Market Size, Demand & Growth

The global underwear market sat at roughly $96.7 billion to $99.2 billion in 2025, with analysts converging on a mid-single-digit growth path of about 5.3% a year through 2032 (Persistence Market Research, 2025; Fortune Business Insights, 2025). That is not a hyped category. It is a steady, replenishment-driven one: people buy underwear on a predictable cycle, which is exactly what makes it attractive to a disciplined operator and unattractive to anyone chasing a viral spike.

The headline that actually matters to a new entrant landed in December 2025, when Gildan closed its $2.2 billion acquisition of Hanesbrands (Gildan, 2025). That single deal folded Hanes, Maidenform, Bali and Playtex under one roof alongside Gildan's own lines and targeted $200 million in supply-chain synergies. The takeaway for a startup is blunt: the commodity multipack aisle is now owned by a vertically integrated giant you will never out-cost. A new underwear business has to win on something the consolidators are structurally bad at, a sharp niche, a fabric story, a fit obsession, or a community.

Demand growth is led by performance fabrics (moisture-wicking, antibacterial, recycled nylon), seamless construction, and category newcomers such as period underwear and gender-neutral fits. The UK underwear market, a meaningful slice of the European total, skews toward premium basics and sustainability claims, with Leicester and the East Midlands still holding pockets of domestic cut-and-sew capacity that DTC brands use for short, fast runs.

The strategic conclusion writes itself into the business plan. You are not entering a fast-growth market; you are entering a large, stable one where the bottom is owned by scale players and the margin lives at the specialist end. Your plan should name the slice you are taking, say, organic-cotton boxer briefs for tall men, or seamless period briefs for teenagers, and show why a customer pays you a premium over a Gildan three-pack. Brands such as MeUndies and Tommy John proved that subscription and fit positioning can carve real revenue out of a "boring" category; both built on contract manufacturing rather than owning factories.

Where the demand is actually growing

Inside the flat-ish headline number, certain pockets grow far faster than 5%. Performance and athleisure underwear, sustainable and recycled-fibre lines, period and leak-proof underwear, shapewear, and adaptive or gender-neutral fits are all outgrowing the category average. A plan that targets one of these sub-segments can credibly forecast double-digit growth even while the overall market grows mid-single-digits, because the sub-segment is taking share from old-school cotton multipacks. The trick is to be honest about which growth rate you are claiming: the market-level CAGR for context, and a separate, faster sub-segment rate for your own line, each cited to a different source rather than blended into one flattering figure.

Who actually buys, and why it matters to the plan

Underwear buyers split into segments that behave very differently, and a credible plan addresses the one you are built for rather than "everyone who wears underwear". The replacement buyer purchases on a schedule and rewards convenience and consistency, this is the subscription opportunity. The performance buyer pays a premium for fabric technology and fit and is reachable through sport and fitness channels. The values-led buyer cares about organic cotton, recycled nylon, or ethical manufacturing and will pay for a credible, evidenced claim. The gifting buyer spikes around the holidays and rewards packaging and bundles. Your customer-analysis section should size the segment you are taking, describe its buying trigger, and explain how your acquisition channels reach it efficiently, because the segment you choose dictates your whole cost structure, from creative to fulfilment.

Questions Founders Ask First

These are the questions that come up in nearly every first call about an underwear venture. Short, direct answers, before the detail below.

Do I need my own factory?

Almost certainly not at launch. The default route is a contract manufacturer who knits or cuts-and-sews to your spec, which keeps capital expenditure near zero and lets you test the market with a few thousand units. Owning machinery only makes sense once you have enough consistent volume to keep a line busy and you want control over IP, lead times and quality.

How long until I have product to sell?

Budget 8 to 12 weeks for initial samples and a further 6 to 12 weeks for pre-production approval before bulk production starts. From a standing start, four to six months to first sellable stock is realistic, and the cash gap across that window is the number that catches founders out, not the unit cost.

What is the minimum order I have to commit to?

MOQs commonly run 300 to 1,000 pieces per style and colourway. Startup-friendly factories will go lower but charge a higher unit price for the privilege. The fewer SKUs you launch with, the easier it is to hit MOQ without drowning in inventory.

Is there any margin in basics?

