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.
@beyonce chose a custom gown by @falgunishanepeacockindia for mother @mstinalawson 's second annual Wearable Art Gala last night. The gown, which took 10 days to make, was inspired by Nubian warrior queen Amanishakheto. Reporting by @hernameislex . #wwdeye 👑 🐝#beyonce
After dressing @justintimberlake for his Super Bowl halftime performance last month, @stellamccartney has designed the star’s "Man of the Woods" tour wardrobe. Timberlake will be wearing a mix of pieces from McCartney’s fall men's collection as well as custom designs and items from his own closet. #wwdfashion
@carmeloanthony is upping his fashion game once again, introducing a hat collection with @goorinbros. Called Fresh Greens by Melo x Goorin, the line consists of five unisex models, all of which are made in America from 100 percent wool. Each hat is lined with Anthony’s signature and the inscription “Knowledge of self, wisdom and understanding.” You can purchase the collection line at Goorin’s website as well as three off its stores in San Francisco, New York City and Las Vegas #wwdaccessories
“I am of tradition, but that doesn’t mean I have an old outlook on life,” Hubert de Givenchy told WWD in an interview in 1978. The legendary designer, who died last week at the age of 91, achieved wide success soon after launching his own couture boutique in the early ’50s, but he refused to pine for that time. For the first time since its original publication, read our interview with Givenchy on his awe for Audrey Hepburn and looking forward. Link in bio. #wwdarchives #fbf (📷: Pierre Schermann)
About last night: @alexachung and @supergausa toasted the launch of their capsule collection. “It’s the shape that I love, so rather than amend the last and make the sole crazy or do anything wild, we just did really subtle additions that I think make it look really luxe-y,” said Chung. #wwdfashion (📷: Marc Patrick)
Exclusive: @off____white’s @virgilabloh is launching an exclusive eyewear capsule collection @sunglasshut. The unisex collection, which is made up of three styles, first made its debut on the brand’s fall runway show in Paris. Get all the details on WWD.com – link in bio. #wwdnews #wwdfashion