Retail Roundup: Dueling For Dollars

NEW YORK -- The race for functional sports apparel has tightened, with department stores and mass merchants edging out sporting goods specialty stores for market share.<BR><BR>Active-use sports apparel, which until a few years ago was restricted to...

NEW YORK — The race for functional sports apparel has tightened, with department stores and mass merchants edging out sporting goods specialty stores for market share.

Active-use sports apparel, which until a few years ago was restricted to sporting goods specialty shops, gained ground among department stores in recent years, accounting for some 19.7 percent of sales in 1992, the most recent year for which data is available from the Sporting Goods Marketing Association. Mass merchants tallied even more, nabbing 26.9 percent in 1992, while sports stores raked in 16 percent of the active apparel market.

The ride might get bumpy for department stores, however.

Observers say active apparel could go the way of products like consumer electronics — to category killing chains, such as Sports Authority, or to discounters, like Wal-Mart or Kmart.

“The trend is toward bigger, full-service sporting goods retailers,” said Mike May, marketing director of SGMA. He cited superstore or warehouse concepts from such retailers as Oshman’s Supersports USA, which is converting its small stores to large formats; Sports Authority, Kmart Corp.’s sports warehouse, and Sports Town, which also features megastores. At these large venues, often outfitted with basketball or tennis courts, golf and/or archery ranges, consumers can test equipment before plunking down their credit cards.

“In light of this trend, I think we’ll see two major retail categories emerging — the giant sports specialist and the mass merchant — where people can buy equipment and apparel at the same time. Department stores look like they might be squeezed out, unless they come up with a different angle,” May said.

Observers note that specialty sporting goods chains, including Champs Sports, Bradenton, Fla., and MVP Sports Stores, Wilmington, Mass., are devoting more space to women’s sports apparel, but results are mixed at department stores.

While some, like Macy’s East, Dayton Hudson, J.C. Penney and Federated Department Stores, are adding in-store shops, vendors complain that many department stores still relegate the category to a corner squished between hosiery and hats.

“To many department stores, sporting goods apparel is still a second-class citizen,” bemoaned Glen Greenbaum, vice president of sales at Danskin, here, who believes it needs to have a 12-month home. The problem, he explained, is that usually the category shrinks or even disappears from October through December to make room for accessories like slippers, hats and scarves.

He estimated the company now spends about $350,000 on display fixtures for retailers. Danskin is also launching a multimillion-dollar TV and print advertising campaign to begin in March.

Greenbaum noted that such chains as Niles, Ill.-based Sportmart Inc. and Sports Authority win high marks for offering a huge display in women’s apparel, merchandising it by color and print.

One major complaint from the industry, however, is that category killers don’t emphasize fashion enough. Another is that the department is often situated far from fitting rooms.

Executives at department stores, which already attract the fashion shopper, point out that fashion and merchandising skills can enhance sales of active sportswear as well as nonactive, sports-inspired apparel.

R.H. Macy has beefed up its display and emphasis on functional sports apparel. At the Macy’s Herald Square flagship, for example, the Body Perfect shop stretches fully along the back wall of the fourth-floor junior department, with racks of swimsuits, leotards and tights, stretch leggings, coverups and T-shirts. Display cases at the cash registers house gym bags, hand weights and other workout accessories.

“We want to develop this as a 12-month business,” said Robin Satty, administrator for hosiery, bodywear and fashion accessories at Macy’s. “We’ve grown the business significantly over the past three years. Our challenge is to take this high-margin business and establish it in permanent locations, to let the customer know we believe in it.”

Satty said the category has grown by a single-digit percentage at Herald Square, and by more than 10 percent in some of the branches.

At the flagship, the department was moved in November to its present location, but it is probably going to move again. “It’s not necessarily a junior customer, so we feel it would benefit in more of a misses’ location or a place where there’s more crossover traffic,” Satty said.

Noting that the apparel sells much better than the hand weights or gym bags, she said department stores benefit from the volume of shoppers passing through, because active sportswear is generally an impulse purchase.

“Plus, women tend to shop more in department stores than in places like Sports Authority,” she said. A focus on items, like coverups, crinkle treatments and bike shorts, is another way department stores can compete.

Macy’s also has a Nike shop on its main floor, featuring Nike men’s workout apparel and footwear for cross-training, basketball, running or outdoor activities, and a Sports Cast department selling team logo merchandise.

“Suddenly, sports-inspired apparel, for active and nonactive purposes, is in the mainstream of fashion,” said Kal Ruttenstein, senior vice president of fashion direction for Bloomingdale’s. “It’s gone from mid-American, bad-taste travel clothes to the chicest thing around.

