Ozempic Fuels Hunt for Smaller Clothes - Kanebridge News
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Ozempic Fuels Hunt for Smaller Clothes

Retailers see nascent sales boost fuelled by people switching to smaller sizes; ‘not something we’ve seen before’

By SUZANNE KAPNER
Mon, Jun 17, 2024 3:29pmGrey Clock 4 min

Apparel retailers are discovering that weight loss is their gain.

While blockbuster drugs like Ozempic that lead to significant weight loss have dented demand for diet plans and caused food companies to prepare for people eating less, clothing sellers are finding that millions of slimmed-down Americans want to buy new clothes.

The newly svelte aren’t just restocking their wardrobes, many are also gravitating to more body-hugging shapes and risqué designs, according to industry executives and shoppers. Some brands are responding by replacing zippers with adjustable corsets and adding more sheer looks.

The nascent downsizing is happening across brands and types of garments. Industry executives said that they can’t be certain weight-loss medicine is the cause, but added that the shift is unlike anything they have seen. It is also an about-face from recent years, when many retailers rushed to add larger sizes to accommodate Americans’ growing girth.

About 5% of Lafayette 148’s customers are buying new outfits because they have lost weight, often replacing their size 12 clothes with size 6 or 8, according to Deirdre Quinn , the brand’s chief executive. The benefit is twofold; in addition to boosting sales, Lafayette 148 is saving money because smaller sizes use less fabric, Quinn said.

More customers of clothing rental company Rent the Runway are switching to smaller sizes than at any time in the past 15 years, said Jennifer Hyman , co-founder and CEO. These customers are also showing more of a willingness to experiment with different styles such as cutouts and other body-baring features. “When you are more comfortable in your skin, you are more willing to try edgier looks,” she said.

For Maggie Rezek, getting dressed used to be about hiding her extra weight in oversize shirts and baggy pants. Since she lost 60 pounds on semaglutide, the active ingredient in Ozempic, the 32-year-old, who handles marketing for a beauty salon, has splurged on a new wardrobe. Now, her staples consist of crop tops and jean shorts. She has traded in her sneakers for kitten heels. She even documents her outfits on social media.

“Before, I was insecure about my body,” said Rezek, who lives in Indianapolis. “Now, I feel like I fit better in clothes. That gives me the confidence to dress up and be more stylish.”

Some 15.5 million people, or 6% of U.S. adults, say they have tried injectable weight loss drugs to slim down, according to a survey of more than 5,500 Americans conducted in March by polling company Gallup. Nearly three-quarters of current users said the drugs—a class known as GLP-1 that were originally developed to treat diabetes—are effective or extremely effective in helping them shed pounds.

Weight-loss drugs don’t work for everyone and the cost can sometimes exceed $1,000 a month, limiting the market. The full price isn’t always covered by insurance. Moreover, people struggle to keep the weight off once they stop using the drugs.

Still, some companies expect the market for these drugs will be big enough that they are shifting course. WW International , formerly known as Weight Watchers, acquired a subscription service that offers telehealth visits with doctors who can prescribe drugs like Ozempic. Nestlé is introducing a new food line this year designed for people taking weight-loss medication.

Clothing companies could use a boost. Apparel sales fell 4% in the 12 months that ended in April compared with the same period a year earlier, according to market research firm Circana, as people give priority to their spending on necessities.

Coming out of the Covid-19 pandemic, Amarra, which sells evening gowns and other formal wear in 800 retailers in the U.S., Canada and Australia, saw increased demand for larger sizes. Now, that trend has reversed.

“Over the past year, our retailers have been telling us they need smaller sizes,” said Abhi Madan, Amarra’s co-founder and creative director. Amarra, which is based in Freehold, N.J., has added sizes as small as 000. He says he is also selling more sizes in the 0-8 range and fewer in the plus-size range of 18-24.

Madan said the shift is changing the way Amarra designs dresses. It is replacing zippers with lace-up corsets, which can more easily accommodate shifting weights because the laces can be tightened or loosened. It is also adding more sheer side panels that give a figure-hugging look.

AllStar Logo, which sells polo shirts, fleece jackets and other gear to large companies, has seen demand for its largest sizes fall by half over the past year, according to Edmond Moss , its sales director.

“We used to sell a lot of fleece jackets in extra, extra large,” Moss said. “Now everything has gone down by at least one size.”

Sales of the three largest sizes of women’s button-down shirts fell 10.9% in the first three months of 2024 compared with the same period in 2022 at a dozen brands, according to Impact Analytics, which helps retailers manage their inventory and size allocations.

Sales of those same button-down shirts in the three smallest sizes grew 12.1% over that period. Impact Analytics analysed purchases in physical stores located on Manhattan’s Upper East Side. It focused its research on this area because it has the highest concentration of individuals in New York City taking these drugs specifically for weight loss, according to market research firm Trilliant Health.

