Under Armour's “Unlike Any” campaign featuring Zoe Zhang.
The ath-leisure trend may be coming to an end and athleticwear giants are going to see some fallout.Wells Fargo analyst Tom Nikic said in a new report that consumers over the last several years have “filled their closets with athleticwear” that has crossed into casualwear from the likes of Nike, Lululemon and Under Armour. But having bought enough — and combined with some bankruptcies of sports retailers and a lack of product innovation — the sector may be heading for a slowdown.“Big picture...the category appears poised to take a breather for now,” Nikic said.This led him to lower full-year earnings estimates for Nike, Lululemon and Under Armour, but Nikic also downgraded the latter to underperform from market perform, saying the company looks likely to be hit hardest by sales leveling off.Deutsche Bank in July downgraded Under Armour to “sell” from “hold” over its dwindling near-term growth prospects and the company cut its annual revenue projection less than a week later. Under Armour posted its first-ever loss during the first quarter. Nikic explained that Under Armour still operates mainly in the struggling U.S. retail market and is sold more as performance gear, unlike Nike and Lululemon, while its sneaker offering has “more customer attrition than any other brand,” according to the results of a survey.While “cracks started to show” in the industry last year as growth slowed to 6 percent, the lowest rate since 2010, Nikic said headwinds are expected to continue into 2018 as sales trends have continued to “deteriorate” this year.As for Nike, which is expected to deliver financial results for its first fiscal quarter next week, Nikic said the recent launch of the Vapormax sneaker hasn’t grabbed the “sneaker-buying community,” and that its recent deal with Amazon could negatively affect the brand’s retail presence.“The cannibalization risk would be high if Nike ever began selling premium sneakers directly to Amazon,” Nikic said.He also noted that 40 percent of more than 550 young men surveyed on their buying habits in the athletic sector said they would buy premium sneakers on Amazon if they were available.At the moment, Nike only sells “mass” product on Amazon retailing under $90.Nikic admitted that Lululemon “seems to have the most momentum” among the three brands, but he pointed out that its positive financials have been driven entirely by price increases over the last year or more and store traffic has been negative, presenting a risk “if/when Lulu can no longer push higher pricing.”Lululemon in August posted a 10 percent decline in second quarter net income, while net revenue increased 13 percent and comparable sales, including digital, increased 7 percent.Adidas was characterized as a “bright spot” in the industry, but Nikic pointed out that its business has been driven with fashion, not performance product.“The athletic industry was able to avoid some of the issues that have plagued the rest of retail for years (negative traffic, aggressive promotions, etc.) but now that demand is cooling off, they can no longer avoid these headwinds,” Nikic said.
@tradesy is turning the concept of a showroom upside down with its new space in Santa Monica. Here, the company plans to hold events, art exhibits and a showcase rare fashion pieces like this Louis Vuitton boxing set. Get all the details on Tradesy’s first showroom on WWD.com. #wwdnews
Spotted last night at the @erdem x @hm launch event: Kate Bosworth, Rashida Jones, Kirsten Dunst and Selma Blair. The party, which took place in LA, also marked the opening of their pop-up shop. “I was interested in creating a collection that wasn’t in any way disposable. It was about pieces you’d create and keep forever, things that have a permanence to it,” designer Erdem Moralioglu said. #wwdeye (📷: Katie Jones)
Renee Zellweger in yellow in 2001 and again in 2017. Chosen as one of the 12 @pantone Leading Spring Colors (and dubbed “Meadowlark”), it only makes sense that the bright hue stands the test of time and is making a resurgence this season, seen already on stars like @blakelively and @gigihadid. (📷: Donato Sardello & @rexfeatures) #wwdfashion #tbt
Dior’s 70th anniversary celebration continues with a new exhibition at the Royal Ontario Museum in Toronto. “Christian Dior,” which is scheduled to run through March 18, takes a look at the founders tenure from 1947 to 1057 and feature 40 designs. Pictured here is an evening gown from the Ailée, fall 1948-49 haute couture collection. #wwdfashion (📷: Brian Boyle)
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews