The top five fastest-growing sports/activities over the past three years were: BMX Bicycling, Cardio Tennis, non-traditional/off-road triathlons, Cross-country skiing and Pickleball, according to the newly released 2018 SFIA State of the Industry Report.
Additionally, total participation in the three major running categories (Running/jogging, treadmill and trail running) rose for the first time since 2013. Winter sports, followed by fitness and team, have seen the largest, three-year average annual growth rates. Meanwhile, the U.S. inactivity rate for those ages 6+ has remained steady at 28 percent over the last three years.
Elsewhere in the 45-page SFIA report, available for sale to non-members, the trade group notes that annual industry growth jumped 2.4 percent in 2017 with most companies said to be: ‘Successful and thriving’, ‘Grinding it Out’ or ‘Challenged.’ The five most important concerns in the industry in 2017 were: Increasing Market Share, Retail Failures, Slower Consumer Spending, Consolidation of Retailers and Material Cost/Availability.
Optimism within the sporting goods industry declined for a second consecutive year in 2017 as 76.4 percent predicted sales growth, according to the report. As a point of reference, 95 percent of survey respondents forecasted industry sales growth in 2015. Of course, much has occurred over the last three years, most notably retail consolidation and the Direct-To-Consumer movement. The Sports & Fitness Industry Association, meanwhile, says brand DTC selling has stabilized at 76 percent.
With Washington and Beijing locked in a standoff on trade, Outdoor Industry Association representatives last week urged members to reach out to their suppliers “to encourage the Chinese government to go to the (negotiating) table with the U.S.”
In a Sept. 13 member webinar, the trade group affirmed pricing and sourcing challenges for its members heading into the Fall19/Winter20 seasons and confirmed some vendors have already decided to raise prices ahead of expected increased tariffs while others have decided to absorb any new duty increases.
“These additional tariffs will hamper the (outdoor) industry and put some products out of reach to some customers,” said Rich Harper, OIA’s Manager of International Trade, pointing to higher tariffs on backpacks and sports bags. On the trade side, the OIA said additional tariffs will make it significantly more difficult for small and mid-size outdoor companies to compete.
Meanwhile, following a tweet last week by President Trump that said the U.S. was “under no pressure” to make a deal with China, the Chinese government was reportedly finalizing plans over the weekend to schedule a Washington visit by Vice Premier Liu He next week The caveat for those high-level talks—The U.S. not establishing a firm date for new tariffs on $200 billion worth of Chinese imports. A final list of those products is expected this week, and it may include some outdoor products. OIA representatives told webinar participants that it encouraged Congressional Republicans to work with the Trump Administration to remove those outdoor products from the list. With $50 billion in Chinese goods already facing additional 25 percent duties, new tariffs on the $200 billion worth of targeted products may be lowered to 10 percent.
Additionally, the U.S. now has less than two weeks to bring Canada into a new North American Free Trade agreement, according to a Sept. 30 deadline established by the administration. The U.S. wants its new trade pact with Mexico finalized before President-Elect André Obrador takes office on Dec. 1. There are no established trade negotiations between the U.S. and Canada this week.
The Anta Sports-FountainVest unsolicited $5.3 billion bid for Finnish-owned Amer Sports, if finalized by year-end, would create a $5.3 billion, publicly traded company and provide greater retail access for Amer Sports-owned brands such as Wilson Sports, Arc’teryx and Salomon, particularly in Asia. Additionally, it would provide the new parent with a sizeable footprint in the outdoor segment for growth across the region given 62 percent of Amer’s annual revenues, or $1.94 billion, were generated in the category last year. Ball Sports represented 24 percent ($759.6 mil.) of Amer’s FY17 revenues with Fitness accounted for 13 percent ($419.9 mil.).
Anta, an official partner of the Beijing 2022 Winter Games, celebrates its 25th anniversary and 12th year as a public company in 2019. While it markets a namesake shoe brand and owns daily shoe manufacturing capacity of 3,000 pairs using only 30 workers, the company’s aspiration is as a global company with a portfolio brands. An Amer Sports acquisition would take Anta a step closer to its objective.
The company licenses the Fila and Descente brands for distribution in China and owns a number of additional sport labels besides Anta in Kingkow, Sprandi and Kolon Sport. Between its licensed and owned brands, the company operated 11,253 single-brand stores across China and elsewhere in Asia in Fila’s case. An acquisition of Amer’s brand portfolio would accelerate Anta’s brand retail presence across Asia. That effort would spark Amer’s sales in region, which accounted for only 14.5 percent of its FY17 revenues, or $452.8 million, compared to 41.8 percent ($1.3 billion) in the Americas and 43.7 percent ($1.36 billion) in the EMEA. Conversely, with Amer in the fold, Anta would find stronger global distribution channels for its existing stable of brands outside of Asia.
