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How to Start a Clothing Store

How to Start a Clothing Store


How to Start a Clothing Store

If you're looking to start a Clothing Store, you've come to the right place. Since we're going to show you exactly how to do it.

We'll start with key Clothing Store industry fundamentals like how big the market is, what the key segments are, and how revenues and profits are generated.

Then we'll discuss keys to not only starting a Clothing Store, but succeeding in it!

How big is the Clothing Storeindustry?

According to IBISWorld, the Clothing Stores industry in the US consists of more than 174k establishments. Over the past five years, the sector has grown slowly, at an average of 1.2% per year to $186.6 billion.

What are the key segments of the Clothing Store market?

Clothing Stores are segmented by type of clothing sold:

  • Family Clothing Stores stock clothing for men, women and children, without specializing by gender or age group. This segment represents 54.6% of the total market.
  • Women's Clothing Stores specialize in women's wear, including misse's, junior's, plus-size, and maternity. This segment's share of the industry totals 25.8%.
  • The remainder of industry revenue comes from Lingerie, Swimwear & Bridal Stores; Men's Clothing Stores; and Children's & Infants’ Clothing Stores.

What external factors affect the Clothing Store market?

A number of factors affect the performance of the Clothing Store industry. These drivers include:

Per capita disposable income - Income affects demand for clothing; therefore, increasing income

Number of adults - Since adults are wage earners and heads of household, adults are the primary purchasers of clothing. Thus, the number of adults in the US affects demand for clothing.

World price of cotton - Cotton is a primary input for clothing manufacturers. When the cost of cotton rises, so do prices for finished garments. Not all input cost increases can be passed on to the consumer, so rising cotton prices could result in lower profit margins for Clothing Stores.

Online shopping - Online shopping is a direct threat to the industry. Online Clothing Stores are able to offer lower prices and larger inventories than brick-and-mortar Clothing Stores. Savvy brick-and-mortar Clothing Stores will work to capture the online audience.

Trends + Trendsetters: The Best in Fashion Content Marketing

Combining In-Store and Online Shopping

Who are the key competitors in the Clothing Store market?

Major players in the Clothing Stores industry include The TJX Companies (TJ Maxx, Marshalls, AJ Wright, Bob’s Stores), Ascena Retail Group (Lane Bryant, Charming Shoppes, Maurices, Dressbarn, Catherines, Ann Taylor, Loft), and Tailored Brands (Moore's Men's Wearhouse, K&G).

What are the key customer segments in the Clothing Store market?

The key customer segments in the Clothing Store market are as follows (with the percentage of revenue they generate in parentheses):

  • Baby Boomers, or people born between 1945 and 1960 (24.5%)
  • Generation X, or people born between 1960 and 1980 (35.5%)
  • Generation Y, or people born between 1980 and 2000 (22.5%)
  • Others (17.5%)

What are the key financial metrics and costs in the Clothing Store market?

The key financial metrics in the Clothing Storemarket are as follows:

Profit - Clothing stores have average profit margins equal to 4.7% of total revenue.

Purchases - Purchases are the largest expense in the industry, averaging 55.8% of total revenue.

Wages - Wages are the second-highest industry expense, representing 13.0% of revenue, on average.

Rent, Marketing, and Other Expenses - Rent is another significant expense for Clothing Stores. Since visibility is key for store success, location is an important factor, and prime retail locations can be pricey. Marketing costs represent a smaller, but still significant portion of revenue. Other expenses include administrative costs, warehousing, depreciation, etc.

What are the keys to launching a new Clothing Store?

  1. Settle on a Market - Decide what gender and age group(s) you will target, and where you will locate. Decide whether you want to serve a niche group, or base your store on a theme.
  2. Choose a Name - Be sure to choose one that isn't already taken, and isn't too similar to another store.
  3. Have a Business Plan - Besides being a framework for how you want your business to operate, a business plan is necessary for obtaining funding.
  4. Product Selection - Carefully research and choose vendors, and only select products that stay true to your market.
  5. Product Pricing - Know how much the market will bear, and how much the competition charges for a similar item.
  6. Staff - Staff turnover in retail is unavoidably high, but selecting salespeople who have an interest in fashion will help with retention.
  7. Make Customer Service a Priority - Provide an extra measure of attentiveness to customers they aren't likely to get this at a large store and be receptive to customer suggestions.

Clothing Store Theme Example

Creating a Strong Customer Experience

What are the typical startup costs for a new Clothing Store?

Initial, one-time costs:

  • Lease - includes security deposit and other fees associated with signing a lease
  • Improvement costs - includes space customization, fixtures, etc.
  • Starting inventory
  • Office machinery/software - cash register, POS software, computers, phones, etc.
  • Website
  • Advertising and events - for the store’s launch

Ongoing costs:

  • Rent and utilities
  • Inventory
  • Salaries
  • Advertising

Example of Clothing Store Fixtures

How much do Clothing Storeoperators make?

According to the Bureau of Labor Statistics, Top Executives in the Clothing Stores industry have an annual mean wage of $90,800.

Factors that make a Clothing Store a Customer Favorite

Helpful Videos

Creative Retail Sales Ideas for Clothing: Marketing, Branding, & Work Life

Marketing Your Clothing Retail Business

Retail Design Tips: Creating the Ultimate Customer Experience in Retail

How to Arrange a Clothing Store: The Tech Factor

Additional resources in the Clothing Store market

For additional information on the Clothing Store market, consider these industry resources:

American Apparel & Footwear Association

National Retail Federation

American Apparel and Footwear Association

Download Our Business Plan Template!

If you want to create your own business plan quickly and easily, we now offer a business plan template that allows you to develop a professional business plan in hours or days, not weeks or months. Visit this link to learn more: products/bpt/pre-vsl/misc

OR, We Can Develop Your Plan For You

Our professional business plan writers can create your entire business plan for you. We will make sure your business plan is sound and ready for investors so you can continue to focus on running your business. Over the past decade, we have created business plans for hundreds of hotels and related travel & hospitality businesses.

To speak with a Growthink business plan consultant, call 800-506-5728 or complete the form below.


Growthink helped birth my company. They got to know both me and my vision. They helped ‘smack me upside the head’ to help make sure I was realistic, about meeting expectations. As a result, they helped craft, draft and construct the right written presentation. As a result, I got my funding.

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Founder & CEO
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