Major players in the sportswear and footwear market are experiencing a slowdown in sales
23.04.2024 1143

Major players in the sportswear and footwear market are experiencing a slowdown in sales

The sportswear segment was not immune to the effects of inflation: sales of the main players slowed down in 2023, writes worldfootwear.com

Consumers' desire for comfortable clothing and healthy lifestyle trends in the wake of the COVID-19 pandemic have fueled the growth of the global sportswear market, which accounted for 18,3% of total apparel spending in 2019 and 22,0% in 2022 (just- style.com). But in 2023 the trend has changed.

ResearchAndMarkets' report "Global Sportswear Market to 2027" shows that the global sportswear market grew by 6,4% in 2022, but growth slowed to 4,6% in 2023, proving that the segment is not immune to the effects of inflation . This is especially true in Europe and North America, where all major players have faced difficulties.

In the quarter to the end of November 2023, Nike's sales were up about 1%, with sales of the brand itself, as well as Converse, declining primarily in the North America and EMEA regions. The company made headlines when it embarked on a restructuring plan that resulted in the layoff of 2% of its workforce. “This is a painful reality and I do not take it lightly. We are not performing at our best at this time, and ultimately I hold myself and my leadership team accountable,” the company's CEO said in February (cnbc.com). Nike finished the third quarter of its fiscal year with a slight increase in sales of 0,3% to $12,4 billion.

Adidas isn't doing any better. The company ended 2023 with revenue of 21,4 billion euros, down 4,8% compared to the previous year. “While nowhere near good enough, 2023 ended better than I expected at the start of the year,” Adidas CEO Bjorn Gulden said, highlighting improved operating performance. “We expected a materially negative operating result, but achieved an operating profit of €268 million. Thanks to a very disciplined go-to-market and procurement process, we have reduced our inventories by almost €1,5 billion.”

In this context, the US region remains the most challenging for the company, as this market has been particularly affected by the Yeezy scandal, as well as the company's conservative sales strategy aimed at reducing inventory levels.

Even Puma, which has posted impressive growth over the past two years, has not been able to escape the effects of slowing consumer demand. Last year, the German sportswear giant reported sales growth of 1,6% year on year to 8,60 billion euros, compared with 24,4% growth the previous year. “In 2024, we see the market environment remains challenging. As we work through this ongoing challenging trading environment together with our retail partners, with a focus on sell-through and smart sales, particularly in the US and Europe, we expect a softer first half of the year,” warned company chief executive Arne Freundt.

Under Armor continues to fight. In the three months to the end of December, sales fell 6,1% year-on-year to $1,49 billion, with sales in North America, the company's largest market, down 12% year-on-year to $914 million. “Despite the mixed situation retail sales during the holiday season, third-quarter sales results were in line with our expectations,” said Stephanie Linnartz, the company's then-CEO, highlighting the “better-than-expected profitability” that had been Under Amour's goal all year. But eyes are certainly on Under Armor as a leadership change was announced soon after, with founder Kevin Plank returning to the helm just over a year after Linnartz's appointment.

In this context, Skechers' results provide the most positive outlook for the sportswear and footwear market. “For the full year, we achieved a new annual sales record of $8 billion, reduced inventory levels by 16% and continued to invest in our distribution capabilities, including new locations in India, Canada and Latin America,” Skechers Chief Operating Officer David Weinberg said in a statement. .

The sportswear segment was not immune to the effects of inflation: in 2023, sales of the main players slowed down, writes...
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