I commented last week about my 'Athletic Footwear Rebound' theme, and FL being the best and most levered value-play on this trend. It probably makes sense to look at market share trends with the different brands as well. The trends are very telling.
Nike and Brand Jordan. What's there to say here? Business is solid. The brands have collectively gained 5 points of share thus far year-to-date (and not slowing). They won't give it up anytime soon. I wish I could say this about Nike's apparel business, which still can't find its groove. But with 46% share of a $9bn wholesale footwear market, Nike needs about 1.5 points of share gain to maintain the 3-4% top line growth rate necessary to fuel its broader financial model. 5 points gets Nike's USA team a strong finish to a solid year.
AdiBok: Adidas and Reebok can't get out of their own way. Brand adidas is not doing badly - market share consistently down by half a point (but getting less bad on the margin), and order levels are healthy. Adi might fare well in an athletic rebound as the brand never lost relevance (especially in apparel). But Reebok's chart almost suggests that share is going to zero. Almost every retail contact I have in my arsenal agrees that there is absolutely no reason to buy Reebok. The consumer simply does not want it. Reebok's share is down to 3-4%, but keep in mind that its share in lower-end department stores is closer to 8%. Yes, this is very very bad. With cost pressures heating up, and Under Armour coming in (Reebok owns the NFL license, and UA is all over football) my bet is that RBK loses another point at a minimum over a year. That might not sound like much, but it cuts the size of the US business by another 25%, or $90mm wholesale. While not a death sentence for AdiBok, UA has got to have its eye on this one.
One statistic I've got to throw out there is that New Balance - which has 9% of the US market - is larger than both Reebok and adidas combined. It now stands as the number 2 brand in the US measures in sales. Though with 80% of its sales in running and cross training (the two categories UA is targeting) I suspect that things will get ugly for NB.
Chart below shows year/year point change in market share by brand. Courtesy of NPD Fashionworld.
Nike and Brand Jordan. What's there to say here? Business is solid. The brands have collectively gained 5 points of share thus far year-to-date (and not slowing). They won't give it up anytime soon. I wish I could say this about Nike's apparel business, which still can't find its groove. But with 46% share of a $9bn wholesale footwear market, Nike needs about 1.5 points of share gain to maintain the 3-4% top line growth rate necessary to fuel its broader financial model. 5 points gets Nike's USA team a strong finish to a solid year.
AdiBok: Adidas and Reebok can't get out of their own way. Brand adidas is not doing badly - market share consistently down by half a point (but getting less bad on the margin), and order levels are healthy. Adi might fare well in an athletic rebound as the brand never lost relevance (especially in apparel). But Reebok's chart almost suggests that share is going to zero. Almost every retail contact I have in my arsenal agrees that there is absolutely no reason to buy Reebok. The consumer simply does not want it. Reebok's share is down to 3-4%, but keep in mind that its share in lower-end department stores is closer to 8%. Yes, this is very very bad. With cost pressures heating up, and Under Armour coming in (Reebok owns the NFL license, and UA is all over football) my bet is that RBK loses another point at a minimum over a year. That might not sound like much, but it cuts the size of the US business by another 25%, or $90mm wholesale. While not a death sentence for AdiBok, UA has got to have its eye on this one.
One statistic I've got to throw out there is that New Balance - which has 9% of the US market - is larger than both Reebok and adidas combined. It now stands as the number 2 brand in the US measures in sales. Though with 80% of its sales in running and cross training (the two categories UA is targeting) I suspect that things will get ugly for NB.
Chart below shows year/year point change in market share by brand. Courtesy of NPD Fashionworld.
