The following research report contains market research, analysis, statistics and business intelligence relating to research on Intimate Apparel & Lingerie Industry In Poland.

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ABSTRACT
With a population of 38.7 million (including 19.9 million women), Poland offers a significant and promising market for lingerie. The lingerie market in Poland was worth USD 83 million in 1999 and is expected to achieve USD 86 million in 2000. Most lingerie items sold in Poland are produced domestically, and prices are in the medium to low range. Domestic production in 1999 was USD 181.1 million and is estimated to be USD 121 million in 2000. About 72% of Polish lingerie in 1999 was exported, and the remaining 28% was sold domestically. The same trend appears in the first half of 2000.

In 1999, imports of lingerie amounted to USD 50.5 million, a 9% increased over 1998. The largest suppliers were: Germany and China, 25% each; France, 10%; Italy, 9%: Hungary, 7%: Vietnam and Turkey, 4% each. The U.S. share was very limited, only 0.1% (USD 80.500). EU countries supplied 50% (USD 25 million) and developing countries 41% (20.8 million) of total imports. Similar results are expected in 2000.

The best sales prospects are stretch-lycra/cotton briefs and panties, brasseries, bodysuits, corsets, nightgowns and pajamas.
The key competitive factors for suppliers are price, quality, innovative fashion and strong brand recognition. Also very important is market promotion. A. MARKET HIGHLIGHTS & BEST PROSPECTS

Market Profile

Poland is a fast growing economy, having enjoyed a GDP growth of 5.6% in 1998, 4.1% in 1999, and a forecast of 5.2% in 2000. At the same time, inflation has been steadily decreasing (17.8% in 1997, 13.6% in 1998, and 10% in 1999).
Statistical data

MARKET SIZE TABLE (U.S. DOLLARS MILLIONS)

1998 1999 2000* Growth Rate

Import Market 44.8 50.5 52.0 0-1%
Local Production 120.7 118.1 121.0
0-1%
Exports 80.6 85.5 87.0 0-1%
Total Market 84.9 83.0 86.0 0-1%
Imports from U.S. 0.1 0.1 0.51 0-1%
Exchange Rate: 1998 USD 1= PLN 3.5 1999 USD 1= PLN 3.8 2000 USD 1= PLN 4.3
Estimated inflation rate in 2000 is 8%.
1999 Import Market Share:
Germany and China, 25% each; France, 10%; Italy, 9%; Hungary, 7%; Vietnam and Turkey, 4% each.

Best Sales Prospects

Recently, professionals have noted a return to femininity in women's underwear, with lingerie that mixes attractiveness with comfort, thanks to lycra , microfibres and natural fabrics (cotton, silk). The folowing items are expected to be successful in the next three years:

- Women's briefs and panties of stretch-lycra/cotton
- Brassieres, bodysuits and corsets
- Women's nightgowns and pajamas

Successful colors are white, black; ivory, beige, ecru, grays and blue for teenaged customers; and successful fabrics are cotton, lycra, stretch-lycra/cotton, high technology man-made fibers and silk

The Polish underwear market is still quite conservative and traditional. Most female customers prefer traditional colors (white, black or beige) and patterns. However, younger consumers and women with higher income are more receptive to the latest trends and fashions. There is a growing demand for advanced and modern designed products.
B. COMPETITIVE ANALYSIS

Marketing Strategies and Business Practices

The market for lingerie has experienced slow growth. Consumer demand for higher quality and more fashionable products has resulted in increasing imports and developing of local production based on imported raw materials. Macroeconomic improvements have narrowed the price differential between domestically made and foreign products.
The key competitive factors for suppliers are price, quality, innovative fashion and strong brand recognition. Also very important is market promotion. Price disadvantages faced by imports can be overcome when foreign suppliers are able to meet delivery commitments and negotiate attractive financing terms.
Domestic production and exports

The Polish Central Statistical Office (GUS) does not provide separate information for lingerie. Experts estimate that the 1999 production of lingerie was USD 118.1 million, a 10% decrease from 1998.

About 72% of Polish lingerie in 1999 was exported and the remaining 28% was sold domestically. The same trend appeared in the first half of 2000.

The most successful Polish lingerie manufacturers are: International Wieslaw Jonczyk, Lemax Lingerie, Corin, PIK, Gorsenia, Kostar, Eldar, Gaia, Ilva, Stella, Dama Kier, PW Presto-Bis, and Kovex. Recently, domestic manufacturers have begun to respond to market demands for more sophisticated products. They follow international fashion trends and exhibit at the international shows. These manufacturers choose their retailers carefully and stay in close touch with their customers. Domestic lingerie manufacturers are making a considerable effort to meet the demands of the new market and copy the techniques of their competitors. The Polish firms' prices are very competitive, and their products are quite fashionable. The quality of home-grown products is also improving. Polish lingerie manufactures use almost 100% imported fabrics and accessories, mainly from Italy and Germany.

