The rise of the “athleisure” brand: how companies are tapping into women consumers

By Melissa “Missy” Enaje

The lifeline for fashion trends varies depending upon the season, but retail sporting-good companies are banking on the longevity of a particular consumer market: “athleisure” or retail goods focused on women and their athletic and leisure pursuits.

“You are seeing retailers take away from other categories or other areas of the store to make room for sports apparel, just because it’s on fire,” said Poonam Goyal, Bloomberg Intelligence U.S. retailing senior analyst, “growing much faster than the rest of their apparel.”

Retailer J.C. Penney Co. Inc. opened its first store in Brooklyn at the end of August, occupying 124,000-square-feet of retail space, including a dedicated area for the woman consumer.

“They have a large section for women’s athletic wear,” said Chen Grazutis, Bloomberg Intelligence branded apparel equity analyst, “something they didn’t have before.”

J.C. Penney partnered with Nike Inc. for a girls’ active wear line but removed the brand from stores in 2013. It is now slated to return to stores by the first quarter of 2015, added Grazutis.

A few retail companies that aimed to capture this market are performing well. J.C. Penney (JCP) shares closed at $7.64 compared with its 52-week low of $4.90. Nike (NKE) shares closed at $87.23, well above the 52-week low of $69.85. Under Armour (UA) shares closed at $65.37, sharply higher than the 52-week low of $38.02.

“The woman consumer is shopping for sports apparel, not to say that men aren’t, because Lululemon also has a men’s line,” Goyal said, “but women are definitely shopping.”

The Vancouver-based technical-athletic apparel company caters to customers interested in yoga clothes and running gear. Over the past month, the company increased new merchandise shipments to its stores, even as analysts expect strong e-commerce trends.

As for Under Armour, the Baltimore-based sports clothing, athletic shoes and accessories retailer, third-quarter expectations are strong. An industry report by Amy Noblin of William Blair increased its sales assumption for the company to $924 million, representing a growth of 27 percent compared with the same quarter a year ago.

“In the last six months, Under Armour made a conscious decision to focus on women,” Grazutis said. “Before NFL kickoff, they came out with a lot of commercials with ballet dancer Misty Copeland. Under Armour endorsed a ballet dancer because they figured out that’s the untapped market.”

The company’s latest commercials fall under the campaign “I Will What I Want.” Last month the company signed model Giselle Bündchen to a multi-year contract. Commercials featured the model dressed in Under Armour apparel during a workout session.

“Under Armour going after the women’s side speaks deep potential of the market,” Grazutis added. “Nike, Gap Active, everybody’s chasing the ‘athleisure’ segment category.”

Caption: Nike Inc.’s marketing campaign for Nike Training Club, its instructor-narrated fitness app. Photo Credit: Melissa “Missy” Enaje