By  on February 9, 1994

ATLANTA -- Sports apparel firms are up against a shrinking manufacturer base, a dramatically altered retail arena and an increasingly demanding consumer. Growth in women's apparel will continue to come from crossover applications, rather than sports-specific products.

This was the view that emerged at Financial Day, the traditional kickoff to the Super Show here, where industry leaders and market analysts gather for a look at the financial health of specific companies and the industry in general.

A market study by Kurt Salmon Associates pinpointed many of the trends. Among the survey's highlights:

  • Consumers are shopping less but spending more. The trend is away from the mall and toward direct clubs, mail order and factory outlet stores.

  • Consumers want individualized product, immediacy and value.

  • Home shopping is creating a direct link between suppliers and consumers; manufacturers will increase inventory and ship direct. To implement Quick Response, manufacturers will need high tech information systems capable of automatic stock replenishment.

  • Manufacturers should think globally, expanding into new markets such as Asia and Europe.

  • Independent manufacturers will continue to be absorbed by larger firms, particularly in licensed apparel.

  • Brand portfolios are needed to reach multiple distribution channels, as are stronger ties with key retailers.
The proliferation of catalogs and TV shopping networks will dramatically affect traditional retailers, said Jim Severyn, who heads the athletic and leisure markets for KSA.

"Some retailers will respond by going into other avenues, such as home shopping and computer networks," he said. "There will still be a need for stores, but they will have to make shopping fun, with concept shops."

U.S. sales of sports apparel, estimated at $14 billion wholesale in 1993, are expected to increase only 1 to 2 percent in 1994.

"The future of the market depends on expanding casual or crossover usage, as sports/fitness usage accounts for just 8 percent of sales, while casual is 35 percent and active/casual is 56 percent," said John Riddle, president and chief executive officer of the Sporting Goods Manufacturers Association, which sponsors the Super Show."Manufacturers will optimize their chances for success by concentrating their brand offerings by functional items, such as shorts, tops and sweats, rather than expansion across sports usage."

Licensed products continue to be one of the brightest stars in sports apparel, said Riddle. Retail sales of licensed products by the major leagues of baseball, football, basketball and hockey topped $8 billion in 1993, compared with $6.7 billion in 1992. Licensed products at the Super Show have more than doubled over the past two years, to 2,700 booths this year.

Lawrence Pugh, ceo of VF Corp., said the company's commitment to licensed apparel has been underscored by recent acquisitions. In January, VF acquired Nutmeg Industries, a Tampa-based manufacturer of licensed sports apparel, including fleece and T-shirts. In October, it acquired H.H. Cutler, a Grand Rapids-based maker of licensed brand name youthwear, sold primarily through mass merchants.

"Nutmeg had a base for European imprinting and distribution, while H.H. Cutler was well positioned in the fastest growing channel of distribution," said Pugh. "These acquisitions position VF as number two in licensed sports apparel, and our goal is to be number one."

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