Denim’s status as an American icon has been on full display this summer amid celebrations of the nation’s 250th anniversary. But despite the renewed cultural spotlight, a recent discussion between Jefferies and Euromonitor suggests the category is navigating a more complex business environment.
A recently published report from the investment bank challenges several post-pandemic beliefs about the denim industry, including the so-called denim cycle that many brand executives began to talk about in 2021.
Though jeans are a closet staple, Jefferies said data indicates “there was no major boom in the denim industry over the last few years” and that U.S. jeans have underperformed compared to the broader apparel category with 2025 being an exception. The report added that the “multi-decade shift to comfort, athleisure, and leggings has limited the category’s ability to capture growth.”
The pivot to loungewear during the first months of the Covid-19 lockdown is often credited for the demise of skinny jeans, but Jefferies said the trend for wide leg, baggy and barrel fit started more meaningfully in 2021 when some regions began to lift restrictions. These comfort-driven silhouettes continue to lead, with 31 percent of U.S. consumers saying they are willing to pay more for comfort.
Though the designers love a skinny jean on the runway (and the hoopla they create on social media) the report indicates no big comeback for the millennial fit is expected. Instead, the market is warming up to slim and straight leg as a middle ground.
One exception, Jefferies noted, is wider GLP-1 drug adoption may drive interest in more fitted silhouettes, including skinny jeans.
Pricing problems
Prices are rising, but the report said it is not translating into meaningfully stronger value growth. Jefferies said jeans “exhibit structurally limited pricing power,” with unit price increases over from 2015 to 2025 driven largely by cost passthrough versus demand.
Economy jeans—or value jeans that retail for under $30—accounts for 45 percent of U.S. jeans. Standard jeans, which retail for $30-$75, makes up 40 percent.
While standard caters to young, trend-focused consumers, Jefferies said premium lacks brands with the level of differentiation that is needed for consumers to increase their spending. Meanwhile, “super premium” struggles with unclear positioning versus luxury, noting that “affluent consumers don’t prioritize denim.”
Jefferies points out Levi’s Blue Tab Collection, which mostly hovers below $300, as a label to watch. “We are interested to see how Levi’s push into premium with Blue Tab can drive AUR growth and potentially new customer acquisition,” the report stated.
On the horizon
The report highlights several opportunities for the global denim industry. Jefferies said jeans are expected to outperform the global apparel category, supported by digital drivers.
Brazil, and Indonesia stand out as denim growth markets because of younger female demographics and value-focused demand. Europe is forecast to be shaped by innovation and collaborations, while APAC and Latam will be more digitally driven, with TikTok Shop and platform-native engagement key for reaching younger consumers, Jefferies said.
In general, the women’s market is eyed for growth, especially as the demographic shows higher intent to increase spending. With the women’s category being more trend-driven and fragmented than men’s, Jefferies said “emerging brands at the intersection of standard and premium” can gain share.
Levi’s and Wrangler have already implemented strategies to grow their women’s business through a greater variety of fits, female-led campaigns and emphasis on head-to-toe denim dressing.
