<https://www.wsj.com/articles/s.....1511752321>

Good thing someone is paying attention to this fashion space.

Here's the whole text of the article, because the Journal is paywall.

Startups See Lucrative Niche in Plus-Size Clothing

The market gets less attention at big retailers, and
entrepreneurs are taking advantage

Eloquii’s designs feature unusual cuts, as well as styles
that hug the body in places. PHOTO: ELOQUII

By Amy Westervelt

Nov. 26, 2017 10:12 p.m. ET

It’s a $21 billion slice of the fashion market. It generates
heated arguments about how clothes are designed and who they’re made for.

And small companies think that they can get a major piece of
it.

We’re talking here about plus-size clothing for women, which
represents 10% of retail sales, and has been a shining star in an otherwise
sagging fashion retail market, outpacing total clothing sales for women for the
past three years. Yet fashion observers and regular shoppers say that large
brands haven’t been meeting the needs of plus-size customers, outside of a few
specialty retailers.

Enter small companies. A wave of entrepreneurs are betting
that they can grab customers by offering garments that they say are better
designed for plus-size figures and more fashionable than current offerings.
Some companies are even selling bespoke outfits that are tailored to customers’
specific measurements.

These new entrants don’t have the market heft of established
specialty retailers like Lane Bryant. But observers say that they’re making
inroads and have a lot of room to grow.

“We’re seeing small, independent brands be much more
successful in this market than larger brands and retailers,” says Marshal
Cohen, a retail-industry analyst with NPD Group. “The small, new, innovative
players are generally beating out the big behemoths that are sort of stuck in
the old way of doing fashion retail.”

A new take

Sizing is a contentious issue in fashion. A large number of
women are size 14, 16 and above—35% to 60%, depending on which report you
read—yet there aren’t a lot of options out there for them. While most
mainstream retailers do carry sizes above 14, the choices are often limited.
Usually, customers have to choose among garments that were created for an
hourglass, size-4 body and then have been simply sized up.

“I don’t see enough brands that are really breaking
boundaries for plus-size fashion, that are actually designing for plus-size
bodies, or for a diversity of shapes,” says Kat Eves, a Los Angeles-based
stylist who works exclusively with plus-size men and women. “It’s always
mirroring straight size trends. Who’s the Chanel of plus?”

The industry logic, say analysts and some in the industry,
has been that plus-size women don’t buy as many clothes on average as other
women. Brian Beitler, chief marketing officer of Lane Bryant, a subsidiary of
Ascena Retail Group, says it is true that the typical plus-size customer spends
less on clothes than a thinner person. But, he says, that’s due largely to a
lack of choice and the social stigma of being plus size.

All of which means that large brands are “leaving a lot of
room for smaller, innovative brands to come in and make their mark,” Mr. Cohen
says.

Probably the biggest new entrant is Eloquii, which started
out as the plus-size label of The Limited. After the brand was cut in 2013, a
few key employees sought out an investor to buy it from Limited, which has
since gone out of business. The line relaunched as a stand-alone in 2014 and
has been doubling its sales every year since, reaching around $80 million for
fiscal 2017.

Their approach: draping and unusual cuts or sleeves to
create flattering silhouettes, as well as styles that hug the body in places
(rather than the traditional approach, which has tended toward very baggy, and
lots of high-waisted empire cuts).

Mariah Chase, CEO of Eloquii, says that the employees who
stuck with the company after it was cut loose “really saw an opportunity for
plus-size fashion rather than just taking The Limited stuff and sizing it up.”

Other companies are taking the same approach and designing
plus-size clothes from the ground up. Noushie Mirabedi and Ronda Raymond,
founders of Eight & Sand, an Oakland, Calif., women’s clothing line
launched in 2015, focus on wardrobe staples such as a tailored henley in a
variety of colors.

Eight & Sand brought in models for numerous styles and
sizes for its first run of clothing, to ensure that its designs work for a
variety of shapes, including hourglass, pear, apple and boxy.

They currently have 750 customers, and Ms. Mirabedi says
revenue is increasing every month.

She says the average customer came back six or seven times
in 2016, and the return rate is under 2%, “versus the 35% average return rate
for online fashion retailers.”

Mallorie Dunn, the designer behind another clothing
retailer, SmartGlamour, which launched in 2015, customizes each garment it
designs and sells depending on a woman’s measurements, emphasizing colorful
prints and girlish, flirty cuts.

“Every brand designs differently, and then every body is
different, especially women’s bodies,” she says. “You have to be able to tailor
a bit to each individual if you want a truly great fit. You can’t really expect
something that’s made for the mass market to fit everyone well.”

Two-thirds of Ms. Dunn’s customers every month are return
visitors. With several thousand customers, she says she’s working on about 60
orders at any given time. Sales, she says, have doubled each year.

Not all of the plus-size startups are designing clothes. In
some cases, they’re acting as middlemen for other companies that make plus-size
clothing.

Panty Drop, an underwear subscription service, began
carrying plus-size lingerie lines in fall 2016 to complement its standard
sizes. Julie Arsenault, founder and chief executive officer of Panty Drop, says
she extended the company’s plus-size offerings from 3x up to 6x after
interacting with various body-positive communities on social media.

“They told us loud and clear that if we really want to serve
this market, we need to go higher than 3x,” Ms. Arsenault says. She says
monthly revenue is in the thousands, and sales are growing 20% month over
month.

Down the road

For all these startups’ success so far, there are obstacles
on the way that may hurt their growth.

Perhaps the most daunting: Big brands have recently started
to devote more resources to the plus-size market. Michael Kors and Comme des
Garcons have expanded their high-fashion lines into plus size, and H&M and Target have
begun designing specific collections for plus-size women. In March, Wal-Mart announced plans to acquire
ModCloth, a pioneer in size-inclusive fashion.

“The big brands are definitely waking up to this,” Mr. Cohen
says. “But they tend to change slowly.”

Another issue that small fashion retailers must face:
Plus-size clothing can cost more to make, because overseas factories are often
not set up to make it. Clothing factories are typically making clothes for five
to 10 brands at a time, and manufacturing larger sizes would require changes to
their cutting tables and machines that are costly. That makes it harder for
small businesses to compete with large-volume businesses.

More niches

Still, some observers say there are plenty of niches for the
startups. Ms. Eves, the stylist, says, for instance, there’s a need for wider
footwear, as well as “intimates, high-end designer wear, sportswear….There’s
this perception that plus-size women aren’t active, and that’s completely
untrue.”

Then there’s the whole other side of the plus-size
business—clothing for men. Few startups have started to address that
potentially rewarding market.

“There are way fewer options than there are for plus-size
women,” Ms. Eves says.

Ms. Westervelt is a writer in Oakland, Calif. Email reports@wsj.com.

Appeared in the November 27, 2017, print edition.