The size of the Polish market has attracted severaal foreign lingerie manufacturers, such as: Triumph, Felina, and Roetch. Also, French lingerie producer Chantelle will invest EUR 4 million in the construction of a lingerie factory in the Special Economic Zone (SSE) in Starachowice. Production will start there in the third quarter of 2000 and is planned mainly for export. Participating in this investment is the company Sopolfan from Ostrowiec Swietokrzyski, the first company launched by Chantelle in Poland in 1997.

Polish Exports
EXPORT MARKET SHARE
(USD million/percentage)
1998 1999

1. Developed countries 74.0 (92%) 78.9 (92%)

EU countries (whole group) 73.9 (92%) 78.8 (92%) Germany 30.5 (38%) 29.2 (34%)
France 22.2 (28%) 27.6 (32%)
Italy 9.8 (12%) 10.0 (12%)

2. CCE countries (whole group) 6.3 (8%) 5.6 (7%)
The Czech Republic 2.4 (3%) 2.4 (3%)

3. Developing countries 0.3 (0%) 1.1. (1%)

Total (1+2+3): 80.6 (100%) 85.5 (100%)
(Table made by author based on GUS data)

In 1999, Poland's total lingerie exports amounted to USD 85.5 million, representing a 6% growth over 1998. European Union countries shared 92% of total Polish exports, and CEE countries shared 7%. Major buyers were Germany (34%), France (32), Italy (12), Denmark and Belgium (4% each), and the Czech Republic (3%). The biggest export values were recorded in HS 6108 (USD 44.3 million) and HS 6212 (USD 31.5 million). Forecasts for slower growth (0-1%) in 2000 mean that exports are expected to total USD 87 million.

The popularity of Polish exports may be explained by the high value of re-exports. Foreign lingerie manufacturers producing in Poland have achieved a very high level and standard of manufacturing. Their products are both exported from and sold in Poland (and are counted as such in the statistics). These mostly German brands, such as Triumph, Felina, and Roetch, are very successful on the Polish market. Their products, manufactured in Poland (with Polish partners on a joint venture basis), are of the highest quality and are very much in demand.
Third Country Imports
IMPORT MARKET SHARE
(USD million/percentage)

1998
1999
1. Developed countries 25.4 (57%) 25.4 (50%)

EU countries (whole group) 25.0 (56%)
25.0 (50%)
Germany 15.8 (35%) 12.5 (25%)
Italy 4.0 (9%) 4.5 (9%)
France 2.7 (6%) 5.3 (10%)

2. CEE countries (whole group) 2.7 (6%) 4.3 (9%) Hungary 1.7 (4%) 3.3 (7%)

3. Developing countries 16.7 (37%) 20.8 (41%) China 8.9 (20%) 12.7 (25%)

Total (1+2+3): 44.8 (100%) 50.5 (100%) (Table made by author from GUS data)

In 1999, imports of lingerie amounted to USD 50.5 million a 9% increase over 1998. The largest suppliers were: Germany and China, 25% each; France, 10%; Italy, 9%: Hungary, 7%: Vietnam and Turkey, 4% each. The U.S. share was very limited, only 0.1% (USD 80,500). EU countries supplied 50% (USD 25 million) and developing countries 41% (20.8 million) of total imports. Similar results are expected in 2000.

Most of the well known brands are present in Poland: Princesa, Leonis, Selmark, Abanderado, Punto Blanco, Ocean/Spain; Lejaby, Aubade, Barbara, Chantelle, Lise Charmel, Passionata, Simone Perele First, Ravage, Millesia, Nina Ricci, Osore, Phillipe Matignon, Laura Philippe,/France; ESGE, Naturana, Felina, Rosch, Schiesser, Marco Polo/Germany; La Perla, Antonella, Garda, Lormar, Lilly, Doremi, Dori, Rose Rosse, Lucas , Cotton Club/Italy; Hanro/Switzerland; Luwa, Wolff/Austria; Calvin Klein, Maindenforn/USA.

Foreign lingerie companies are very active in marketing and promoting their products in Poland.

