Global market review of active sportswear and athletic ... · sportswear and athletic footwear – forecasts to 2014 2008 edition. Page i Global market review of active sportswear

Global market review of activesportswear and athletic footwear – forecasts to 2014

2008 edition

Page i

Global market review of active sportswear and athletic footwear – forecasts to 2014 2008 edition

By Malcolm Newbery

January 2008

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Page iv Contents

Contents

Single-user licence edition............................................................................................................. ii Copyright statement .................................................................................................................. ii Incredible ROI for your budget – single and multi-user licences............................................... ii just-style.com membership .......................................................................................................iii

Contents.......................................................................................................................................... iv

List of figures ................................................................................................................................. vi

List of tables .................................................................................................................................. vii

Chapter 1 Executive summary....................................................................................................... 1 Report scope............................................................................................................................. 1 This sporting life: Report introduction and theme ..................................................................... 1 The active sportswear and athletic footwear market................................................................. 1 Market estimates....................................................................................................................... 2

The market in 2005 and 2007........................................................................................... 2 The market in 2014........................................................................................................... 3

Supply to the market ................................................................................................................. 4 Developments in sportswear.....................................................................................................5

Chapter 2 Introduction and report theme ..................................................................................... 7 The theme of this edition........................................................................................................... 7 Clothing and footwear sporting definitions ................................................................................ 7 This sporting life: Live the dream .............................................................................................. 8 Report contents and coverage.................................................................................................. 8

Chapter 3 The active sportswear and athletic footwear market ................................................. 9 Source of the definition of active sportswear and athletic footwear .......................................... 9

Total sports apparel.......................................................................................................... 9 Active sports apparel ........................................................................................................ 9 Sports licensed apparel .................................................................................................. 10

Sports and their participants ................................................................................................... 10 Apparel, footwear and equipment ........................................................................................... 13 The sports/product matrix ....................................................................................................... 14 Sportswear, population, regions and the ‘propensity to purchase’ ......................................... 17 Sources of data ....................................................................................................................... 18 Units and exchange rates .......................................................................................................19

Chapter 4 Market estimates ......................................................................................................... 21 The active sportswear and athletic footwear market, 2005-2007 ........................................... 21

Growth, 2005-2007......................................................................................................... 22 Market estimates, 2007........................................................................................................... 24

International background ................................................................................................ 24


Page v Contents

World market estimates, 2007........................................................................................ 24 Population................................................................................................................ 25 Combined market value and spend per person....................................................... 26 The active sportswear market.................................................................................. 27 The athletic footwear market ................................................................................... 29

Market estimates, 2014........................................................................................................... 33 Future drivers of the active sportswear and athletic footwear markets .......................... 33 World market estimates, 2014........................................................................................ 34

Population................................................................................................................ 34 Combined market value and spend per person....................................................... 35 The active sportswear market.................................................................................. 36 The athletic footwear market ................................................................................... 38

Market growth, 2007-2014 ...................................................................................................... 41 Active sportswear growth, 2007-2014 ............................................................................ 41 Athletic footwear growth, 2007-2014 .............................................................................. 42

Annual time lines..................................................................................................................... 43

Chapter 5 Supply to the market ................................................................................................... 52 Channels of distribution........................................................................................................... 52 Retailers, brands and no-name merchandise ......................................................................... 52 Global brands.......................................................................................................................... 55 Other important companies in the sportswear sector ............................................................. 59 Competition from the casualwear ‘pretenders’........................................................................ 62

Chapter 6 Current and future developments in sportswear ..................................................... 64 Sports and the clothing and footwear that is worn .................................................................. 64 Attitude, aspiration and product .............................................................................................. 65

Converse ........................................................................................................................ 66 Toray .............................................................................................................................. 66 Fila.................................................................................................................................. 66 Nike ................................................................................................................................ 66

Celebrity, the cult of celebrity and sponsorship ...................................................................... 67 The retail situation................................................................................................................... 67 Supply and the control of costs ............................................................................................... 69 Licences and joint ventures ....................................................................................................70 Brand ownership and acquisitions .......................................................................................... 71


Page vi List of figures

List of figures

Figure 1: Percentage split of active sportswear and athletic footwear in the world, 2005 and 2007

(%) ............................................................................................................................22

Figure 2: Global regional population share, 2007 (m people and %).............................................. 25

