NEW YORK -- After somewhat of a dry spell, activewear retailers and manufacturers are forecasting a bountiful spring '96 season.
Two elements are coming together to create this positive market configuration. First, a high-pressure system of branded activewear, which started blowing in last year, is expected to settle across the country by next spring. On top of that, a blast of summer Olympics merchandise is expected to blanket the country, with a concentration in the Southeast, leaving the activewear market with good, sales-driving conditions.
This comes as welcome news to many in the market -- for many manufacturers and retailers who needed direction when sales of licensed team apparel started to slow.
'I think activewear is one of the best growth opportunities for 1996 at J.C. Penney's,' said Steve Carter, merchandise manager. 'Not just in men's but for the entire company. Current performance would dictate that, but also the freshness and excitement the brands are offering for spring '96 make me think so. I think the combination of the strength of the brands like Nike and Adidas coupled with the excitement retailers should experience for Atlanta '96, should make spring one of the best years in recent memory.'
Herman's We Are Sports is basing its spring predictions on current sales.
'The Olympic and Americana merchandise I have already has performed very well thus far and branded is as hot as a pistol,' said John Hoeffler, men's and women's activewear buyer. 'In the Olympic-themed product, Nike [which has Americana product as opposed to officially licensed Olympic apparel] has a whole red, white and blue theme, and it's one of the hottest I've seen. I expect it to be a barn burner.'
Herman's has 40 Olympic shops so far out of its 117 stores, and, by the time the Games roll around, they'll be stocked with both officially licensed Atlanta '96 merchandise, as well as Americana-themed apparel, according to Hoeffler. Besides the Olympic shops, Herman's has been successful with recently established in-store boutiques featuring Nike, Reebok, Adidas and Fila among others.
'My number-one priority is Nike, followed closely by Adidas,' Hoeffler said. 'Both are getting double-digit increases. And in some of the stores with branded shops, we're getting triple-digit increases. The branded business was fair through 1994 and the first quarter of 1995. And since April it's had double-digit increases. It was like the sky opened up. We expect a very good spring '96.'
Jeff Conor, apparel buyer for City Sports Boston, said the movement to branded product is a boon to his business, since the chain was never heavily into licensed apparel to begin with.
'With the switch in the market from licensing to branded, we can't keep anything from the top names in the stores,' Conor said. 'And anything with a swoosh on it is the product in branded. From what I've seen, I think there will be a lot more of this. Business for spring will be much better. We've been on a tear this whole year anyway; and now that the general population is changing to the branded look, we're ready for it.'
City Sports will start offering Olympics merchandise around holiday, and will build up the offering through spring until the Games begin.
'I think these Olympics will be hotter than the last because they're being held in the homeland and that means more to people,' Conor said. 'Also, Olympics merchandise is a big thing for tourists, and here in the city we get a lot of tourists.'
J.C. Penney's has its own private label apparel featuring the USA Olympic and Atlanta '96 logos.
'We think a lot of attention will be given by customers to our Olympic brand as well as merchandise by Champion and Starter that will depict the '96 Olympics,' said Carter. 'So we will do shops in-store around the Olympics.'
Nike plans to deliver Atlanta '96 'team-inspired' merchandise at the end of January and the end of March, according to Liz Flynn, spokesperson.
And Reebok will be offering an array of Olympic-themed apparel. 'It's key to create product that is not just Olympic product,' said Jim Riley, vice-president and product manager. 'So we try to create apparel that has the U.S. flag theme in our running category, and the world flags theme in shorts and T's. It won't be a key part of our spring business -- our key product is still our basic product -- but you need that fluff around your key product. People buy the fluff but they always need the basics. Basics are very safe and, year in, year out, people buy the same things. Then they buy crossover products, and collection items like the flag line. So retailers can merchandise and draw people to the racks of other products.'
J.C. Penney's Carter said that's what his store plans to do for spring.
'Beyond [Olympics], we see the real strength in the market coming from brands such as Nike, Adidas and Champion,' he said. 'Virtually all the brands carry a line of fundamentals -- T's, tanks and shorts, fleece and warmups. But most then go beyond that and offer themed groups such as basketball and volleyball, and we're making plans for those also. So we'll be carrying their fundamentals plus looking at groupings that we will space throughout the season.'
And before anyone thinks licensed team apparel has been written off as dead, it hasn't. Stores like Penney's will maintain a strong presence in the category by concentrating on the key local teams. 'In other words,' said Carter, 'instead of offering a wide range of products covering a range of teams, we'll pull the goods for the key local teams. In Houston, we'll be the dominant Houston Rockets retailer, and, in Chicago, we'll be the dominant Bulls retailer. To a certain degree, there is a decreased consumer demand, but in individual cities that have a winning sports franchise, it's still a very viable business.'
