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!

Importantly, a critical step in starting a clothing store is to complete your business plan. To help you out, you should download Growthink’s Ultimate Clothing Store Business Plan Template here.

How Big is the Clothing Store industry?

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 Industry?

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.
  • Women’s Clothing Stores specialize in women’s wear, including misse’s, junior’s, plus-size, and maternity.
  • 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 Industry?

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.

Who are the Key Competitors in the Clothing Store Industry?

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).

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What are the Key customer segments in the Clothing Store Industry?

The key customer segments in the Clothing Store market are Baby Boomers, Generation X, and Generation Y.

What are the Key Costs in the Clothing Store Industry?

Purchases – Purchases are the largest expense in the industry.

Wages – Wages are the second-highest industry expense.

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 clothing store 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.

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

Helpful Videos

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

How to Arrange a Clothing Store: The Tech Factor

Additional resources in the Clothing Store Industry

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


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