2020 has been a rollercoaster year for a good number of industries and activewear is no exception.
According to the research data analyzed and published by Comprar Acciones, the market is estimated to be worth $353.45 billion in 2020. It is projected to grow at a 3.7 percent CAGR in the period between 2020 and 2026, to reach $439.17 billion by the end of the duration.
For the key players in the industry, the challenging year has left little option but to adapt. One of the recent trends for top activewear players is a shift to direct-to-consumer sales.
According to the NPD, online sales of activewear will account for 40 percent of all sales in 2020, a new high.
NIKE - For Nike, the top sportswear brand globally, there was a 75 percent increase in online sales during its fiscal Q4, which ended in June 2020. At the time, the brand closed 90 percent of physical stores. For the first time, e-commerce revenue accounted for 30 percent of its total revenue.
During the three-month period which ended on August 31, 2020, Nike’s online sales rose once again, this time by 82 percent. This took place although retail outlets had reopened.
Thanks to the surge in e-commerce, the company offset losses as annual sales only dropped by 5 percent. From $39.1 billion in fiscal 2019, it dropped to $37.4 billion during fiscal 2020 according to its earnings report.
Total revenue for fiscal Q1 2021 amounted to $10.6 billion, with $1.5 billion as net profit. Despite having shed over 40 percent in March 2020, Nike’s stock is up by 40.79 percent year-over-year (YoY) as of December 11, 2020 and 35.80 percent year-to-date (YTD).
ADIDAS - At the height of the pandemic, Adidas closed down over 70 percent of its retail stores. As a result, its revenue for H1 2020 sank by 27 percent to $9.81 billion.
During the three-month period which ended on September 30, 2020, its revenue amounted to $7.01 billion. Operating profit fell by 12 percent during the quarter to $934 million while net profit totaled $677 million.
Despite the overall drop in revenue, Adidas online sales increased by 93 percent in Q2 2020 alone. In April and May 2020, growth accelerated at a triple-digit rate. During Q3, online sales surged by 51 percent.
PUMA - On the other hand, Puma’s operating profit had grown sevenfold and its annual sales had doubled in the six-year period leading up to 2020. However, during Q1 2020, its net profit fell by 61.6 percent YoY to $39.1 million against $1.4 billion in total sales. E-commerce sales for the period rose by 40 percent. By Q3 2020, however, the situation had improved with sales rising by 13 percent to $1.87 billion and operating profit by 17 percent to $223 million. Notably, direct-to-consumer sales grew by 60.9 percent during the period.
Overall, Puma saw total e-commerce sales for the first nine months of 2020 grow by an impressive 66.5 percent.
UNDER ARMOUR - For Under Armour, the three-month period which ended on September 30, 2020 saw wholesale revenue drop by 7 percent to $830 million. However, like the other activewear giants, the company saw direct-to-consumer sales rise by 17 percent to $540 million. Its revenue for the period was $1.43 billion with $38.9 million as net profit.
US Athleisure Items to Account for 31 Percent of Apparel Sales in December 2020
Besides embracing direct-to-consumer sales, dominant sportswear brands are also capitalizing on the thriving athleisure market.
According to NPD, athleisure items like sweatpants and sweatshirts are projected to account for 31 percent of total apparel spending in the US during the 2020 holiday season. Comparatively, the segment had a 26 percent share in the 2019 holiday season.
OLD NAVY - According to the company’s earnings report, Old Navy had an increase of 55 percent in the activewear segment. The reason for this was that more customers wanted comfortable clothing as they spend more time indoors.
ATHLETA - Athleta, Gap’s brand for female workout clothes, similarly recorded an increase of 35 percent in net sales. On the other hand, Banana Republic, famed for work apparel, had a decline of 34 percent in net sales.
ABERCROMBIE & FITCH - Abercrombie & Fitch has also experienced success with Gilly Hicks, which sells women’s loungewear and bras. During the most recent quarter, it saw a double-digit increase in sales as online sales soared over 100 percent.
In a bid to get a share of the pie, Kohl’s is planning to launch a brand known as FLX for active apparel in 2021.
The US athleisure market is estimated to reach $105.1 billion in sales in 2020 according to Euromonitor and Coresight. Compared to 2019, that would be a 9.2 percent decrease, attributed to the pandemic and reduced in-store shopping. However, the two forecast a rebound in 2021, projecting that the sector will grow by 7.9 percent YoY.