For the six months ended June 30, Anta generated 44 percent topline growth to an estimated $1.54 billion and 34 percent improvement in profit to about $282.6 billion.
With the longest possible holiday season fast approaching at 33 days between Thanksgiving and Christmas, traditional and specialty retailers received a dose of bad news last week—Amazon’s online dominance is showing no signs of abating. With research firm NetElixir forecasting Amazon’s share of all U.S. online sales in 2018 to rise to 40 percent, up from 35 percent in 2017 and 22 percent in 2014, Wells Fargo research disclosed Amazon is the dominate online apparel and footwear player with a 35 percent share (or 4x the second-largest player), and still pushing with new fashion styles and service efforts (try-on before paying). Both may create greater brand allegiance among the 18- to 34-year old set that made 17 percent of its 2017 online purchases at Amazon. NetElixir research shows that Amazon’s apparel/shoe revenues are up 19 percent in 2018 over 2017, although the Average Order Value is down 3 percent.
Nike, despite its June 29 announced alliance with Amazon, is clearly keeping its online options open and wide. Next month, the Swoosh will begin selling a collection of footwear and apparel products on Walmart-owned Jet.com as the brand moves to widen its ecommerce net for affluent, urban millennials. No specifics have been disclosed on products that will be available on Jet, but it’s a sure bet the assortment will differ from the Nike offerings available on Amazon or FootLocker.com as the company firmly sets a segmented strategy.
• Year-over-year retail sales rose 6.6 percent in August, according to monthly data from the U.S. Census Bureau. Adjusted sales in the sporting goods/hobby/musical instrument/book store segment were down 3.9 percent last month and are off 2.2 percent on an unadjusted basis for the first eight months of 2018.
• NetElixir is forecasting 15 percent ecommerce sales growth during Holiday 2018 (vs. +13% in 2017, +10% in 2016) with 42 percent of all online purchases made through mobile phones. Product listing ads are forecast to drive more than 65 percent of total paid search sales during the season. Additional trends forecast by the Princeton, NJ company include: more voice searches and heavy discounting by larger online retailers that could negatively impact margins for smaller merchants that aim to remain price competitive.
• REI is opening its first store in Alabama, a 20,000-sq. ft. store in Huntsville in Fall 2019.
New Balance unveils its TCS New York City Marathon products at select retailers and newbalance.com. The collection ranges from $30 retail for graphic T-shirts to$450 for a limited-edition, Expo-exclusive Gore-Tex shell jacket. There are also four performance running shoes in the range, including the new FuelCell Impulse for $135. The NYC Marathon takes place Nov. 4.
Feetures is releasing The Merino 10 collection, an update to its merino sock, consisting of a blend of merino wool and TENCEL fibers that is said to be warmer, drier, softer and more durable. Available in eight different colorways.
Pro-Tec is introducing new helmets, including a collaboration with Volcom and new Classic Lite at $100 retail that has polycarbonate shell with 11 open vents and is said to be 30-percent lighter than the Classic.
False ‘Made in USA’ claims were at the heart of recent Federal Trade Commission actions. Patriot Puck in Farmingdale, NY, which also does business as Underground Sports Inc., Hockey Underground and Ipuck Hockey, has agreed to stop making false ‘Made in USA’ claims for its products since virtually all of them are sourced in China. Also, the FTC has charged Sandpiper of California and PiperGear USA of falsely claiming in ads, promotional materials, product labels and on social media that their backpacks travel bags, wallets and other products are made in the U.S. In fact, 95 percent of Sandpiper’s products are imported as finished goods and 80 percent of PiperGear’s products are imported as finished goods or contain significant imported components.
Rossignol names Scott Rittschof, a bike industry veteran with prior experience at Cycling Sports Group and Pon Bicycle Group, as SVP of its global bike division. He will manage the Rossignol Group bike business that includes the Felt, Rossignol and Time brand. Following his appointment, the company announced the departure of Bill Duerhing,Co-founder and president of Felt.
United States Soccer League is initiating aleague-wide licensing program in the coming season headed by former MLS and Starter licensing veteran Stu Crystal. The effort will include all USL Division III clubs and will aim to streamline licenses for independent clubs. The initial efforts will focus on fan-facing categories such as apparel, accessories and novelties with opportunities to partner with industry-leading licensees in each category.