^ljj, ion: wsj. export potential study DEPARTMENT OF COMMERCE Digitized by the Internet Archive in 2012 with funding from LYRASIS Members and Sloan Foundation http://www.archive.org/details/marketformensboyOOunit export potential study THE MARKET FOR MEN'S AND BOYS' CLOTHING IN WESTERN EUROPE NOVEMBER 1964 UNITED STATES DEPARTMENT OF COMMERCE \ Luther H. Hodges, Secretary Franklin D. Roosevelt, Jr., Under Secretary Thomas G. Wyman, Acting Assistant Secretary for Domestic and International Business BUSINESS & DEFENSE SERVICES ADMINISTRATION George Donat, Administrator For sale by the Superintendent of Documents, U.S. Government Printing Office Washington, D.C., 20402 - Price 30 cents / V \ * :...^,^:, a . f *V^. Expansion of the economies of European countries has been accompanied by increased mass production, a trend toward readymade clothing for men and boys, and a decline in traditional custom-tailored clothing. This presents an opportunity to U.S. manufacturers of readymade clothing to profit from their long experience by selling in these changing, growing markets. This survey is intended to help U.S. businessmen visualize the rising sales potential in Western European markets and to guide newcomers to this new field of export sales of men's and boys' outerwear. Data for the survey were gathered from trade sources by U.S. Foreign Service Officers in 12 European countries. Other information available in the U.S. Department of Commerce, Bureau of International Commerce, was added. The Clothing Manufacturers' Association of the United States of America cooperated on the project. The survey was prepared under the direction of William W. Shoaf, Direc- tor, Business Services and Analysis Division, Office of Textiles. Material was assembled and compiled by Barbara A. Smith. James S. Love, Jr. Deputy to the Secretary for Textile Programs iii Page Foreword iii Introduction 1 Summary 3 Part I. European Economic Community: Belgium-Luxembourg Economic Union 5 France 8 Federal Republic of Germany 11 Italy 14 Netherlands 17 Part II. European Free Trade Association: Austria 19 Denmark 20 Norway 22 Sweden 24 Switzerland 26 United Kingdom 28 Number Page 1. Belgium-Luxembourg Economic Union: Imports of Selected Items, by Principal Country of Origin, 1961 and 1962 35 2. Belgium: Sample Retail Prices of Selected Items, January 1964_ 36 3. Luxembourg: Sample Retail Prices of Selected Items, January 1964 36 4. France: Production of Selected Items, 1960 37 5. France: Imports of Selected Items, 1961-62 37 6. France: Sample Retail Prices of Selected Items, October 1962__ 38 Tables (continued!} Number Page 7. Federal Republic of Germany (excluding West Berlin): Produc- tion of Selected Items, 1962-63 39 8. Federal Republic of Germany: Imports, by Country of Origin, 1961-62 39 9. Federal Republic of Germany: Sample Retail Prices of Selected Items, Bremen, February 1964 40 10. Germany: Size Chart for Men's and Boys' Outer Clothing 41 11. Italy: Production of Selected Items, 1960-61 44 12. Italy: Imports, by Principal Country of Origin, 1961-62 44 13. Italy: Sample Retail Prices of Selected Items in Milan, February 1964 45 14. Netherlands: Production of Selected Items, 1961-62 45 15. Netherlands: Imports of Selected Items, by Principal Countries of Origin, 1961-62 46 16. Netherlands: Sample Retail Prices of Selected Items, September 30, 1962 47 17. Austria: Production of Selected Items, 1962 and January-Sep- tember 1963 48 18. Austria: Imports, by Country of Origin, 1961-62 48 19. Austria: Sample Retail Prices of Selected Items, November 1963 49 20. Denmark: Production of Selected Items, 1961-62 49 21. Denmark: Imports of Selected Items, by Country of Origin, 1961-62 50 22. Denmark: Sample Retail Prices of Selected Items, October 1, 1962 52 23. Norway: Production of Selected Items, 1960-61 53 24. Norway: Imports of Selected Items of Men's and Boys' Outer Clothing of Wool or Fine Animal Hair, by Country of Origin, 1961-62 54 25. Norway: Sample Retail Prices of Selected Items in Oslo, January 30, 1964 55 26. Sweden: Production of Selected Items, 1961-62 55 27. Sweden: Imports of Selected Items, by Principal Country of Origin, 1961-62 56 28. Sweden: Apparent Consumption of Selected Items, January-Sep- tember 1962-63 57 vi Tables (continued) Number Page 29. Sweden: Sample Retail Prices of Selected Items, November 12, 1962 58 30. Sweden: Manufacturers' Average Prices for Selected Items, 1962-63 58 31. Switzerland: Production of Selected Items, 1963 59 32. Switzerland: Imports, by Country of Origin, 1961-62 59 33. Switzerland: Sample Retail Prices of Selected Items, March 13, 1964 60 34. United Kingdom: Production of Selected Items, 1954, 1958, and 1961 61 35. United Kingdom: Imports, by Country of Origin, 1958-60 62 36. Great Britain: Distribution of Retail Sales by Type of Retail Outlet, 1961 62 37. United Kingdom: Sample Retail Prices of Selected Items, London, February 1964 63 38. United Kingdom: Distribution of Purchases of Readymade and Made-to-Measure Men's Suits, by Retail Price, 1962 63 vii Introduction This study provides guidelines for marketing men's and boys' outer clothing in countries that are full members of the European Economic Com- munity (EEC) or, except Portugal, of the European Free Trade Association (EFTA). 1 Portugal requires licenses for imports of clothing and offers little or no opportunity as an export market. EXPLANATION OF TERMS EEC and EFTA are gradually revising their tariffs. The EEC countries plan by 1970 to eliminate internal tariffs and to set a common external tariff (CXT) on goods imported from all nonmember countries. In the process of setting the CXT, some EEC countries may be required to lower their present tariffs and others to raise them. The tariffs given in this report are those in effect as of December 1963, and therefore may not be up to date. Current tariff data may be obtained from Department of Commerce Field Offices. In the countries covered in this survey, the ad valorem duty is charged as a percent of c.i.f. value (cost, insurance, freight). Tariffs are paid by the importer, but they will be of interest to the exporter because they add to the cost of the product to the ultimate consumer. The terms "outer clothing" and "readymade outer clothing" are used in- terchangeably in this study. "Men's and boys' readymade outer clothing" is defined here as men's and boys' readymade suits, overcoats, topcoats, sportcoats, and slacks of wool or part wool, not waterproof, and not knit. Tariffs on garments made of these materials differ from tariffs on garments made of other materials. 1 Members of the EEC are Belgium, France, Italy, Luxembourg, the Netherlands, and the Federal Republic of Germany. Members of EFTA other than Portugal are Austria, Denmark, Norway, Sweden, Switzerland, and the United Kingdom. Lists of foreign firms interested in importing men's and boys' outer cloth- ing may be obtained from the Commercial Intelligence Division, Bureau of International Commerce, U.S. Department of Commerce, Washington, D. C. 20230, or from any Department of Commerce Field Office, at a cost of $1 for each country list. Unless otherwise indicated sources of the tabular data included in this study are Foreign Service despatches. Summary There is a growing trend in Western Europe toward the acceptance of readymade clothing. Previously almost all men's clothing was made to order; now the proportion is from 50 to 90 percent of the total sales of men's outer clothing. Overcoats and topcoats make up most of the ready- made clothing. The increasing prosperity enjoyed by the European Economic Community (EEC) and the European Free Trade Association (EFTA) countries has brought about a rise in the consumption of clothing in these countries. Some of this rise in consumption is filled by increases in domestic production, but much of the rise is met by increased imports. Thus, there is a growing market in the EEC and EFTA countries for imports of readymade men's and boys' outer clothing. At the present time, most of these imports are supplied by members of the EEC and EFTA. One reason for this is that members of the EFTA and EEC enjoy a tariff advantage within their trading groups. The European Economic Community consists of Belgium, France, the Fed- eral Republic of Germany, Italy, Luxembourg, and the Netherlands. Tariffs of and affecting these countries are changing, but by 1970 duties are ex- pected to stabilize at a 20-percent ad valorem common external tariff ap- plying to all non-EEC countries. Also by 1970, EEC members will by stages have eliminated tariffs within the Community. The European Free Trade Association, consisting of Austria, Denmark, Norway, Portugal, Sweden, Switzerland, and the United Kingdom, is keep- ing pace with the European Economic Community by reducing tariffs between ETA countries, but no concerted effort is being made to change tariffs ap- plying to nonmembers. Nevertheless, it is believed that there is a definite market for U.S. -made men's and boys' clothing, particularly casual wear and clothes made with the new blended fabrics. Heavyweight fabrics have been preferred in the past, but medium and lighter weight fabrics are gradually gaining accept- ance and will offer new opportunities for imports. Selling readymade clothing in Western Europe is not too different from selling in the United States. Many of the sales techniques and promotions used in the United States will be effective in Western Europe. In most of the countries, advertising agencies are available to help the businessman handle the advertising. Advertising literature and labels should be in the language of the country in which goods will be sold. The U.S. manufacturer must expect to put as much effort into selling and service in Western Europe as he does in the United States. Retailers in Western Europe report that they would be interested in buying men's cloth- ing from the United States, but that no strong selling effort has been made to them. Trade fairs are widely used in Western Europe for displaying merchan- dise to be sold. Much of the season's buying is done at these fairs; and to gain success, the importer must be ready to take part in them and to show samples with prices. Prices should be quoted c.i.f. port of entry. When the clothing is equal in quality to that produced locally, the prestige of the "Made in U.S.A." label will often overcome the slight difference in price. Part 1. European Economic Community BELGIUM-LUXEMBOURG ECONOMIC UNION Production Figures released by the National Institute of Statistics show that Belgian production of readymade outer clothing for men and boys has been increas- ing steadily . . . from $30.8 million in 1959, to $34 million in I960, $36.7 million in 1961, $37.9 million in 1962, and an estimated $25 million in the first 7 months of 1963, 14 percent more than in the corresponding period in 1962. 