Athleisurewear Fad A Rapidly Growing, But Crowded Space

SportsOneSource, sales of yoga apparel rose 45 percent year over year. During the same time period, yoga participation grew by -- 4.5 percent. Analysts at Barclays may have come to a similar conclusion. The analysts stated that U.S. athletic apparel market (or "athleisurewear") will rise by nearly 50 percent to more than $100 billion by 2020. Many retailers and manufacturers sell athleisurewear but the large players include Lululemon Atlethica LULU, Nike NKE, Under Armour UA and The Gap GPS

Analyst commentary

Brian Sozzi of Belus Capital Advisers told Benzinga in an e-mail interview that “the apparel industry is ripe for innovation, the last real beneficial piece of clothing that was created was compression gear.” Sozzi also stated that specialty retailers now have an opportunity to “re-excite” consumers with the athleisure trend. However, Sozzi isn't convinced that the market is headed towards a $100 billion market. According to Sozzi, a leading jeans manufacturer such as VF Corp VFC needs to commit more capital to the category while its retailer partners need to devote “stores inside stores” and not just tables towards the line. The Talented Blonde Kristin Bentz noted that the athleisure wear market is becoming “more integrated” in to daily life as well as corporate life. In an e-mail to Benzinga, Bentz pointed out the fact that corporate America sees the value in fit and healthy employees, an attitude which certainly supports the growing trend. However, Bentz stated that the market is getting “painfully” crowded and only a few names in the space stand out. “Lululemon was lucky to occupy a niche between yoga freaks and gear-a-holics,” Bentz told Benzinga. The Lululemon brand is “technically precise to give it studio credibility and expensive enough to pass muster to the higher-end. However, Nike and Under Armour can come in and accomplish both faster and cheaper.” Bottom line, according to Bentz, retailers and manufacturers that aren't Nike and Under Armour need to “be afraid. Be very afraid" of the competitive threat.