NEW YORK, October 25, 2018 /PRNewswire/ --
FN Media Group Presents Microsmallcap.com News
Commentary
A new generation of urban fashion disruptors is continuing to
steal market share from major brands, riding the athleisure trend
to define new market segments. Major players such as Adidas
(OTC: ADDYY) and Foot Locker, Inc.(NYSE: FL), who once
dominated the sportswear industry, are now giving way to new brands
such as RYU Apparel Inc. (TSX.V: RYU)(OTC: RYPPF) who
continue to innovate with their functional line of urban athletic
apparel. Major fashion brands such as Deckers Outdoor
Corporation (NYSE: DECK) and PVH Corp. (NYSE: PVH) have
also begun to embrace the trend, designing athleisure lines to
cater to consumers seeking comfort and quality in the same
item.
RYU Apparel Inc.'s (TSX.V: RYU)(OTCQB:
RYPPF) rise to prominence is particularly impressive in a retail
industry that has entered into a profound crisis. The loss of
interest in "fast fashion" brands sold by Macy's and H&M has
hit those major retailers hard, forcing them to close stores and
cut prices. Investors are questioning the strength of a comeback
strategy by Macy's after it was forced to downsize in several
prominent locations. According to the New York
Times, H&M reported earlier this year it was holding a
$4 billion stockpile of unsold
clothes.
Athleisure Sales Growth Has Outpaced Traditional Apparel
Sales Growth, and the Market Continues to Expand
While the financial community debates the depth of the so-called
"death of retail", US sportswear and athleisure sales will total
almost $116 billion this year. This
figure represents a year-over-year increase of almost 7%.
RYU Apparel Inc.'s (TSX.V:
RYU)(OTCQB: RYPPF) is taking it to another level
with revenues doubling each year since 2016 . In fact, RYU
outsold both Lululemon and Under Armour combined over its first two
years of operation.
Retail Stores Rapidly Expanding
RYU Apparel Inc. (TSX.V: RYU)(OTCQB: RYPPF)
has four stores in Vancouver, BC
with two more Toronto area
locations to be opening before the end of this year. RYU also
recently went cross-border opening their first retail store in
Venice, CA. RYU is also close to
opening their Brooklyn, NY retail
store in the near future. RYU is set to have 9 stores in
North America by the end of this
year. Marcele Leone, CEO claims to
grow that number to 29 by the end of 2022 and is looking to expand
overseas.
With North American expansion well under way, RYU has begun to
look beyond its iconic outerwear and bags to footwear, swimwear,
underwear and accessories. Margins on sales products have been
stable at 46% over the last two years and these are expected to
increase as economies of scale are reached and high-margin items
are added to the company's product line.
Athleisure's Influence Killing The Price of
Denim
According to The NDP Group, yoga pants and leggings has
seriously influenced the pricing of premium denim jeans.
Individuals were willing to spend between $200 and $300 for a
pair of jeans, but in 2018 the average price for a pair of jeans
has dropped to $32, according to
Euromonitor, and the firm forecasts that the US premium jeans
segment will decline by 1.8% in 2018 versus a low-single-digit
increase for the overall jeans market. Instead of opting into
wearing denim, women today are more inclined to wear the more
comfortable athleisure apparel, even at the office.
Competing in a Stale Industry
PVH Corp. (NYSE: PVH), who owns a collection of fashion
brands including Calvin Klein and
Tommy Hilfiger, have begun to cater
to the athleisure trend through their new CK Performance line.
Calvin Klein's latest offering
includes a line of activewear specifically designed for those
living an athletic and multi-dimensional lifestyle.
The athleisure trend has begun to influence footwear as well.
The "sports leisure" style has become the largest category in the
U.S. sneaker space according to the research firm NPD Group. Demand
for sport leisure styles increased 17% last year to $9.6 billion in sales, a trend that companies
such as Deckers (NYSE:DECK) have already begun to target.
Deckers' performance lifestyle brands such as Hoka One One, Teva,
and Sanuk all directly target consumers with an active and diverse
lifestyle.
Adidas (OTCQX: ADDYY) are already major players in the
athleisure space, working together with celebrity designers
including Kanye West to create a
unique line of shoes and apparel. Recently Adidas launched a new
version of Kanye West's signature
shoe called the Yeezy Boost 700, which comes in a variety of color
variations and models. A new "V2" version of the Yeezy Boost 350 is
expected to be released on Black Friday.
As a national sportswear retailer, Foot Locker, Inc.
(NYSE: FL) have been exposed by the athleisure trend as sports
performance brands gave way to challengers from the athleisure
segment. Following market trends, Foot Locker has shifted its
strategy to embrace clothing and footwear in the athleisure market
including Adidas' Yeezy line of footwear.
RYU Apparel Inc. (TSX.V: RYU)(OTC: RYPPF) has a bright
future ahead by creating a strong brand with a strong supportive
community of members and trainers. With profits doubling year over
year and retail store expansion into the
United States, RYU should not be overlooked.
For a FREE research report on RYU Apparel Inc. (TSX.V:
RYU) (OTC: RYPPF), visit Microsmallcap.com.
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