Figure 3: World market and spend per person, for active sportswear and athletic footwear, 2007

(US$m and US$) ...................................................................................................... 26

Figure 4: Active sportswear by region and population, 2007 (US$m and %) ................................. 27

Figure 5: Active sportswear spend per person by region, 2007 (US$) ........................................... 28

Figure 6: Athletic footwear by region and population, 2007 (US$m and %) ................................... 29

Figure 7: Athletic footwear spend per person by region, 2007 (US$) ............................................. 31

Figure 8: Athletic footwear by region and population, 2007 (m units and %).................................. 32

Figure 9: Global regional population share, 2014 (m people and %).............................................. 34

Figure 10: World market and spend per person, for active sportswear and athletic footwear, 2014

(US$m and US$) ...................................................................................................... 35

Figure 11: Active sportswear by region and population, 2014 (US$m and %) ............................... 36

Figure 12: Active sportswear spend per person by region, 2014 (US$) ......................................... 37

Figure 13: Athletic footwear by region and population, 2014 (US$m and %) ................................. 38

Figure 14: Athletic footwear spend per person by region, 2014 (US$) ........................................... 39

Figure 15: Athletic footwear by region and population, 2014 (m units and %)................................ 40


Page vii List of tables

List of tables

Table 1: US top sports ranked by participants, 2006 (no. of participants and %) ........................... 11

Table 2: The sports/product category matrix................................................................................... 15

Table 3: Estimate of the propensity to purchase in the developing world, 2007............................. 18

Table 4: Exchange rates as of 11 October 2007............................................................................. 20

Table 5: Main regional consumption of active sportswear and athletic footwear, 2005 and 2007

(US$bn and %) ......................................................................................................... 22

Table 6: World and regional markets for active sportswear and athletic footwear, 2007 (m people,

US$ and units) .......................................................................................................... 25

Table 7: World and regional markets for active sportswear and athletic footwear, 2014 (m people,

US$ and units) .......................................................................................................... 34

Table 8: Active sportswear growth by region, 2007-2014 (US$m and %) ...................................... 41

Table 9: Active sportswear growth in spend per person, by region, 2007-2014 (US$ and %) ....... 42

Table 10: Athletic footwear growth by region, 2007-2014 (US$m and %) ...................................... 42

Table 11: Athletic footwear growth in spend per person, by region, 2007-2014 (US$ and %) ....... 43

Table 12: The combined sportswear market by region, 2003-2014 (US$bn) ................................. 44

Table 13: The active sportswear market by region, 2003-2014 (US$bn) ....................................... 45

Table 14: The athletic footwear market by region, 2003-2014 (US$bn) ......................................... 46

Table 15: The athletic footwear market by region, 2003-2014 (m units)......................................... 47

Table 16: The combined sports market by region as an index, 2003-2014 (US$ percentage growth,

2007=100) ................................................................................................................ 48

Table 17: The active sportswear market by region as an index, 2003-2014 (US$ percentage

growth, 2007=100).................................................................................................... 49

Table 18: The athletic footwear market by region as an index, 2003-2014 (US$ percentage growth,

2007=100) ................................................................................................................ 50

Table 19: The athletic footwear market by region as an index, 2003-2014 (unit percentage growth,

2007=100) ................................................................................................................ 51


Page viii List of tables

Table 20: Branded, own-label and anonymous merchandise US dollar share, 2005 and 2007 (%)

.................................................................................................................................. 53

Table 21: Adidas and Nike shares of world active sportswear and athletic footwear markets by

region (US$bn and %) .............................................................................................. 56


Page 1 Chapter 1 Executive summary

Chapter 1 Executive summary

Report scope

This report concentrates on consumers who enjoy a sporting lifestyle, and

garments that will be used in active sport. This includes competition, recreation

and exercise. It does not include wearing a fleece, sweat or shirt in team

colours to the ball game or the soccer match

This sporting life: Report introduction and theme

There are a number of themes and arguments running through this report, of

which the prime one is that we have all become ‘available’ for sports brands

and retailers to reach with their marketing material. The prime reason why, as

consumers, we are now so available is that sport is a huge business, and

particularly, a huge business for television.

The purchasing choice is frequently determined by the sportsman or woman

you admire, or the team that you follow and hence the brand that you aspire to

wear. It could be called “live the dream”.