“As a department store, we can take a leadership position in terms of fashion, and by positioning the active with the nonactive sports apparel, we hope to boost sales of both,” Ruttenstein said.

But Bloomingdale’s is finding its strength among the faux jock set.

Ruttenstein cited A.B.S., Tapemeasure and Necessary Objects among the hot lines at Bloomingdale’s. Stretch pants, terry sweatpants, shiny satin miniskirts and long slim skirts, cropped stretch tops, jog suits and long or short stretch dresses with a striped racing motif have been performing well since mid-November, when the craze for sports-inspired apparel really took hold, said Ruttenstein.

The third-floor bridge area has an A.B.S. display of active styles with “94” emblazoned like numbers on team jerseys. But these items are for looking good, not for true workouts — Ruttenstein said a lot were sold for New Year’s Eve — and carry hefty price tags. An A.B.S. red satin stretch sweat jacket retails for $225, a cotton terry sweatshirt is $142 and a cropped V-neck top is $86. But they have been selling without price resistance, according to the retailer.

In the second-floor juniors area, a “Fit for the Future” shop in 1,000 square feet of prime real estate prominently offers similar looks with a racing-stripe motif from Necessary Objects, at lower prices — $28 for shorts, $42 for sweatpants, $38 for tight miniskirts. These are more for working out, but still offer the fashion customer more than the basics.

Tucked away in another corner of the juniors floor is a small bodywear shop, where basic leotards and roomy coverups are sold. Plastic teal barbells are suspended over the area, but it did not have nearly the panache of the other two shops.

“There is definitely a major push to devote more to women’s apparel,” said a spokesman at Champion Products, Winston-Salem, N.C. “This is going to be a great growth opportunity.”

Officials at Champion noted that Champs, Lady Footlocker, MVP and Oshmann’s Sporting Goods are among the best in displaying sporting apparel. “Champs selects key vendors and is very fashion-forward,” he said. “Despite their size, they have a great merchandising staff, and they’re always on top of trends.”

Among department stores, Federated chains win kudos from vendors for Sports Forum shops, featuring video monitors and an environment with a locker room feeling.

Some stores are still lagging behind in the race, however. “A lot of department stores are missing out on a great opportunity, by focusing more on collections and traditional sportswear,” said one source, who did not want to be identified.

Given this climate, many resources are taking matters into their own hands, working with department stores to create shop-in-shops and offering in-store signage to explain their products.

“Manufacturers and retailers have to work a lot closer to make an impact,” said John Lee, director of advertising and promotion at Russell Athletic, part of Russell Corp., Alexander City, Ala.

“Department stores are cutting back on service, and we need to get more involved to explain who we are,” he said.

For the past two years, the company has rolled out in-store shops at such retailers as Macy’s; Parisian, Birmingham, Ala., and Belk’s, Charlotte, N.C., and now has about 25 shops.

“As a category, functional sportswear has generally become a commodity, so it’s easily knocked off at low prices, particularly in the mass market,” said Isaac Lagnado, principal of Tactical Retail Solutions, a consulting firm. “When the category first emerged several years ago, department stores had a more commanding presence. But silhouettes, fabrics and even colors haven’t changed all that much, and consumers prefer buying these commodity products at the mass level.”

Kurt Barnard, president of Barnard’s Retail Consulting Group, said, “Category killers present the merchandise well, with far greater assortments than department stores, and at lower prices. The Sports Authorities of the world have tremendous sku’s. Consumers feel that if something is not for sale there, it isn’t made.”

Barnard noted department stores could possibly fight the category killer, and even the mass merchant, which sells the commodity product, by offering more fashion.

“That probably would not have a significant impact on the whole market. It is a very small segment of the population that is interested in high fashion in functional sportswear. Department stores have to determine whether higher prices and the turnover make it worthwhile to devote the necessary space.”

R. Fulton Macdonald, president of International Business Development, agreed that mass merchants have grabbed a hearty share of the functional sports apparel market, but since health-related issues are mainstream parts of the lives of many people, department and better specialty stores should not give up the category.

“Upper-end retailers should fight back with their best skills — higher-taste level, better fashion sense, greater commitment to quality, style and finesse,” he said. “When fashion merchants and department stores sell functional sports apparel, they sometimes offer different and more attractive product.”

Macdonald continued: “But department stores need to make this category important, with sustained efforts. Seasonal merchandising — often the department store approach — won’t do it and will allow the mass merchants to dominate this category.”