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SGMA Survey Supports Sports is a Good Business for 2009, SGMA, comments by Larry Eder

Larry EderbyLarry Eder
March 31, 2009
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The SGMA is one of the major organizations that has championed sports participation and the sports industry in the sports community. We have provided the full release below because there are some very important concepts to get down. The key is this: running, our sport, revolves around a dedicated participant. Whether the person races or not, they buy shoes, socks, apparel, and as their sporting activity is one thing that they can control in their life-running is not going away.

Happy race finishers can be found the world over, this photo from RAK half marathon, courtesy of PhotoRun.net.


A fascinating irony to this writer is, of the thirty-five or so running footwear brands and micro-brands we follow, how many do not seem to comprehend that running is something for all ages. Young athletes (12-19) participate at a high level, as do masters and even more senior athletes. At the early part of our lives and, at a part of our lives where some of us have wisened up a bit, sports becomes quite important once again. Yet, most footwear brands focus on the mythical 22-34 year old. Hint: in most races, you can not find 22-25 year olds, except in the elite areas. Numbers are in youngsters and masters.
Other notes that should be taken seriously by running biz–in apparel, 33 percent of the apparel is going to be used by an active athlete. Non participants still want authenticity-which is where one’s brand needs to focus-quality and performance win out.
And finally, while the SGMA is always and rightly so, going to note Dick’s, Sporting Authority and Hibbet, the real winners in this economy are the specialty running stores-their clients are more loyal and dedicated–true enthusiasts!
So, yes, we are in a terrible economic time, but no, running and walking are not going away, and if one had a choice of which sporting business to be in, logic would suggest the sport of running. Hmmmm, is that why so many folks are coming into the sport of running?
For the consumer, the choices are the best ever. There is no reason why 99.8 percent of the populace can not find a running or walking shoe that truly fits their needs. And, now where do we buy those shoes? Yes, dear readers, your local running store! ( You can find one of the 720 plus stores we list on www.runningnetwork.com or email us and we will help you find a local store! Email at Runnetads@gmail.com).