1 Main producing areas in Belgium are Binche (in the province of Hainaut), which has about one-third of the country's total production capac- ity and contains the most mechanized enterprises; Brussels (also accounting for one-third of production capacity), which has mostly integrated enter- prises that sell an important part of their production direct to the consumer in large retail outlets; and an area including Antwerp, Liege, Ghent, Bruges, Charleroi, and Tournai. Companies located in this area are similar to those in the Brussels area and vary in importance with the size of the market in which they are located. It is reported that no civilian readymade clothing is produced in Luxem- bourg. Imports Imports of selected items of men's and boys' readymade outer clothing are shown in table 1. 1 These figures are for all Belgian firms employing at least 10 persons. No detailed statis- tics on Belgian production of men's readymade outer clothing are available. The Netherlands is the principal foreign supplier of men's outer clothing, accounting for 66 percent of total Belgian imports of such goods in 1962, and for 67 percent during the first 9 months in 1963. West Germany ranked second, supplying 15 percent of Belgian imports in 1962, and 16 percent in the first 9 months of 1963. Channels of Distribution Domestic retail sources estimate that not more than 60-75 percent of men's and boys' outer clothing sold in Belgium is readymade. About 15 percent of this clothing is bought in small stores (one or two employees); 50 percent in medium-size stores (three to six employees); and 35 percent in large stores (six or more employees) including chain stores, selling 16 per- cent of total sales, and department stores, selling 19 percent. Almost no men's and boys' outer clothing is sold by mail order houses. There appear to be a few wholesalers specializing in outer clothing in Belgium, but most retailers buy direct from the manufacturer, placing orders 4-6 months in advance of the selling season. Some retailers place all of their orders in advance, but most place about 50 percent in advance and follow up with one or more orders according to demand. Retailers store their own merchandise. The prestige of wearing made-to-order clothing is still a factor among older men in Luxembourg, but is gradually losing importance. Of all men's and boys' outer clothing now sold in Luxembourg, 65 percent are ready- made garments and 35 percent made to order. Luxembourg retailers place approximately 70 percent of their orders 6 months in advance of the selling season. The retailer stores his own stock of merchandise. Medium-size stores (4-12 employees) account for about 60 percent of total sales of men's and boys' readymade outer clothing in Luxembourg. Small stores (3 employees and less) and large stores or chain stores (more than 1 2 employees) each sell 20 percent. There are no prestige men's clothing stores in Luxembourg. Importers generally deal with a foreign manufacturer or his agent. Manu- facturers' agents and distributors usually act as representatives for the com- bined Belgium-Luxembourg sales territory; their headquarters are in Ant- werp, the main clearing post for nearly all U.S. goods destined for Luxembourg or Belgium. Orders usually are placed through factory agents and delivered direct to the retailer within 2-3 months. There are few importer-distributors. Pay- ment is usually made 30-90 days after delivery. Invoices are generally dis- counted 3 percent for payment in 45 days and 2 percent for payment in 60-90 days. Styles, Sizes, Prices Styles and sizes are similar to those of German-produced outerwear. Tables 2 and 3 give some indication of general price levels of men's and boys' clothing in Belgium and Luxembourg. Market Potential Wages and personal income have risen in Belgium with the increase in economic activity. Per capita income is among the highest in Europe. Con- sumption, consequently, is also high. Expenditures for clothing alone in 1961 were 13.7 percent of total consumer expenditures. Production of men's and boys' outer clothing must be supplemented by imports to meet domestic demand. In 1962 Belgium-Luxembourg together spent $2.7 million on imports of suits for men and boys, about $2.2 million more than the amount exported. Imports of overcoats ($1.6 million) ex- ceeded exports by $848,500, and imports of sportcoats were $194,180 higher than total exports of this item. Imports of jackets were $1.1 million. However, only $738,551 was spent for imports of men's and boys' slacks, compared with exports of $3 million. Import duties in general are more favorable for EEC members than for the United States, and imports from the Netherlands are duty-free; but it is believed that original and attractive U.S. products, principally sportswear, will find an outlet in Belgium. The Belgian market for the new wash and wear clothing, and for men's medium-weight suits and coats, especially the "wrinkle-free" suits, is ex- panding. The Belgian customer is quality conscious, but U.S. -made merchan- dise equal in quality and competitive in price with domestic merchandise sometimes has a greater appeal than the Belgian product because of the prestige of the U.S. label. The Luxembourg market for men's and boys' clothing is small by U.S. standards. The country's population in 1960 was 322,000; 116,000 were men between the ages of 15 and 64, and 20,200 were boys 5-14 years of age. The market for boys' clothing, especially slacks, is limited. The market for lightweight men's summer suits also is small but it is growing, as Luxem- bourgers are becoming prosperous enough to dress appropriately for the several warm summer weeks when the temperature rises as high as 85° Fahrenheit. A moderate amount of U.S. readymade clothing (especially for boys and young men) could be sold if the garments were competitively priced and styled to suit European tastes. Tariffs and Licenses The ad valorem duty for imported U.S. men's and boys' wool or part wool outer clothing is 20 percent. Men's and boys' outer clothing imported from EEC countries carries an ad valorem duty of 9.6 percent. In addition to the ad valorem charge, Belgium has a transmission tax of 16 percent that applies to all countries. No import license is required. Luxembourg has a 2-percent import tax and a 2-percent turnover tax besides the ad valorem charge. No import license is required. FRANCE Production and Imports French production of selected items of readymade men's and boys' outer clothing in 1960 is shown in table 4. Table 5 shows imports by country of origin of selected items of men's and boys' readymade outer clothing in 1961 and 1962. In 1962 West Germany contributed 40 percent of French imports. Italy was second with 36 percent. Channels of Distribution About 70 percent of the suits sold in France, 90 percent of the overcoats, 90 percent of the sports jackets, 95 percent of the slacks, and 97 percent of the sportswear are readymade. Readymade includes "mesure indus- trielle" — i.e., the customer chooses the materials, his measurements are taken, and the manufacturing is done at the factory as a 100-percent readymade. Retailers buy direct from manufacturers. Large retailers (sales volume above $300,000; average sales, $450,000) generally place 90 percent of their orders 6 months in advance of the selling season; small- (sales volume below $100,000) and medium-size stores (sales volume of $100,000-$300,- 000) place 50-60 percent of their orders 6 months in advance of the selling season. The two seasons are September 15-November 15 and March 15- May 15. Retail outlets are also mantained by the large manufacturers, who gen- erally store stocks at the manufacturing site until they are required. The independent medium- and small-size retail outlets draw stocks from manu- facturers as needed. Small- and medium-size stores together account for 70 percent of retail sales of men's and boys' readymade outer clothing. Large stores sell ap- proximately 30 percent (chain stores, 22.5 percent and department stores, 7.5 percent). Although an attempt 2 years ago to establish a chain of men's apparel retail outlets in Paris suburbs was not as successful as anticipated, chain out- lets are expected to be established as suburbs expand, bringing about a change in buying habits. A new development in France is the sale of inexpensive men's wear, especially sportswear and shirts, at supermarkets such as Inno-France, which now has six branches in the country. Boys' and girls' wear in age bracket 12-18 is also being retailed in a new type of outlet known as PRE BAC (Pre-Graduation). The store has several separate departments which carry complete outfits — i.e., suits, raincoats, overcoats, sportswear, skisuits, caps, shoes, underwear, shirts, and belts — for boys and girls of various age brackets (12-14, 14-16, 