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business newsReal or Ridiculous? The Men's Underwear Index
By
Justin Rohrlich
Feb 22, 2010 12:10 pm
How long a man lives with his old Skivvies speaks volumes about the markets.
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Greenspan, who was fond of keeping his ear to the ground when trying to divine the state of the financial climate, noticed that purchases rose when the economy was humming, but dropped when it wasn’t.
"[Greenspan] once told me that if you think about all the garments in the household, the garment that is most private is the male underpant, because nobody sees it except people in the locker room, but who cares,” Robert Krulwich, a former economics reporter, told NPR in January 2008. “Your children need clothes, your wife needs clothes that have to change, your children grow, you need clothes on the outside. But the last purchase that you don’t have to make is underpants... [men wear them until they are in] total tatters.”
Krulwich continued:
"If you look at sales of male underpants it's just pretty much a flat line, it hardly ever changes... But on those few occasions where it dips that means that men are so pinched that they are deciding not to replace underpants. And [Greenspan] said 'that is almost always a prescient, forward impression that here comes trouble.' "
“I just loved the way he would sneak around human behavior looking at things like that,” Krulwich said. “People are greedy, fearful, pretty much deeply mysterious, and quite crazy. But there is sort of a science, let’s say, if you put enough of them in a pot, you can tell some stuff about an economy. So he would put various attitudes of humans in a pot and study them, like an oracle. And, to give him his due, he was pretty close to right much of the time.”
Sure enough, when the economy started to tail off in 2008, annual men’s underwear sales dropped by 12%. However, underwear sales may have thrown us a little head fake at the beginning of 2009, when a report from market research firm the NPD Group showed male underwear sales up 4.8%.
Marshal Cohen, of market research firm NPD, has been in the enviable position of tracking men’s underwear sales for more than 30 years.
"You can go for just so long with the elastic having been blown out of your underwear,” he said. “It’s a very uncomfortable thing for anyone who’s gone through that.”
Elastic blowouts notwithstanding, research firm Mintel believes we may be in for a soft 2010. The outfit predicts 2.3% fewer sales this year.
Bill Patterson, a senior analyst at Mintel who, like Marshal Cohen, is lucky enough to study men’s underwear for a living, says, “It’s simply a bellwether. When people are feeling confident, they spend more. The last thing you’re going to do when you’re short on cash is go and replace your underwear.”
NPD’s Cohen does note, however, that what underwear says about the United States doesn’t necessarily apply to the economies of other countries, like Lebanon, where George Khoury, manager of the Celio Store in Beirut, told a reporter from Public Radio International that men in his country buy for fashion, not comfort. "Lebanese people are always like attached to, what do you call it? Ego," Khoury said.
"Take this the right way. Some countries, underwear is a different kind of product, and/or a non-product at all. So you have to really pick and choose the right ones. In other countries, some of the product is made by the consumer themselves, some countries they’re not wearing it, so it’s a little bit difficult to read all the time in many of the other places."
There is a glimmer of hope amid all the gloom and doom in the world of underwear. Robert Clark, of Skiviez (the self-proclaimed “men’s underwear authority") is optimistic.
“Our sales have been up this year and we are not sure exactly why,” he said. “With all the bad news, we were expecting sales to fall and they haven’t, so we are quite pleased.”
So, go ahead and buy that new BMW. If the founder of Skiviez says things are looking up, they must be.
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No positions in stocks mentioned.
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