Global Market Review of Performance Outdoor Apparel – Forecasts to 2018 2012 Edition

Global market review of performance outdoor apparel – forecasts to 2018 2012 edition

Global market review of performance outdoor apparel – forecasts to 2018

2012 edition

Author: Writing Solutions

Published by just-style.com

November 2012

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Table of contents

Table of contents List of tables Definition What is performance outdoor apparel? Chapter 1 Introduction Size of the global performance outdoor apparel market Regional overview Import/export Drivers of performance outdoor apparel sales Changing lifestyles New product categories Women driving sales Ageing market Fashion and functionality Chapter 2 United States Size of performance outdoor apparel market The outdoor industry Trends in outdoor recreation Participation New growth areas Tourism Legislation Made in the USA Industry consolidation Major manufacturers Champion Columbia Sportswear Company INVISTA Mountain Equipment Co-Op (MEC) The North Face Patagonia Recreational Equipment Inc (REI) Chapter 3 Asia Pacific Size of performance outdoor apparel market China Market trends Consumption trends Japan South Korea Australia

Sourcing hotspot New Zealand Major manufacturers Driza-Bone Icebreaker NEPA Speedo Tonton Sportswear Vantage Garment Enterprise (VGE) Chapter 4 Europe Size of performance outdoor apparel market Challenges Regional markets UK France Germany Switzerland Scandinavia Consumption trends Functionality Performance outdoor apparel moving to mainstream Major manufacturers Berghaus Blacks Ellesse Fjällräven Helly Hansen Jack Wolfskin Karrimor Mammut Norrøna Peter Storm Schoeller Textiles Chapter 5 Latin America Size of the market Brazil Protectionism Consumption patterns Major manufacturers Doite Páramo Chapter 6 Future outlook Size of global performance outdoor apparel market by 2018 Future trends Increased competition v

R&D focus Re-shoring Impact of fluctuating commodity prices . Adventure travel Emerging markets Future style trends Future technology trends

List of tables

Table 1: Total performance outdoor apparel sales, by major market 2007-2018 (US$bn) Table 2: Total performance outdoor apparel sales, US 2007-2018 (US$bn) Table 3: Outdoor product sales in the United States, January-July 2011 (US$m) Table 4: Columbia Sportswear Company sales, 2009-2011 (US$m) Table 5: Total performance outdoor apparel sales, China & Japan 2007-2018 (US$bn) Table 6: Chinese outdoor products market by sector 2011, (%) Table 7: The numbers of domestic and foreign brands for outdoor products in China, 2009-2011 Table 8: Total performance outdoor apparel sales in Western Europe, by major markets 2007-2018 (US$bn) Table 9: Western European outdoor product sales by segment, 2011 (%) Table 10: Performance outdoor apparel sales in major markets worldwide, 2007-2018 (US$bn) Table 10: Most recognized brands by adventure travellers, 2010

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Chapter 1 Introduction

Table 1: Total performance outdoor apparel sales, by major market 2007-2018 (US$bn)

2007 2008 2009 2010 2011 2012F 2013F 2014F 2015F 2016F 2017F 2018F Total US China Japan Europe Rest of the World Source: just-style, industry interviews

Size of the global performance outdoor apparel market

Outdoor apparel is the fastest-growing segment of the global sports apparel market. just-style estimates that in 2011, global performance outdoor apparel reached a value of US$ xxxxbn, and should grow to a value of US$xxxxbn by 2018. As a whole, the sector weathered the economic recession that began in 2008 relatively well. Europe, however, continued to suffer economically in 2012 as a result of the ongoing Eurozone sovereign debt crisis, which hindered consumer spending across the continent as confidence dwindled. However, we forecast slowing growth in 2012 for Europe rather than a decline, with a return to strength in 2013. One of the strongest areas for growth, going forward, will be China, which benefits from a booming economy, a growing middle-class, and increasing consumer consumption patterns.

Regional overview

The top three markets for performance outdoor apparel are North America, Europe and Asia, with the US being the single largest and most developed market. Outdoor leisure activities such as hiking, fishing and skiing typically require a great deal of costly additional equipment and accessories as well as the right clothing. As such, the biggest markets for all outdoor goods are those that are affluent and developed and boast of wealth of spectacular natural scenery. Key markets for this sector therefore include Canada, the UK, France, Germany, Scandinavia (particularly Sweden and Norway), Australia and New Zealand.

However, Asia is developing fast, driven by rapid economic growth and expanding middles classes in China, South Korea and Hong Kong. Latin America is also a growing market, with Brazil in particular one of the world’s leading emerging markets and an economic powerhouse. Many of its citizens are now wealthy enough to pursue outdoor leisure hobbies and sales of suitable apparel should boom. Mexico, Argentina, Chile and Colombia could also contribute.

Chapter 2 United States

Table 2: Total performance outdoor apparel sales, US 2007-2018 (US$bn)

2007 2008 2009 2010 2011 2012F 2013F 2014F 2015F 2016F 2017F 2018F US Source: just-style, industry interviews

Size of performance outdoor apparel market

The performance outdoor apparel market in the US has grown by approximately xx% between 2004 and 2010, and this growth is expected to continue until 2018.

According to the US Outdoor Industry Association, the seven-month fall/winter period, which tracks sales between September 2011 and March 2012, saw relatively limited growth with overall outdoor product sales up by xx% to US$xxxxbn. In July 2012, the industry reported sales of US$xxxxxm, compared to US$xxxxbn in June. Meanwhile sales of apparel fell to US$ xxxxxm from US$xxxxxm in June.