U.S. Market Position

American Lingerie is little known in Poland. Imports of lingerie from the United States amounted to USD 80,500 in 1999 and constituted a very small portion of imports to Poland (0.1%). American brand products are very often imported from Far Eastern factories owned or used by U.S. companies. The real share of the American lingerie on the Polish market is higher than reported, because when a U.S. company in China manufactures a product, imports of this product to Poland are considered to be imports from China, not from the U.S.

In 1994, a Polish company, Ibsen, located in Lodz, signed an agreement with the American lingerie firm Maindenform. Maindenform offers a line of so-called shaped lingerie that is becoming very successful in Poland. Ibsen is also an exclusive representative for Calvin Klein lingerie in Poland. CK lingerie (as well as men's underwear) enjoys great popularity in Poland.
Sara Lee products are also well known in the Polish market, but they are imported from Spain

Poland has signed customs agreements with the European Union (EU) and Central European Free Trade Agreement (CEFTA). Consequently, lingerie imports from EU and CEFTA countries are not subject to customs duties. For items not originating in those areas, duty rates are 19.7%. American products, therefore, are less competitive in the Polish market on the basis of price. Generally though, it is believed that American-made products represent high quality. Thus, with appropriate promotional efforts, American lingerie can find buyers in Poland.
C. END-USER ANALYSIS

Poland, with a population of nearly 39 million (including 19.9 million women), is a significant and promising market for lingerie and an attractive market for exports and investments.
Research on the Polish consumer market, which consists of a variety of end-user profiles, is based on demographic factors such as sex, income, age, lifestyle and neighborhood. The most important factors are income and sex. For example, upper to middle income women are not really concerned with price. This group appears to be more conscious of their image and appearance. They are looking for the best and and will buy well known brand names. This is probablythe result of aggressive advertising campaigns of new-to-market products and name brands, which have only recently been introduced in Poland.
The lower income group of end-users is most comfortable in the mass market, which offers lower-price lingerie, both imported and locally produced. But even in this group, customers may decide to purchase more expensive and prestigious products of higher quality.

The purchase of lingerie and underwear is also influenced by fashion, which in turn is influenced by the consumer's age. All searches prove that young women and those just abover forty years of age are the most active consumers. Especially the second group of customers does not save on lingerie and tends to purchase lingerie of high quality, high price and well known brands. Also these customers prefer to purchase in an exclusive lingerie boutique located in a "commercial avenue".

Demand for lingerie is increasing, due to the increasing buying power of consumers. Growing demand for lingerie is also the result of a well-developed retail network.
The city shops offer mostly imported underwear products (70%), while rural shops offer mostly Polish products.
The average household shopping budget in Poland is: food 40%, home maintenance 26%, clothing, shoes and toys 7%, health 6%, cosmetics 5%, and education and insurance 2.5%.

By December 31, 1999 the Polish population was 38.7 million , 49% male (18.8 million) and 51% female (19.9 million). The urban dwellers in Poland represent 62% (23.9 million) of total population. 12.5 million women live in urban areas and 7.4 million in the countryside..

POLISH FEMALE POPULATION OVER 15 YEARS OF OLD
15-19 years 1.7 million 20-29 years 3.0 million 30-39 years 2.5 million 40-49 years 3.2 million 50-59 years 2.1 million 60-69 years 1.9 million
over 70 years 0.9 million
D. MARKET ACCESS

A 19.7% import duty applies for all below-listed product categories:

HS 6108 Women's or girl's slips, petticoats, briefs, panties, nightgowns, pajamas, negligees, bathrobes, dressing gowns and similar articles, knitted or crocheted
HS 6208 Women's or girls singlets and other undershirts, slips, petticoats, briefs, panties, nightgowns, pajamas, negligees, bathrobes, dressing gowns and similar products excluded knitted and crocheted

HS 6212 Brassieres, girdles, corsets, braces, suspenders, garters and similar articles whether or not knitted or crocheted
A 7% percent value added tax (VAT) applies to all of the above listed products except:

VAT is calculated on CIF price increased by
customs duty, independent of the country of origin.

Certificates

Lingerie does not require special certifications prior to being imported or sold in Poland. "B"certificates issued by Polskie Centrum Badan i Certyfikacji (Polish Center for Research and Certification, or PCBC) do not apply for these products. Certificates issued in the country of origin are usually accepted by Polish customs authorities.