16-18). Items are carefully selected for details that will have a strong appeal for young customers. Retailers who import men's and boys' outer clothing place their orders with visiting sales agents. There are no wholesalers. Retailers expect de- livery in 6 months and credit terms of 30, 60, or 90 days. Prices Sample prices of selected types of men's and boys' outerwear are shown in table 6. These samples were obtained from well-known stores in three classes of outlets. The Men's Apparel Manufacturers' Association reports a slight increase in sales of higher priced winter and summer suits. The proportion of total sales of winter suits accounted for by suits in various price ranges in the winter season of 1963-64 is shown below: Percent of Percent of Price range total sales Price range total sales Under $36 ~1 2~ $55 to $60 Zi 23~~ $36 to $42 4 $61 to $66 19 $43 to $48 8 $67 to $74 17 $49 to $54 16 Over $74 11 The proportion of total sales of summer suits accounted for by suits in various price ranges is shown below: Percent of Percent of Price range total sales Price range total sales Under $30 ~ 4~ $51 to $60 I~ 31~~ $38 to $40 9 Over $60 16 $41 to $50 40 The retailer's markup on the manufacturer's price is normally 33 Va percent. Styles U.S. clothing styles are not markedly different from French styles except in scale of sizes and in weight of wool fabrics. French customers usually prefer heavier materials, as they tend to associate weight with quality. However, a change in consumer preference, especially in large cities, is be- coming apparent. Lighter weight fabrics are being used more than pre- viously for suits and topcoats, and an increasing number of Frenchmen are buying suits exclusively for summer wear. Young men and boys are becom- ing very fashion conscious. Retailers report a noticeable increase of inter- est in clothing by young men over 16 years old. French customers are becoming brand conscious. A trend that is just beginning and is expected to grow is the development of brand reputations by some large manufacturers. The Centre d'Etudes Techniques des Industries de rHabillement, a re- search bureau sponsored by the Manufacturers' Association, is gathering information for the purpose of standardizing measurements in France. Eventually, with the cooperation of similar manufacturers' associations in other countries, they hope to standardize throughout Europe. According to the Productivity Committee of the Manufacturers' Associa- tion (CAPCOMA), styles are changing very slowly. In men's suits, colors and types of fabrics are the features changing most noticeably. In 1963, 97 percent of men's suit sales were single breasted, but dealers anticipated an increased demand for double-breasted suits during the coming season. Two-button coats are preferred. Suits without side or back vents represent 73 percent of total sales. Colors remain classic. Average or dark grey represent 40 percent of total sales; blue, 18 percent; and brown, 25 percent. Woolen fabrics are used in 49 percent of the suits made, but in 1964 about 52 percent of the suits will probably be of wool. Twenty percent of suits sold in 1963 were made of blendings of wool and Dacron, but in 1964, 24 percent of the suits sold are expected to be of these blends. Sales of light summer suits, which for many years were insignificant, represented 28 percent of total sales in 1963. Eighty-one percent of summer suits were made with blends the greater part of which were of man-made fibers. Consumers' preferences with regard to topcoats have not changed signifi- cantly. Topcoats continue to be straight in style and dark in color. Market Potential Imports of men's clothing are expected to continue increasing because of the strong appeal of foreign styles. Italian raincoats and British sports- wear, for example, although slightly more expensive than comparable French apparel, enjoy a good demand because of their novelty and differ- 10 ence in style. U.S. -manufactured men's wear should find a reasonably good market, even at slightly high prices, provided there is a novelty appeal. U.S. styles for beachwear, sportswear, leisurewear, etc., should prove attrac- tive to Frenchmen, who are not offered a wide range of choice in similar domestically manufactured products. This opinion was also expressed by an official of the Federation des Fabricants Francois du Vetement Masculin on his return from a business trip in the United States in early 1964. In view of the increasing interest in U.S. -made clothing, U.S. manufac- turers and exporters will find it worthwhile to exhibit at the specialized salon, "Sa/on Europeen de I'Habillement Masculin ," held annually in Paris in February. This show is an excellent medium for bringing products to the attention of French buyers since most of them attend the show and place orders there. Tariffs and Licenses Duty on men's and boys' outer clothing imported from non-EEC countries is set at 20 percent ad valorem, the CXT target. The ad valorem duty for EEC members is 7.5 percent for items of wool or cotton. Other taxes ap- plicable to all countries are a sales tax of 26 percent of c.i.f. duty-paid value and a customs stamp tax of 2 percent of total customs charges. No import license is required. FEDERAL REPUBLIC OF GERMANY Production and Imports Production of selected items of men's and boys' readymade outer cloth- ing and imports of such outerwear made of wool or fine animal hair in 1962 and 1963 are shown in tables 7 and 8. Channels of Distribution German consumers are showing a decided preference for readymade clothing. Retail sources estimate that only 10-25 percent of men's and boys' outer clothing is made to order. The percent is 10 to 15 in large cities and more in small towns and rural areas. Large establishments, including department stores, chain stores, and mail order houses, sell approximately 70 percent of all men's and boys' outerwear. Medium size stores sell 20 percent and small stores, 10 percent. Chain stores and very large retail stores, some of which reportedly sell as large a volume as individual chain stores, account for an estimated 35 per- 11 cent of total retail sales. Department stores sell 30 percent and mail order houses, 5 percent. Large stores buy almost exclusively from the manufacturer. Medium-size stores buy mostly from manufacturers but also through cooperative buying organizations or from wholesalers. Small retailers buy about 50 percent from manufacturers and 50 percent through cooperative buying organiza- tions or from wholesalers. The large retailers (annual sales volume more than $250,000) tend to import direct from foreign manufacturers. Several department store con- cerns have buying agents in the United States. The chain stores and the largest individual retailers also are thought to have buying agents or other connections abroad. Medium-size stores (annual sales volume $62,500 — $250,000) buy mainly from visiting salesmen or German agents of foreign manufacturers. Some buy through cooperative purchasing organizations (Einkaufsvereinigungen), several of which have connections in the United States. Small stores (annual sales volume up to $62,500) buy imported goods through cooperative purchasing organizations, wholesalers, or importers. Many orders are placed at trade fairs, particularly the International Men's Fashion Week in Cologne. Clothing manufacturers from many coun- tries show their products at these fairs, and failure to exhibit can severely handicap a firm's sales efforts. The trade fairs also enable foreign manu- facturers to study the particular requirements of the German market. The trade usually buys a large part of its requirements about 6-7 months ahead of the selling season and requests delivery by installments. Spring and summer samples should be shown to the retailers in October and No- vember. In Germany, terms of sale provide that if delivery has not been made 1 8 days after the agreed delivery date, the buyer has the right to cancel the contract unless the delay is due to an act of God (force ma- jeure). Credit terms usually offered allow a 3.5-percent discount for payment in 10 days; a 2-percent discount for payment in 30 days; and net for pay- ment in 60 days. Very large firms may expect more favorable terms. Prices, Sizes Table 9 gives sample prices in retail outlets of Bremen of various types of men's and boys' garments. A study of retail prices of selected items of men's and boys' outer cloth- ing was also made in November 1962. A comparison of the prices in table 9 with prices obtained in a previous study (November 1962) of selected men's and boys' outer clothing shows that most prices in the high- price level have increased while the prices in the medium- and low-price levels are generally lower. Trade sources explained that the changes were due not to an actual decline in clothing prices for identical items but to 12 shifts in the types and qualities of products available. In the high-price category, goods were of even better quality than in November 1962. In the medium- and low-price categories, manufacturers were reducing prices in order to improve their competitive position. Imports in the latter two categories, mainly from other EEC countries, also have exerted a downward pressure on prices. Table 10 is the only size chart for men's and boys' clothing that is recog- nized as binding by the Federal Association of the German Textile Retail Trade, Registered Association. The chart lists 78 sizes — 50 designated for men, 7 for cadets, and 21 for boys. The sizes were determined by measure- ments taken in a mass survey of about 10,000 individuals. The key to the size designations for cadet and men's sizes is the chest measurement. Most size designations in these two categories are 2-digit figures obtained by dividing the chest measurement by 1, 2, or 4; for ex- ample, the chest measurement for men's long-slim size 94 is 94 cm., for men's regular size 48 is 96 cm., and for men's short-stocky size 24 is 96 cm. On the other hand, boys' sizes are based on height, as is the practice in other European countries. Men's stout sizes are the regular sizes preceded by the numeral 1. The boys' stocky sizes and men's short-short stocky and short-portly sizes are indicated by adding the numeral 5 to the regular measurement. Table 10 also shows what percentage of the total men's outer clothing market is accounted for by each of the men's sizes. About 90 percent of the men measured in the mass survey were classified under 30 of the 50 men's sizes. Following is a breakdown of the 30 men's sizes by category, and the percentage share of total sales for each category: Number Percent of Category Sizes of sizes total sales Regular 44-54 ~ 6 31.1 Stout 144-154 6 13.0 Short, stocky 23-27 5 11.0 Short-short, stocky __ 245-265 3 4.7 Long-slim 88-106 6 18.9 Portly 51-57 4 9.0 Source: Association of Men's and Boy's Outer Clothing Industry, Registered Association, Germany. Market Potential The large department stores seem to represent the best medium for volume sales of U.S. outerwear in West Germany. These stores sell ap- proximately 70 percent of all men's and boys' outerwear. Because of their size, they can publicize more widely than smaller outlets the fact that they are displaying and selling U.S. -made goods. 