BIG MEET: NIKE VS. SPEEDO
Byline: Anne D’Innocenzio
NEW YORK — With its new Nike license, Jantzen is diving right into the performance swimwear market and aiming straight for Speedo, the industry powerhouse.
Speedo has long dominated the $100 million-plus competitive swimwear scene, controlling about 60 percent of the market. Nike/Jantzen hopes to take a big bite out of that share with its mostly women’s competition suits, due in stores in June.
Observers say the company has a tough fight ahead in what is a specialized, somewhat static business.
This is Jantzen’s first major foray into the performance market. The swimwear maker, whose parent company is VF Corp., Wyomissing, Pa., began to develop a performance line a year and a half ago under the Jantzen label, but the line took a back seat to other labels the company was developing, such as Bolero, as well as its push-up bra program called It Must Be Magic. “We are taking direct aim at the Speedo market,” said Larry Miller, executive vice president at Jantzen. He’s added several new designers and shifted a few other designers from other areas to work on the Nike line. “We have the swimwear expertise, and combined with the strength and authenticity of Nike, we believe we can dominate the performance market in three to five years.”
A Nike spokesman added that the Jantzen deal is the firm’s first attempt at competition swimwear. Two years ago, Nike made a stab at the fitness swimwear market, but failed. “Swimming is one of the biggest fitness activities, and in many parts of the country, highly competitive. This will allow the Nike brand to become part of that world.”
Jantzen will design and produce the line, and product will be subject to Nike’s approval. The Nike line, which will also feature some related activewear, will contain a small offering of fitness-related suits, but the majority will be performance-oriented. About 70 percent of the Nike line will be in women’s.
Neither Nike nor Jantzen would offer sales projections.
Miller said that the line will be carried at three levels of distribution — department stores, sporting goods specialty retailers and swim dealers, a network of retailers that sell directly to high schools, universities, country clubs and community swim groups. Within two to three years, 70 percent of the merchandise is expected to be carried in sporting goods stores and swim dealers.
What does Authentic Fitness Corp., which holds the Speedo label, think of all of this?
Linda Wachner, Authentic Fitness’s chairman and chief executive officer, says she’s undaunted.
“I plan to run the business the way I’ve always run it,” said Wachner. “We have a terrific line, and our suits win. In fact, Speedo won over 65 medals in Barcelona. I refuse to have a contest in the press with any company.”
Jantzen’s goal to topple Speedo is ambitious, say industry observers. Speedo, which has been the official supplier to the U.S. Swim Team since 1985, garners the bulk of the business, while about 20 percent of the market is held by TYR Sport and the remainder held by other labels, such as The Finals, Arena, Hind and Dolphin.
Jantzen officials said that it plans to bring some fashion-forward looks to the performance market. It is already in negotiations with fabric vendors to develop other fabric products, beyond Dupont’s chlorine-resistant Lycra spandex, type 128, which is typically used for competition suits.
Executives in the performance swimwear market, however, point out that making a splash won’t be easy.
“It’s a very intricate, complex business. It’s going to be a big learning curve,” observed David Rosen, vice president of sales and marketing for Huntington Beach, Calif.-based TYR, known for its directional forward-looking prints. “No fashion company has ever been able to penetrate the authentic performance market. Integrating fashion with performance is very difficult.”
Peter Rubin, president of Mainstream, a moderate-to-better fashion swimwear firm, and president of the Swimwear Association, noted that the performance swimwear market is “static.”
“It’s not a booming market, and it’s not a growing market,” Rubin said. “The average consumer doesn’t go out and buy a performance swimsuit, especially the aging baby boomers who are more interested in tummy control.”
In fact, industry observers point to an unsuccessful attempt by Catalina, which, under its previous owner, launched a men’s and women’s competition line five years ago called 100 Meters. It even had Mark Spitz endorse the men’s line. The line, however, proved to be a dud.
While industry observers point to Jantzen’s expertise in the department store arena, cracking into the web of swim dealers, which number about 135, is an entirely different matter. Currently, Speedo and TYR each garner about 45 percent of the swim dealer distribution.
“If Jantzen wants to break into the swim dealers, they are going to have a lot of work ahead of them,” said James Johnston, president of Arena North America Inc., Englewood, Colo. “It is an intensely depressed margin business, and there is a lot of pressure on manufacturers. It requires huge inventory commitments. It takes a certain kind of commitment to be successful.” Jantzen officials acknowledge that it is wading into foreign waters, admitting that the biggest obstacle will be breaking through the swim dealer network.
“Overall, it is a tough market, but with the Nike label and with our background and expertise, we will be able to deliver,” said Miller. “We have strong operating systems, and we will be able to break through. We know swimwear, and this is another swimwear product that we are developing.”
Miller added that Jantzen is in the process of hiring a swim dealer merchandising expert to break through the network.
Miller says that Jantzen plans to develop its own advertising campaign, in conjunction with Nike, which they expect to launch in August 1995. Jantzen also intends to capitalize on Nike’s all-college partnerships with four big name schools — University of Miami, University of Michigan, University of North Carolina and University of Southern California.
Such a partnership allows Nike to outfit these schools for their entire men’s and women’s athletic programs. By fall 1995, Jantzen said that all the swim teams at the four colleges will be outfitted in Nike swimsuits. Jantzen also wants to capitalize on Nike’s partial partnerships with hundreds of other colleges and universities. Speedo, observers said, has dominated the college swimwear scene.
As for outfitting the U.S. Swim Team, Jantzen said that it hopes to go after that market in December 1996, when the four-year contract with Speedo ends.
“We entertain bids every four years,” said Susan Weeks, marketing director for U.S. Swimming, Colorado Springs, Colo., which is the governing body under the Olympic Committee for Competitive Swimming.
As for the Olympics, Speedo has already tied up most of the Olympic Team for 1996, but Jantzen officials are looking at the year 2000.
“We are definitely looking ahead to outfit the next Olympic team,” Miller said.