Now that most of the major leagues have postponed their respective seasons due to COVID-19, it is important to understand what implications these postponements bring for sports retail. Overall, I do not expect this to move the needle for the athletic footwear market, but I believe the licensed apparel market will feel some impact. Let’s dive into what I mean.
Looking at both the pro and college leagues, rarely have we seen a championship or an MVP performance change the trajectory of athletic footwear sales. Consumer purchasing typically does not move in the direction of championship or player success. This year we have another major sporting event on the calendar as well – the Olympics. While no dates have shifted as of now, as I noted here the Olympics usually does not give much lift to the sports retail business, and I expect this will continue to hold true for the Summer Games.
The fact that performance footwear is out of fashion today creates an even more challenging environment. Consumers are not buying performance shoes as fashion, regardless of who is playing or winning in a sport. The performance shoe business is smaller than the sport lifestyle business and is shrinking.
Sporting events do not move the market in athletic footwear, and so I do not believe their absence will either.
Sports marketing will take a minor hit with these event postponements. The bragging rights of MVPs or league championships always bring additional exposure to a brand. But that kind of exposure does not manifest itself directly through consumer behavior. Instead, its value is more of a long-term brand building tool. So the lack of brand exposure will not hurt much in the short-term.
On the other hand, sales of sports licensed products do follow the events closely.
An East Coast sports retailer filed for bankruptcy recently, citing the poor results of its local teams. Teams that have not won a championship in a long time (looking at you, Kansas City Chiefs) bring a huge lift to local markets. Teams that repeat championships do not get the same lift as the first year.
Both retailers and brands benefit here, especially after championships.
Nike is the uniform suppler for MLB, NFL, and NBA. I expect sales of caps, jerseys, and championship gear will be affected by the postponements. But assuming those games are eventually played, much of those sales will be made up at a later date.
So, while these postponements are devastating to the diehard fan and to broadcast media, they will not severely alter the sports retail business.