Renewed spending will aid demand for sports apparel, but online sales will limit growth.
Los Angeles, CA (PRWEB) March 12, 2012
The Licensed Sports Apparel Stores industry includes about 841 firms that operate an estimated 19,161 brick-and-mortar stores. These retailers sell apparel licensed from major sports leagues (e.g. NFL, NBA and MLS) and colleges. Stores are located across the country in line with population disbursement, and major retail outlets are often located within sports stadiums to capture demand from team enthusiasts. The economic downturn did not spare the industry, particularly because consumers often purchase team- or league- branded sports apparel as impulse items, and they generally consider them to be luxury goods. According to IBISWorld industry analyst Brian Bueno, “as unemployment soared and incomes fell, consumers cut back on unnecessary expenses, including apparel and sports-related recreational purchases.”
IBISWorld estimates that industry revenue fell 2.1% and 1.6% in 2009 and 2010, respectively, because of the slowdown in consumer spending. Bueno says, “since 2011, the economy has shown signs of improvement and the unemployment rate has slowly crept downward, bolstering consumer sentiment and spending.” As a result, industry revenue increased 0.7% in 2011 and is expected to jump another 3.0% to $3.7 billion in 2012. Overall, revenue is estimated to grow at an annualized rate of 0.6% over the five years to 2012. Nonetheless, external competition from online sports apparel retailers has generally hurt industry performance during the past five years, limiting the potential for a stronger recovery in sales in 2011 and 2012. While many industry firms also operate online retail channels, these sales are not captured within the industry's revenue figures, which only include brick-and-mortar sales. The online market has generally increased price competition, hurting demand for physical stores.
The US economy is expected to continue strengthening, which will have a direct positive influence on the Licensed Sports Apparel Stores industry over the next five years. As unemployment falls, incomes rise and consumers regain confidence, spending on discretionary items such as sports apparel is expected to increase. IBISWorld anticipates that these trends will likely benefit the industry’s top three players, Dick's Sporting Goods, Foot Locker and the Sports Authority. These factors will also raise sporting event attendance, creating demand for industry products from fans seeking to support a team. Increasing competition from big-box retailers (e.g. Walmart) and online retail channels will likely hamper growth, but revenue is forecast to grow over the five years to 2017.
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This industry sells licensed sports apparel, accessories and collectibles. Retailers must obtain a license to sell branded sports apparel and accessories. Many retailers also carry replica items, which are specifically identified as such. The industry does not include online sales of licensed sports apparel or products purchased through big-box retailers and department stores.
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