The active sportswear and athletic footwear market

just-style has chosen to use the view of the Sports Goods Manufacturers

Association (of the US) to define what constitutes the market. Its view is that

the market is defined as “sports apparel that consumers say they purchased

with the intent that it will be used in active sport”.

SGMA published a list of no fewer than xxx single sports in its Sports

Participation Survey for 2007. It now believes that: “Sports on the rise include

low and no impact activities – such as elliptical motion trainers, fitness

swimming, Pilates training, bicycling, yoga, and walking on a treadmill. Sports

that are not growing at a quick rate are those activities which feature high

intensity, lots of body contact and body pounding...and they include high-

impact aerobics, step aerobics, stair-climbing machines and tackle football.

One of the challenges facing all sports is that there are so many sports out

there competing for the time and attention of all athletes!”


Page 7 Chapter 2 Introduction and report theme

Chapter 2 Introduction and report theme

The theme of this edition

Although, inevitably, there are a number of themes and arguments running

through this report, the prime one is that we have all become ‘available’ for

sports brands and retailers to reach with their marketing material. The prime

reason why, as consumers, we are now so available, is that sport is huge

business, and particularly, huge business for television. In that context, the

report will question whether that is making consumers of sports clothing and

athletic footwear:

○ active participants in performance sports;

○ active participants in ‘soft’ sports (more of that in Chapter 3);

○ passive ‘couch potatoes’ watching their sport;

○ consumers who know what they want, and who can interact with

brands (more of that from the Nike ID Design Studio in Chapter 6);

○ consumers who buy what their sporting idols tell them to buy.

Clothing and footwear sporting definitions

In this, the third edition of the report, just-style has remained faithful to the

definitions used before. In the first edition of this report, a definition was offered

of what the product category was. This was necessary because, as in some

other apparel product categories, the boundaries between fashion and function

are not clear. The apparel industry in general has difficulty with its terminology

concerning product definitions. It is unclear where formalwear ends and

casualwear begins. What is the difference, for instance, between a tailored

jacket, a structured jacket and an unstructured jacket? What is the dividing line

between formal and casual trousers?

The sportswear product segment is one of the most confusing. Most

consumers (see previous just-style reports) know what they mean by jeans or

lingerie. This report on sportswear has to start by stating how sportswear is to

be defined and this is done in Chapter 3, which explains the market. The

definition turns out to depend more on the manner in which the garments are


Page 9 Chapter 3 The active sportswear and athletic footwear market

Chapter 3 The active sportswear and athletic footwear market

Source of the definition of active sportswear and athletic footwear

As the (English) writer sits typing this manuscript at his PC, he is wearing a

Nike replica rugby shirt (the 2007 Rugby World Cup was recently played in

France), a pair of Nike tennis trainers (he is a ‘well past his best’ club tennis

player), a pair of Wilson tennis socks that go with the Nike shoes (but create

brand competition) and Fruit of the Loom fleece jog suit bottoms.

And yet, he is involved in nothing more athletic than writing for just-style.

So, how is the market for active sportswear and athletic footwear to be

defined? The solution lies in the use of the word “intent” as explained by the

Sports Goods Manufacturers Association (SGMA) of the US. As the industry

trade and lobbying body for the sports clothing, footwear and equipment

brands of the largest national market in the world, its experience and opinion

matters. Its view, expressed by VP of marketing Mike May, is that the market is

defined as “sports apparel that consumers say they purchased with the intent

that it will be used in active sport”.

In its 2004 annual report (referred to in an earlier edition of this report), SGMA

spelt its position out carefully and clearly by defining sports apparel in three

ways.

Total sports apparel This is apparel that consumers define as “clothing designed for, or that could

be used in, active sports”. This is an extremely broad definition, encompassing

clothing that people wear for many different occasions.

Active sports apparel This narrower definition of sports apparel describes apparel that consumers

say they purchased with the intention that it “will be used in active sport”. This

does not mean the apparel was purchased for that exclusive use. The intention

may have been to wear it on other occasions as well. While such apparel may


Page 21 Chapter 4 Market estimates

Chapter 4 Market estimates

The active sportswear and athletic footwear market, 2005-2007

The world market in 2005 represented sales of US$xxxbn of active sportswear

and athletic footwear, bought by a world population of xxxxxbn people. This

means that US$xxxxx was spent on behalf of every man, woman and child in

the world on active sportswear and athletic footwear in 2005.

