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How Big Can the Mask Market Really Get?

With a multi-billion dollar market prediction, the category may not be a fleeting trend for brands.
A mask display in New York | Source: Getty Images
By
  • M.C. Nanda
BoF PROFESSIONAL

NEW YORK, United States — When New Jersey Gov. Phil Murphy issued an order last week requiring masks be worn outside, the timing couldn't have been better for Gap Inc.

The company, which owns Gap, Old Navy and Banana Republic, had announced just 24 hours earlier that it was getting into the mask manufacturing business on an industrial scale. At that point, Gap had already sold 10 million masks to institutions like the state of California, New York City and Kaiser Permanente.

When the coronavirus first became a threat in the US in early March, fashion brands of all sizes began stitching masks. But what at the time looked like a fleeting trend, with proceeds often donated to charity, has turned into a big business and a valuable customer acquisition tool.In April alone, Etsy sold over 12 million face masks, with sellers collecting roughly $133 million. KeyBanc predicts retailers could see sales of masks approach $9 billion in the US.

And though masks have faced a backlash from conservatives in America, demand is expected to surge as Covid-19 cases spike in many US states. With a coronavirus vaccine unlikely to materialise until the end of 2020 at the earliest, more brands see a long-term opportunity in making and selling masks.

Masks are available at a wide range of price points, from Old Navy’s five-pack for $12.50 to variations from Off-White that sell for over $300 on StockX. Brands are expanding their ranges to include dozens of colours and patterns.

"Our belief is that masks are here, and they're going to be here for a while," said Lawrence Lenihen, founder and chief executive of Resonance, a platform that provides manufacturing and fabric sourcing services to brands like Pyer Moss and The Kit.

Like many other brands, Resonance initially incorporated a charitable component to its offering — mask donations and contributions to charitable organisations — when it rolled out masks in late March and April. In late June the company transitioned the category to become purely commercial.

“They’re not hugely profitable, but I think they are a valuable part of the market mix going forward,” Lenihen said.

Masks as Fashion

Off-White masks have proved particularly popular: One striped mask design mask has doubled in resale value since lockdowns began, with StockX selling roughly 200 units a month compared to 80 pre-lockdown. Masks from the brand, which typically sell for anywhere between $50 to $150, were taken down from luxury marketplace Farfetch earlier this year after prices rose to over $1,000.

Jesse Einhorn, senior economist at streetwear marketplace StockX, said he doesn’t see brands like Off-White, Bape and Tekashi Murakami moving away from the category anytime soon. The average purchase price of a face mask on the platform since lockdown is $140, which has dipped slightly in the past month to $120.

“I think this is really only the tip of the iceberg,” Einhorn said. Masks, along with puzzles, have been among the fastest-growing categories on the site since lockdowns began. “I think we’re going to see a lot more releases from a lot more in-demand brands and those are going to have a robust secondary market.”

Flooding the Market

At Gap Inc., the move into bulk orders comes at a tough time for the company, which has closed some stores permanently and laid off 10 percent of its corporate workforce.

“We’re going to see how this plays out over time,” said John Strain, the company’s chief digital and technology officer. “It’s hard for us to project how long any of this is going to go on but for right now we’re really excited about the business.”

KeyBanc analyst Edward Yruma also pointed to Under Armour as a potential leader in the category after it unveiled its take on activewear masks, with a stock of 30,000 selling out in an hour on its site. It’s another company that’s struggled recently, with plans to terminate its $280 million contract with UCLA and reportedly offload the app MyFitnessPal, which it bought in 2015 for roughly $475 million.

Brands should be cautious about relying too heavily on a category subject to shifting government mandates and consumer attitudes over the next few months. While a vaccine may take longer than a year, it’s unclear how many consumers will be come back after buying a single five-pack.

“It’s not going to be a frequent or repeat purchase,” said Alexis DeSalva, a senior research analyst at Mintel, told BoF in May. “There’s so much volatility right now, but I do think that incorporating it into a normal business operation or assortment in the interim throughout 2020 is something that has legs.”

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