The growing athleisure trend in sportswear has resulted in ups and downs for sportswear brands like Nike, adidas, Under Armour and Skechers in the huge American market: for example, adidas, with the help of 60% growth in their Originals category, has just replaced Under Armour as the #2 sportswear brand in the US, and Skechers is #2 in the women’s athletic market.
While remaining #1, Nike stock dropped 10% earlier this year to become one of the Dow’s worst performers – only three years after the NPD Group* estimated that the brand dominated the US sportswear market with 59% share.
Nowadays, the swoosh has to stave off stiff competition from trendy brands worn by style icons favoured by millennials. While Nike sales are slowing down, brands like adidas, Under Armour and Skechers are vying for the title fastest growing brand in the US.
In 2014 Under Armour passed adidas to become the #2 sportswear brand (apparel and footwear) in the US, but since then adidas President of North America Mark King has been working hard on regaining the #2 spot. Adidas opened a new design lab in Nike’s home town Portland, introduced some heritage models like the best-selling Stan Smith tennis shoe and launched trendy partnership-lines like Kanye West’s Yeezy line and the upmarket Zne.
“We’re very much in a retro fashion cycle today,” says Matt Powell, vice president and sports industry analyst, The NPD Group. “Millennials are really flocking to wearing old-school looks.”
But, in an interesting twist, a traditional “athleisure” brand like Skechers is making inroads in the US performance market. Among women, Skechers (#2) and Asics (#3) followed Nike as the top selling athletic footwear brands in 2015, the retail tracking service of the NPD Group indicate.
In the first quarter of 2015, Skechers had 5% share of the athletic footwear market in the US – more than adidas (4.6%) and ASICS and New Balance (both 4%), according to the NPD Group. The strong Skechers growth in Performance styles was driven by their GoWalk shoes, which “reignited” the walking category, according to Powell. But, the brand obviously also benefitted from the consumer preference for athleisure styles, which helped their sales grow 29% in the previous year.
American athletic footwear sales grew 8% in 2015 due to a high demand for retro and athleisure styles, which grew 30% to $3.5-bn, according to the NPD Group. But, sales in performance categories like running and basketball – which are Nike strengths – grew less than 5%.
During this year until August, performance activewear sales grew 5% in department stores and 3% in national fashion chains, say The NPD Group in their Retail Tracking Service, January-August 2016 report. In the same period sales of the more traditional technical athletic footwear dropped in specialty and sporting goods stores – although these still remain the main performance wear sales channels.
The fact that a major sporting goods chain like Sports Authority filed for bankruptcy this year is an indication of the strain under which sport specialists operate.
“Less than one-third of dollar sales went toward using activewear for athletic activities – the lowest percentage in four years,” says Powel. “At the same time, market share has grown for activewear spend towards work use and recreational or social weekend activities.”
In the year until August 2016, activewear purchases for aerobic/fitness-based activities have increased and the growth rate has accelerated over the past two years, says Powell. “Purchases for running use have, however, dipped, tying into the idea that consumers’ activewear spend is becoming tied more to lifestyle than to technical purposes.”
* The NPD Group is a global market research company specialising in retail trends. See more here.