Running as Fashion: The Reports of My Death are Greatly Exaggerated

 

Many retailers and vendors in the industry were surprised by a recently published report from a research firm that indicated sales trends were slowing for running footwear not intended for running, while shoes purchased with the intent to run had increased.  The report suggested that sales of running shoes fell slightly (-0.9%) in the U.S. after three years of gains, with a 1.8% decline in running shoes used for leisure more than offsetting a 1.3% increase in shoes used for running.

The report left the impression that the running category was still trending lower with the sub-title, “Sales Softening But Not to Core Runners.”

 

“The published report triggered a number of calls to SportsOneSource,” said James Hartford, president, CEO and chief market analyst for The SportsOneSource Group, which tracks athletic footwear sales in the market.  “Most wanted to get our take on what was happening to this $5 billion+  category as a whole. Was it declining? Was the growth of toning having an impact on running? Where was the fashion consumer going?”

 

The short answer from SportsOneSource is that the running category appears to be alive and well – and growing.  Based on retail point-of-sale data compiled by the firm’s SportScanInfo weekly retail sales tracking service, sales of running footwear increased nearly 3% in 2009, with particular strength in full-line sporting goods and running specialty.  Both channels reported double-digit comp sales gains for the year in running footwear. 

 

At Sports Authority, women's running footwear was up low-double digits in 2009 while men's rose high-single digits, according to Michael McGuinn, SVP and GMM, footwear/active apparel.

 

At MC Sports, which operates over 65 stores in six states in the Midwest, running footwear sales jumped 14% in 2009, according to Mark Lundvick, the retailer’s divisional merchandiser manager for footwear.

 

In its fourth quarter ended Feb. 27, The Finish Line reported double-digit same-store gains in running at higher product margins. Running comps were up double-digits for the year.

 

On the performance specialty side, Fleet Feet, Inc. also saw double-digit comps for 2009, albeit at a slightly lower growth rate than the pre-recession 2007 and 2008 years.

 

Hartford notes that not all categories of running performed well in 2009, but most of those trends have reversed themselves in 2010.  Product classified as Performance Running in the SportScanInfo system enjoyed very strong growth in 2009, while product classified as Fashion Running posted a low-single digit decline for the year.

 

“Retailers and vendors alike attributed the Fashion Running decline last year to weaker product from key brands,” said Hartford.  “We saw consumers move into the performance product for their fashion and casual needs at a pretty rapid rate.  We see the move to tech running and performance as fashion as a very encouraging trend for the market.”

 

Even more encouraging, suggested Hartford, are the current year-to-date results that indicate the category is trending up in the high-single digits.  Even the mall, where running had slipped a bit in 2009, is up nearly 10% for fiscal 2010 to-date.

 

A number of retailers are seeing an acceleration of growth in 2010.

For Q1, TSA’s McGuinn said both women's and men's are up low-double digits at Sports Authority stores. “Nike is very strong again,” said McGuinn, “pointing to strong customer response to Nike’s Run Avant, Nike’s Lunar Glide and Nike’s Air Max Torch 4 offerings. “Our current sales in Nike are totally outstripping our inventory, but the Asics trend remains strong and Under Armour sales are outpacing inventory.”

 

Also supporting the running category for TSA is continuing demand for core items from Nike such as the Air Max Torch and Dual Fusion, as well as key Asics styles such as 2150, Nimbus and Kayano. Average retail selling prices in the category are up. Another trend is black running shoes, which are retailing across all price-points. Strong product overall is helping feed those gains.

 

“The strength in running footwear we are seeing is coming from the mix in our assortment, specifically, value, innovation (newness) and performance,” said McGuinn. “We also have done a much better job with in-stocks in sizes.”

 

For the year, TSA is looking for mid- to high-single digit gains in running footwear.

 

MC’s Lundvick said MC Sports is running up 7% so far this year. He believes the strength reflects evidence that running as an activity held up well during the downtown. He pointed to stories of people who lost their jobs having more free time to get in shape but also continued gains in race participation. The just-held Fifth Third River Bank Run in MC Sport's hometown of Grand Rapids, MI, saw its greatest number of participants in its 33 years.

 

“We still think running is very important for our customer and we always feel we have the ultimate end-use customers where they actually are out there using it,” said Lundvick. “Our customer is always about the sport, the activity and staying healthy and being active doesn’t change our consumer, even with the economy the way it is.”

 

Among brands, Nike and Asics continue to the two major drivers in the running category for MC Sports, but both New Balance and adidas have gained share at the chain due to some special programs and associate incentives. He did note that men's is seeing stronger gains than women's, although he attributes that to the popularity of toning shoes.

 

Like Sports Authority, MC Sports is also seeing black becoming more popular-especially with men.

 

“We're not seeing any drop in price points,” added Lundvick. “Between $60 and $100 are probably our strike zones. But we're doing a little bit better with shoes over $100, which is good.”

 

Looking ahead, Lundvick remains optimistic due to a number of new color combinations and technologies the major brands are bringing to the running category.

