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ATHLETIC APPAREL - Market Overview

Market Overview

According to Just-Style, the U.S. athletic apparel market grew an estimated 8.5% from 2003 to 2008, from $13.0 billion to $14.1 billion, and is projected to grow another 8.5% by 2014, to $15.3 billion

ATHLETIC APPAREL - Demographics

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According to a survey complied by Cotton Incorporated’s Retail Monitor™, although consumers buy athletic apparel to wear when exercising, the vast majority wear it for other purposes as well. Only 13% of respondents said they wore their athletic apparel only for exercise, while 80% reported wearing it around the house.

FAVORED FORMS OF EXERCISE

Source: Cotton Inc

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The most popular retail channels for athletic apparel were mass merchants and sports retailers (29% each). Regardless of retail channel, consumers cared most about fit/comfort. However, the number-two factor among those who shopped at mass merchants was price (20%), while those who shopped at sports retailers were more likely to care about performance features (19%) than price (8%).

• In the survey. 77% of the customers said that they were likely to read labels, and 64% said that the information provided on labels was likely to influence their purchases. A key piece of information they glean from labels is fiber content.

• When asked to choose among three athletic apparel products with the same price, style, and performance features but with different fiber content, most consumers chose cotton (76%) over polyester (12%) or nylon (12%). Nearly a third of consumers (31%) said they avoided certain fibers when buying athletic apparel, and the most-avoided fiber was polyester (35%) — the main reasons being that it was uncomfortable, was too hot, and didn’t breathe.

• In contrast, the comfort of cotton makes it consumers’ favorite fiber to wear when exercising. When asked what attributes best described cotton athletic apparel, most consumers cited comfort (87%) and softness (86%), followed by durability (77%) and good fit (77%).

ATHLETIC APPAREL – Demographics (Cont’d)

TRIATHLON – Overview

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According to USAT, annual membership has grown from 15,000 in 1993 to 100,000 mark in 2007 and 134,942 in June 2010.. The number of national triathlon events has nearly tripled in the last eight years, to well over 2,000 sanctioned events annually.

According to USAT, the average triathlete competes in five triathlons per year and actively participates in a variety of other sporting events, including 10K’s, marathons, mountain biking, skiing, climbing, hiking and weight training.

According to USAT, Triathletes are eager to try the products that will help them train harder, go faster and excel in their sport. In a survey conducted by USAT, Eighty-five percent stated that they frequently give advice or recommendations to someone else purchasing sports products or services.

According to SGMA (Sporting Goods Manufacturers Association), in 2009, approximately 1.2 million people competed in on-road triathlons. That was an 11% increase over 2008 and an amazing 51.4% increase from 2007. And approximately 666,000 people competed in off-road triathlons in 2009. This was a 10.6% increase from 2008 and a very respectable 37.9% increase over 2007.

Source: USA Triathlon and Sporting Goods Manufacturers Association

TRIATHLON – Overview (Cont’d)

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• In the United States, triathlon is one of the fastest growing sports. USA Triathlon’s membership reached 134,000 in 2010 (USAT, 2009). This growth is due to more than 1800 races in the United States alone and the inclusion of athletes of all ages. There are kids’ races and age group participants often exceed 80 years of age.

• Globally, triathlon is gaining in popularity as well. The International Triathlon Union (ITU) which is the governing body of the sport outside of the United States and World Triathlon Corporation, corporate owners of the famed Ironman, IronGirl and IronKids brands (Ironman, 2010) hold many races internationally, which quickly sell out.

• Along with this explosive growth, technological advancements in racing apparel and gear, improved nutrition and the lack of a clearly defined sales authority has identified the need for an online retail business that can offer athletes the products they need and want at the best possible price available.

• In USA, 50% of triathletes earn more than $100,000 per year with an average annual income of $126,000 (USAT, 2010). 50% of a triathlete’s discretionary income is spent on bikes and bike related equipment or approximately $2800 annually. 19% of income (around $370) is spent on fitness clothing and athletic shoes. An additional $277 is spent on nutritional supplements (USAT, 2010).

