The ongoing war with Russia continues to take a heavy toll on the Ukrainian sporting goods market, with sales and imports unlikely to recover to their 2021 heights anytime soon. Retailers are struggling to recover from the losses they suffered during the first months of the conflict, while the wholesale sector is slightly bolstered by military orders, according to local players.
Before Russian troops crossed the Ukrainian border, the sporting goods retail sector offered ample development opportunities across the supply chain. Sales were growing by an average of 15 to 20 percent per year, reaching an all-time high of nearly €1 billion in 2021, according to Andrii Mokryakov, an analyst with Pro-Consulting, a Kyiv-based think tank.
One of the key consequences of the largest European armed conflict since World War II was an overwhelming wave of emigration. It is estimated that 6.4 million Ukrainians – predominantly women and children – fled the country seeking shelter in Europe. This exodus dealt a painful blow to relevant segments of the Ukrainian sporting goods market, Mokryakov admitted.
“Since the start of the Russian full-scale invasion, the tides in the sporting goods market changed somewhat as demand for goods aimed at women and children, who left the country, dropped, but it increased in the tactical clothing and footwear segment,” Mokryakov said. “However, this phenomenon was short-lived, and by 2023, there was a tendency for demand to recover in the women’s and children’s segments.
The war with Russia has forced Ukrainian sporting goods retailers to adapt or brace for difficult times, said Igor Klimchyuk, CEO of Ukrainian sporting shoe retailer Kedoff. “The [sporting] shoe market is in great stagnation. Demand for women’s goods has plunged. That’s why we switched from sneakers to producing and selling tactical footwear, which we produce under the Forester brand,” Klimchyuk said. In 2022, tactical shoes accounted for nearly 30 percent of overall sales, he revealed.
Retailers Suffer
Despite the fluctuations in consumer demand, these were not the main challenges for Ukrainian sporting goods retailers. Mokryakov recalled that at the beginning of 2022, most major international brands like Adidas, Puma, Reebok and Under Armour were represented in Ukraine, as were prominent international retailers like Deltasport, Sportmaster, Decathlon, Intersport and 4F.
When Russian troops seized control of 20 percent of Ukrainian territory and active hostilities raged near Kyiv, virtually all market players saw their infrastructure severely damaged. “At the start of the full-scale invasion, the sector suffered significant losses. Some stores near the front line were destroyed or damaged,” Mokryakov said, citing the Sport City retail chain, which lost several stores. “After the full-scale invasion by Russia, 12 Sport City stores were lost,” confirmed Oleksandr Misonets, COO of the retail chain. “About 3,500 square meters of shopping floor were occupied or destroyed by the Russians. According to preliminary estimates, the losses incurred by the chain reach almost 120 million Ukrainian hryvnia [€2.65 million].”
Marathon, another prominent retailer, lost six stores, including its largest in Mariupol, Mokryakov said. Foreign brands like Adidas and Decathlon temporarily suspended operations in the country to ensure the safety of their employees. They returned in mid-2022 when the situation on the battlefield stabilized.
“Small chains and individual stores, including mono-brand stores with a small ‘margin of safety,’ suffered the most,” Mokryakov said. Sportmaster Ukraine LLC, a former Russian sporting goods giant Sportmaster subsidiary, urgently took steps to sever all ties with its former parent company. In March 2022, it rebranded, changing the banner’s name over 27 stores to Athletics LLC. Three stores were permanently shut down. Sportmaster Ukraine LLC has been owned by local managers since 2021.
Marathon also suffered significant losses. Kirill Gryadovkin, head of Marathon’s digital department, revealed that the company lost its largest Sportlandia store, located in the Port City shopping center in Mariupol—a city on the Black Sea coast that suffered tremendous destruction during the fighting in 2022. Not only were stores in occupied territories lost, but Marathon also had to shut down its Jack Wolfskin store in the Duffy shopping center in Kharkiv, Ukraine’s second-largest city, where local officials reported that every third building was damaged.
However, most of the Ukrainian sporting goods stores belonging to big chains gradually resumed operations, according to the Ukrainian Association of Retailers in a report on its website in August 2023. “Less fortunate were small chains that did not have time to build up muscles in Ukraine in the form of several points of sale with an obviously positive sales result,” the association claimed. For example, the country’s first mono-brand boutique, Supreme Spain, which was launched in Kyiv in 2019, did not survive the crisis. The association added that the 4F sporting goods store, which also launched in Kyiv during the pandemic, was permanently shut down.
Despite the challenges, Ukrainian sporting goods retailers have not lost their appetite for development. In 2023, New Balance, Puma and Reebok opened several new mono-brand stores, and Sport City added several new locations to its chain.
Ukrainian sporting goods retailers are believed to prioritize development in central and western parts of the country, which are generally considered safer than eastern and southern regions, where heavy fighting continues, and Russian forces have been gradually advancing in recent months.
Market Swings
Import dynamics clearly indicate the turbulence the Ukrainian sporting goods market has experienced in recent years. In 2021, the import of sporting gear surged by 48 percent compared to 2020 as international trade revived after the coronavirus pandemic. However, in 2022, deliveries plummeted by 47 percent compared to the previous year. Several factors contributed to this trend. The Russian sea blockade of Ukrainian seaports and the resulting logistics turmoil were key factors. Additionally, during turbulent times, wholesalers primarily relied on warehouse stocks, refraining from ordering new consignments from abroad.
In 2024, the import flow in the segment stabilized but has yet to reach pre-war levels, Mokryakov said. Sportswear imports skyrocketed by a staggering 1600 percent in 2022, but the figure dropped by 1100 percent the following year.
The dynamics are almost entirely attributed to military orders, as the sportswear segment in Ukraine also includes tactical shoes and clothes. According to Mokryakov, sales in the Ukrainian sporting goods market are expected to range between $600 and 630 million (€546 to 574 million) in 2024, more than a third below the all-time peak registered in 2021. That level is unlikely to be achieved until 2027 due to the effects of emigration and general economic difficulties. However, Mokryakov commented that sales will likely grow by 10 to 15 percent per year in value.