Yes, more than people expect. Briefs and boxers carry low unit costs, so a brand sourcing efficiently can hold 55-70% gross margins even at accessible retail prices. The margin gets eaten by paid acquisition and returns, not by the garment itself.

What It Costs to Launch

There is no single startup number for underwear because two completely different businesses share the name. An asset-light brand using a contract manufacturer can put a capsule range on the market for $5,000 to $40,000 (roughly £4,000 to £32,000) (Maker's Row, 2025). A founder who wants to own production and run their own knitting or cut-and-sew line is in a different universe of capital, which we break down in the machinery section below.

Asset-light brand launch, where the money goes

• Design & sampling: $50-$150 per design in sampling fees, often 3-5 iterations per style
• First production run (contract): $15-$60 per piece on small batches; MOQ 300-1,000 per style/colour
• Branding, packaging & trims: $2,000-$10,000 (custom boxes, woven labels, hangtags)
• Compliance & testing: $100-$500 per style for flammability and fibre testing
• E-commerce & brand site: $1,000-$8,000 to build and stock with content
• Launch marketing & influencer seeding: $3,000-$15,000 for a credible first push
• Working-capital buffer: 3-4 months of operating cost to bridge the sampling-to-cash gap

The single most overlooked line is the returns and reorder reserve. Underwear has a higher try-and-return rate than people assume, and budgeting 5-8% of units sold for returns is realistic. Add the reorder reserve, because a product that sells out in week three with no restock for ten weeks kills momentum just as it arrives. A plan that shows lean spend but no working-capital buffer is a plan a lender will not back.

Three launch budgets, side by side

It helps to anchor the plan to a tier rather than a single number. A lean test at $5,000-$15,000 funds one or two styles at minimum MOQ, basic packaging, a templated store and a small seeding budget, enough to prove demand before committing further. A credible launch at $25,000-$60,000 covers a four-to-six SKU range, proper branding and photography, compliance testing, and a genuine paid-acquisition budget with a working-capital buffer. An owned-production setup starts around $150,000 and climbs past $250,000 once you add machinery, a leased unit, fabric inventory and the staff to run it. Most successful underwear brands begin in the middle tier on a contract-manufacturing model and only graduate to owned production once volume justifies it.

For founders weighing the broader category, our clothing manufacturer business plan template and lingerie business plan template cover adjacent cost structures that are useful to compare against before you commit.

Machinery & Production Setup

If you intend to own production rather than outsource it, the equipment list is the part of the plan that lenders and investors scrutinise hardest, because it is where capital concentrates. Underwear production splits into two construction methods, and the machinery is not interchangeable.

Cut-and-sew vs seamless knitting

Cut-and-sew takes flat knitted fabric, cuts panels and joins them, the traditional route for boxers, briefs and trunks, flexible across styles but with more fabric waste and labour per piece. Seamless circular knitting produces tubular garments with no side seams, which is how most modern performance underwear and sports bras are made; it cuts fabric waste by an estimated 15-30% but locks you into higher-cost, specialised machines (AnySew, 2025).

Indicative machinery costs

• Single-needle industrial lockstitch machine: $500-$3,000 each (entry workhorse)
• Overlock / flatlock machines (seam finishing, elastic waistbands): $1,000-$4,000 each
• Circular knitting unit (seamless tubular underwear): $25,000-$150,000 depending on gauge
• Programmable pattern controls add-on: $8,000-$15,000 (cuts labour and fabric)
• Fully integrated underwear production line: $750,000 and up
• Annual machine maintenance: 5-8% of equipment value ($500-$4,000 per unit)

Source: Sewing Trip equipment cost guide, 2025. The honest planning point most guides skip: a single circular knitting machine sitting idle is a money pit. The economics of owning production only work above roughly tens of thousands of units a year per machine. Below that, a contract manufacturer is cheaper per piece and infinitely more flexible. Your plan should state the volume threshold at which you flip from outsourced to in-house, not assume you start there.

Beyond the machines

In-house production also means a cutting table or automated cutter, a steam/finishing station, racking and storage for raw fabric and finished goods, and quality-control inspection. Factor in three-phase power for industrial machines and a lease on premises zoned for light manufacturing. These are the items that turn a tidy machinery budget into the $250,000-plus end of the range.

