Products and Competition Stretch Market for ‘Athleisure’ Clothing

Products and Competition Stretch Market for ‘Athleisure’ Clothing

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A result: The $330 billion athleisure market — including athletic apparel, footwear and accessories — is being stretched more than Lululemon’s stretchiest yoga pants.

Already, some signs of strain are showing. Nike spooked investors — many of whom had bought into the athleisure boom — by reporting slowing sales on Tuesday. The athletics giant warned that revenue growth could slow further this year, to the midsingle digits, down from initial estimates of almost 10 percent.

That came after Urban Outfitters in October scaled back its promotion of the company’s athleisure brand, just a little more than a year after introducing it. Theory said early this year that it would not move forward with its stand-alone activewear line, Theory Plus.

Kit and Ace, the start-up operated by the family of the Lululemon founder Chip Wilson that specializes in a soft, washable, stretchy fabric it calls “technical cashmere,” laid off about 35 people or 10 percent of the staff at its headquarters in Vancouver, British Columbia, last month. Even Lululemon, the athleisure pioneer, has been struggling with falling profit margins and rising inventory.

“There’s a lot of wannabes out there creating noise,” said Matt Powell, a sports industry analyst at the NPD Group, a market research firm. “The shakedown’s started. A lot of these brands are going to go away.”

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Inside a Tory Sport store in New York. Tory Sport is a line of athletic wear from the designer Tory Burch.

Credit
Benjamin Lowy for The New York Times

Few retail and fashion analysts expect that athleisure and active wear, as a category, will stall. Surveys show participation in group fitness and exercise classes is up among young adults in the United States. A cultural shift in the workplace, led by start-ups and other newer companies, has made it more acceptable to wear sneakers, and even sweatpants, to the office.

In cities like New York and Los Angeles, spinning classes are starting to replace cocktail bars as after-work hangouts, marketers say. And they say younger shoppers increasingly aspire to the idea of a hip, healthful lifestyle — cold-pressed juice and yoga class, documented and broadcast on Instagram — over a new Coach handbag or MaxMara dress.

Retailers have jumped on that trend as a way to inject an edgier, younger, experience-based element into their clothes and accessories, as a lack of decisive fashion hits has depressed sales.

Still, the growing athleisure universe makes it harder than ever for brands to stand out. And retailers are finding that the trend does not present a quick or easy fix to their woes.

“These retailers feel they have to participate, otherwise they’re losing share,” said Lupine Skelly, a retail analyst at Wedbush Securities. “But there’s just a slush of products in the market, and relatively little brand loyalty. How do you differentiate yourself so you’re just not competing on price?”

Gap’s experience offers one example. Though Gap does not break out sales for its high-end Athleta activewear, where jogger pants can go for $79, Ms. Skelly says growth has softened. But the retailer’s less expensive label, Old Navy, has found traction with athletics wear starting at less than $20, a trend mirrored in Gap’s core brands.

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A woman in New York wearing athletic wear. Some brands are starting to see excess inventory.

Credit
Benjamin Lowy for The New York Times

Still, Gap’s chief executive, Art Peck, told investors last month that Athleta “is right in the sweet spot of the lifestyle trend.” That was after a quarter in which companywide comparable sales slid 7 percent from a year earlier, and the company gave a weak outlook for 2016.

Even companies that specialize in the athleisure category, like Lululemon, are having to adjust. The company is fighting back against the competition by expanding its men’s business and growing globally. The company has said that it intends to open 60 stores this fiscal year, including eight stores each in Europe and Asia, where Lululemon runs just a handful of stores. It has 354 stores worldwide.

Nike, meanwhile, has struggled with mounting inventory, aggressively marking down its shoes and hoodies at factory stores and selling to third-party discounters — both steps the athletics wear giant has historically been loath to take.

But Trevor Edwards, the Nike brand president, signaled that Nike would double down on athleisure trend. “More and more women are blending running, fitness and sports style in their lives, and this shift is fundamental to how this business operates,” he said on a call with investors on Tuesday.

With such a deluge, can Yogasmoga hope to make a mark?

Yes, says Mr. Bali. Yogasmoga’s shirts and pants are the softest and most durable, made from a line of high-end fabric it calls Aurum, a blend of Lycra and Supplex, a pile-resistant type of nylon. They are made in the United States, allowing Yogasmoga to respond to trends in real time.

The company spent two years developing its Carbon 6 black dye for pants Mr. Bali promises will never go see-through, a product mishap that previously plagued Lululemon. And shoppers appreciate Yogasmoga’s authenticity and commitment to social causes, he said: There is no Photoshopping in any of its ads, and the brand has set up a nonprofit organization that finances women’s health, education and microfinance projects in India.

“We’ve put so much love into this,” Mr. Bali said. “We‘re not going to be the silly brand nobody remembers in a few years.”

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