The fact that activewear is a strong category in terms of sales needs little convincing. A couple of examples are the rise of brands such as Under Armour and newborn concepts such as Beyonce’s fashion adventure Ivy Park. On the denim front, Mavi and several other players have put a greater focus on stretch and comfort thanks to athleisure as well. With this in mind, a recently published US market study carried out by Deutsche Bank (DB) tells us only now, that this growth has been taking place at the expense of regular clothes’ sales.
According to the report’s authors, athletic apparel was up 4.1% from 2008-2015 on average, whereas non-athletic apparel grew only 0.2% during the same timeframe, lagging overall apparel in seven of the past eight years. The writers also see athleisure as a genuine trend linked to lifestyle and thus expect the disparity between athletic and non-athletic growth to widen in upcoming years.
In this athleisure-dominated scenario, DB indicates that “the retailers best poised to navigate this shifting channel dynamic are those with less exposure to women’s non-athletic apparel and the ability to play in fast fashion, off-price, or online in a meaningful way.”
But athleisure isn’t the only one to blame for the regular clothes’ market struggle. DB researchers see as well a lack of compelling fashion on the horizon to boost sales and “remain concerned that there is no clear replacement for the skinny jean, a trend that has grown long in the tooth, which we think is necessary for a new silhouette to emerge and inspire women to refresh their closets.”
There is no clear replacement for the skinny jean, a trend that has grown long in the tooth, which we think is necessary for a new silhouette to emerge and inspire women to refresh their closets.
The credit institutions don’t glimpse a near end to the numerous store closings that have been shaking up some of the companies featured in the report –among them American Eagle Outfitters, Abercrombie & Fitch Co., Gap Inc., Urban Outfitters, Inc. and Macy’s Inc. DB forecasted 833 store closures in 2016 within the covered group of companies, and suggests that 314 additional closures still need to disappear in order to right-size for current sales trends and market share. Over the past three years, 3,000 shut down already.
Only once this adjustment on the number of stores happens, modest growth rates might blossom: “We do see light at the end of the tunnel (albeit a long tunnel) as additional stores close, toward a productive balance to be achieved between the online and brick & mortar channels allowing for growth in both […] We expect a modest reacceleration in sales per sq. ft. ahead for our apparel retailers, in part driven by the effect of a smaller but healthier store base.”
Among the reasons that explain the challenging situation of apparel, DB remarks persistently weak mall traffic; a shift in spending habits towards home improvement, technology, autos, healthcare and travel to the detriment of fashion; and the fierce expansion of fast-fashion retailers and online players such as Amazon that provoked an imbalance between supply –which is still growing– and slumping demand.