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adidas david beckham
SPORTSWEAR

sector Overview:

Sportswear is very big business: In Europe alone, almost 90% of people under 35, and 76% of the population as a whole, buy at least one item of sportswear a year. Consumers benefit from a huge range of choice so brand awareness and credibility is pretty much everything. Small wonder that marketing budgets are enormous and performance enhancing technology considered the holy grail of any sports manufacturer. In addition, trends in health and well-being are acting as catalysts for change as governments and sports associations recognise the cost benefits of securing fitter, healthier nations.


The range of activities that we participate in is also growing as action sports, such as snowboarding, extreme biking and in-line skating, catch up with traditional games such as soccer and basketball. This is not solely a Western phenomenon. Thanks to greater promotion, the massive fan-bases that support the top teams and the worldwide desire for a healthier lifestyle there is significant and growing markets in Asia. Overall, annual growth in sportswear manufacturing is expected to continue at an average of 5% over the next decade.

ONES WE ARE WATCHING

 

Nike
Nike, the world’s largest sportswear company, is in growth mode. 2007/8 revenues of $13.5bn were up 13% on the year before while gross margin increased by 16%. As it seeks to incorporate yet higher performance credentials into its products, this mass-market player is pushing harder into the swimwear and soccer areas. The rise of Adidas seems to have acted as a catalyst for Nike which has started linking social networking to its stores and won a series of prizes for new products including the Revolutionary Support Sports Bra, the Considered 2K5 shoe and the Nike+ Air Zoom Moire. Nike is aiming at $23bn revenues by 2011.

Puma
The outcome of the brothers’ split at Adidas and so also based in Herzogenaurach, Puma was, for a long time, a relatively small player in the sportswear sector. However, it gained significant growth and rising profitability in the early part of the decade when its products were increasingly worn by celebrities such as Madonna. Now, with a string of new golf, running and soccer products hitting the market, Puma is a strong player from both the fashion and performance perspectives. It has double digit revenue growth and has had particular recent success at the Rugby World Cup and at the African Cup of Nations where it equipped over half the teams.

 

 

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