Distribution/Business Practices

Pricing is an important factor. High prices might discourage a buyer from engaging in any trade discussions and preclude any presentation of product advantages. Moderate prices and favorable conditions of payment can help make products attractive on the Polish market. Despite the strong position of European companies, there are good prospects for American products.
Poles hold the United States in very high regard and believe U.S. made products to be more reliable than products from other countries. U.S. companies interested in establishing business ties with Poland should take advantage of this environment. Manufacturers of school and office supplies that are interested in expanding into the Polish market should devote adequate time and effort toward promoting their products.
The most common method of entering the Polish lingerie market is to establish a local distributor or authorized representative. American companies are advised to ensure that their potential partner is familiar with the sector and is able to organize and develop effective sales network. U.S. firms should also consider opening branch offices and/or setting up their own distribution network.
Lingerie networks are well developed in Poland. There are big lingerie departments in every supermarket, department store and shopping center. There are also networks of specialized, exclusive lingerie retail shops located in center of large cities.
The biggest importers/distributors of lingerie are Ibsen (Chantelle Societe, Maindenform Itln, Pain de Sucre, Calvin Klein, Passionata), Alicja II S.c.(Garda, Lormar, Lilly, Doremi, Dori, Rose Rosse), Deseo (Princesa, Selmark, Abanderado, Punto Blanco, Ocean), Madame(Simone Perele, First, Lise Charmel, Ravage, Millesia, Nina Ricci, Osore Lanoro, Lejaby, Barbara, Phillipe Matignon, Hanro) and Katerina Trading Company (Magal, Marcella, Antonella).
The largest wholesalers are Kwartet S.C., Giewont, Venus, Mikoma, Blekitna s.c., and Hanlan.
A substantial role in the distribution of lingerie, especially the cheapest products, is played by chains of supermarkets and hypermarkets, which often are included in large shopping centers. The most prominent hypermarkets in Poland are: Makro Cash & Carry, Selgros Cash & Carry, Geant Polska, Auchan Polska, Carrefour Polska, E. Leclerc, Hit Hypermarket. Sixteen percent of Poles regularly shop at hypermarkets and supermarkets.

Financing

The recommended method of payment for imported goods is an Irrevocable Letter of Credit (L/C). Polish banks require that Polish customers deposit the entire amount of the transaction into the bank before issuance of the L/C. Typically, L/C's are opened for a period to cover production and shipping, and they are normally paid within seven working days of receipt of the goods. Cash payment or down payments provide an extra measure of security for export sales.

When both partners cooperate successfully and gain mutual trust and confidence, some importers are offered payment terms of 30 or 60 days after delivery. In some cases, trade cooperation in this sector is made on a commission basis in Poland, where the importer pays as sales are made and product delivered. This method of payment is generally made when a foreign firm has an exclusive representative or agent in Poland.

KEY CONTACTS

Polska Izba Bielizny
(Polish Chamber of Lingerie)
ul. Gdanska 54 suite 116
90-612 Lodz
tel/fax: 48/42/639 80 95
Mr. Mariusz Hanczak, President

Krajowa Izba Mody
(National Chamber of fashion)
ul. Piotrkowska 282 A
93-034 Lodz
tel: 48/42/683 21 40, 683 21 41
fax: 48/42/683 21 44
Ms. Barbara Wandachowicz, President

Polska Izba Gospodarcza Importerow, Eksporterow i Kooperacji
Domestic manufacturers of ladies lingerie:

CORIN Exclusive
ul. Zamkowa 56
95-200 Pabianice
tel: 48/42/215 53 00
fax: 48/42/213 12 35
Mr. Mariusz Hanczak, President
www.corin.moda.com.pl
e-mail: corin@moda.com.pl

DAMA KIER
ul. Kazimierz Wielkiego 230 a
32-400 Myslenice
tel: 48/12/274 10 84
fax: 48/12/272 26 39

FELINA POLSKA Sp. z o.o.
ul. Rewolucji 1905r. nr 44
90-213 Lodz
tel: 48/42/639 84 22
fax: 48/42/632 62 95
Ms. Weronika Magiera, President

GAIA S.c..
uL. Jurowiecka 56
15-101 Bialystok
tel: 48/85/675 23 81, 675 44 30
fax: 48/85/675 50 13

GORSENIA Sp z o.o.
Ul. 28 Pulku Strzelcow Kaniowskich 65
90-558 Lodz
tel: 48/42/ 6374041
fax: 48/42/ 6376815
Ms. Maria Banach, President

LEMAX LINGERIE PPHU
Ul. Winogrady 26
61-663 Poznan
tel: 48/61/ 8203636
fax: 48/61/8203636
www.lemax.bielizna.pl
e-mail: emax@bielizna.pl
Mr. Leszek Ozminski and Ms. Malgorzata Ozminska, Co-owners