13 The types of U.S. -made clothing believed to be most marketable in Ger- many are specialized articles, specifically sport and casualwear; lightweight summer garments for men (of mohair, synthetic fibers, or blends of the latter with wool or cotton) including better quality "wash and wear" summer suits; overcoats with detachable fur linings, an item that sold in the 1963-64 winter season at about $110-$ 120 and was very popular; sportcoats the outer part of which is skin or leather and the inner part is pelt or fur (called in German Nacktpelz or naked pelt), retailing at $88-$90 and well ac- cepted, especially by young men interested in sports; and outerwear for teenagers and young men. There also may be a market for stylish clothing for children up to 5 or 6 years of age. To penetrate the German market, U.S. manufacturers should be prepared to match the efforts of their domestic and foreign competitors. This means exhibiting at the Cologne Men's Fashion Show, participating in spring and fall sales shows of finished garments organized by the largest buyers, having salesmen or regional representatives call on medium-size retailers to show samples of garments and cloth, contacting German purchasing agencies in the United States, filling German orders according to agreed specifications, and composing advertising literature and correspondence in German. It would also be helpful if U.S. manufacturers would indicate the German equivalent of U.S. sizes in quotations and on garment labels, as is done by other foreign firms. Tariffs and Licenses The German import duty on men's and boys' wool outer clothing is 16 per- cent ad valorem, c.i.f., for all non-EEC members and 6 percent for EEC members. In addition, a turnover equalization tax of 6 percent of the duty- paid value is levied on all imported men's and boys' outerwear. No licenses are required. ITALY Production and Imports Production of selected items of men's and boys' readymade outer cloth- ing and imports of such outerwear of wool or fine animal hair in 1960 and 1961 are shown in tables 11 and 12. Estimates of Italian foreign trade in men's and boys' outerwear, based on statistics for the first 8 months, indicate that imports increased nearly 40 percent in 1963. West Germany increased its exports to Italy by 123 percent, but the United Kingdom still leads in sales to that country, with a total value of more than $400,000 (including sales of raincoats). 14 Channels of Distribution About 70-80 percent of the retailers' orders are usually placed in ad- vance of the selling season. Small retailers order about 4 months and large retailers at least 6 months in advance. Most retailers store their own stocks of merchandise. The Italian readymade clothing manufacturing industry is relatively new, and its channels of distribution are still being perfected. At present, almost all Italian manufacturers sell direct to the retailers through company-em- ployed salesmen or commission agents. Some of the larger retailers have buyers who purchase direct from the manufacturer. More and more manufacturers' retail outlets are appearing on the scene. Some of the larger manufacturers, including Facis, Lubian, Abital, Marzotto, Rinascente, and Coin, have opened retail stores in several of the major cities where they sell their products at fixed prices. These larger stores will probably gain increasing importance in the market because of their size. Approximately 90 percent of men's and boys' readymade outer clothing is sold through small and medium-size stores — 80 percent through small stores, 10 percent through medium-size stores. The other 10 percent is sold through large stores. 2 A small store is defined as a family or individ- ually owned concern having only one place of business, employing no more than five nonfamily members, and having annual sales up to about $60,000. Medium-size stores are for the most part closely owned corporations or limited liability partnerships. Often they have five or more outlets in no more than one or two cities. Total sales of each outlet rarely exceed $300,- 000 annually. Large stores are vertically integrated chain department stores — Rina- scente-Upim, Standa, Coin, among others — which have numerous outlets throughout the country, employ more than 1,000 workers, and have annual sales in excess of $10 million. Rinascente, the largest, employs approxi- mately 10,400 workers in all its_ operations and has annual sales of about $130 million. Increasing competition in the readymade clothing industry has forced manufacturers to liberalize payment terms, so that many manufacturers now accept deferred payment for as long as 4 or even 6 months. Sales on consignment are coming into increasing use. Discount terms are usually 2 percent of invoice value granted for payment within 30 days, and 1 per- cent for payment within 60 days. Approximately 40-50 percent of men's readymade clothing is purchased by the consumer under the installment plan and paid for over a 6-12 month period. Installment buying by consumers is the standard practice in the smaller retail outlets. 2 Estimate made by Associazione Italiana degli Industrial'! Sull'Abbigliamento (Italian Ready-Made Clothing Manufacturers' Association), Milan. 15 An estimated 85 percent of the men's and boys' readymade clothing imported into Italy is purchased by wholesalers, large specialized dealers, and a few manufacturers' agents who distribute to retailers or provincial agents. Some of the largest retail stores import and sell direct, but their share of total imports of men's and boys' clothing is probably less than 5 percent. Payment for imported readymade men's clothing is usually made through irrevocable letters of credit against documents. Delivery time has ranged from a few weeks to 4 or more months. Prices Table 13 gives an indication of prices of selected types of men's and boys' readymade outerwear in three classes of outlets. These prices were obtained from stores in Milan, but they are believed to be representative of prices throughout Italy. Average retail prices have increased approximately 15 percent since 1962 and are thought to have gone up another 15 percent in 1964 as a result of higher labor and material costs. Prices for boys' readymade clothing vary considerably according to sizes. Most boys' wear is still made by small suppliers and sold through specialty outlets. Market Potential The developing Italian readymade clothing industry is now able to offer a fuller range of sizes, styles, and materials lhan heretofore. The Italian Ready-Made Clothing Manufacturers' Association estimates that readymade items already account for more than 50 percent of Italy's consumption of men's outer clothing, and this percentage is expected to increase. The As- sociation's figure is an average of the various categories of men's clothing, e.g., readymades account for almost 100 percent of raincoat sales and 80 percent of topcoats sales but only 25 percent of suit sales. Total Italian imports of men's and boys' readymade outer clothing repre- sent less than 1 percent of domestic consumption of these products. The main barriers U.S. exporters must overcome in order to increase sales are intense competition within the Italian industry, differences in color and style between Italian- and U.S. -made clothing, and liberal payment terms offered by Italian producers. Tariffs and Licenses The import duty on men's and boys' readymade outer clothing is 18 per- cent ad valorem (c.i.f.) for non-EEC countries and 7.2 percent for EEC members. A sales tax of 3.3 percent of the duty-paid value and compensa- tory import tax of 5 percent of the duty-paid value are applicable to all countries. No import licenses are required. 