The Battle of the Athleisure Lines: With Dick’s, JCPenney and Kohl’s All in the Game, Who Stands to Win Most?
Even as COVID-19 vaccines continue to be distributed and government-mandated lockdowns ease, many experts have suggested that pandemic-fueled athleisure trends are here to stay — so it’s no surprise a number of nationwide retailers are investing in the market with their own private-label activewear lines.
In November, JCPenney launched Stylus, a women’s label that features T-shirts, jumpsuits and sneakers costing $26 to $89. Early this month, Kohl’s debuted FLX (pronounced “flex”) — composed of core apparel like tees, loungewear and shorts, as well as seasonal pieces such as fleece and jackets for men and women, with prices from $25 to $125. And just this week, Dick’s Sporting Goods launched VRST (pronounced “versatile”) — its first men’s athleisure line, including a variety of commuter pants, joggers and shorts along with tees, hooded sweatshirts and quarter-zips that range from $30 to $120.
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But in the battle for the athleisure crown, which retailer is best positioned? According to experts, there is likely to be no one winner — or loser — in this duel as retailers have multiple paths to success (or failure) in the category.
“I’m not sure it’s a battle as much as it is a winning formula for all retailers,” said Jane Hali, CEO of brand investment research firm Jane Hali & Associates LLC. “Someone who’s not in the industry might ask, ‘Why do this now at the end of COVID?’ Well, we’re not going to go back to everything the way it was. Anyone who isn’t in it is going to lose share.”
Indeed, according to Farla Efros, president of retail consultancy HRC Retail Advisory, the athleisure category itself has emerged as “the clear pandemic winner as it’s so multi-purposed — for comfort, working out and [overall] flexibility.”
“[Private label] allows retailers to stretch price points, stretch customer demographics and stretch margins. The retailers that have established brands and credibility in apparel can have success,” she added.
Over the past year, Kohl’s has been growing its active business by increasing the square footage of the area dedicated to the category by 25% in roughly 160 of its stores and introducing Adidas shop-in-shops in 175 outposts. JCPenney has also been working to strengthen its branded merchandise offerings this year, reinventing its Xersion activewear brand two months ago — the first redesign since its launch in 2008. Dick’s, however, has long been a big player in the space, with Calia by Carrie Underwood and its namesake DSG label.
What’s more, other boldface retailers have already dabbled in the space prior to the COVID-19 outbreak that forced consumers indoors — including Nordstrom with in-house fitness line Zella (also sold at Nordstrom Rack under the name Z by Zella), as well as Target, whose All in Motion label hit the $1 billion-in-sales mark just a year after its launch. Plus, there are athletic behemoths like Adidas, which announced a partnership with Peloton to create a line of athletic apparel and lifestyle gear in unisex styles — the start of an ongoing collaboration between the two companies and proof that retailers are able to find cross-branding opportunities in similar categories.
According to The NPD Group, private label represents about a third of all activewear apparel sales today. Last year, it advanced in the low single digits to low teens, while the rest of the activewear sector was down in the mid-single digits. Senior industry advisor of sports Matt Powell told FN that more and more retailers are shifting dollars away from brand partners and investing in their own private labels for a number of reasons.
“First of all, brands are growing their own businesses very aggressively, so they’re really putting themselves in a position of being a competitor to the retailer. Number two, operated and managed properly, the private-label business makes significantly more margin than the branded product,” he said. “Third, it’s a great way to differentiate themselves from their competitors; if retailer A has a proprietary brand and retailer B doesn’t, that already helps retailer A stand out.”
But as the market continues to expand, concerns have naturally surfaced over whether athleisure is on the verge of saturation. While Hali, sees more runway for the firms looking to tap into the sector — suggesting companies that are not already doing so are missing an opportunity — NPD’s Powell warned that getting into the private-label athleisure space is not a cure-all for struggling retailers.
While private label has historically grown in periods of economic uncertainty and distress, retailers tapping into the market will still need to be able to fill a gap in the marketplace to see success beyond the pandemic boom — and, of course, factors such as the cost of the offerings; product innovation and performance; the inclusivity of the label; and the company’s existing hold on the athleisure market.
“These things don’t always work,” Powell said. “Retailers have been pretty successful with it, but it’s not a guaranteed success. The product has to be positioned correctly, sourced correctly and priced correctly. It’s not a simple magic wand.”
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