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Editorial Coverage: Fashion trends are constantly changing.
What’s popular one day may not be the next. Athletic wear styles
rarely change, but athleisure wear is changing the entire market
and creating lucrative new revenue streams for businesses that take
part in this exciting new segment.
- Athletic wear sales have grown by a whopping 61 percent since
2007.
- Morgan Stanley forecasts sales of $355 billion by 2021, up from
$290 billion now.
- Celebrity marketing partnerships boost companies’ social media
profiles.
Athleisure wear revolves around a company like RYU’s ability to
combine workout-ready clothing with comfort and global appeal. The
modern athleisure market is all about creating apparel that is
suitable for both high performance and daily use. RYU
Apparel, Inc. (TSX.V: RYU) (OTC: RYPPF) (RYU
Profile) is the newest threat to challenge the fashion
monopoly controlled by conventional clothing conglomerates
Nike, Inc. (NYSE: NKE); Gap, Inc. (NYSE:
GPS); Adidas AG ADR (OTC: ADDYY)and
Lululemon Athletica, Inc. (NASDAQ: LULU).
To view an infographic of this editorial, click here.
A Hot Trend in Fashion: Athleisure
The current state of the fashion industry is not looking good
for established companies like that choose to remain dedicated to
the declining performance apparel segment of the fashion industry.
Some companies, however, are changing scope and broadening their
athletic wear to include athleisure wear.
RYU (TSX.V: RYU)
(OTC: RYPPF) interviewed athletes and trainers, asking
them what they want most from their performance apparel. The
resulting products were designed to achieve professional
performance without giving up a moment of comfort. This approach
has allowed companies such as RYU to cater to both the fashion and
athletic wear markets through its athleisure line without
alienating its customers.
Adidas has partnered with Kanye West on
Yeezy, a luxury athleisure line with a high price point. The highly
coveted Yeezy sneaker models flew off the shelves and immediately sold out the day they were sold in stores,
prompting Adidas to promise the shoes could be purchased online as
well. The Adidas Yeezy Boost 350 V2 was the second-most
Instagrammed sneaker ever.
The athleisure market has captured the attention of other
apparel conglomerates as well, and for good reason. The athleisure
industry grew by 17 percent
in 2017 and is now the largest apparel category in the United
States. Even Nike has taken notice of this market shift and has
responded by creating a new line in collaboration with Serena
Williams and Off White.
RYU’s head start in athleisure has given the company a
considerable advantage as major brands battle to secure their share
of the athleisure market. The company’s revenue has grown each year
since 2016 ($1.36 million in 2016, $3 million in 2017, and $8
million projected in 2018) and even outsold Lululemon and Under
Armour combined over their first two years ($4.5 million versus
$2.4 million) of business. RYU expects to see margins increase once
economies of scale are realized.
RYU’s first mover advantage gives it the edge in the athleisure
industry, with companies such as Wrangler, Nike, Lululemon and
others fighting to catch up. The demand is there. The question is,
how will companies survive in such a competitive market?
Companies such as H&M have already found it difficult to
avoid inventory crunch
because their entire business model revolves around selling
low-margin items at high volumes. In athleisure, the successful
companies are more likely to sell high-margin, premium items that
guarantee quality. While major brands such as Nike and Adidas may
be willing to offload unsold product via outlets, others such as
RYU don’t discount their merchandise.
Patent-Protected Innovation
RYU’s quality products come from the top. Each item is designed
by fashion tycoon and CEO Marcello
Leone to achieve a professional level of performance.
Leone is personally involved in the design and testing of each
product on RYU’s line, ensuring each item will perform after every
use. This dedication to quality allows RYU to maintain a limited
number of SKUs, limiting inventory and maintaining stable
margins.
Another important thing to look for in this industry is a
company’s ability to secure patents on its innovative athleisure
wear. RYU owns several patents on its products, including the
“Trilayr” waistband that addresses several problems with existing
yoga pants, allowing a full range of flexibility for yogis,
weightlifters, walkers and joggers.
RYU’s innovative approach to its technical gear also led to the
creation of the company’s patented OutLayr technology, which
provides a number of RYU products with waterproofing necessary to
survive outdoors in any type of environment, rain or shine. These
patents are a critical aspect of RYU’s product design. With each
innovation, RYU has created legally protected designs that
establish its products as the industry standard for performance
apparel.
The athleisure trend is about more than just clothing; however,
it’s about demanding quality and performance in every setting. RYU
is more than a clothing company, its an innovative tech company
dedicated to improving the quality of urban athletic wear with
every product they design. The company’s extensive list of patents
is an extension of this approach, providing legal protection
against competitors lagging behind.
The Athleisure Trend Isn’t Slowing Down
The biggest growth is yet to come in athleisure. Lululemon’s
shares hit a record high of $160.68 this month with total sales in
the quarter ending July 29 rising 25 percent to $723.5 million.
Morgan Stanley expects the industry to be worth
over $350 billion by 2020, leaving plenty of room for growth for
RYU and others that continue to innovate in the space. RYU’s
experienced management team’s innovative approach to product design
is expected to maintain its advantage over the competition.
Nike, Inc. (NYSE: NKE) is an international
fashion and performance apparel company that has established
footholds in most major sports categories. The organization
produces performance apparel and casual clothing and dominates the
international shoe market. The company is working to catch up on
the athleisure trend, adapting its popular line of Air Jordan
sneakers to include technical improvements, such as self-tightening
laces.
Lululemon, Athletica, Inc. (NASDAQ: LULU) is
one of the largest names in the athleisure wear market. Projections
suggest the company could reach $3.2 billion
in sales this year, driven by solid numbers in women’s pants,
Lululemon’s most profitable category. The company’s current focus
is on fashion over function when it comes to its approach to
athleisure.
Adidas (OTC: ADDYY) is an international
performance apparel, casual apparel and shoe manufacturer. The
company joined the athleisure movement in order to take on its
rival Nike, which helped drive Adidas’ stock price up to an
all-time high of $218 per share in August. Adidas continues to
appeal to the urban athletic wear market through its partnership
with West’s Yeezy line, which released a new edition of the Yeezy
Boost 350 V2 in September.
Gap Inc. (NYSE: GPS) is a retail clothing
company beginning its expansion into athleisure apparel. The
company announced it will soon be launching a new brand called Hill City that will cater to male urban
athletes and professionals, mimicking the success the company
experienced with its Athleta line for women. The company’s Athleta
line is expected to cross the $1 billion
milestone in sales over the next couple of years.
For more information on RYU Apparel, please visit RYU Apparel,
Inc. (TSX.V: RYU) (OTC: RYPPF)
Please also read and review and the following article: Meet The Innovative Sports Apparel Company That
Crushed Lululemon and Under Armour’s Numbers
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