SPORTS INDUSTRY SALES DROP IN ‘08; PARTICIPATION BUFFERS MAJOR DECLINES

SGMA CEO Tom Cove Examines Key Industry’s Issues: Soaring Production Costs, Collapsing Financial System, Shrinking Credit Limits, But Interest in Sports Stays Strong
WASHINGTON, D.C. – March 31, 2009 – “Despite the weak economy and rising costs of doing business, there is no indication that Americans are less involved in sports, outdoors, and fitness activities than before the recession and history tells us that giving them up is one of the last sacrifices dedicated participants are willing to make.” Those are the words of Tom Cove, president of the Sporting Goods Manufacturers Association (SGMA), who commented about SGMA’s 2009 State of the Industry address, which is sponsored by Dow Corning.
According to SGMA, the U.S. sporting goods industry is $66.3 billion business (at wholesale) – down 3.2% from 2007. Technology continues to be at the core of product innovation and fitness gear continues to be the number one equipment category. By the end of 2009, U.S. sports industry sales could potentially drop another 6%.
While Americans are involved in more than 100 athletic, recreational, and exercise pursuits, overall levels of participation in this country would be higher if not for the existence and interest in sedentary attractions.
”A significant issue which adversely affects levels of sports participation is the ever present appeal of electronic gadgets which are truly sedentary in nature such as laptops, iPods, Internet chat rooms, computer games, and cell phones,” said Cove. “It’s worth noting that SGMA is also busy trying to improve physical activity opportunities through schools and after care programs. The ancient Greeks had it right when they emphasized the importance of a sound mind and a sound body.”
Looking Back at 2008
In looking back at 2008, the sports apparel industry fell by 2.0% (at wholesale) – from $29.5 billion in 2007 down to $28.9 billion in 2008. On the plus side, since 2000, sports apparel sales have grown by 24.6%. In recent years, the strength of the category has been based on the fact that consumers enjoy the performance fabrics that provide compression, moisture management, and temperature control. By wearing this high-tech clothing, today’s athletes are far more comfortable throughout and at the end of their athletic experiences which enables them to perform at a high level – both in practices and in games.
As for athletic footwear, wholesale shipments dropped 4.6% (at wholesale) — from $13.0 billion in 2007 to $12.4 billion in 2008. Again, it’s not all gloom or doom for athletic footwear as the entire category has grown by 37.8% since 2000. The top five categories in ’08 for athletic footwear were running ($3.16 billion), classics/originals ($1.98 billion), kids ($1.77 billion), basketball ($837 million), and skate/surf ($823 million). The top three growth categories for athletic footwear were outdoor/adventure (up 8% to $580 million), sport sandals/slides (up 6.7% to $167 million), and tennis (up 5.0% to $165 million).
The big statistical gainers in sporting goods equipment sales were firearms/hunting (up 10% to $2.54 billion), fishing (up 10% to $1.93 billion), optical goods (up 7.5% to $1.21 billion), ice hockey (up 5.9% to $218 million), racquetball (up 4% to $26 billion), volleyball (up 3.8% to $56 million), and camping (up 3.3% to $1.74 billion).
The entire exercise equipment industry continues to be the largest category under the sporting goods equipment banner. In 2008, it was a $4.2 billion business (at wholesale). That represented a 10.6% drop in sales from where the fitness industry was in ‘07. The wide variety of user-friendly and gender-friendly machines helps to sustain the fitness industry.
There are a number of isolated issues which also affect industry sales, such as:
It’s Not Made in America. Two-thirds of the respondents to SGMA’s annual State of the Industry survey said that at least 75% of their products were produced offshore.
Looking Like a Winner. Just 33% of all sports apparel and athletic footwear are purchased by consumers who plan to wear those items in an actual sport or exercise activity.
The Big Three. The three largest sporting goods retailers are The Sports Authority, Dick’s Sporting Goods, and Hibbett Sports.
Fitness Forever. Older Americans are continuing to buy and use fitness equipment.
Strong Fan Base. According to the ESPN Poll, in 2008, 73% of Americans aged 12 and older said they were an avid fan of at least one major sport.
Sports Participation
Despite the dip in the economy, sports and activities that had ‘statistically significant’ growth from 2007 to 2008 were either fitness or family/social activities that don’t cost much money to play. Fitness activities which had ‘statistically significant’ growth in 2008 over 2007 were step aerobics (up 21.0%), high impact aerobics (up 8.7%), low impact aerobics (up 7.9%), elliptical motion trainers (up 7.2%), dumbbells (up 6.2%), and walking for fitness (up 2.7%). Walking for fitness, by the way, is the most popular activity in the U.S. with 111.7 million participants.
Family/social activities which had ‘statistically significant’ growth in 2008 over 2007 were ultimate frisbee (up 20.8%), backpacking (up 18.5%), surfing (up 18.2%), racquetball (up 18.1%), court volleyball (up 17.2%), trail running (up 15.2%), indoor soccer (up 11.8%), bicycling (up 10.2%), and tennis (up 9.6%).
What’s Happening in 2009
The SGMA feels that in 2009, the sporting goods industry – like the entire U.S. economy — will continue to be affected by plunging consumer confidence. The SGMA projects that overall industry sales will decline by 4% in 2009. One industry executive quipped, “Flat is the new up!” Other factors which are influencing the sports industry include the following:
New Products. Nearly every company surveyed by SGMA stated that ‘product development’ remains a high priority.
Retail Strength. Many industry executives feel that specialty retailers are faring better than most retailers because they serve dedicated participants.
Big Spenders. Nearly one-third of all spending on athletic footwear is by those aged 13-24, who also pay the highest average retail price for sneakers.
Fitness Favorites. Free weights remain the most common form of fitness equipment found in the home, while people spend more money on treadmills.
Gym Favorites. The top three fitness equipment machines, based on wholesale sales, are treadmills, elliptical machines, and exercise bicycles.
Scholastic Sports. Since 1990-1991, there’s been a 62% increase in girls playing high school varsity sports and a 28% increase in the number of boys playing high school varsity sports.
In response to a survey by SGMA, the five ‘hottest’ sports for sales growth in 2009 will be fitness walking, lacrosse, running, aerobic training, and camping.
As the industry moves through 2009, the five biggest challenges for vendors will be dealing with ‘slower consumer spending,’ ‘retail failures,’ ‘low consumer confidence,’ ‘increasing market share,’ and ‘stricter compliance issues.’ In 2009, the five biggest challenges for retailers will be ‘retailers reducing the number of vendors,’ ‘retail consolidation,’ ‘moving inventory risk to vendor,’ ‘consumer demand for value/low prices,’ and ‘retailers reducing number of SKUs.’
On Capitol Hill
The SGMA is active on Capitol Hill generating congressional support for two pieces of federal legislation that can impact, in a positive way, the health of millions of Americans:
(1) The Personal Health Investment Today (PHIT) Bill, a new piece of legislation in Congress, is geared at encouraging physical activity by easing the financial burden to participate. If passed, this bill would expand pre-tax accounts to allow for payment of expenses related to physical activity and team sports, including equipment. The PHIT Bill can empower Americans to be active, healthy, and fit.
(2) The Carol M. White Physical Education Program (PEP) is using federal funds to jumpstart innovative P.E. programs in American schools and community based aftercare programs. To date, PEP has provided more than $500 million in grants to P.E. programs in schools and community based groups to help them buy more equipment and train more instructors. PEP is teaching children how to live active/healthy lives.
Within the State of the Industry Report 2009, there are individual editorial sections on a number of sports/activities such as baseball, basketball, billiards, bowling, camping, fitness equipment, football, golf, ice hockey, lacrosse, martial arts, soccer, softball, tennis, and volleyball. There are also special sections on athletic footwear, sports apparel, and sports licensed products.
SGMA has published its annual report, The State of the Industry 2009, which discusses business and participation trends in detail. It may be obtained at www.sgma.com.
Dow Corning Corporation, the main sponsor of SGMA’s 2009 State of the Industry address, is a leading supplier of innovative silicone solutions for the textiles industry, has developed a new line of silicone textile printing inks that meet the needs of both the branded apparel manufacturer and the screen printer. The new flexible textile printing inks are durable, color-fast, and suitable even for tough-to-print, high-performance sports apparel. Dow Corning offers a comprehensive selection of proven silicon-based performance enhancers and process aids for textiles, and is breaking new ground in the realm of eco innovation. In addition to materials, the company provides supportive services and solutions tailored to the specific business and sustainability needs of the global textiles industry.