 

“We still see some great offerings from all the vendors,” said Lundvick. “We're certainly excited in Asics. The 2100, 1100 and Kayano are very strong for us and we don’t see anything diminishing there. In Nike, the Vomero and Torch continue to be strong and we see the Lunar Glide and Lunar Elite as a key component of our mix as we go forward. Adidas is offering more technology to the consumer and working hard to get the consumer to recognize their brand in the running community.”

 

At Foot Locker, the retailer said while the toning category drove growth in the women’s business during fiscal first quarter, its strongest gains in men's were generated in its running category as fashion trends shift from the casual and lifestyle footwear assortments to the running category. Management said the improvement in running shoe sales coincided with the introduction of new technology, such as lightweight footwear, as well as new styles from several suppliers.  Foot Locker has also recently introduced a new running specific retail format that is currently being tested in New York City.

 

Toning and running were the “two major components” driving footwear gains at Dick’s Sporting Goods in the first quarter, according to company Chairman and CEO Ed Stack.

 

Patrick Dolan, a spokesman for Finish Line, said Finish Line remains optimistic about the running category going forward due to continued innovation from such brands such as Nike, Puma, Asics and Reebok. One newer style doing well is Reebok’s ZigTech shoe.

 

“Our core consumer has responded the Zig’s fresh design and versatility as a shoe that offers performance and style,” said Dolan. “In addition, lightweight running shoes continue to gain traction. Products such as Nike’s Air Max, Free and Lunar Lite lightweight running shoes continue to be strong performers for the company. We are experiencing positive trends in both men’s and women’s running categories. Our customers continue to look for new and fresh offerings. Finish Line’s focus on delivering a premium assortment of footwear is connecting with this demand and continues to drive sales in this category for the company.”

 

Dolan also said running footwear continues to connect with its young, fashion-conscious consumers who lead active lifestyles. Said Dolan, “Our core customer can wear their running shoes for a jog in their neighborhood or with jeans to the movie theater.”

Finish Line expects its men’s and women’s running business to largely be driven by Nike, Puma and Reebok going forward to complement the momentum in toning.

 

“We are very excited about the innovation that Nike and Reebok continue to bring to the category,” said Dolan. “We believe the toning category will continue to evolve during the year and bring more people to the category. Skechers and Reebok will be the dominant players this year. The consumer has responded well to the category and we believe this behavior will continue into the foreseeable future.”

 

Fleet Feet Inc. President Jeff Phillips told SEW that the energy from 2009 has actually accelerated into Q1, resulting in an 11.4% same-store gain for the period.

 

“We had a pretty sluggish February with two snow weekends impacting a bunch of our stores but we bounced back in March with our comps ahead 15.2%,” said Phillips. “So business clearly came back in March. People just weren't able to get out with all the snow. And although not all the numbers are in, we have enough to tell us that April is going to be good too.”

 

Among brands, Saucony is gaining share at Fleet Feet due to strong product, Brooks “remains really strong,” and Nike continues to regain ground across Fleet Feet's banners. Phillips said the three brands are stealing some share from kingpin Asics. “That's not saying we've seen anything negative in Asics' product but they've got three brands to compete with now and they are all doing a real good job right now,” said Phillips. “We have a lot of great product out there right now.”

 

At Gazelle Sports, which operates four stores in Michigan, comps in 2009 were up 14.3% in running footwear, which accounts for about half of its business.  With the help of an early spring, comps over the last couple months are running up around 20%.

 

“The weather helped us in Michigan,” said Ted Kushion, merchandise manager, footwear, Gazelle Sports. “It got warm in the beginning of March and we never really had any bad weather since them.”

 

Kushion highlighted Brooks as a particular strong seller for Gazelle Sports.

 

“The new Adrenaline has been great for us and the Brooks Ravenna has been good addition,” said Kushion. “The Nike Lunar Glide has also been great. Adidas has also really come out of no man's land for us with some pretty good styles for us, including the Adistar Solution cushioning shoe and the Supernova Sequence stability shoe.”

 

City Sports, the 17-unit northeast urban-based sporting goods chain, saw a slow start to the Spring 2009 season but momentum built throughout the summer and into the fall.

 

“The running customer seemed less apprehensive on price, and some great new product headlined by the Nike LunarGlide+ in August really generated some excitement in the market,” said Doug Smiley, footwear buyer at City Sports. “Our ‘pure’ performance running category remained strong and we had some extremely strong comps on certain styles. No matter what the economic climate, it was great to see runners remaining passionate and still showing up to check out the latest updates, attend our run clubs and events, and make it to road races and marathons.”

 

On the downside, Smiley said more casual running styles were a bit more erratic.  

 

“Consumers were more hesitant to drop upwards of $100 on a new color release of a style they already owned, and we saw an overall trend shift into more Air Max and even Lunar product and away from Shox,” said Smiley. “A good deal of this was price-driven as our best Shox style retailed at $115 while Lunar and Air Max product was available in the $80 range.”

 

Looking at 2010, Smiley said 2010 has been “tremendously strong” so far.

 

SportsOneSource is forecasting a high-single digit increase in the overall running footwear category for 2010.  “All the energy around toning footwear also has us looking for bigger things in running over the long term as well,” offered Hartford. “We view toning/walking as a ‘gateway’ activity and fully expect that many of those consumers will turn to running over time.”