Sourcing partners and what to vet

Whichever route you choose, you will rely on suppliers, and the plan should name the type of partner and the criteria for selecting one. At the scale end of the market, Gildan and the former Hanesbrands lines (Hanes, Maidenform, Bali, Playtex) supply wholesale basics; MAS Holdings is one of the world's largest intimate-apparel manufacturers behind many global brands. For a startup, the realistic partners are mid-size contract manufacturers and private-label specialists across Sri Lanka, Bangladesh, India, China, Portugal and Turkey, plus the surviving UK cut-and-sew workshops around Leicester for short, fast domestic runs.

When vetting a manufacturer, the plan should commit to checking five things: minimum order quantity per style and colourway; sampling lead time and cost; fabric sourcing and certifications (OEKO-TEX, GOTS for organic cotton, recycled content claims); compliance support for FTC and UK labelling; and references from brands at your stage. A factory that is cheap per unit but cannot support small runs or labelling compliance is more expensive than it looks once relabelling and excess inventory are priced in.

Margins & Unit Economics

Underwear lives or dies on the spread between landed cost and the price a customer will pay, and on how much it costs to acquire that customer. Most brands price retail at 2.2 to 3 times wholesale cost, landing gross margins of 55-70% and net margins of 10-20% once marketing, fulfilment, returns and overhead are paid (Fabrikn, 2025).

A worked example

Take a DTC men's brand selling a three-pack of seamless boxer briefs at $36 retail with a $12 landed cost per pack (garment, trims, packaging, inbound freight). Each pack throws off $24 of gross profit, a 67% gross margin. At 2,000 packs a month, that is $72,000 revenue and $48,000 gross profit per month. Now subtract reality: $18,000 in paid acquisition and creative, $6,000 in fulfilment and payment fees, $4,000 in returns and replacements, and $8,000 in fixed overhead. Net profit lands near $12,000 a month, about a 17% net margin, healthy, but only because the customer is buying repeatedly.

That repeat behaviour is the whole game. A one-off underwear purchase rarely pays back the acquisition cost; the second and third orders do. So the unit economics in your plan should show lifetime value, not just first-order margin, and the revenue model should lean on the levers that drive repeats:

• Subscription / replenishment: recurring multipacks, the model MeUndies scaled on
• Bundles & multipacks: raise average order value and cut per-unit shipping
• Wholesale / B2B: lower margin but volume and predictable reorders
• Private-label contract manufacturing: if you own a line, sell capacity to other brands
• Limited drops: seasonal prints and collaborations at premium prices to lift blended margin

The acquisition maths that decides everything

Because the first order rarely covers the cost of winning a customer, the metric your plan must defend is the ratio of customer lifetime value to customer acquisition cost. If a customer costs $20 to acquire and a three-pack nets $24 of gross profit, the first order barely breaks even, the business only works if that customer comes back. Model an average of two-and-a-half orders per customer over eighteen months and the lifetime gross profit climbs to roughly $60, giving a healthy 3:1 ratio against the $20 acquisition cost. Show that calculation explicitly. It is the single most persuasive thing in a consumer-brand plan, and its absence is the most common reason an underwear pitch reads as wishful.

Channel-wise, most underwear brands start with paid social and influencer seeding because the product is visual and the purchase is impulse-friendly, then layer on retention email, referral and subscription to lower blended acquisition cost over time. Wholesale and marketplace placement come later, once the brand has proof of sell-through and enough margin headroom to give a retailer their cut.

SBA & UK Funding Routes

Apparel manufacturing in the US sits under NAICS 315, which carries an SBA small-business size standard of $8 million in average annual receipts (U.S. Small Business Administration). That matters because it keeps almost every new underwear venture comfortably inside SBA eligibility for the 7(a) loan programme.

Why manufacturers fare well with SBA lenders

Manufacturing businesses see above-average 7(a) approval rates, roughly 65-75%, against an overall small-business bank approval rate near 67% (Crestmont Capital, 2026). The reason is structural: machinery serves as collateral, and the sector has historically defaulted less than service businesses. The average 7(a) loan size runs around $479,000, which comfortably covers the machinery-heavy end of an underwear production budget. A founder buying a seamless knitting line has a far stronger SBA case than a pure marketing-led DTC brand, precisely because there is hard collateral on the balance sheet.

