• Fix the price of the products appropriately
• Maintain favorable brand recognition
• Develop attractive and high quality new products
• Ensure product availability and optimize supply chain efficiencies
• Provide effective marketing support
• Obtain sufficient retail floor space and effectively present its products at retail
The failure to compete effectively or to keep pace with the rapidly-changing markets and trends is likely to have an adverse effect on business, financial condition and results of operations. Moreover, if the competitors misjudge fashion trends and market conditions, then they are likely to be faced with significant excess inventories for some products that they are expected to have to sell at a loss or miss opportunities that is to result in lost sales.
Competitive Structure
The principal methods of competition are the quality of the products, the quality of the service and price. Top four companies in uniform rental segment account for 73.5 percent of the revenues. The remainder of the market is served by more than 400 smaller businesses; many of them are regional market participants. Top four companies in the direct sales market account for 57.2 percent of the revenues. The uniform selling companies are also giving tough competition to the rental companies. The competition is also there for acquisitions and mergers. The top 5 companies are competing for acquiring existing companies in various territories to gain distribution and facilities advantages. The average inorganic growth for these companies in the last 5 years was around 2 to 4 percent.
There are approximately 700 to 750 companies in North America. Over the coming years, the number of companies in the market is likely to drop. Small local companies on the workwear market can survive by supplying a small regional customer. The demand for local service is expected to continue as well. The market is crowded and many companies jostle for a few contracts. However, the situation is not as bleak as many people think. The number of workwear companies is not falling at a great rate and many companies are growing as well. Finding and winning the business are the problems that most companies are experiencing.
The workwear market is controlled by a mix of manufacturers, distributors, and rental companies operating throughout the region. There are about 750 companies operating in this market. However, the market is very well controlled by the top five participants who enjoy a combined market share of 66.2 percent. The top market participants are driving the market by adding more and more new customers across the region. They also look for strategic mergers and acquisitions to lead the market. The largest workwear rental company in North America is Cintas Corporation and its policy of entering new markets and acquiring new key customers are the main reasons of its dominance in the region. Other workwear rental companies include the Aramark Corporation, G&K Services and Unifirst Corporation. Williamson Dickies, VF Imagewear, and Carhartt are amongst the group of the leading direct-sale companies.
There are a large number of companies, such as Superior Uniform group, Gateway International, Uniforms manufacturing Inc, Ameripride, Coyne, Prudential, Mission uniforms, Fecchimer brothers, Big front uniforms are in the mid-range market. Asian workwear manufacturers, who make very inexpensive unbranded workwear, are competing with the largest workwear manufacturers throughout North America. Some companies have started distributing garments of Asia Pacific origin enhancing the competition in the market.
Over the forecast period, the average price of workwear is expected to be affected by both the increased popularity of high-end manufacturers and by the decreasing price of the low-end imports from Asia Pacific.
Figure 1-2 shows the competitive structure for the North American Workwear market in 2008.
Strategic Conclusions
The North American workwear market is entering a crucial phase in its life cycle. It was experiencing a slow and steady growth until 2008 and the economic decline is highly expected to apply brake in this growth for a certain period. The market is likely to bounce back from 2011. However, the coming years are very important. Given, the growth rates are to be sustained into the long term, and then workwear manufacturers are going to have to make a variety of changes to their perception of the market. They have to concentrate on the fabric quality, which is more economical and besides, they also have to come up with innovative designs to drive the market.
The competition in this market has been fierce and this is set to continue over the coming years as the largest workwear companies’ increase their domination over the whole region; the major market participants are predicted to grow at a decent rate than the market as a whole. However, in order to grow, workwear manufacturers are likely to have to change their sales techniques and their customer expectations. They are expected to focus heavily on acquiring national key accounts.
The North American market is likely to experience various challenges over the coming years. The corporate-wear segment is going to demand for more fashionable workwear means that workwear is changing its appearance and its manufacturers increasingly have to look to the high street for the latest trends and colors. The quality of workwear and the details of the fabric used to make it are expected to gain importance among the workwear customers.
The growth is initially predicted to be for the most basic workwear garments, and is only anticipated to become evident in corporate imagewear later.
Next Month… Part Three: The Industry Responds
