Emil Gullia
As the economy continues to stabilize, new trends have unfolded regarding consumer health habits. The perfect storm is brewing for niche sporting goods retailers as consumers are becoming more mindful about health and reconnecting with the outdoors. Small industry sporting goods and outdoor companies are taking advantage of the climate and growing their concepts into national chains. This trend has made it possible for these retailers to grow their footprint and boost sales by being able to offer specialty brands and services to consumers fueling a healthy competitive market.
Evidence of this expanding market trend is found within the growth plans of smaller regional chains such as Olympia Sports, Dunham Sports and Sport Chalet. National brands such as Gander Mountain, Academy Sports + Outdoors, Dick’s Sporting Goods and Cabela’s also are reacting to the changing consumer trends and seeing an increase in their growth metrics. Examples include:
· Academy Sports + Outdoors has been aggressively expanding in the Southeast with new store announcements and has plans to expand its distribution center in North Georgia, adding more than 250 jobs.
· Olympia Sports announced plans to open 25 more stores in 2013.
· Sport Chalet, a chain which has suffered in the past from the economy, is expecting a 15 percent growth in revenue in the next year.
· Cabela’s public earnings announcement on July 26revealed revenue was up 11.6 percent on a year-over-year basis and same store sales were up 4.7 percent.
· Waterford,Michigan-based Dunham’s Sports is expanding with a focus in the Southeast.
· Gander Mountain also is expanding and is opening in new markets.
· Dick’s Sporting Goods, despite a decline in share price as a result of second-quarter results, has been growing significantly by expanding its geographic footprint and retail offerings.
· Hibbett Sports, a sporting goods retailer specializing in footwear, equipment and apparel, raised its 2013 outlook with fiscal second-quarter earnings rising 33 percent. The company also opened seven new stores in the last year and expanded three equaling to 837 stores nationwide.
Not only are outdoor and sporting goods stores seeing a continued trend in the healthy consumer mindset, specialty clothing and athletic wear retailers are following the trend. Evidence suggests that “workout” and “performance” wear is more commonly accepted as everyday wear and increasing market share. Retailers such as lululemon athletica and Gap’s Athleta are prime examples.
· lululemon athletica continues to see the highest sales per square foot of any sporting goods apparel chain at $1,800 per square foot. Its clothes have set the standard for high-quality yoga and active wear and a sizeable part of the store is tailored towards men.
· Gap’s acquisition of Athleta in 2008, a women’s active wear brand starting as an online retailer, plans to operate more than 50 stores by 2013.
Gym and fitness facilities have benefited as well. During the 2012 Florida ICSC conference at the Gaylord Palms in Orlando, many landlords voiced an interest in expanding gym concepts as a result of the response from consumers. Nationally-recognized tenants such as LA Fitness have continued to expand across the country while smaller gyms, led by Cross Fit and TRX, have continued to take form in shopping centers and park green space across the country.
Industry leaders continue to debate the source of this retail trend. Is it a result of the economy, a change in consumerism, services offered or recently built or upgraded space? Regardless, it is evident that the average consumer is acutely aware of the importance of a healthy lifestyle. It also is certain the demand is recognized by top-tier retailers who cater to these mainstream values and lifestyle.
— Emil Gullia, CCIM, is senior director of business development for Franklin Street’s retail tenant services group.