Old Navy is jumping into a new category with the launch of its intimates collection.
Old Navy says underwear was the most searched-for merchandise on the Old Navy website that the company wasn’t already selling.
Priced from $4.99 to $24.99, the collection includes bras, bralettes and underwear.
Old Navy is part of the Gap Inc. /zigman2/quotes/206554267/composite GPS +0.62% portfolio of brands.
Gap, which is undergoing a turnaround, is poised to benefit from an uptick in apparel spending after a year in which sales of clothing and accessories suffered due to COVID-19, according to analysts.
Old Navy has been the standout brand in the Gap lineup, with Athleta growing and the namesake and Banana Republic facing challenges.
“Old Navy appears to be extremely well-positioned for market share gains this year, Athleta has meaningful runway for continued growth and Gap brand is showing greenshoots in their brand-health initiatives,” wrote Wells Fargo analysts in a March note after meeting with Gap executives.
Wells Fargo rates Gap stock as overweight with a $40 price target.
Gap stock has rallied 43.1% over the last three months, and has soared nearly 341.3% over the past year.
The benchmark S&P 500 index /zigman2/quotes/210599714/realtime SPX -1.04% is up 53.2% over the last 12 months.
Women’s underwear is a crowded category, with a number of big brands like Victoria’s Secret, Aerie from American Eagle Outfitters Inc. /zigman2/quotes/209429711/composite AEO -0.24% , and digital-native brands like Thirdlove and Rihanna’s Savage x Fenty.
L Brands Inc.’s /zigman2/quotes/202062875/composite LB +2.23% Victoria’s Secret brand is also undergoing a business revamp in order to keep up with changing trends. The company recently raised its guidance for a second time in weeks as stimulus funds and other factors drove what L Brands called “unusual shifts in consumer spending patterns.”
Women’s intimates, a category that is growing to include items like sports bras, loungewear and shapewear like items from the Spanx brand or the Kim Kardashian brand Skims, has grown to a $19.6 billion industry. It’s expected to increase at a 4.3% compound annual growth rate (CAGR) from 2020 to 2025, according to data provided by Coresight Research.
With the women’s underwear category pretty full, retailers might want to explore the options for men.
NPD data shows that men’s underwear sales grew 2% during the second half of 2020 while men’s apparel fell 12%. Boxer briefs were up 64% and boxers were up another 16%.
“As we saw in many apparel categories, consumers have been focused on garments that prioritize comfort, and underwear sales among men was no exception,” said Kristen Classi-Zummo, director of apparel market insights at The NPD Group, in a statement.