On the manufacturing side, even if they don't offer officially licensed products, vendors see the Olympics as an event that will kick start spring business.
'The Olympic merchandise brings people into the department, but I also think that, with the Olympics everyone lays a guilt trip on themselves and they get into the mind frame they should be doing more active things,' said Reebok's Riley. 'They're sitting on the couch watching these athletes and then they begin to think they should go out and do something. So they buy other activewear as well.'
Nike's Flynn agrees.
'I'm optimistic that it will be a great year for the activewear business because people are interested in the Olympics, especially in the U.S. teams, and that will draw them into the stores,' she said. 'Also, we have great indicators based on last year showing that lifestyle fitness is becoming more mainstream every year. We had a record year last year for our apparel sales.'
Fila USA is expecting its spring business to increase by 40 percent, predominantly because of department store expansion, according to Tom Moore, director of department store sales.
'Our strength comes from the downtrending of licensed apparel; that's brought our product into the department,' he said. 'The active departments are being retooled to increase fashion products, instead of having just a very narrow licensed product assortment.'
Some of the items Fila expects will do well include T-shirts, nylon Fila butt-printed shorts (where the brand name is emblazoned on the rear of the shorts), swimwear and Grant Hill basketball apparel.
'We do about 65 percent of our business with those core items,' Moore said. 'Another 35 percent comes from fashion items we build around that to impact our business.
Reebok's Riley said he sees the activewear market experiencing a kind of 'crossover' syndrome and the apparel reflects that.
'People are doing a lot more activities,' he said. 'With the addition of rollerblading, and the lack of interest in baseball, people are out doing all sorts of exercise instead of being couch potatoes.
'Basketball is still a hot area of the business, but I see a huge increase in crosstraining,' Riley continued. 'Shorts are important in different lengths, from running to more active lengths with 4 1/2- to 5-inch inseams. They can be combined for activity and sport and can also be worn as a swim short. I also see a big price sensitivity happening as to what the consumer will pay. So we have to be sure to have product that hits every level. We have the top tier for that client all the way down to product for someone who only has a few dollars to spend.'
Nike has two themes happening for spring: technical products and lines that get their inspiration from organized sports.
'Within those two themes, we have our biggest categories,' Flynn explained. 'There's soccer, because it's growing tremendously. And we have our OTS [organized team sports] line, which is the authentic and replica product of the 14 men's college basketball teams and five women's teams that we sponsor. That business is huge. We also have our ACG [all-conditions gear] line, and in that we have River Guide, which is a sandal/water-inspired collection made of quick-drying fabrics like nylon and mesh. That's been really big for spring. And in the ACG category, we have our Approach line, our F.I.T. (Functional. Innovative. Technology.) line and our Tailwind technical running gear.'
When pressed about what they like so much in the branded lines now, retailers say it's fundamental products as well as fashion items.
'I think the basics, like Nike's T's, tanks and shorts, are a fundamental stay of the business,' Herman's Hoeffler said. 'But in Nike and Adidas, there's a definite fashion segment, and you need that to sell the other pieces.'
The fashion items Hoeffler speaks of include graphic T's and shorts, butt-logo shorts and, from Nike and Adidas, nylon wind jackets and pants.
Conor at City Sports said consumers will see a lot more sportswear inspiration in the activewear.
'Companies are coming out with merchandise that is sports oriented but you can wear it out,' he said. 'And I see a lot more brighter fashion colors that we haven't seen. They're not fluorescents like the old days, but a lot of brighter accents, like yellow.'
Despite all the optimism out there, both sides are grounded in the reality of the current tough business situation.
'You have to be aggressive versus the other retailers,' said Hoeffler. 'The competition has never been as fierce. Everyone's slugging it out for every active dollar because the active market is not growing. You have to go after assortments with major vendors, and you have to be aggressive with closeouts.
From the manufacturing perspective, Reebok's Riley said being a major brand helps getting placement in a tight retail environment.
'A buyer may buy a lot in a boom time, but they narrow their purchases in a tough time,' he said. 'We're lucky because ours is a major brand and is hopefully one they'll support. In a lot of department stores, you have a hard time finding the sports brands. It comes down to the management of large department store chains and whether or not they want to be in sports. But the Olympics are an added edge, giving them an opportunity to get into that business. So if they do a good job on the Olympics, they can keep the effort on sports categories, and for a long time they can have a basic product mix that will do well.'