The Sporting Goods Manufacturers Association (SGMA), the #1 source for sport and fitness research, is the leading global trade association of manufacturers, retailers, and marketers in the sports products industry. SGMA helps lead the sports and fitness industries by fostering participation through research, thought leadership, product promotion, and public policy. More information about SGMA membership, SGMA’s Sports Research Partnership, and SGMA’s National Health Through Fitness Day can be found at
www.SGMA.com
# # #
www.sgma.com ⎜1150 17th Street NW, Suite 850, Washington, DC 20036 ⎜ p: 202.775.1762 f: 202.296.7462

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  • Larry Eder
    Larry Eder

    Larry Eder has had a 51-year involvement in the sport of athletics. Larry has experienced the sport as an athlete, coach, magazine publisher, and now, journalist and blogger. His first article, on Don Bowden, America's first sub-4 minute miler, was published in RW in 1983. Larry has published several magazines on athletics, from American Athletics to the U.S. version of Spikes magazine. He currently manages the content and marketing development of the RunningNetwork, The Shoe Addicts, and RunBlogRun. Of RunBlogRun, his daily pilgrimage with the sport, Larry says: "I have to admit, I love traveling to far away meets, writing about the sport I love, and the athletes I respect, for my readers at runblogrun.com, the most of anything I have ever done, except, maybe running itself." Also does some updates for BBC Sports at key events, which he truly enjoys. Theme song: Greg Allman, " I'm no Angel."

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Larry Eder

Larry Eder has had a 51-year involvement in the sport of athletics. Larry has experienced the sport as an athlete, coach, magazine publisher, and now, journalist and blogger. His first article, on Don Bowden, America's first sub-4 minute miler, was published in RW in 1983. Larry has published several magazines on athletics, from American Athletics to the U.S. version of Spikes magazine. He currently manages the content and marketing development of the RunningNetwork, The Shoe Addicts, and RunBlogRun. Of RunBlogRun, his daily pilgrimage with the sport, Larry says: "I have to admit, I love traveling to far away meets, writing about the sport I love, and the athletes I respect, for my readers at runblogrun.com, the most of anything I have ever done, except, maybe running itself." Also does some updates for BBC Sports at key events, which he truly enjoys. Theme song: Greg Allman, " I'm no Angel."

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