UK and international

In the UK, the government-backed Start Up Loans scheme (delivered by the British Business Bank) offers up to £25,000 per founder at 6% fixed interest with free mentoring, a realistic fit for an asset-light launch but not for buying machinery. Larger UK plans typically combine a Start Up Loan with founder capital, an asset-finance facility against the equipment, and sometimes regional growth grants in textile clusters such as Leicester. In India, a major garment-manufacturing base, funding usually pairs MSME (Udyam) registration with bank term loans and state textile-park incentives.

What lenders and investors actually read for

Whether the money comes from an SBA lender, a UK Start Up Loan assessor or an angel, three things get the closest read. First, the working-capital schedule: can you survive the four-to-six-month gap between paying the factory and collecting revenue? Second, the unit economics: does the lifetime-value-to-acquisition-cost ratio show the business is fundamentally profitable, not just busy? Third, the founder's grasp of the category: a plan that names its niche, its MOQ, its compliance path and its sourcing partner reads as written by an operator, while one that talks about "the underwear market" in generalities reads as written by a tourist. The financial forecast in our paid packages is built specifically to answer those three questions in the format assessors expect.

A Realistic Launch Timeline

The gap between "I have an idea" and "I have stock to sell" is longer than most first-time founders plan for, and the cash tied up across that gap is the number lenders test. Here is a grounded month-by-month sequence for a contract-manufactured launch.

• Month 1, Concept & positioning: lock the niche, the fabric story and the opening SKU list; draft the business plan and the funding ask
• Month 2, Sourcing & tech packs: shortlist manufacturers, request quotes against your MOQs, and prepare tech packs with measurements, fabric and labelling spec
• Months 2-4, Sampling: 8-12 weeks of sample rounds; wash-test for shrinkage, grade the full size run, and confirm fit before committing to bulk
• Month 4, Compliance: flammability and fibre testing, register an FTC RN number, finalise care and fibre labels for the US and UK
• Months 4-6, Pre-production & bulk: 6-12 weeks from approved sample to delivered stock; pay deposits and manage the working-capital gap
• Month 5, Brand & channel build: e-commerce site, photography, packaging, and a seeding list of micro-influencers
• Month 6, Launch: first drop, paid acquisition test budget, and the replenishment/subscription mechanic live from day one
• Months 7-12, Iterate to breakeven: track repeat rate, returns and contribution margin; reorder winners, cut losers, and only then consider new styles

The line that separates a fundable plan from a hopeful one is the working-capital schedule across months 2 to 6, when you are paying for samples, compliance and a production deposit with no revenue yet arriving. Show that runway explicitly.

Labelling & Legal Requirements

Underwear is a regulated consumer textile, and the rules are about labelling and flammability rather than trade licences. Get them wrong and you are looking at relabelling, withdrawn stock, or worse, so this belongs in the operations section of any serious plan.

United States

• Comply with the FTC Textile Fiber Products Identification Act: every garment must show fibre content (generic names, percentages in descending order), country of origin, the manufacturer or dealer identity (an RN number is the standard way to do this), and care instructions per the Care Labeling Rule
• Meet the Flammable Fabrics Act, 16 CFR Part 1610 (Standard for the Flammability of Clothing Textiles), enforced by the CPSC
• Register a free RN number with the FTC to identify your business on labels
• Functional fibres such as spandex/elastane must be named even below the usual 5% threshold

Reference: FTC, Threading Your Way Through the Labeling Requirements.

United Kingdom

• Comply with the Textile Products (Labelling and Fibre Composition) Regulations 2012: fibre composition must use recognised English generic names
• Meet UK product safety duties under the General Product Safety Regulations, enforced by Trading Standards / the Office for Product Safety & Standards (OPSS)
• Provide clear care guidance and ensure any flammability and chemical-safety claims are substantiated
• Register the business with HMRC and account for VAT once over the threshold

India (a major manufacturing base)

• Obtain a Trade Licence, GST registration and Udyam (MSME) registration
• Secure a Factory Licence if the workforce exceeds 20 workers
• Meet BIS marking and the Textile (Consumer Protection) labelling standards
• For export, register with the Apparel Export Promotion Council (AEPC) and hold an RCMC under the Foreign Trade Policy

Mistakes That Sink Underwear Brands

Across the apparel plans we have written, the same handful of errors recur. None are exotic; all are avoidable on paper before they cost real money.

