The Federation of the European Sporting Goods Industry (Fesi) has surveyed its members to determine the extent of the Covid-19 pandemic’s effects on them and the sporting goods industry. In short, it has found that the pandemic has cut revenues considerably and that e-commerce, while more important than ever, has not made up the difference. To be precise, 45 percent of Fesi’s member companies have seen their revenues plummet by 50 to 90 percent during the crisis.
Naturally, the closure of stores in compliance with quarantines has all but eliminated sales through brick-and-mortar channels. But it has also raised e-commerce to unprecedented levels. As Fesi points out, digitalization — long a “key driver for the sporting goods industry” – has never been as important as it is now, and companies with the best omni-channel retail strategies in place are the ones most successfully weathering the storm. Unfortunately, total losses tend to outweigh overall gains from e-commerce. Some 85 percent of companies surveyed have seen only a 0 to 20 percent boost from the net.
As for production, Fesi identifies a number of reasons for the pandemic’s depressive effects: social distancing, the varying infection and death rates of the virus by country, the cancellation of orders by clients, and short- and long-term uncertainty.
Overall, the survey finds, the rescue packages set up by the national governments of Europe have so far been insufficient to safeguard the sporting goods industry. Fesi believes the problem is twofold. On the one hand, according to Fesi’s president, Neil Narriman, it is important to boost the companies’ liquidity to enable them to cover fixed costs at a time of retail closures and changes in consumer behavior. On the other, notes its secretary general, Jérôme Pero, “it is crucial to also start preparing gradual longer-term strategies now, in order to re-launch the economy sustainably in a safe and coordinated manner.”
The survey also finds that 35 percent of the companies are producing personal protective equipment (PPE), such as medical masks, and 25 percent have instituted some kind of policy to encourage exercise and social distancing among their employees and the public.
In Fesi’s estimation, the surveyed companies are geographically representative of the Covid-19 problem. The survey’s cohort consists of 40 percent large enterprises (more than 250 employees), 30 percent SMEs (10 to 249 employees) and 20 percent micro-enterprises (less than 10).
Fesi has submitted the survey to the European Commission and will be repeating it regularly and extending it to all the members of its national associations. The next edition will look into the effects of supportive policies on the EU, national and local levels.