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Source: USA Triathlon

According to USAT, age group less than 17 and under has the highest distribution, followed by triathletes in the age group of 40 -44

TRIATHLON – Overview (Cont’d)

TRIATHLON – Overview II (Demographic Structure)

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Source: USA Triathlon

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Source: USA Triathlon

TRIATHLON – Overview II (Demographic Structure) Cont’d

Running USA 2009 Survey Findings

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Typical U.S. Female RunnerDemographics:Average Age: 38.661.9% Married78.7% College educated69.0% Earn a household income of $75,000+ Running Routine:74.7% Run/Jog 4+ hours each week80.1% run 12 months a yearAverage number of days run per week: 4.1Average number of miles run per week: 2364.8% describe themselves as ‘Frequent/Fitness Runners’ Product Preferences:Average number of running shoes purchased in last 12 months: 3.0 pairsLast running shoes purchased: ASICS (29.9%), Brooks (14.9%), Nike (13.6%)64.4% spent $90+ on their running shoes and 50.1% purchased their running shoes at a specialty running storeFavorite brands of running apparel: Nike (64.3%), Under Armour (42.2%), Champion (36.9%)80.2% spent $100+ on running apparel in the last 12 months and 61.5% purchased running apparel at a specialty running store

Typical U.S. Male RunnerDemographics:Average Age: 44.873.5% Married78.8% College educated76.4% Earn a household income of $75,000+ Running Routine:79.2% Run/Jog 4+ hours each week82.5% run 12 months a yearAverage number of days run per week: 4.5Average number of miles run per week: 29.555.8% describe themselves as ‘Frequent/Fitness Runners’ and 32.7% as ‘Serious Competitive Runners’

Product Preferences:Average number of running shoes purchased in last 12 months: 3.4 pairsLast running shoes purchased: ASICS (29.1%), Nike (15.9%), Brooks (14.1%)56.4% spent $90+ on their running shoes and 42.9% purchased their running shoes at a specialty running storeFavorite brands of running apparel: Nike (56.1%), ASICS (33.8%), Under Armour (32.0%)76.2% spent $100+ on running apparel in the last 12 months and 66.6% purchased running apparel at a specialty running store

Road Running reaches new heights with more than 10 million finishers, 17,000 events in U.S. for 2009;

Source: Running USA

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Age Group Female Male

6-17 yrs 8.6% 9.4%

18-24 yrs 11.5% 8.2%

25-34 yrs 31.8% 24.0%

35-44 yrs 26.4% 26.7%

45-54 yrs 15.3% 19.9%

55-64 yrs 5.1% 8.8%

65+ yrs 1.3% 3.0%

Trends in USA Runners

Source: Running USA

• In 2009, Women accounted for 53% of all road race finishers, and in the last twenty years their participation rates have rocketed from 908,000 in 1989 to just over 5.4 million in 2009 .

• Fueling some of this growth is the fact that women are social and tend to tackle new goals with a close friend or group of girlfriends more often than men

• In 2009, the age distribution of age has shifted towards a slightly younger running . The average age of a timed road race finisher in 2009 was 35.3, with males averaging approximately 3 years older (36.8 males/33.8 females) than the typical female participant.

Few Trends

Bicycle Market Size

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The U.S. bicycle industry was a $5.6 billion industry in 2009

 Year Bicycles Sold (Millions), all wheel sizes

 2009  14.9*

 2008  18.5*

 2007  18.2*

 2006  18.2*

 2005  19.8*

 2004  18.3*

 2003  18.5*

 2002   19.5*

 2001  16.7*

 2000  20.9*

 1999  17.5*

 1998  15.8*

 1997  15.2*

 1996

Source: National Sporting Goods Association.

Cyclers Demographics

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According to the National Association of Sporting Goods Retailers, Cycling is the second most popular recreational activity in the United States, even without being a TV sport. 

Racing Demographics

Source: National Association of Sporting Goods Retailers,

13Source: Active Marketing Group, The data is of year 2006

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Shoe Market Size and Distribution Network

Source : National Sporting Goods Association’s 

Where do the triathletes buy from?