MITEX S.c.
Ul. Bartoka 61/142
92-531 Lodz
tel: 48/42/ 6376739
fax: 48/42/ 6376739
www.mitex.pl
e-mail: mitex@mitex.pl
Mr. Jerzy Mikitiuk, Co-owner
Mr. Wojciech Kunikowski, Co-owner

PW PRESTO BIS
ul. Szadecka 2
60-162 Poznan
tel: 48/61/ 8684549
fax: 48/61/ 8684565
Mr. Jan Szuba, Owner

INTERNATIONAL WIESLAW JONCZYK
ul. Fabryczna 7a
98-300 Wielun
tel: 48/43/ 8433916
fax: 48/43/ 843 36 06
Mr. Wieslaw Jonczyk, President

Importers/distributorsof ladies' lingerie:

BARON PH Os. Boh. II Wojny Swiatowej 61-387 Poznan tel: 61 8774903
fax: 61 8774903
Mr. Piotr Baron, Co-owner

DESEO S.c. ul. Smolensk 33 31-112 Krakow
tel: 48/12/422 9478
fax: 48/12/421 7083
e-mail: deseo@krakow.mtl.pl
Mr. Zbigniew Wallitzky, Co-owner

IBSEN Sp z o.o. ul. Zelwerowicza 21a 90-147 Lodz
tel: 42 6784050; 42 6780767
fax: 42 6780917
e-mail: bsen@ckzeto.com.pl
e-mail: czjka@hot.pl
Ms. Beata Pawelczyk-Blasiak, Commercial Director
Mr. Hikie Fromer, President

KATERINA TRADING Co. Sp z o.o.
ul. Zjazd 8 60-653 Poznan
tel: 48/61/ 8224907
fax: 48/61/ 8224907
Mr. Bogdan Grochol, President

"MADAME"Ewa Witzka ul. Kupaly 14 80-354 Gdansk tel: 58 5575090
fax: 58 5575090
e-mail: witzka@poczta.onet.pl
Ms. Ewa Witzka, Owner

TRIS-LINE ul. Poniatowskiego 6 43-300 Bielsko-Biala
tel: 33 8100357
fax: 33 8100357
Ms. Bozena Kubalanca, Owner Trade Promotion Opportunities
Participation in Polish trade fairs has proven to be a rewarding vehicle for new entrants into this market. For the underwear sector the major events are:

EVENT POZNAN FASHION WEEK SITE Poznan, MTP DATES August 5-8,2000; March 6-9, 2001
ORGANIZER International Poznan Fair Sp. z o.o. ADDRESS ul. Glogowska 14, 60-734 Poznan PHONE 48/61/869 22 97
FAX 48/61/866 06 90
E-MAIL mto@pol.pl
INTERNET www.mtp.pol.pl
EVENT KRAK-FASHION SITE Krakow, Centrum Targowe
DATES December 2000
ORGANIZER Chemobudowa Krakow S.A. ADDRESS ul. Klimeckiego 14, 30-706 Krakow
PHONE 48/12/656 14 66, 652 78 00
FAX 48/12/652 78 03, 652 78 07
E-MAIL targi@chemobudowa.pl
INTERNET www.centrumtargowe.com.pl

For advertising purpose the major professional trade magazines are:

MAGAZYN MODY INTYMNEJ
Publisher:
Pol-Consell
Al. Stanow Zjednoczonych 51
04-028 Warszawa
fax: 48/22/810 62 92
e-mail: mmi@bielizna.pl
internet: www.mmi.bielizna.pl
Ms.Aleksandra Pilat, Chief Editor

MODA TOP
Publisher:
Moda Top Sp. z o.o.
Al. jerozolimskie 87
02-001 Warszawa
tel/fax: 48/22/625 78 50
tel: 48/22/622 52 03
e-mail: textinet@inste.com.pl
Ms. Jadwiga Komorowska, Chief Editor

MODA FORUM
Publisher:
UNIT Wydawnictwo Informacje Branzowe Sp. z o.o.
ul. Powsinska 28A
02-903 Warszawa
Ms. Marta Antosik, Publishing Director
tel: 48/22/651 79 28 through 30
fax: 48/22/651 79 26
e-mail: unit2@unit.com.pl, unitgra@unit.com.pl
http://www.unit.com.pl

DISCLAIMER
Information in this report relies on sources including Government Publications, Opinions of industry experts and other public sources. Infomat can accept no responsibility for the accuracy or completeness of such information or for loss or damage caused by any use thereof. All prices subject to change without notice.

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Published: 2006 August
Market: Mens Womens Childrens
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