Actionable news
0
All posts from Actionable news
Actionable news in DKS: DICK'S SPORTING GOODS Inc,

Retail, be warned, there's not enough room in this hot women's category to go around

With trouble bursting at the seams in the apparel industry — store closings, over-stocked inventories and outright bankruptcies — retailers big and small continue to look to tap into a market that has often been dubbed "hotter" than the rest: athleisure.

"True Religion declared bankruptcy, Ascena Retail Group's stock is falling. ... J.Crew is facing challenges," Manik Aryapadi, a principal in consulting firm A.T. Kearney's retail practice, told CNBC. "Athleisure is actually growing. ... It's growing at the expense of denim and traditional women's wear."

But with that growth, albeit exciting for some retailers, comes speculation that the market is becoming overcrowded and that too many players are now vying for a piece of it.

"The problem with the athleisure market isn't so much that demand is dropping off a cliff, it's more that supply is excessive and demand is not quite what it once was," GlobalData Retail Managing Director Neil Saunders said in an interview.

"These two dynamics make for unhappy bedfellows and are the reason there is so much pressure on existing players, and why some are exiting the market," Saunders said.

When Dick's Sporting Goods announced earlier this week that its gamble on the women's athleisure market is coming to an end, it sounded somewhat of an alarm across the industry.

Two years ago, Dick's announced the launch of Chelsea Collective, a boutique that aimed to fuse fitness and fashion with athleisure styles and beauty brands. The first two — and only — Chelsea Collective locations were rolled out in Virginia and Pittsburgh. On Monday, the Pittsburgh Post-Gazette reported that the stores will be closing in early August.

Around the brand's inception, Dick's said Chelsea Collective would curate popular brands such as Brooks, Hunter Boots, Pure Vida, Nike and philosophy. However, the concept may have shown up on the scene too late.

"Pioneers and innovative retailers like Lululemon continue to do well, even if the edge has come off growth," Saunders said. "However, a proposition like Chelsea Collective ... is feeling the pain."

It appears the safer bets in the space are made on those players who have managed to build a loyal following and a respected brand, especially with key categories of shoppers like millennials. Newcomers should take notice.

Dick's said it opened its Chelsea Collective stores as a "lab" to better understand the women's athletic apparel and accessories business.

"As the leases at both [Chelsea Collective] locations are expiring soon, we have concluded the very successful...


More