For several years it was ath-leisure that was the biggest buzzword in the men’s wear industry. Now it’s sneakers and streetwear.
Once the highest-flying performer in the activewear arena, Under Armour in October posted its first-ever quarterly sales decline, a 5 percent year-over-year drop to $1.4 billion. Profits fell during the quarter as well, with net income totaling $54.2 million, compared with $128.2 million a year ago.
The profits took a hit of $89 million in costs related to a restructuring plan the company revealed in August that is intended to provide more financial and operational flexibility. After bringing in an outsider — former Aldo executive Patrik Frisk as president and chief operating officer — other moves included several hundred layoffs, a new head of women’s and footwear and the discontinuation of the highly touted Tim Coppens-designed UAS high-end fashionable sportswear line. Instead of the Coppens line, Under Armour will now focus on a rotating group of collaborators such as A$AP Rocky, whose collection for the brand is expected to be released later this year.
Founder and chief executive officer Kevin Plank — who has been criticized of late for paying more attention to his private investment company than to Under Armour — has called 2017 a “reset” year and characterized the company’s slowing sales as more related to growing pains than fundamental problems.
But Under Armour is not alone in having its issues. Even Nike has seen its North American business slow. In the second quarter, the company said profits fell 9 percent to $767 million and its sales in North America declined 5 percent to $3.49 billion. Last fall, Nike had said it would fine-tune its distribution and move away from what it called “undifferentiated” retailers. Instead it is extending its initial test partnership with Amazon and also implementing another pilot with Stitch Fix, albeit for women’s wear initially.
As Nike ceo Mark Parker put it at the time: “While the athletic marketplace continues to shift, we’re very confident in the factors of our business that we control.”
But men can’t wear sneakers and layered tops all the time — much as they might like to. And so, on the other end of the spectrum, tailored clothing is also experiencing a resurgence.
The leader in the category, Tailored Brands, reported that profits rose 30 percent in the third quarter to $36.9 million, with strength at both its flagship Men’s Wearhouse chain as well as Jos. A. Bank. The company is the largest specialty retailer of suits and formalwear in the U.S. and operates 1,480 stores.
In the period, comparable-store sales at Jos. A. Bank rose 4.9 percent and fell 1 percent at Men’s Wearhouse, but company ceo Doug Ewert revealed that both businesses were notching increases in comps in the fourth quarter.
Among the most popular categories, Ewert said, was custom clothing, which is selling at a rate of $2 million a week, as well as the new Travel Tech collection of Jos. A. Bank.
Sport coats and outerwear were also among the categories cited as solid performers by retailers during the just-completed holiday selling season, with Bob Mitchell, co-ceo of Mitchells Stores, saying tailored clothing actually exceeded his expectations. Rothmans cited sport coats, dress slacks and outerwear as top sellers, and Brooks Brothers did well with shirts and sweaters — the perfect complement to a suit or sport coat.