16 NETHERLANDS Production and Imports Netherlands production and imports of selected items of men's and boys' readymade outer clothing in 1961-62 are shown in tables 14 and 15, re- spectively. Belgium and Luxembourg are the major source of imports of men's and boys' outer clothing, supplying 48.9 percent of the total. Germany is second, with 28.8 percent. Channels of Distribution Approximately 80-90 percent of the men's clothing sold in the Nether- lands is ready-to-wear, and the percentage is believed to be increasing yearly. Small stores sell about 10 percent of men's and boys' readymade outer clothing and medium-size stores, 40 percent. Large stores (chain and department stores) have accounted for 50 percent, but their share of the market is increasing. Mail order houses represent about 5 percent of total sales, and they also are gaining ground. Small stores are defined as those having an annual sales volume of less than $41,790; medium-size stores, volume $41,790 — $1,393,000; and large stores, more than $1,393,000. Most retailers buy direct from the manufacturer, but about 20 percent deal through cooperative buying companies. A few retailers buy through wholesalers (primarily small goods). Almost all orders are placed about 6 months in advance of the selling season. The goods are delivered when finished, and are stored by the re- tailer. Large stores and chain stores prefer to import direct from the manufac- turer, rather than through agents. This is partly because the Netherlands retailer likes to feel that he is buying on terms at least as favorable as those offered U.S. buyers. Smaller stores buy from wholesalers and/or agents. Payment is usually made within 30 days pfter delivery. Drafts are often used as a means of payment. Reputable Dutch businessmen do not like to use letters of credit. This would allow suppliers to receive their money be- fore the clients see the goods and, they fear, make it possible for manu- facturers to make unauthorized changes in the orders or send substitute or substandard merchandise. Prices Table 16 shows prices of selected types of men's and boys' readymade outerwear in three classes of outlets. 17 Market Potential U.S. ready-to-wear clothing has an excellent reputation for fit and style in the Netherlands, where the people expect quality in readymade as well as in hand-tailored clothing. The market there for U.S. -made men's and boys' outerwear appears to be growing, particularly for medium-price, ready-to-wear suits for men. Children's wear is harder to sell, however, because Dutch children do not progress from childish styles as early as do American children. A Dutch boy of six, for example, wears clothing styled like that of an American boy of four. Consequently, U.S. styles often are not obtainable in the right sizes for the Netherland market. Netherland buyers claim that the cost of imports — high prices plus duties and transport charges — is the main factor discouraging larger sales, but they also stress U.S. suppliers' disinterest in exports and the inadequacies of U.S. export business methods. In the U.S. exporters' favor, however, is their record for delivering goods faster than European firms. Tariffs and Licenses As of December 1963, the duty applicable to imports of U.S. men's and boys' outer clothing of wool or part wool was 20 percent ad valorem com- puted on the c.i.f. value, compared with 9.6 percent for EEC countries. No import license is required. 18 Part II. European Free AUSTRIA Production and Imports Local retail sources estimate that about 70 percent of the men's and boys' outer clothing sold in Austria is readymade. Production of selected items of men's and boys' readymade outer clothing in 1962 and the first 9 months of 1963 and imports of such outerwear in 1961 and 1962 are shown in tables 17 and 18. Channels of Distribution Imports of men's and boys' outerwear are channeled largely through wholesalers and agents, but retailers place almost all their domestic orders direct with the manufacturer, ordering about 70 percent of their stock 5-6 months in advance of the selling season and paying for the merchandise 2 or 4 months after receipt. They store their own stock. Of total retail sales of men's and boys' readymade outer clothing, small stores (up to 3 employees, annual turnover up to about $40,000) account for 78 percent; medium-size stores (4-19 employees; annual turnover $40,- 000-$l 90,000), 20 percent; and large stores, 2 percent. Retail sources estimate that chain stores (three or more units) account for about 80 percent of retail sales of men's and boys' outer clothing; depart- ment stores having a separate garment department account for 15 percent, and mail order houses for 5 percent. About 50 percent of all imports of men's and boys' outer clothing are channeled through wholesalers. Agents import 20 percent, retailers 15 per- cent, and department stores 15 percent. 19 Importers expect prices to be quoted c.i.f. European port (preferably Bremen and Trieste) or destination. The usual terms of sale are prompt de- livery and payment 60-90 days after receipt. However one of the largest department stores expects a discount of 3-5 percent for payment in 10 days. Prices Table 19 lists sample prices of selected items of men's and boys' ready- made outer clothing. Market Potential Austrians used to be regarded as very conservative in their dress. Be- cause the local clothing industry was protected by import barriers and re- sisted change, new materials and styles were late in appearing in Austrian markets. Retail sources are concerned because Austrian vacationers when abroad buy the newer styles and materials (e.g., wash-and-wear suits in Italy), which are unavailable in Austria. Considerable interest has been shown in wool and synthetic blends for men's suits. Now that import barriers are being lowered, the market for more up-to- date styles and materials is expected to increase. United States manufac- turers are urged to quote prices c.i.f., port of entry, print advertising literature in German, and stress the "Made in U.S.A." label. Tariffs and Licenses As of December 31, 1963, the ad valorem duty on men's and boys' outer clothing of wool was 28 percent of the c.i.f. value. This was later reduced to 25.2 percent until June 30, 1964. The ad valorem duty is not to be less than 1 1,000 AS ($431) per 100 kilograms. Duties on items other than wool are the duty on the fabric plus 5 percent ad valorem, the minimum duties ranging from 8,400 ($329) to 21,000 AS ($823) per 100 kilograms. A turnover equalization tax of 8.25 percent is levied on the duty-paid value. The ad valorem duty is reduced by 60 percent for EFTA members. These products are subject to import licensing requirements under global quotas. The exporter should inquire of his agent or importer to determine the status of the quota at the time he is ready to enter the market. The quota on clothing is expected to be increased semiannually until fully liberalized. DENMARK Production and Imports Production of selected items of men's and boys' readymade outer clothing and imports of selected items in 1961 and 1962 are shown in tables 20 and 21. 20 Channels of Distribution Retail sources estimate that 85 percent of the men's outer clothing sold is readymade. Large stores, including chain stores and department stores (annual sales volume over $290,000), account for about 50 percent of retail sales of men's and boys' readymade outer clothing in Denmark. Medium-size stores (an- nual sales volume of $145,000-$290,000) sell 35 percent of the total; and small stores (annual sales volume of less than $145,000) sell 15 percent. Chain stores account for an estimated 15 percent of sales and department stores, about 20 percent of total sales. The Danish retailer usually orders direct from the manufacturer about 6 months in advance of the selling season. The supplier then holds the stock until the stipulated time of delivery (e.g., one-third to be delivered on March 1, one-third on April 1, and one-third on May 1). The importing retailer usually orders through a sales agent, and only department stores import direct. Drafts at 30-60 days are widely used. Danish retailers prefer a draft attached to documents rather than establish- ment of irrevocable letters of credit. Prices Sample prices of selected items of men's and boys' readymade outer clothing are given in table 22. Sizes A modified "Italian" style is the primary influence in men's wear in Den- mark. Market Potential The Danish readymade clothing industry is well developed and dominates the domestic market for men's and boys' outer clothing. However, trade sources believe that a market exists for U.S. -made men's and boys' ready- made outer clothing for sports and leisure wear, but principally for cotton and cotton/synthetic blended fabrics, rather than wool. Licenses and Tariffs The ad valorem duty in Denmark on men's and boys' readymade outer clothing is 20 precent unless wool comprises less than 50 percent, by weight, of the material, in which case the ad valorem duty is 22.5 percent computed on the c.i.f. value. These duties are reduced by 60 percent for EFTA mem- bers. 21 A turnover tax of 9 percent is assessed on imports of men's and boys' outer clothing regardless of the country of origin. No import license is re- quired. NORWAY Production and Imports Production of selected items of men's and boys' readymade outer cloth- ing in 1960 and 1961 and imports of such items in 1961 and 1962 are shown in tables 23 and 24. Readymade men's clothing accounts for approximately 97 percent of men's clothing sales. In the case of most categories of men's and boys' outer clothing of wool and cotton, domestic production supplies about 90 percent of the local consumption. Detailed statistics on the various cate- gories of men's and boys' clothing of manmade fibers are not available. Oslo, Bergen, and the More area are the main centers of the clothing in- dustry. However, owing to a labor scarcity in these areas, there is a trend towards expanding the industry in small communities where labor is more readily available. Channels of Distribution Eighty percent of the men's and boys' readymade clothing is sold at retail by medium-size stores of 3-20 employees. Small stores (1-2 em- ployees) sell 10 percent, and large stores (more than 20 employees) sell 10 percent. Of the large stores, department stores account for approxi- mately 7 percent of total sales and mail order houses for 3 percent. Chain stores presently handle only men's shirts, but they plan to expand their range of men's clothing. The larger Norwegian manufacturers have their own sales organizations selling direct to retailers, while a number of medium-size and smaller pro- ducers sell to retailers through wholesalers and agents. Retailers and whole- salers are starting to strengthen their bargaining position with suppliers by making joint purchases. Until recently, few of the more than 500 cooperative stores located all over Norway sold men's and boys' outer clothing. However, a majority of the cooperative stores are expected gradually to expand into this field and through large-quantity buying are likely to have a great influence on clothing sales. Mail order houses are also expected to slightly increase their share of sales. Domestic orders are usually placed 3-4 months in advance of the selling season. The order is then delivered in prearranged lots throughout the season. 