DICK’S Sporting Goods (DKS) taps into the athleisure opportunity with new brand

DICK’S Sporting Goods (NYSE: DKS) has unveiled a new athletic apparel brand for men called VRST, which will be available in over 400 of its stores in the coming weeks. The apparel line will include commuter pants, joggers, shorts, tees and hooded sweatshirts.

DICK’S saw significant growth in its apparel, footwear and hardlines categories during 2020. The company generated $1.3 billion in sales from its vertical brands during the year, with CALIA being the second largest women’s athletic apparel brand. This year, the company plans to build on the momentum in athletic apparel with a strong assortment.

The athleisure category witnessed significant growth last year as people stayed at home, worked from home and even worked out more at home amid the COVID-19 pandemic. This strength is expected to continue for the most part of this year as well which is prompting retailers to focus on this category with continued enthusiasm.

Competition

Retailers like Gap Inc. (NYSE: GPS), Macy’s (NYSE: M), Kohl’s (NYSE: KSS), and American Eagle Outfitters (NYSE: AEO) witnessed strong demand in the activewear category during their most recent quarters. Macy’s made changes to its assortment to focus on high-demand categories like activewear and loungewear.

Gap and Kohl’s expect the strong performance in active wear to continue this year. Gap expects its Athleta brand to reach $2 billion in sales by 2023. Kohl’s plans to expand its assortment in athleisure and outdoor and the company will increase the space in its stores for the active category by at least 20% this year to take advantage of the opportunity in this space.

Outlook

According to a report by Linchpin, the US market for athletic wear is estimated to grow to $69.2 billion in 2021, up from $54.3 billion in 2015. This will account for 36% of global athletic apparel sales.

The global athletic apparel market is projected to reach a value of $580 billion by 2025 while the athleisure industry is expected to reach a value of $83 billion by the end of 2021.

Click here to read more on retail stocks