The athletic shoe market dipped by 8.2% in 2020

The athletic footwear market has been performing generally better than the market for sports apparel and sports equipment in the last decade. Apparently, the opposite happened last year because of the Covid-19 pandemic, as many consumers didn’t buy a new pair of sneakers, except for running or exercizing, as they were confined at home and stores were closed for many weeks.

In terms of U.S. dollars, the vendors’ global sales of athletic footwear dropped by 8.2 percent to $65.37 billion in 2020 from $71.21 billion in the prior year, with all the regions posting year-on-year declines. As the dollar was undervalued, the drop of the global market in terms of local currencies was higher. The vendors’ sales outside the U.S. were down by 8.9 percent to $41.38 billion in terms of dollars, but converted into euros, they fell by 10.5 percent.

After a good start to the year, the coronavirus outbreak first hit suppliers in Febuary, closing Chinese factories and disrupting exports, before spreading through Asia and into Europe and North America a month later. The combination of interrupted supply, closed retail stores and consumers in an initial state of shock caused broad sales declines industrywide.

Our annual study of the wholesale market relies primarily on the publicly available data of the major companies. We also rely on input from management, press and credit reports or our own estimates when no other data is available. Most revenue figures are reported in terms of invoiced sales, but as many brands include their direct-to-consumer (DTC) revenues in their numbers, the equivalent wholesale value is perhaps overstated by about 8 to 10 percent if we take into account a DTC share of around 20 percent with a gross margin of 50 percent. This is partly compensated by the brands’ sales to distributors at a discount.

All data are compiled in local currencies and converted into U.S. dollars at the average OECD rate for the year. Detailed market shares by region will be available shortly from the annual Apparel & Footwear Market Facts report compiled by Sporting Goods Intelligence in the U.S., which can be ordered at www.sginews.com.

It was not all bad news last year, as several factors contributed to a faster recovery at some companies than at others, allowing six brands to end the year with positive growth and minimizing the declines for others. Running specialists like Hoka One One and On Running, which we have added to our annual chart for the first time, are among them. Like Brooks Running, they posted significant double-digit increases thanks to a boom in the sport of running not seen since the ‘70s, due to the need to keep fit during the pandemic. It was similar to the bike and fitness boom that lifted the global sports equipment market last year.

Running was an important growth segment for bigger, more diversified and mature brands like Nike, Adidas, Skechers, Puma, New Balance and Asics, but this didn’t prevent them from booking overall sales declines for the year. Other winners were the big two Chinese brands, Anta and Li Ning, as the retail sector re-opened much faster in China than in the West, allowing a quick return to growth. Not all the Chinese brands benefitted, though, as both Xtep and 361° reported declines for the year.

The early days of the pandemic saw store closures and stay-at-home orders in many regions. Some European countries, along with Australia and Canada, kept retail stores closed for months after the rest of the world reopened. The result was a huge shift to online shopping, giving the advantage to brands that had invested in a robust e-commerce infrastructure such as On. Nike, which has hardly concealed its plan to capture as much of its brand sales as possible through its DTC channel, credited the pandemic for speeding the shift to digital by as much as three years as compared to its prior expectations.

Asia, which has been the fastest-growing region for several years, turned in the least-worst performance last year, dropping by just 6.2 percent to $19.45 billion and accounting for 29.8 percent of the world total, up from 29.1 percent the year before. North America declined by 6.9 percent to $23.98 billion, but increased its share by 0.5 percentage points to 36.7 percent.

Those gains came to a small extent at the expense of Europe, where the vendors’ sales fell by 8.5 percent in dollars to $16.42 billion, going down by 0.1 percentage points to 25.1 percent. In terms of euros, they were off by 9.9 percent. Other regions fared worst, falling by 18.7 percent to $5.51 billion, hurt by extended Covid outbreaks in South America that decimated everyone’s sales in the region. Other regions came to account for just 8.4 percent of the global market, down from 9.5 percent in 2019.

The Nike group remained comfortably atop the leaderboard with a big gain in global market share to 39.4 percent, extending its lead over the perpetual number two, Adidas, which will remain in its position after the divestiture of Reebok. The top tier accounted for 58.8 percent of the market in 2020, down from 59.3 percent in 2019. Below that, Skechers remained securely in third place, followed by Vans and Puma, with New Balance and Asics rounding out the $2 billion-plus club. That second tier also lost share, dropping to 23.2 percent of the market from 24.2 percent, with Anta and Crocs nipping at their heels. The biggest winners were further down the rankings, where the fast-growing running brands’ share collectively jumped by a full percentage point to 2.8 percent from 1.8 percent.

Photo: Hobi Industry, Unsplash