22 Men's and boys' outer clothing is usually imported through an exclusive distributor or general agent appointed by the foreign exporter. Some for- eign orders are placed direct with the manufacturer. 1 Most importers, exporters, and manufacturers' agents are located in Oslo and work through subagents in Bergen, Stavanger, Trondheim, and Kristian- sand. Oslo is regarded as the principal distribution center, and Bergen is an important secondary distributing center on the West Coast. Stavanger, located south of Bergen, also receives a considerable volume of imports direct. In the north, Trondheim is the major distributing center, and Tromso and Narvik are secondary centers. Importers prefer to buy clothing in small lots, testing the popularity of a product before committing themselves with a large order. Payment is usually made through irrevocable letters of credit, or in cash against sight docu- ments of 60 days or more. Quotations on a c.i.f. basis in U.S. dollars or Norwegian crowns are preferred. Foreign orders by retailers are usually placed 6 months in advance of the selling season. EFTA countries enjoy up to a 60-percent tariff advantage and therefore U.S. producers need to keep prices as low as possible to be competitive. Rapid deliveries from the United States and low freight and handling charges might be achieved by using the free port of Gothenburg or prac- tically equivalent facilities in Oslo as points of distribution for both Norway and Sweden. Although Norwegian firms prefer to deal with Norwegian agents, it is believed that they would not object seriously to dealing with a joint agent for Norway and Sweden. An alternative to using the free port would be, of course, to ship as many orders as possible under the same bill of lading and have a forward- ing agent break the shipment down and redistribute it to the individual buyers. Prices Sample prices of selected items of men's and boys' readymade outer clothing are given in table 25. Market Potential Because of the country's rather small population, the Norwegian market for men's and boys' clothing is limited. The U.S. share of that market also is small, apparently because U.S. producers and exporters have had no program of sustained sales effort. If a more vigorous sales policy were 1 The following section is based on information from "Basic Data on the Economy of Nor- way," World Trade Information Service, Economic Reports, Part 1, No. 61-62, Bureau of Foreign Commerce, U. S. Department of Commerce. 23 pursued, the U.S. share of the market probably could be increased, inas- much as the price, style, and quality of U.S. men's and boys' readymade clothing are competitive and U.S. products are popular. With the increasing prosperity enjoyed by Norwegians sales of clothing are expected to be greater, especially sales to the teenage and young adult groups who have the greatest purchasing power. Although consumers are quality conscious and place great emphasis on workmanship and durability, the younger age groups are particularly interested in style and shades, often discarding clothing that shows no signs of wear but is not the latest fashion. Norwegians regard price as an important factor in buying men's and boys' outer clothing, but their principal considerations are quality and style. Suits are generally "all year" and made of wool. Summers are short in Norway, and very few light-weight suits are sold. It is believed that with increasing prosperity an appreciable market for light-weight summer suits of manmade fibers will appear. There seem to be no insurmountable obstacles to increasing U.S. exports of men's and boys' outer clothing to Norway. The most apparent reason for the relatively insignificant share the United States has of the Norwegian market is that no sustained sales effort has been made by U.S. producers and exporters of men's and boys' clothing. To promote sales of a sub- stantial size, it is believed that a fairly large investment in advertising would be required. Licenses and Tariffs An ad valorem duty of 25 percent is set on men's and boys' readymade outer clothing of wool. If the chief constituent material is silk or continuous manmade fibers, or if the garment is fur trimmed, the ad valorem duty is 30 percent (minimum $1.97 per lb.) These duties are reduced by 60 percent for EFTA members. A turnover tax of 11.11 percent is assessed on imports of men's and boys' outer clothing regardless of the country of origin. No import license is required. SWEDEN Production and Imports Production of selected items of men's and boys' readymade outer clothing and imports of selected items in 1961 and 1962 are shown in tables 26 and 27. Imports of overcoats accounted for 34.4 percent of domestic consumption during the first 9 months of 1963 (table 28). During the same period, im- 24 ports of trousers accounted for 21.7 percent of domestic consumption, suits, 5.6 percent, and suit coats, 6 percent. Channels of Distribution According to the Federation of Swedish Industries [Sveriges Industrifor- bund), approximately 90 percent of men's clothing sold in Sweden is ready- made. Trade sources estimate that small stores, sales volume of up to $38,600, account for about 20 percent of retail sales of men's and boys' outer cloth- ing; medium-size stores, sales volume $38, 600-$l 54,400, account for 50 percent of retail sales; and large stores, more than $154,400, account for 30 percent. Approximately 85 percent of total retail sales are made by stores specializing in men's and boys' apparel and stores maintaining individual departments for each large line of merchandise. The remaining 15 percent of men's and boys' outer garments is sold retail through chain stores and mail order houses. Retailers customarily order direct from local manufacturers, usually plac- ing 60-70 percent of their orders in advance of the selling season. A num- ber of relatively small orders are placed all at once, but such contracts are repeated 4-6 times during the course of a year, depending on the size of the retail store. Large retail houses, including chain stores, store their own stocks of merchandise. Joint purchasing agencies and wholesalers store imported merchandise in their central warehouses ready for delivery to re- tail stores. Swedish imports of men's and boys' outer clothing are small. Ninety per- cent of the imports are bought by large retail clothing stores, retailers' joint purchasing agencies, and large department stores. Textile wholesalers buy very little. Irrevocable letters of credit are used for most business transactions with U.S. firms. Other terms used are cash against sight documents of 60 days or more. Quotations should be made in U.S. dollars or Swedish crowns and should include cost, insurance, and freight. Prices Sample retail prices in three classes of outlets of selected items of men's and boys' readymade outer clothing are given in table 29. Manufacturers' average prices are shown in table 30. Market Potential The prospects for increasing the U.S. share of the market for boys' outer clothing are good. Several large textile retail stores in Stockholm already 25 carry U.S. -made clothing, and retailers report considerable consumer inter- ests in U.S. -made leisure or sports wear items, including zip-up jackets; car- coats, cotton or wool shell, with or without hoods, with or without liners, treated for water repellency; sport coats and jackets; and wash-and-wear garments, including shirts and slacks. One retailer reported that sales of U.S. -made suits were rather small because of their styling differences and somewhat higher prices. Retailers are interested in U.S. -made men's and boys' overcoats, topcoats, sportcoats, and sport and leisure wear. They would welcome advertising brochures, color-illustrated catalogs, and price schedules (preferably quoted c.i.f. Sweden), featuring all kinds, styles, and sizes of men's and boys' readymade outer clothing. Tariffs and Licenses The tariff on men's and boys' outer clothing for non-EFTA members is 13 percent ad valorem if the garments are made of wool, and 17 percent if the garments are predominantly of silk or continuous manmade fibers. These duties are reduced by 60 percent for EFTA members. A turnover tax of 6.4 percent is assessed on imports of men's and boys' outer clothing regardless of the country of origin. No import license is required. SWITZERLAND Production and Imports Production of men's readymade outer clothing in 1963 and imports of men's and boys' readymade outer clothing of wool or other animal hair in 1961 and 1962 are shown in tables 31 and 32, respectively. Channels of Distribution Approximately 85 percent of the men's clothing sold at retail is ready- made. Following is the sales index for Men's and Boys' Readymade Outer Clothing published by the Textile Review, official publication of the Swiss textile industry, Issue No. 10, March 5, 1964 (1949 = 100): 1958 136.2 1960 162.8 1962 194.3 1963 215.5 The Textile Revue states that the sales increase of men's and boys' ready- made outer clothing is very high in comparison to the general sales in- crease of textile goods. 