The athleisure fashion trend is becoming a huge problem for Dick's Sporting Goods
Dick's Sporting GoodsCalia by Carrie UnderwoodAs everyone from Victoria's Secret to Kohl's is jumping on the "athleisure" trend, there is suddenly a lot of competition in the sports apparel space.
That puts athletics retailer Dick's Sporting Goods on thin ice.
Apparel is a huge part of Dick's business. With a rough third quarter, which executives blamed on unseasonably warm weather, the continued success of apparel is more important than ever for the company.
Currently, much of Dick's success in the apparel market is due to deals with companies such as Nike and Under Armour. However, while more people may be wearing these brands as they florish in the athleisure market, more stores are also selling the brands, and more companies are creating brands of their own.
In a November earnings calls, CEO Edward Stack acknowledged that companies such as Kohl's are emerging as competitors as they increase sales of athletic apparel.
According to Stack, Dick's is not yet feeling the pressure in the athletic wear market, as locations have a different shopping environment and wider selections of options (especially shoes) than retailers selling general merchandise or purely athleisure clothing.
While Stack may maintain Dick's apparel business is smooth sailing, the company is clearly aware that a massive change is occurring in the industry and scrambling to keep up.
Athleta
Last spring, Dick's debuted a new women's athletic brand called Calia by Carrie Underwood, which taps into athleisure trends with offerings such as dip dyed hoodies and knit scarves. In July, Dick's launched a new lifestyle and fitness boutique called Chelsea Collective, which sells apparel, footwear, and accessories with a fashionable twist.
There are currently two stores, which Stack refers to as "labs," intended to test offerings. The locations have also been instructive for the company in terms of understanding the best ways to personalize service, the importance of footwear, and how to broaden lifestyle apparel.
"We've learned some things that we can bring back into the Dick's business around the accessory category, around some of the key brands that we have in the Chelsea Collective that we could bring into the Dick's store," Stack said in an earnings call.
These insights will likely impact Calia, which Dick's currently expanding. The brand is positioned to become the company's No. 3 women's apparel brand by the end of 2016.
Despite its women's athleisure expansion, Dick's remains best known as a general sporting goods store, not a purveyor of high-fashion fitness trends. Dick's apparel business might be doing alright now, but for it to continue to do so, the lifestyle element is of utmost importance.
With investments in Chelsea Collective and Calia, Dick's is trying hard to add some lifestyle to its pure athletic reputation.
But, it could take some serious work to make customers ditch trendy brands like Lululemon and major retailers selling Nike to buy printed leggings at the sporting goods chain instead.