The European lingerie market will experience a growth of 2-3% in 2018, a major industry manufacturer has predicted.
Peter Partma, CEO of European Lingerie Group AS (ELG) believes that further consolidation of Europe’s still relatively fragmented lingerie industry will also continue this year.
Europe is the world’s largest intimate apparel and lingerie sector, accounting for 40% of the total EUR23.3 billion value of the world lingerie retail market in 2016, according to market research.
As for further consolidation, mergers and acquisitions are a strategic way of entering the market and understanding the current needs and preferences of the population, Partma said.
“ELG has a clear strategy to grow through geographical and product portfolio expansion, new distribution channels and online sales. We are expecting organic and stable growth in the next years – approximately 6-10% turnover increase yearly for the Group companies,” he added.
Headquartered in Latvia, ELG produces lace and fabrics for the largest lingerie brands under the Lauma Fabrics brand name and medical textiles under Lauma Medical.
It also designs, manufactures and distributes branded premium lingerie garments under the Conturelle and Felina groups.
With the acquisition of Felina International in June 2017, ELG doubled its business by creating a rare vertically integrated structure with 1,250 employees, expanding its reach to design, manufacturing and distribution of lingerie.
“In addition to continued organic growth, we are also working towards further consolidation of fragmented lingerie industry in Europe gaining scale, further efficiencies and increasing our market presence,” said Partma.
European Lingerie Group’s revenue for 2017 is approximately EUR72 million, including EUR34 million generated by Lauma Fabrics and around EUR38 million by Felina International.
ELG’s nearest competitors in 2017 were other European countries, mainly Germany, but the biggest competition in the lower-priced segment came from Asian and Turkish manufacturers.
In recent years, however, production costs in Asia have grown rapidly and production in Europe has started to flourish and regain its global position in the industry, noted Partma.
“At the same time we see that Western consumers value locally sourced materials and production quality, comfort, design and innovations of the products which is ELG’s big advantage together with the full production cycle from fabrics to ready-made garments,” explained Baiba Birzniece, a supervisory board member of ELG.
“The fact of the matter is that consumers’ preferences vary from country to country. European women often prefer functional lingerie over fashionable lingerie. They also value convenient shopping and online becomes more and more relevant. That is why ELG has defined online sales channels development as one of the priorities in 2018 together with product innovations and expansion into new markets,” she added.