1. Over-ordering on the first run

Founders chase a lower unit price by ordering big, then sit on unsold stock for a year. Hit MOQ on the fewest styles you can, prove sell-through, then scale. Cash buried in inventory is the most common reason an otherwise sound underwear brand stalls.

2. Treating labelling as an afterthought

Missing fibre content, no RN number, an unsubstantiated "antibacterial" claim, any of these can force a relabel or pull stock from sale. Build FTC and UK labelling into the spec sheet you send the factory, not after the goods land.

3. Competing with Gildan on price

Post the Hanesbrands acquisition, the commodity multipack tier is owned by a vertically integrated giant. A new brand that positions on "cheap basics" is fighting a war it cannot win. Win on fit, fabric, fit-for-a-niche, or community instead.

4. Ignoring shrinkage and fit grading

Underwear is unforgiving on fit. Cotton-rich blends shrink; a size that fit the sample fails after three washes. Grade the full size run and wash-test before bulk, or your returns line, already 5-8% of units, balloons.

5. No working-capital bridge

The four-to-six-month gap between paying the factory and collecting revenue is where brands die. A plan that shows the launch budget but not the cash runway across that window is incomplete, and any lender will see it immediately.

Underwear Manufacturing Terms Worth Knowing

Sourcing conversations move fast and assume you know the vocabulary. Getting these terms wrong on a first call signals to a factory that you are inexperienced, which rarely helps your pricing. A few that belong in any underwear founder's working vocabulary:

• MOQ (minimum order quantity): the smallest run a factory will produce per style and colourway, commonly 300-1,000 pieces
• Tech pack: the technical spec sheet you send a manufacturer, measurements, fabric, trims, stitching, labelling, that turns a design into something a factory can make
• Cut-and-sew: construction that cuts fabric panels and stitches them together; flexible but with more waste and labour
• Seamless / circular knitting: tubular construction with no side seams, the basis of most modern performance underwear
• GSM (grams per square metre): fabric weight; heavier GSM feels more premium but costs more and ships heavier
• Grading: scaling a fit-approved sample across the full size run so each size fits correctly
• OEKO-TEX / GOTS: textile certifications for chemical safety and organic content that values-led buyers look for
• FOB price: "free on board", the per-unit cost at the factory's port before freight, duty and your inland costs
• Landed cost: the true per-unit cost once freight, duty, trims and packaging are added, the number your margin is actually built on

The two that catch founders out are FOB versus landed cost. A quote that looks healthy at the FOB price can evaporate once ocean freight, import duty and packaging are added. Always model margin on landed cost, never on the factory quote alone.

Sample Business Plan Preview

Here's an extract from an underwear-brand business plan written by our team, so you can see the level of specificity we build in:

What's in the Template

Every Avvale business plan template comes pre-structured for your industry. The underwear manufacturer edition includes:

• Executive Summary, your niche, fabric story and the funding ask in 60 seconds
• Company Overview, legal structure, ownership and whether you contract-manufacture or own a line
• Market Analysis, sized to the underwear category with the consolidation dynamic spelled out
• Customer Analysis, the specific buyer you are taking from the multipack aisle
• Competitor Analysis, mapping against scale players (Gildan, Hanesbrands) and DTC challengers
• Product & Sourcing Plan, construction method, MOQs, sampling timeline and compliance
• Marketing Plan, acquisition channels and the repeat-purchase engine
• Operations Plan, manufacturing route, lead times, QC and labelling workflow
• Management Team, founder bios, advisers and planned key hires

The optional Financial Forecast add-on (included in our $300/£250 and $1,000/£800 packages) provides a 5-year Excel model with income statement, cash flow, balance sheet, break-even analysis, and the startup capital schedule , built to satisfy an SBA lender or a UK Start Up Loan assessor. See our market research and content service if you want the numbers and narrative handled for you.

Frequently Asked Questions