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Aug 21, 2017

Sneakernomics: No, Athleisure is not Dead

Matt Powell, Vice President, Senior Industry Advisor ;

Sports

@NPDMattPowell

With the disappointing quarterly results from some of the major sports retailers, there has been a renewed cry that the athleisure trend is over. While recent results for athleisure have been challenged, the rest of the apparel and footwear markets have actually been much worse.  The gap in trend between athletic and fashion has remained about the same. There is no indication that the athleisure customer is spending their money on other footwear and apparel.

There is no question that we are in a cycle of brick & mortar retail malaise in the U.S., with many of the industries that NPD measures experiencing a slowing down of sales. Retail traffic continues to slide downward, and we are on track to close a record number of stores this year. It appears that retail is killing retail.

We cited a year ago that many fashion brands were rushing into athleisure to tap into the positive growth the category was experiencing at the time. This has created a glut of brands that are making performance apparel when they have no history of making (or marketing) “performance apparel.” We predicted a bubble, and that bubble is bursting. In the meantime, the glut of inventory is hurting the core performance brands and retailers.

In an effort to reverse their sagging wholesale sales, several brands have ramped up their direct-to-consumer efforts. The branded athletic outlet business is robust, as is online discounting. But this devalues the regular product sold in core retail.

We are in a sportswear-as-fashion cycle right now. There is not a single performance category that is trending positively. Brands have been unable or unwilling to create more sportswear to feed this market, instead making more performance products that have to be reduced to clear.

Much of the product at retail is uninspiring and tired. Brands have not done a good job of creating compelling new products to ignite the market.

At the same time, in an effort to drive sales, brands have loosened restrictions on retailer promotions. This combination of too much weak off-trend product, and more permissive rules have made this back-to-school period the most promotional in more than two decades. When price is the sole motivator for purchase, retail is in trouble. Shopping in sports has never felt more joyless

As we have noted previously, there has been a slowdown in sneaker purchases by Hispanics. This has also had a major dampening impact on the industry.

So Athleisure is not dead by any means, but like much of retail it is very sick.

The sports industry is at a critical crossroad. Will the industry go the way of the rest of teen retail, chasing the deepest discounts in a race to the bottom, or will the industry do the right thing and return to the days of full-price sales, focusing on the aspiration and inspiration that made the industry great? 

Time will tell which course wins out.


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