American women are buying jeans again after a decade-long boom in athleisure

Hollis Johnson/Business Insider

Denim is making a comeback.

• New data from The NPD Group shows that sales of women's jeans in the US were up in 2018.
• NPD said that this category is experiencing a comeback after a decade-long boom in athleisure.
• Most of the growth stemmed from increased purchases at discount and off-price stores such as TJ Maxx.

Over the past decade, American women have been ditching denim to wear gym clothes around the clock, which created a fundamental shift in the way people dress - and a boom in sales of athleisure clothing. But now evidence is mounting that denim is finally having a comeback and working its way back into closets.

On Thursday, The NPD Group reported that sales of women's jeans in the US were up by 22 million units in 2018 versus the previous year, amounting to a total of 364 million pairs sold overall.

This data fits in well with other recent studies. In data shared with Business Insider, Euromonitor predicted that the compound annual growth rate for jean sales in the US will rise by 1% between 2018 and 2023. This category had a compound annual growth rate of -2.3% between 2013 and 2018. For context, the compound annual growth rate for sportswear in the US was 6% during the same period.

Athleta

Athleisure has been a dominant trend in recent years.

"The recent growth in women's jeans is good news for the industry - women want to wear more than just leggings and yoga pants," Marshal Cohen, chief industry advisor for NPD, wrote in a statement to the press on Thursday.

Read more: Athleisure is not just a trend - it's a fundamental shift in how Americans dress

Cohen said that most of the growth in jeans sales stemmed from women buying more denim at off-price and low-cost retailers like TJ Maxx or Ross Stores. Sales of women's jeans in these channels were up almost 30% in the 12 months ending February 2019, representing 17% of total unit sales.

There was still growth within the specialty store channel, however. But retailers such as American Eagle, H&M, and Topshop, which account for over a third of annual women's jeans sales in the US, saw a less impressive 6% growth rate in jeans sales in the past 12 months, NPD said.

American Eagle pointed to the growth in this category in a recent earnings call, saying that the brand surpassed $1 billion in jeans sales in 2018. The retailer has incorporated more stretchy fibers into its jeans to create comfortable shapes that appeal to the athleisure loyalist.

"Our jeans business has strengthened dramatically over the past few years fueled by unique fit, fabric, innovation, and value that our customers love," American Eagle's brand president, Chad Kessler, said in an earnings call in March.

Premium brands suffer

This focus on price is problematic for some of the more premium denim brands out there.

"The emphasis on quantity and discounting means marketers need to find new ways to inspire the women's jeans consumer, and deliver product that compels them to take their purchase to the next level," Cohen said.

In a recent note to clients, Deborah Weinswig, CEO of Coresight Research, said that women are now opting for more comfortable and less expensive yoga pants rather than forking out for expensive designer jeans.

Levi's, which recently went public, outlined its plans to double down on more affordable styles in its IPO documents.

These more affordable collections, such as Denizen, which is sold at Target, are profitable for the business. In fiscal year 2018 and in fiscal year 2017, net revenues from these brands increased 28% and 21% year over year, respectively, the company said.