The stock market value of the public sporting goods companies around the world rose to $216.3 billion in 2012, up by 28.8 percent on 2011 in terms of local currencies and on a weighted average basis. Curiously, together, the 13 European-based companies on our annual chart experienced the highest growth at 38.3 percent, in spite of the latest recessionary trends on the continent. Their performance was driven by currency-neutral gains of 46.4 percent for Luxottica, which is the parent company of Oakley, and 33.6 percent for the Adidas Group. Sports Direct International gave a boost to the European score, with its stock rising by 88.0 percent to the equivalent of $3.5 billion.
With a worth of $19.1 billion and $18.6 billion, respectively, Luxottica and Adidas had the highest market capitalization after Nike, which ended the year at $46.5 billion. Analysts treated these two companies better than Nike, whose valuation rose by only 5.1 percent in the course of 2012, probably because of its falling quarterly earnings and its problems in China. VF Corporation easily made it into the fourth spot, with an 18.7 percent increase to $16.6 billion, followed by Lululemon, the fast-growing American activewear retailer, and by Shimano.
SGI's annual stock market capitalization chart, which you can find on Page 3 of today's issue of SGI Europe, calculates the net worth assigned by investors to 94 publicly listed sporting goods suppliers, vendors and retailers around the world, based on the variation in the number of their outstanding shares and their stock exchange quotation between Dec. 30, 2011 and Dec. 31, 2012. The percentage changes are calculated in local currencies at the conversion rates on those two dates.
The biggest gain was recorded by Cybex International, whose value jumped by 493.5 percent on the back of the settlement of a big and dangerous product liability lawsuit against the American fitness equipment company. The biggest loser was Deckers Outdoor Corporation, which lost more than half of its value because of heavy investments, declining margins and the end of a rally at Ugg Australia, the group's premium brand of sheepskin boots.
Interestingly, looking at the various sectors of the market, some of the slowest movers in terms of sales growth performed the best on the stock exchanges of this world last year. At 46.4 percent, the sports equipment companies on our list enjoyed the highest gain in stock market capitalization, thanks to the improving profitability of major players including Luxottica, Shimano, Jarden Corporation and Brunswick Corporation. Together, the 21 retail stocks followed just behind with a combined growth of 41.7 percent in their stock market value. The 14 apparel companies came next with a rise of 36.9 percent, due in part to lower raw material costs. The athletic footwear companies lagged behind with a combined increase of only 12.7 percent in market capitalization.
The occurence last year of mega-events such as the European Football Championships and the Olympics, combined with better weather conditions than in 2011, probably had an impact on the sporting goods market and on the results of some companies. More broadly, investors were apparently pleased with the sporting goods companies' ability to pass on cost increases ? with the exception of Deckers and a few other players ? while building up their brands and maintaining a flexible business model that generates cash. These processes have not been as easy to implement in some other sectors, partly because of financing problems and insufficient marketing.
As in previous years, the sporting goods industry outperformed other sectors of the economy, but this time this was not the case in Asia. The glut of athletic products on the Chinese market limited the rise in the value of the 17 Asian stocks on our chart to 22.1 percent, slightly below the 22.9 percent increases recorded by the indexes of the Hang Seng stock exchange in Hong Kong and the Nikkei in Tokyo.
In the Americas, where the economy is improving and much of the excess capacity in the retail sector has been eliminated, the 50 stocks on our list enjoyed a 26.7 percent increase in value against improvements of only 7.3 percent for the Dow Jones Industrial Average, 15.9 percent for Nasdaq and 11.5 percent for the Standard & Poor's 500. The previously mentioned 38.3 percent jump in our European stocks beat the 5.8 percent gain on London's FTSE index and the 29.1 percent increase in the Dax, the German blue chip index.
The sporting goods sector had already shown its relative resilience in 2011, posting an overall increase of 2.3 percent in stock market capitalization in contrast with general trends, after posting big post-recession gains of 83.8 percent in 2009 and 36.2 percent in 2010, as recorded in SGI before.
As it turns out, the European sporting goods industry's performance has not been similar to that of the fashion and luxury goods segments. The share price of Prada, which was listed in Hong Kong in 2011, roughly doubled last year, and other important luxury goods companies enjoyed big gains. Textilwirtschaft, the German trade magazine, reports that its MAI index for sports and fashion companies jumped by 32 percent for the year. The MAI index covers 20 stocks ranging from Hugo Boss to H&M, as well as Adidas, Nike and Puma. Inditex, the company that owns Zara, shone on the index with an increase of more than 70 percent in its share price.
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