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Sportswear amid waves of football matches and Olympic games
Issue date:01/08/2008
ATA Journal for Asia on Textile & Apparel - Aug 2008 Issue
Source:Journal for Asia on Textile & Apparel
While big international brands still dominate the market for sports apparel, there is always room for small textile companies to innovate, Adrian Wilson report
The cost of England's failure to qualify for this year's Euro 2008 football tournament is estimated to have cost up to ￡2 billion to the country in lost revenues.

Beer manufacturer Carlsberg, for instance, estimated that brewers alone lost ￡15 million in British sales, compared with a tournament featuring England. The biggest revenue impact, however, was on the loss of sales through branded England sports apparel, which was bad news for Nike.

The world's largest sportswear manufacturer purchased Umbro – the manufacturer of the official England football strip – for ￡285 million in October 2007.

European tournaments give big impact on apparel brands

The UK is Europe's largest market for sports and leisure apparel, moving almost 226 million units at retail, followed by France (158 million), Germany (169.5 million). Italy (175 million) and Spain (145.5 million) in 2006.

In many provincial towns throughout Britain, football shirts with the names and numbers of players on their backs – and sponsors on their fronts – are almost obligatory. This is a trend the country – and arguably the US through its baseball, basketball and American Football followers – spread worldwide.

However, one company that probably isn't too worried by the absence of valuable England football stars such as David Beckham and Wayne Rooney at the event – held in Switzerland and Austria from June 7-29 – is Nike's arch rival Adidas.

Adidas managed to sponsor both its national team, Germany, which was the runner-up in the event, and winner Spain – something of a dream final for the sportswear giant.

Having both finalists wearing the group's sportswear "was just fantastic", a spokeswoman for the company said, after Spain beat Germany 1-0 to claim its first continental championship in 44 years.

In addition to Spain and Germany, Adidas also sponsored the French, Greek and Romanian teams, in addition to around 100 individual players in the tournament.

Adidas also provided the official match ball, delivering 30 for the final, in addition to more than 2,500 others for the 16 teams that competed in the three-week-long competition.

Sales for Adidas grew in all regions except North America in 2007. Its sales in Europe increased 5% to 4.369 billion euros from 4.162 billion euros in 2006 while those in Asia grew 12% to 2.254 billion euros in 2007 from 2.02 billion euros in 2006. The company also registered 32% growth on sales of 657 million euros in Latin America in 2007.

Adidas has expanded its leadership position in football, and even prior to Euro 2008, was the clear market leader in Europe, with a market share of 40% in 2007 up 2% on its 2006 share.

The company's CEO and chairman, Herbert Hainer, said that for over fifty years, Adidas played a major role in significant football product innovations.

This strong position, however – further bolstered by the company's acquisition of Reebok in 2005 – is not necessarily beneficial for textile suppliers.

It is enabling Adidas, like Nike, to increase its bargaining power and lower its purchasing prices by buying larger quantities of both shoes and apparel.

Clearly, the domination of sportswear by huge brands such as Nike and Adidas is bad news for suppliers.

They are not, however, completely powerless, and innovation is the key.


The No-sew Technology developed by Petratex Confecções of Portugal has contributed to the success of the latest Speedo LZR Racer swimsuit
Consider Petratex Confecções of Portugal, a small company which invests heavily in R&D and co-operations with universities and research institutes.

The seamless No-sew Technology developed by Peratex has been partly behind the success of the latest Speedo LZR Racer swimsuit, which has broken all records in terms of performance.

Peratex was the first company to develop and patent equipment and specific working methods for producing 100% thermo-fused garments and has subsequently supplied hundreds of thousands of the seamless garments to leading sports brands including Adidas and Nike, as well as high fashion names like Armani and Prada.

Chinese sportswear brands rising

The domination of sportswear by huge Western brands is also something China is painfully aware of.

China's government has been urging the country to establish its own brands in a bid to retain some of the value in the products of its mass production, but more and more, it seems as if it will be enticed into buying back many of the goods it produces at hugely inflated mark-up.

So is there no resisting the forward march of big brand domination and the homogenisation of the world?

China's sportswear market grew to a value of US$7.2 billion next year from US$3.84 billion in 2006, according to Shanghai-based brand strategists ZOU Marketing.

In 2006, Nike controlled roughly 16.7% of it, and Adidas 15.6%.

Chinese brand Li Ning claimed the third place with a 10.5% share, however, and Anta the fourth place, with 4%. Aggressive marketing is now lifting brand recognition for these local companies.

Li Ning Group announced strong results for 2007, the group's revenue grew by 36.7% to about RMB4,348 million, with branded apparel accounting for over 97% of it.

"Against the backdrop of a long list of strong growth factors, namely China's strong economy, increasing affluence among the population and improving consumer sentiment in the run-up to the 2008 Beijing Olympic Games, we managed to grow our sales and strengthen our profitability as we intensified our efforts in brand marketing, product research and development, sales channels and supply chain management," said chairman, Li Ning.

Meanwhile, Nike, as the world's largest sportswear brand with 2007 sales of US$18.6 billion set its sights set on August's Beijing Olympics as the platform for proving its leadership in practically all other fields of sports other than football.

At the beginning of July Nike athletes premiered the company's USA Track and Field (USATF) uniforms for members of the US 2008 Olympic Team for Track and Field, before a sold-out crowd of 20,000 fans at the University of Oregon's historic Hayward Field during the US Track and Field Olympic Trials.

Athletes run faster with new swift materials

Nike first introduced its iconic "Swoosh" brand on Hayward Field at the 1972 Olympic Trials and has innovated for the world's top athletes over the past 30 years.


Nike Swift System is designed to increase aerodynamic advantages on key parts of the body
Nike's USATF uniforms feature new Nike Swift materials, designed to reduce weight to achieve less drag and faster times. With 7% less drag than the Athens version, wearing the new Nike Swift Suit translates to a benefit of about .02 of a second in the 100 meters race, the company claims.

The Nike "Swift System of Dress" allows athletes to customise what they're wearing while increasing aerodynamic advantages on key parts of the body.

Socks, gloves and arm coverings have been developed so sprinters can run faster. The Nike Swift gloves and arm coverings, for example, have dimpled fabrics to cut wind resistance and allow arms to slice through the air faster. In testing, the Nike design team found that compared with bare skin, the gloves and arm coverings reduce drag by 19% and the socks by 12.5%.

"Our new innovations are truly game changing and industry defining," said Sean McDowell, Nike's footwear design director.

"It is the lightest footwear and apparel we've ever created."

"The difference between making the team and not making the team comes down to mere hundredths of a second," said US Olympic Committee CEO, Jim Scherr. "Nike's ability to deliver ground-breaking apparel and footwear with cutting edge technology has been incredible."


Adidas opened its largest brand center in Beijing, also the biggest Adidas store worldwide, this July
Adidas opened its largest brand center in Beijing early this July, as the host city of this year's Olympic Games. It is the biggest Adidas store worldwide, occupying four floors inside the new Sanlitun Village Shopping Center.

Russia might be latest emerging market

Meanwhile, Adidas also started looking to Russia as its latest growth market.
At the end of 2007, it operated over 460 stores in Russia and the CIS and is planning to take that number to more than 750 stores during 2008. It is also the market leader in Ukraine and successfully entered the market in Kazakhstan in 2007.

"We are well positioned with all our brands in Russia," said Mr Hainer of Adidas. "We are growing so fast in this large country that it is already one of our most important markets in Europe with the potential to claim the top spot by 2010."
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