This world personal consumption figure both combines active sportswear and

athletic footwear, and inevitably contains huge imbalances of purchasing

power across the world. These differences have been analysed in our

database and shown in the various regional figures which follow for 2007 and

2014.

The world active sportswear market for 2005 was worth US$xxbn. This means

that US$xxxx was spent on behalf of every man, woman and child in the world

on active sportswear.

The world athletic footwear market for 2005 was worth US$xxbn. This means

that US$xxxxx was spent on behalf of every man, woman and child in the

world on athletic footwear.

Figure 1 illustrates how the world market was split between active sportswear

and athletic footwear in both 2005 and in 2007.


Page 52 Chapter 5 Supply to the market

Chapter 5 Supply to the market

Channels of distribution

Historically, the sportswear clothing and footwear industry was unique, as far

as apparel in its broadest sense was concerned. It had its own retail channel of

distribution to the market. Unlike ‘ordinary’ street clothing which was sold

through a variety of retail formats, sportswear was sold through specialist

sportswear retailers. They sold specialist sportswear product to dedicated

sportswear consumers. Of course there are specialist sports retailers still.

Principle examples from just three country markets are Foot Locker and Sports

Authority in the US; Sports Direct, JJB Sports and JD Sports in the UK; and

Decathlon in France. Many of the independent specialist shops, especially in

continental Europe, are part of buying groups such as Intersport. What makes

these retailers of sportswear different from other clothing retailers is that they

are retailing brands rather than own-label merchandise. The brand and its

attendant consumer loyalty are stronger in sportswear and sports footwear

than in any other product category.

This historical approach, however, is under threat. Decathlon pushes its own-

labels aggressively in both France and the Netherlands. JD Sports is on record

as recently as October in stating its wish to grow its own brands and get out of

its shop-in-shop arrangements with Nike and Adidas, which have been “of little

impact” (Retail Week, 5 October 2007).

At the same time, the leading market players are integrating forwards into retail

to control their own distribution. This includes strong investments from both

Nike and Adidas which will be considered in Chapter 6.

Retailers, brands and no-name merchandise

There are no statistically proven and reliable data for the share of branded,

retail own-label and anonymous sportswear. As mentioned earlier, and unlike

the situation in most clothing categories, where there is a balance of retailer

own-brands, ‘manufacturer’ brands and no-name merchandise, active

sportswear and athletic footwear are still the preserve of the ‘sports’ brand.

The ‘manufacturer’ in manufacturer brands has been put into inverted

commas, because very little of the manufacturing is done these days in the


Page 64 Chapter 6 Current and future developments in sportswear

Chapter 6 Current and future developments in sportswear

Sports and the clothing and footwear that is worn

As this, the third edition of Global market review of active sportswear and

athletic footwear, is produced, it appears that there may be a reaction to

professional performance sportswear. The SGMA 2006 Sports Participation

Survey (in Chapter 3) has suggested that there is a resurgence of interest in

less strenuous sports activities, which generate a feeling of wellbeing. If the

evidence for this is correct, then there must be an effect upon the type of

sportswear worn. The suggestion is that the sportswear will be less

‘professional’ and less ‘extreme’.

However, it is in the commercial interests of the equipment, clothing and

footwear providers to ‘up’ the value of their products by relating them to real or

perceived benefits. Consequently, they tend to concentrate upon, and

sometimes enhance, the technological elements of their products.

Examples of this from the trade press over the period since the publication of

the second edition of this report (2006) concern moisture management and the

new technology of nanogenes.

It is clear from the press that one of the key performance criteria in modern

sports and active outdoor wear is moisture management – the ability of a

garment to transport moisture away from the skin to the garment’s outer

surface. This provides comfort to the wearer, regardless of the extremes of

effort that they are putting in to their sport.

The market is currently dominated by Invista’s portfolio of moisture

management fabrics – which include CoolMax, Tactel Aquator, ThermaStat,

Thermax and Thermolite Base. However, the pace of development has

accelerated over the past ten years, and a growing number of other companies

have started to compete. They include sports apparel companies as well as

fibre specialists. This is a sure sign that the consumer is taking a clear interest

in the physiological properties of sportswear.


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Global market review of active sportswear and athletic ... · sportswear and athletic footwear – forecasts to 2014 2008 edition. Page i Global market review of active sportswear