26 Medium-size stores account for 60 percent of retail sales of men's and boys' readymade outer clothing, small stores 15-20 percent, and large stores 25 percent. 2 Chain stores handle 40 percent of retail sales of men's and boys' outer clothing, department stores 5 percent, and mail order houses only a minor proportion. Swiss manufacturers of outer clothing sell their products through salesmen who call on the retailer. Retailers place almost their entire order approxi- mately 6 months ahead of the selling season and receive the merchandise as it is completed. Men's and boys' outer clothing usually is imported through agents and manufacturers' representatives; only an insignificant amount is bought direct by the retailers. Domestic credit terms customarily provide for a 2-percent discount for payment within 30 days, or net payment within 30, 60, or, in some cases, 90 days from the date of delivery. For payment within 1-24 days a discount of 3 percent is usually allowed. The Swiss consumer's very high standards of quality require that foreign suppliers comply exactly with agreed quality specifications. Prices Sample prices of selected items of men's and boys' readymade outer clothing in three classes of outlets are shown in table 33. Market Potential Swiss retailers fill most of their requirements for men's and boys' outer clothing from domestic manufacturers. Total imports into Switzerland are still small, but some of the larger department stores and chain stores cur- rently display imported men's and boys' outer garments. Tariffs and Licenses The duties for men's and boys' outer garments are computed on the basis of dutiable weight rather than value, and are given in Swiss francs per 100 kilos (220 lbs.). To calculate the dutiable weight, a tare percentage of 10 percent is added to the "net weight" of the goods (the net weight of the goods and their immediate packing). The dutiable weight is then the gross weight (aggregate weight of the container and its contents) or the net weight plus tare percentage, whichever is higher. The duty applicable to imports from the United States of men's and boys' outer garments of wool or other animal hair is 650 Swiss francs ($150.12) per 100 kilos. 3 The duty appli- cable to EFTA countries is 260 Swiss francs ($60.04) per 100 kilos. 2 The basis of determining store sizes was not furnished in the source material. 3 As of December 1963, one U.S. dollar equaled 4.33 Swiss francs. 27 A sales tax of 5.4 percent on the c.i.f. duty-paid value is also charged. An import permit is required, but it has always been granted. The issuing office is the Service des Importations et des Exportations, Mattenhofstrasse 5, Bern. UNITED KINGDOM Production and Imports Production of selected items of men's and boys' readymade outer cloth- ing in 1954, 1958, and 1961, and imports of selected items in 1958-60 are shown in tables 34 and 35. Rough quantity estimates of production for 1963 are as follows, in thou- sands of units: Men's Boys' Total Suits 8,400 2,000 10,400 Topcoats and overcoats 2,100 750 2,850 Slacks and sportcoats 28,000 14,000 42,000 In 1962, U.K. imports of men's and boys' suits, coats, slacks, and other outerwear were valued at $16,138,000. The major suppliers were as fol- lows: Thousands Thousands Country of dollars Country of dollars Total 16,138 Irish Republic 820 Hong Kong 7,678 West Germany 795 Canada 1,408 Belgium 585 Italy 997 Sweden 487 United States 949 Other 2,419 Imports of these products in 1963 are estimated at $18,000,000. Channels of Distribution In 1961, the total value of retail sales of men's and boys' clothing, in- cluding suits, coats, slacks, and other outerwear, in the United Kingdom was estimated at $1,333 million and represented 2.8 percent of- total consumer expenditures. 4 The estimated value of retail sales for Great Britain alone was $1,168 million. Approximately one-third of these latter sales were through independent stores; one-third through multiples (chain stores); and the rest through cooperatives, department stores, variety and general stores, mail order houses, and credit trades calling on customers. Distribution of 4 "Men's and Boys' Wear — Trade Review and Forecast," Retail Business, No. 51, May 1962, published by the Economist Intelligence Unit, Ltd., Marketing Department, 22 Ryder Street, London, S.W. 1, Great Britain. 28 these sales by size of retail establishment was as follows: Large outlets (annual sales of over $700,000), 44 percent; medium-size outlets (annual sales of $70,000-$700,000), 30 percent; small outlets (annual sales of up to $70,000), 26 percent. The men's suit industry in the United Kingdom is dominated by a few large manufacturing firms that operate their own chains of retail outlets. The four largest of these chains account for about one-half of the sales of men's suits in the United Kingdom. About 80 percent of suits sold by multiples (chain stores) are made-to-measure (not to be confused with handmade or tailormade, which in the United Kingdom is referred to as "bespoke" tailor- ing). The remainder are "readymades" (also know as "off the peg"). About 80 percent of the value of orders of retail outlets are placed direct with manufacturers, and 20 percent, with wholesalers. Retailers order 10-50 percent of their seasonal items 5-6 months in advance of the selling season. The remainder of the orders are placed later in the season as supplies are exhausted. The majority of outlets do not order or stock in depth, but place small reorders of 1-2 dozen items when necessary. Imported men's and boys' clothing are usually ordered from manu- facturers' agents or importers. Some retail groups, such as Smart Weston and C. & A. Modes, import on their own account. Retailers place over 50 percent of their orders for imported goods in advance of the selling season because of delays in obtaining repeat orders. These orders are placed about 5-6 months in advance of the selling season. Prices, Styles Markups. — In the United Kingdom the retail markup for most men's and boys' outerwear is 50 percent on the wholesale price before the purchase tax is applied (33-1/3 on the selling price). However, at least one large chain that works on a volume basis uses a markup of 33-1/3 percent. Markups on specialty and luxury items are higher than for most other outer- wear, ranging from 55 to 65 percent. The markup for wholesalers is 15-20 percent. For importer-distributors who sell direct to retailers it is slightly higher. Importers who sell to whole- salers take as low as 5-10 percent. An import agent usually gets 5 percent or slightly more, depending upon his role in a given transaction. Retail prices. — Sample prices of selected items of men's and boys' ready- made outer clothing in three classes of outlets are shown in table 37. Table 38 shows the distribution of purchases of readymade and made- to-measure men's suits by price range. The style of men's suits manufactured in the U.K. have changed grad- ually but considerably in the past 6-8 years, influenced largely by fashions from Italy, France, Scandinavia, and the United States. British men gen- erally are slow to adopt style changes and will not add to their wardrobes 29 to keep up with the latest fashions. A study by the Odhams' Press Research in 1959 showed that 62 percent of the men surveyed bought no suits that year, 34 percent bought one suit, 3 percent bought two suits, and 1 percent bought three or more suits. British suits in general are more form fitting than the U.S. styles and fairly subdued in color (black, blue, grey, brown). Most are three-button suits with center vent coats. Trousers have cuffs, and are fashionably narrow. Seventeen inches is the maximum and sixteen the average. Several British manufacturers produce a made-to-measure American-cut suit, and styles reasonably close to American cuts can be found among the higher priced readymades. Midweight fabrics (11-14 ounces) are beginning to be more widely used and may pave the way for greater acceptance of lightweight suits. The present average weight of fabrics is 15-16 ounces. Use of synthetic fibers, now in about one-third of all suits made, is steadily increasing. Most of the lightweight suits now being sold are bought by the older generation (possibly because they are more able to afford a suit that will be worn only a few times a year). These lightweight suits are similar in style to those described above. Market Potential The market for boys' suits in the United Kingdom is small, since a large percentage of school-age males wear uniforms (a blazer and matching short or long trousers, depending on the boy's age) which by tradition are made by domestic manufacturers. It is unlikely that U.S. producers could move into this market. Boys' nonschool clothes are mostly casual wear, and it is in this area that U.S. sales may be increased. However, a well-directed sales effort would be required. The best market seems to be the teenage bracket. This age group is quick to follow fads in clothing, which also influence styles for the 20-30 year olds and beyond. Imports of men's suits are small, and prospects for increasing direct sales are slim because of disadvantages in style, price, durability, and delivery time. Prices of the U.S. -made suits are perhaps a greater limiting factor than their style. Another obstacle to overcome is the British preference for the individually tailored suit. Most British suits are made to measure and sell within a price range of $35-60. These suits are identified in the public mind with the high-prestige "bespoke suit" cut by the tailors of Savile Row. To promote U.S. -made suits effectively and to compete with the delivery time of U.K. manufacturers, the U.K. distributor would have to carry a wide range of sizes, patterns, and weights, or guarantee reasonably quick delivery by airfreight. He would also have to undertake any minor altera- tions required. 