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Old Navy’s plus-size experiment failed. It didn’t have to

A number of startups have shown that brands can be both size-inclusive and profitable.

Old Navy’s plus-size experiment failed. It didn’t have to
[Photos: Universal Standard, 11 Honoré, Old Navy]

Over the past five years, brands across the fashion landscape have embraced size inclusivity, launching collections for a wide range of bodies. But in recent months, as brands like M.M.Lafleur and Loft have cut back on their plus-size collections, the movement appears to have taken a step backward.

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The most striking example of this happened last month, when news emerged that Old Navy’s sales had plummeted by 19% from a year ago, and it attributed this decline to the failure of its size-inclusivity program. Old Navy had launched the program with great fanfare last fall, with a big ad campaign and plenty of press. But sales began to decline almost immediately.

By April, Nancy Green, Old Navy’s CEO and president, had stepped down after less than two years on the job. On an earnings call this spring, Old Navy said it would be scaling down the program. While the brand would continue to make its full size range available online, but would be pulling its extended size range from some of its stores.

[Screenshot: Old Navy]
Old Navy’s foray into extended sizing could scare off other retailers from following suit. But the truth is that many other size-inclusive brands—from Universal Standard to Dia&Co to Good American—are growing quickly and generating hundreds of millions in annual revenue. All of these brands launched over the past seven years, and they’re a testament that creating products for consumers of all sizes can be a good business strategy. Founders of successful size-inclusive brands believe it’s possible for mainstream retailers like Old Navy to succeed at extended sizes, but they need time and patience for their strategies to take root.

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What went wrong?

Old Navy poured millions of dollars into its size-inclusivity rollout, which it dubbed Bodequality. As I explored last August, it developed new technology to design garments that would fit well across many body types; it rejiggered its supply chain to work with factories that could manufacture across sizes; and it changed its pricing strategy so that garments cost the same regardless of size. It also redesigned its stores, tearing down the separations between plus and straight sizes, so that women could shop by style rather than size.

[Photo: Old Navy]
These were important steps, analysts say. The problem was that Old Navy didn’t have enough information about how much inventory to buy in each size for each store. According to The Wall Street Journal, stores sold out of middle sizes but were stuck with too many of the very small and very large sizes, which meant it had to heavily discount these items. Many consumers reported being frustrated when they’d show up at a store only to discover that their size wasn’t available.

When we reached out to Old Navy, a spokesperson said, “While we are adjusting in-store inventory to better meet demand, we’re committed to continuing to offer our full size range and representing all customers in our marketing as well.”

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[Photo: Universal Standard]

Ordering The Right Sizes

Matching supply with demand is a tricky business, particularly when you’re covering a much wider range of sizes, says Polina Veksler, cofounder and CEO of Universal Standard. But her brand has been able to do it successfully, which is no small feat given that it offers every single style in sizes 00 to 40.

From left: Universal Standard founders Alex Waldman and Polina Veksler. [Photo: Universal Standard]
Veksler says that one key to the company’s success is that it started by designing for the most common size in the U.S., which is 18. The brand made the radical decision to make 18 its size “medium,” while the rest of the industry uses size 8. This is important because it’s much easier to figure out how many pieces of each item to order when your middle size also happens to be the most popular size in the country.

Universal Standard orders a large number of garments in size 18 and reduces orders in smaller and larger sizes. “What separates us is that we built our business around the reality of the American population,” Veksler says. This strategy helped Universal Standard achieve profitability this year.

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Part of Old Navy’s struggle is that historically its average customer was a much smaller size, since it only offered clothes between sizes 0 and 14. (It also had a niche plus-size collection featuring different garments, ranging from 16 to 30.) As it worked to create the same garments across sizes 00-30, it was unclear exactly how many plus-size women would start shopping at the brand and what size they would be.

[Photo: Universal Standard]
Universal Standard also faced this problem, but Veksler said it helped that the brand expanded it size range gradually, continually assessing demand along the way.  The brand first launched with sizes 10 to 28, then expanded to 6 to 32, and finally arrived at its current range of 00 to 40, which is the broadest assortment of sizes in the market.

As women of smaller and larger sizes came to Universal Standard, the brand was able to increase orders to meet this new demand. “Figuring out demand didn’t happen overnight for us,” Veksler says. “It’s a process, and some of our peers are going through these hurdles right now.”

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[Photo: 11 Honoré]

Winning Over the Plus-Size Customer

Nadia Boujarwah, founder of plus-size multi-brand website Dia&Co, believes that Old Navy needed more time to appeal to plus-size women. While it launched its Bodequality program with a splash last fall, investing in TV ads and a big PR push, this may not have been enough. As a result, many of the larger sizes went unsold.

For decades, larger-size women have turned to retailers that specialize in plus sizing. In the past, this included brands like Lane Bryant and, more recently, Gwynnie Bee and 11 Honoré (which Dia&Co acquired this week). “It takes time to change consumers’ shopping habits and build trust with them,” Boujarwah says. “Many plus-size women were not used to thinking of Old Navy as a shopping destination.”

[Photo: 11 Honoré]
Many of the most successful size-inclusive brands tend to be startups that sell most of their products online. They’re a fraction of Old Navy’s size, which has been a strength, as they’ve been able to design, manufacture, and market in a way that caters to a wide range of consumers. It also allows them to have a more direct relationship with their customers, which helps them better assess demand.

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“There’s no question that it is far easier to build a size-inclusive company from scratch than to retrofit an existing brand to make it more size inclusive,” Veksler says. “But the entire fashion industry is going in one direction, which is toward inclusivity, and any brand willing to go through these growing pains will be better set up in the future.”

Boujarwah believes that it’s important for Old Navy and other retailers to keep meeting the needs of plus-size consumers, who remain underserved by the market. Women size 14 and up make up half of the market, and yet research firm NPD says that women’s plus-size clothing makes up only 19% of apparel.

“The extraordinary thing is that the majority of women in the country wear larger sizes,” Boujarwah says. “By abandoning efforts to be inclusive, you end up not being able to serve the core American consumer, which is perplexing.”

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Boujarwah and Veksler aren’t worried that they’ll face competition when other brands begin extending sizes; indeed, they believe they could benefit from this expansion. Many brands now reach out to Universal Standard to tap into its expertise when it comes to design and manufacturing. The company has started advising brands like Adidas, and has collaborated on collections with designers like Erdem and Rodarte.

“There is a tremendous market opportunity here,” Veksler says, “and our goal is to showcase that it is possible to be profitable as an inclusive brand.”

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About the author

Elizabeth Segran, Ph.D., is a senior staff writer at Fast Company. She lives in Cambridge, Massachusetts

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