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Retailers are the first point of choice for buying their apparel. To name few:

Durham Swimwear 282 King St WestOshawa, ON905-579-9300

Running Free708 Denison StMarkham,ON905-477-7871

Enduro Sport - Leaside 94 Laird DrToronto, ON416-449-0432

Enduro Sport Outlet33 Coldwater RdToronto, ON416-449-7442

Running Free Barrie520 Bryne Drive Unit 9Barrie, ON705-728-1110

Running Free Newmarket201 Main St SouthNewmarket, ON905-235-1438

Running Free Milton515 Main St EastMilton, ON905-878-4800

The Long Run 257 Queen St SouthMississauga, ON905-819-4761

Bialkowski Trysport77 Bowes StParry Sound, ON705-746-8179

Velocity Bike and Multisport 161 Mississaga St EastOrillia, ON705-329-0367

D’Ornellas Bike Shop 1894 Lawrence Avenue EScarborough, ON416-752-3838

Multisport Zone820 Wharncliffe Rd SouthLondon, ON519-854-1278

Runner’s Choice 247 King St NorthWaterloo, ON519-884-5361

Runner’s Den Waterdown245 Dundas Street EastWaterdown, ON905-690-4004

Run For Your Life707 Talbot StSt Thomas, ON519-637-0333

FEW OTHERS

Specialty Products – Compression Socks

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There is much debate about compression socks for runners. Some believe compression socks are a great tool for the sport. Others feel that compression socks provide no added benefit to the runner. Purchasing compression socks is a personal choice and the effects of compression socks on the runner vary. Compression socks are believed to improve oxygen flow to the calves and thus reduce the chance of cramps. Compression socks are also believed to improve the operation of the muscles

The best running compression socks are:•2XU Compression Calf Guards with Stirrup. These socks offer knee-high comfort with a tight fit that still allows great mobility. These socks provide moisture release and breathability for ultimate comfort. Their sturdy construction and design boast looks, practicality and longevity.

•Ironman Endurance Pro. This compression sock is a knee-high calf-hugger. They are made to assist the runner in fatigue reduction and allow the calf to breathe. The socks were made with ventilation and comfort in mind; this sock is ideal for the long distance runner.

•CW-X Compression Socks. These socks offer durability and comfort. These socks are built to keep the calves in top working condition, even after extended roadwork. They provide ventilation and a super fit with added target support.

•Sugoi R&R Knee High Compression. This compression sock is built to provide the runner with added support, increase recovery and provide adequate ventilation. The socks are built in left and right specifications to allow a better and more compact fit.

•Zensah Compression Sock. This is a great sock to round out the list of the 5 best for running. This sock provides target support and added padding for comfort on the impact points. With proper ventilation and a skintight feel, this sock also offers fatigue reduction and hastens muscle recovery.

Specialty Products – Vibram Five Fingers

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Vibram started making FLIR five largest footwear in 2006, dubbing Vibram five fingers Sale. In 2007 Time magazine named one of the best shoes this year for the health of the invention.

The company’s product has been finding a great interest in the athletes zone. According to the company in 2009, the company was struggling to meet demand for shoes FiveFingers: it had expanded from one factory to five, and expanded three times the size of Boston warehouse and office. The 90% of company’s shoes are sold to U.S. buyers.

The shoes sell for $75 to $125, started showing up on runners at elite events such as the Boston Marathon in the last few years. Revenue for FiveFingers shoes jumped to $11 million in 2009, up from $430,000 in 2006. This year, the company's shoes -- which include models for running, training, climbing, hiking and trekking -- are on track to generate sales of $50 million. All of this is separate from Vibram's $125 million annual business making soles

Threats:

The biggest threat to Vibram is a full-court press by counterfeiters. More than 200 fake Vibram websites selling branded knockoffs have appeared online. The counterfeiters' shoes mimic the colors, styles, and logos of FiveFingers; they come in painstakingly made copies of Vibram boxes, with return shipping labels identical to those that Vibram provides its customers. The sham sites pop up constantly, and getting just one of them shut down can cost up to $2,500 in fees for help from lawyers and the World Intellectua