Sportswear sector to reach 440 billion euros

The sportswear industry has been characterized in recent years by growth at or above pre-pandemic levels compared to other sectors, thanks in part to the increased consumer focus on health, wellness, and sport. The three-year period also looks set to see a steady increase over 440 billion euros, according to Euromonitor’s data. However, forecasts for the current fiscal year remain cautious for McKinsey & company, as revealed in the Sporting Goods 2023 report.

Faced with a recession-threatening horizon, the study highlights how players will need to incorporate resilience into their operations, overhaul their supply chains to deal with demand volatility, rising costs, and logistical chaos. The game will be played between brand value consolidation, sustainability, and nearshoring. The latter will allow direct control and reduce production risks, as well as a more sustainable operating model in the eyes of the consumers. Chiara Laudanna, partner at McKinsey & company, illustrated this scenario to MFF.

What are the business estimates for the global sportswear market?

According to the latest Euromonitor data, the global sportswear market closed 2022 with 352 billion and is set to exceed 440 billion euros in the next two years with an average growth rate of 8%, considering the high inflation in the recent months. Sales of sneakers, also used for more formal occasion, could rise by 20% by 2025 to over 80 billion. As for 2023, however, it is too early to say whether or not we will assist a return to growth over the previous year.

What factors will boost the industry?

There has been a perfect storm of supply chain challenges in recent months. The impact on sportswear companies was smaller if compared to other sector but overcoming it will require investing in resilience and productivity. The management of three themes by companies will determine their performance. First of all, the brand value consolidation. About 55% of our respondents are certain that it is important to have a strong and reliable brand, with half expecting investment over 5%. Secondly, the acceleration of decarbonization and circular business models, as 86% of the companies surveyed have announced or have plans to reduce Co2 emissions. Finally, nearshoring, as 75% of our respondents plan to expand it by 2025.

Which countries will lead the way?

Looking at individual country trends, China’s sporting goods market is among the most promising. It is expected to grow by 9% per year through 2025, reaching about 125 billion dollars.

How are sports brands moving forward?

They are consolidating their fame through co-labs with sought-after fashion brands, if we think about The north face and Gucci, Arc’teryx and Jil Sander, and working on micro communities to engage more with customers. In the past three years, companies like Nike and Adidas have gained positions or made their way, like Lululemon and Jd sports, into the top 20 fashion players in terms of economic profit that we publish annually in our «State of fashion». Most of those mentioned before had a market capitalization above that of the industry. Their contribution to profits increased from 19% to 34% out of the total.

According to your study, the European circular sports market may rise 20-25% per year, touching 30-50 billion euros by 2030. Where do companies stand today?

They still have a long way to go to meet their environmental sustainability goals. The two determining actions will be to set the emissions threshold and define a specific abatement curve. After it, choosing sustainable materials and circular business models. (all rights reserved)