Is the Grass Greener on the Other Side of Sportswear?


Jun. 9 2015, Updated 9:07 a.m. ET

Analyzing the opportunities in women’s sportswear

As mentioned in Part 1 of this series, Nike (NKE) recently opened its third women’s-only store in London, UK. Many sportswear firms, including Nike (NKE), Adidas (ADDYY), and Under Armour (UA), derive a larger chunk of their revenue from men’s products. Yet the rising demand for “athleisurewear” has these companies trying to cash in on the new opportunities presented by the women’s segment.

On the other hand, women’s wear rings in most of the revenue for Lululemon Athletica (LULU). So that company is looking to increase its sales contribution from men’s wear.

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New stores

Last year, Adidas (ADDYY) opened three women’s-only stores in China. It also has one in South Korea. Adidas has also launched new lines for women such as the Adidas by Stella McCartney line.

Nike opened one store in China and another in the US last November. It also opened its first women’s-only store in Europe last month, as discussed in Part 1.

Sales contribution

In fiscal 2014, Nike derived 20.8% of its wholesale revenue, or $4.9 billion, from the sale of women’s products. In comparison, 59.2% of wholesale revenue, or $14 billion, came from men’s products. Women’s revenue also grew faster than men’s, at 12% year-over-year in constant currency terms. In contrast, the growth rate of men’s products came in at 9%.

Nike is targeting $7 billion in sales from women’s products by fiscal 2017. As a high-growth opportunity, Nike’s looking to accelerate development in this segment through more women’s-only retail stores and through its wholesale channels.

Under Armour (UA) derived about ~$0.5 billion in revenue from its women’s products in 2013, ~21% of its total sales. The company plans to double this to ~$1 billion by 2016. Ultimately, UA believes its women’s business could equal or exceed the sales from men’s products.

VF Corporation (VFC), another NKE and UA peer, also wants to hike sales from women’s wear. It launched a new women’s line under its North Face brand this year, a first for the company.

NKE, VFC, and UA together constitute 4.6% of the Consumer Discretionary Select Sector SPDR Fund (XLY).


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