A similar trend played out for women’s dresses and sweaters, as well as men’s polo shirts, sweatshirts and T-shirts, according to Impact Analytics.

Prashant Agrawal , Impact Analytics’ founder and CEO, said it wasn’t possible to know if the size changes resulted from people losing weight or a shift in clothing styles, but added that such a pronounced shift is unusual. “It’s not something we’ve seen before,” he said.

Some executives are worried that the shift could reduce demand for plus-size clothes.

“I’m trying to figure out what we have to worry about in the future,” said Doug Wood , the chief executive of clothing retailer Tommy Bahama, noting that as more people lose weight it could hurt sales of its “Big & Tall” collection designed for very large men.

Jillian Sterba went from a size 6 to a size 10 after the birth of her child. When the weight didn’t come off with diet and exercise, she started injections of semaglutide in October. Since then, Sterba, who is 36 and lives in Austin, has lost 35 pounds. She is now a size 4. “Almost half my clothes are not wearable,” she said.

She bought new jeans, tops, bras and underwear. “I had been wearing flowy tops before but now I’m wearing fitted shirts,” she said. Still, Sterba said she is keeping 80% of her old clothes just in case she gains back the weight.



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The Apple growth and profit machine is wavering, and the boost from price increases might not be enough to keep it going at historic rates. That dials up the pressure on Apple’s new chief executive, John Ternus.

The company saved the bad news for its earnings call, an hour after it posted its results for the September quarter, projecting that for the current quarter its high-margin services business will continue to slow and that its widely watched gross profit margin will continue to fall.

Apple AAPL -1.83%decrease; down pointing triangle shares had been flat in post-close trading but declined as much as 4% after the company made the projections, which fell short of Wall Street estimates.

The impact of high memory costs are weighing even more heavily on the company, Ternus and Apple Chief Financial Officer Kevan Parekh said on the company’s earnings call. Apple has stockpiled cheaper components purchased earlier, but those inventories are dwindling.

When Ternus took over as Apple’s third chief executive of the past 29 years on Sept. 1, he inherited sky-high expectations. The men he followed were among the most successful company leaders in American business history. Steve Jobs revolutionized consumer devices multiple times. Tim Cook expanded Jobs’s creation to spectacular heights.

The expectations are reflected in Apple’s huge valuation. Oppenheimer analyst Martin Yang noted that Apple stock trades at 36 times next year’s expected earnings, a premium to the overall market, even though its earnings are only expected to grow 1%, which is slower than its tech peers.

“We see insufficient upside to justify the premium,” Yang wrote in an investor note, adding that Apple needs to boost iPhone sales growth and turn around its slowing services business to make him more bullish.

Investors have bid up Apple shares because it has been a port in the AI storm—a reliable and capital-efficient business that stands apart from rivals which are spending hundreds of billions of dollars racing to the AI frontier.

While others invest in data centers, Apple has been pouring its own cash into buybacks and dividends. But that safety may be challenged if Ternus can’t speed up Apple’s innovation engine.

Apple’s lagging performance in AI was evident when its new “Siri AI” chatbot arrived this past quarter. Its long-maligned assistant was already stale the day it arrived, surpassed by agents such as Instinct and Muse that can complete multistep tasks for consumers, while Siri still sets kitchen timers.

Apple needs to give people reasons to buy its devices as they get more expensive. The company raised prices across the board last quarter to help offset higher costs. Without compelling new features, a big question is whether consumers will slow the frequency of iPhone upgrades.

The new iPhone Duo appears to be a bright spot. Consumers are scooping up the $1,999 foldable smartphone despite mixed reviews—so many that Apple can’t keep up with demand. Shipping dates jumped out to January soon after the device went on sale, a disappointment for the normally reliable Apple supply chain.

Apple said its revenue grew 12% in the September quarter, slightly ahead of Wall Street’s expectations. Its widely tracked gross profit margin, at 47.9%, also came in just ahead of analyst estimates.

Apple will need to find new growth avenues because a reliable engine during the Cook era—the services business—is slowing. Courts and regulators worldwide have limited Apple’s ability to charge developers big fees to distribute apps through its App Store, the biggest component of the company’s services segment.

One of its most lucrative App Store fee generators has been the ChatGPT app from OpenAI. Around the time Apple accused OpenAI of trade-secret theft this past summer, OpenAI began redirecting potential subscribers to pay via its website instead of the App Store, skirting Apple’s tollbooth.

Apple’s valuation has bumped up against a ceiling in recent weeks. Six times it traded above a $5 trillion market capitalization intraday before finally closing above the threshold, which it has already fallen back below.

News Corp, owner of The Wall Street Journal, has a commercial agreement to supply news through Apple services.