30 U.S. manufacturers of men's and boys' outerwear, particularly casual wear and lightweight suits, are urged to participate in the annual Inter- national Men's and Boys' Wear Exhibition, organized by Trade Fairs and Promotions Ltd., Commonwealth House, New Oxford Street, London, W.C. 1, England. Import Tariffs and Licenses U.K. imports of men's and boys' outer clothing are dutiable at ad val- orem rates which vary according to the fiber content of the garment and the country of origin. Three ad valorem duty rates apply to imports of U.S. men's and boys' outer clothing — 20 percent on garments of all-wool fabrics or part-wool fabrics in which manmade fibers constitute less than 5 percent of the fabric's total value; 22.5 percent 5 on garments of part-wool fabrics in which manmade fibers are 5-20 percent of the fabric's total value; and 25 percent 5 on garments of part-wool fabrics in which manmade fibers make up more than 20 percent of the fabric's value. Preferential duty rates apply to imports from Commonwealth Countries: All-wool garments enter the United Kingdom duty free. On part-wool garments, the ad valorem duty is 10 percent when the manmade fiber content of the fabric is less than 5 percent by value, 20 percent 5 when the manmade fiber content is 5-20 percent of the fabric's total value, and 22.5 percent 5 when the manmade fiber content exceeds 20 percent of the fabric's total value. The ad valorem rate on men's and boys' outer clothing imported from EFTA members is 10 percent for all-wool garments or part-wool garments containing less than 5 percent manmade fibers by value, 1 1 .25 percent 5 for part-wool garments containing 5-20 percent man-made fibers by value, and 16.66 percent 5 on garments containing over 20 percent manmade fibers by value. A 10-percent purchase tax is levied on all categories of clothing. The purchase tax is levied on the wholesale value of the goods and applies to imports from all countries. No import licenses are required on clothing, and the necessary foreign exchange permits are issued on application. 5 Minimum rate chargeable. 31 Table 1 .—BELGIUM- LUXEMBOURG ECONOMIC UNION: IMPORTS OF SELECTED ITEMS, BY PRINCIPAL COUNTRY OF ORIGIN, 1961-62 (Quantity in units unless otherwise indicated; value in U.S. dollars) Item and country of origin Quantity Value 1961 1962 1961 1962 Overcoats, excepting rain- 129,876 126,464 1,763,873 1 639 222 Netherlands West Germany 97,493 13,137 2,523 125,035 108,742 9,036 2,212 131,976 1,126,203 308,962 84,984 2,547,253 1,165,608 261,148 74 156 2,657 120 Netherlands West Germany 87,568 21,177 174,964 91,657 20,514 142,683 1,553,348 620,329 1,441,120 1,648,923 622,527 1 136 406 147 , 224 113,262 11,054 5,093 189,438 1,111,047 841 788 109 450 West Germany 8,440 137,293 109,864 601,644 70,388 738 551 92,356 26 , 509 129,296 32,142 6,721 9,809 385 390,597 146,592 456 078 176 891 West Germany 32 107 25 814 Other, total (quantity in 477 375,261 458 964 Netherlands France Italy 279 40 24 26 239 36 30 170,048 74,699 30,994 37,991 265,698 79,988 35 054 Source: Bulletin Mensuel de Commerce Exterieur de 1' Union Economique Belgo-Luxembourgeoise 1961 and 1962, Ministere de Affaires Economiques et de l'Energie, 1962 and 1963. 35 Table 2. — BELGIUM: SAMPLE RETAIL PRICES OF SELECTED ITEMS, JANUARY 1964 (In dollars) Suits Overcoats Topcoats Men 1 s Boys' Men' s Boys' Men' s Boys' Top price in a high-price outlet Medium price in a medium- 124.00 50.00 35.90 63.00 30.00 21.00 140.00 54.50 25.00 46.00 30.00 19.50 90.00 40.00 18.50 46.00 24.00 Low price in a low-price 13 50 Sportcoats Slacks Men's Boys' Men' s Boys' Top price in a high-price outlet Medium price in a medium- price outlet Low price in a low-price 66.50 23.00 17 - 50 24.00 14.00 9i .25 25.00 12.00 9 95 17.00 8.00 fi 25 Table 3 . — LUXEMBOURG : SAMPLE RETAIL PRICES OF SELECTED ITEMS, JANUARY 1964 1 (In dollars) Suits Overcoats Topcoats Men' s Boys' Men' s Boys' Men' s Boys' Top price in a high-price outlet Medium price in a medium- 105 67 44 89 46 21 125 57 26 94 52 26 73 52 26 52 42 Low price in a low-price 21 Sportcoats Slacks Men' s Boys' Men' s Boys' Top price in a high-price 89 42 63 2fi 24 ifi 16 Medium price in a medium- 1 2 Low price in a low-price outlet 21 19 10 7 1 Prices for boys' clothing vary according to ages 36 Table 4.— FRANCE: PRODUCTION OF SELECTED ITEMS, 1960 (In units) 1 Type Men' s For government entities For commercial market Boys : Suits, 2-3 piece: Wool Wool and synthetic fiber blend Sport jackets Slacks: Wool Wool and synthetic fiber blend Overcoats, topcoats Miscellaneous dress and business attire Sports and casual attire: Jackets Slacks and walking shorts Windbreakers, sheepskin lined , Windbreakers for winter sports , Leather jackets , Ski pant s , Hunting and fishing attire Miscellaneous , 15,781 2,344 157,409 90,933 39,078 24,793 108,514 2,125 46,524 9,760 535 1,198 188,402 1,476,001 306,455 1,573,358 2,243,212 2,442,707 614,391 184,212 322,284 2,892,549 61,207 103,981 137 , 856 150,866 188,310 560,244 359,466 53,168 409,439 1,373,927 922,931 475,295 241,090 128,244 2,719,406 50,100 160,380 38,885 141,462 217,319 *Data on value of production are not available. 2 Under 15 years of age. Table 5. — FRANCE: IMPORTS OF SELECTED ITEMS, BY COUNTRY OF ORIGIN, 1961-62 (Quantity in kilograms; value in U.S. dollars) Item and country of origin Quantity Value 1961 1962 1961 1962 Men's wool cloaks and over- 26,184 59,874 361,377 811 968 West Germany Italy 5,284 8,785 5,139 3,503 31,298 12,907 5,586 4,271 2,477 2,135 497 632 71 56,060 76,941 99 , 886 105,353 34,111 437,728 123,124 120 487 BLEU Austria 50,913 31 440 1,396 15,477 25 558 Sweden 11 359 686 1,391 64,069 10,720 18,884 829,734 10 548 811 Men's wool suits, total 966,937 West Germany Italy 14,242 26,755 6,112 2,284 1,646 2,378 10,805 18,564 21,242 5,416 3,972 3,670 2,908 490 212,947 352,094 119,720 52,886 18,351 28,523 45,352 346 , 247 333,469 109,736 87 6 27 Netherlands 41 582 BLEU 39 148 Other countries 9,128 See footnotes at end of table 37 Table 5. —FRANCE: IMPORTS OF SELECTED ITEMS, BY COUNTRY OF ORIGIN, 1961-62— Con. (Quantity in kilograms; value in U.S. dollars) Item and country of origin Quantity Value 1961 1962 1961 1962 Jackets and other wool outer 35,951 13,793 265 , 895 217 039 United Kingdom Italy 5,161 8,339 C 1 ) 20,979 1,485 6,151 4,964 1,244 724 805 88,718 64,944 C 1 ) 94,311 17,929 115,213 68,560 11 968 West Germany 10,953 10 345 1 Included in "other countries." Source: Statistiques de Commerce Exterieur de la France, Premier Partie, 1961, 1962 (Paris: Direction Generale des Douanes, 1961 and 1962, et Droits Indirects) . Table 6. —FRANCE: SAMPLE RETAIL PRICES OF SELECTED ITEMS, OCTOBER 1962 (In U.S. dollars) Suits Overcoats Topcoats Men' s Boys' 1 Men' s Boys' 1 Men's Boys' 1 Top price in a high-price 130.00 49.00 40.00 140.00 47.80 19.00 19.80 15.00 80.00 41.80 26.00 Medium price in a medium- 23.60 Low price in a low-price outlet 21.50 Sportcoats Slacks Men 1 s Boys' 1 Men' s Boys' * Top price in a high-price 64.00 32.00 19.80 26.00 17.00 8.18 Medium price in a medium- price outlet Low price in a low-price 16.20 9.00 7.40 6.00 x 10 years of ag 38 Table 7 ■FEDERAL REPUBLIC OF GERMANY (EXCLUDING WEST BERLIN): PRODUCTION OF SELECTED ITEMS, 1962-63 * (Quantity in thousands of pieces; value in millions of U.S. dollars) Item Quantity Year 1962 Jan. -Nov. 2 1962 1963 Value^ 196 2 Suits Sportcoats Slacks. . . . Topcoats. . Overcoats. 9,247 5,724 22,646 3,507 3,665 8,614 5,386 20,948 6,640 8,372 5,989 20,929 6.467 238 58 108 52 72 1 Separate statistics on the production of men's and boys' outer clothing are not available. Estimates by dealers of the share of the total accounted for by boys* (5-14 years) outer clothing ranged from 15 to 25 percent. Statistics for the full year 1963 had not been published at the time of this study. 3 Excluding clothing manufactured for the account of others, which, how- ever, is included in unit production figures. Source: Die Industrie der Bundesrepublik Deutschland, "Reihe 3," 1962; and "Reihe 2," November 1963, both published by the Federal Office of Statis- tics, Wiesbaden. Table 8. — FEDERAL REPUBLIC OF GERMANY: IMPORTS, BY COUNTRY OF ORIGIN, 1961-62 : (Quantity in hundreds of kilograms; value in U.S. dollars) Country of orgin Quantity 1961 1962 Value 1961 1962 Total Austria , Netherlands. . . , Yugoslavia. France , Italy , Switzerland. . . . Hong Kong , Sweden Denmark United Kingdom. BLEU United States. . Norway Israel Spain 10,647 16,232 9,429,750 14,934,500 1,273 3,276 3,306 1,093 473 355 303 134 126 103 97 94 115 231 894 854 949 361 291 151 117 100 99 47 17 5 1,234 2,799 1,617 1,042 435 708 639 316 270 193 118 47 ,250 ,000 ,000 ,000 ,500 ,000 ,250 ,750 ,250 ,000 ,000 ,500 5,353 2,821 2,670 888 841 727 611 400 288 182 113 18 11 5 ,500 ,250 ,000 ,500 ,250 ,250 ,500 ,250 ,000 ,250 ,250 ,000 ,000 ,500 3,750 1 Suits, topcoats, overcoats, sportcoats, and slacks of wool or fine animal hair. Source: Aussenhandel . Reihe 2 (Wiesbaden: W. Kohlhamer Verlag, 1962 and 1963). 39 Table 9. — FEDERAL REPUBLIC OF GERMANY: SAMPLE RETAIL PRICES OF SELECTED ITEMS, BREMEN, FEBRUARY 1964 * (In U.S. dollars) Suits Overcoats Topcoats Men 1 s Boys' 2 Men' s Boys' Men' s Boys' Top price in a high-price outlet 3 120 52 25 33 23 20 16 15 12 119 48 20 25 18 11 4 100 5 85 4 35 5 22 4 20 5 12 5 20 Medium price in a medium- price outlet Low price in a low-price outlet 5 15 5 10 Sportcoat s Slacks Men 1 s Boys' Men' s Boys' Top price in a high-price outlet 3 61 15 10 6 29 12 5 1 1 Medium price in a medium- price outlet Low price in a low-price outlet 22 10 7 5 x The prices were obtained from various types of retail outlets in Bremen. 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