Yahoo Finance Activewear Retailers Eye Acquisitions, Opportunities, New Markets
How Athleisurewear Boom Has Impacted the US Apparel Industry
Recent acquisition activity in athleisurewear
Several sportswear companies are looking to participate in the activewear boom through the inorganic route. In May 2014, Columbia Sportswear (COLM) acquired 100% ownership of prAna for $188 million. prAna is a yoga wear lifestyle brand that’s seeing not only strong sales traction, albeit on a smaller scale, but also diversification benefits for the remainder of Columbia’s product portfolio. The brand saw sales of ~$125 million in 2015.
Hanesbrands (HBI) has made two acquisitions in the activewear space. In 2010, the company acquired Gearco, which owned the Gear for Sports brand. In 2015, the company purchased Knights Apparel. The products of both companies use licensed collegiate logo apparel.
Exclusives
Some companies have also looked at providing brand exclusives with select retailers (XLY). Hanesbrands’ (HBI) C9 by Champion products retail exclusively in Target (TGT) stores. Target and Walmart (WMT) accounted for about 28% and 21% of Hanesbrands’ US activewear sales, respectively, in 2015.
Wholesale channels
While Kohl’s (KSS) has reported strong sales in Nike products, the company has also launched its own line in partnership with Shay Mitchell. Companies such as Nike are looking to expand distribution through wholesalers, including department stores such as Macy’s (M) and Kohl’s (KSS), both within and outside the United States. Nike’s largest wholesale partner, Foot Locker (FL), is also looking to expand on vendor relationships to drive higher apparel sales, particularly among women and children.
A designer trend
Last year, several high-end brands stepped into the athleisurewear market. Designers Tory Burch and Derek Lam, in collaboration with Gap’s Athleta brand, have launched their own activewear lines. In fact, Dick’s Sporting Goods’ (DKS) Calia by Carrie Underwood and Athleta’s collaborative line with Derek Lam showed at the New York Fashion Week in September 2015. Several prominent designers have also included some activewear outfits in their spring-summer collections.
Besides these major companies, there are several unlisted players in the market, some catering to the premium segment. These include Fabletics, which was founded by actress Kate Hudson.
On the flip side, the activewear boom has negatively affected some apparel categories and retailers. We’ll look at this in the next article.
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