The outdoor industry

Unsurprisingly, the US is one of the largest outdoor industries worldwide. A report commissioned by the Outdoor Industry Association in June 2012 found that the outdoor industry, as a whole, grew by around x % per year between 2005 and 2011, and was the third largest industry in the US, with annual spending (including the manufacture and sale of gear and equipment, tourism spending and industry development) reaching US$xxxbn in direct sales in 2011. In addition, the report was limited to US consumers and so did not take into account foreign and tourist spending on outdoor activities and equipment, suggesting that the actual potential market could be much larger. In total, the economic impact of the outdoor industry is estimated at around US$xxx tn.

Table 3: Outdoor product sales in the United States, January-July 2011 (US$m)

January xxxx February xxxx March xxxx April xxxx May xxxx June xxxx July xxxx Source: Outdoor Industry Association

Chapter 3 Asia Pacific

Table 5: Total performance outdoor apparel sales, China & Japan 2007-2018 (US$bn)

2007 2008 2009 2010 2011 2012F 2013F 2014F 2015F 2016F 2017F 2018F

China

Japan Source: just-style, industry interviews

Size of performance outdoor apparel market

The biggest markets for performance outdoor apparel in Asia in terms of value are China and Japan, with US$ xxxm and US$xxxm in 2011, respectively. Although Australia and New Zealand are well-established outdoor markets, the small population size reduces their impact, while the lack of available data makes their industries more difficult to analyse. In terms of potential, South Korea is the fastest-growing market in the region, with around xx % of the population regularly participating in outdoor activities.

China

China is one of the fastest growing markets for outdoor recreation and by extension, for performance outdoor apparel. From an outdoor industry worth just CNY xxm (US$xxxxm) in 2000, retail sales exploded to CNYxxxbn (US$xxxx bn) in 2010 and increased by a further xx% to CNYxxxxxbn (US$xxxbn) in 2011 – with an expected further xx% increase in 2012. At the wholesale level the market has grown by around xx% to CNYxxxxbn (US$ xxxxbn), according to the China Outdoor Commercial Alliance.

Table 6: Chinese outdoor products market by sector 2011, (%)

Apparel xx Shoes xx Backpacks xx Equipment xx Source: China Outdoor Commercial Alliance

Performance outdoor apparel is estimated to account for xx% of the total sector along with xx% for shoes, xx % for backpacks and xx% for outdoor equipment. Approximate sales of performance apparel were US$xxxm for 2011.

However, the market has still reached only a fraction of its potential. For example, in comparison with the US retail market for outdoor products, total outdoor product sales in China for 2011 were just xx% of US sales for the 2011/12 season (US$xxx bn compared to US$xxxbn). As Chinese consumer spending power increases we

Chapter 4 Europe

Table 8: Total performance outdoor apparel sales in Western Europe, by major markets 2007-2018 (US$bn)

2007 2008 2009 2010 2011 2012F 2013F 2014F 2015F 2016F 2017F 2018F Europe Germany UK France Italy Switzerland Russia Austria Spain & Portugal Benelux Others Source: just-style, industry interviews

Size of performance outdoor apparel market

According to the European Outdoor Group, the total outdoor goods sector in Western Europe had an annual retail turnover of US$xxxxbn. Performance outdoor apparel is the largest sub-sector and in 2011 had a value of US$ xxxbn.

Overall, the performance outdoor apparel sector grew by x % in 2011, with the strongest growth seen in central and northern Europe markets such as Germany, Denmark and Sweden and the weakest in the Benelux countries as well as Italy and Spain.

Table 9: Western European outdoor product sales by segment, 2011 (%)

Apparel Football Backpacks Sleeping bags Tents Climbing Other Source: European Outdoor Group

Germany is the biggest market in Europe for outdoor products by a considerable margin, accounting for around US$ xxxbn in outdoor apparel sales in 2011.

The UK is the second-largest market, with US$ xxxbn in sales followed by France with US$xxxbn. These countries make up the top three biggest consumers and account in total for over half the market ( xx%).

Chapter 5 Latin America

Size of the market

Latin America, with its varied and mountainous terrain, has huge potential for the outdoor industry. With its strong textiles manufacturing industry, it also presents an attractive opportunity for the performance outdoor apparel market. There is very little data available on the exact size of the outdoor industry in the region. However, estimates suggest that around xx speciality outdoor stores now operate across Chile, Bolivia, Peru, Ecuador and Colombia – compared to just xx in xxxx. The biggest retailer in the region, Ecuador-based Tatoo Adventure Gear, has expanded to xx stores across the region and in 2009 became the exclusive distributor for Black Diamond in Chile, a brand it already represents across the Latin America region.

Brazil

Brazil is the biggest market in the region. It has a very young and active population, with over xx% under the age of xx, and is passionate about sports with football the most popular sport in the country.

The Brazilian sporting goods market is growing between x-xx% per year with a per capita sporting goods consumption of around US$ xx per year. The World Cup in 2014 and the Olympic Games in Rio in 2016 are also set to push the industry further and increase investment in the country as well as introduce new brands and raise its tourism profile. It is hoped that taxes will be reduced for local manufacturing, sports marketing and innovation, which will help the development of the performance outdoor apparel sector.

However, at the moment the performance outdoor apparel sector in Brazil remains underdeveloped and has high barriers to entry due to import duties. There are estimated to be xx specialist outdoor retailers currently operating in the Brazil market.

Protectionism

The Latin American region is highly protectionist, and many countries struggle to develop their industries due to high tariffs and import duties for foreign goods. Mercosur, a trade alliance between Argentina, Brazil, Paraguay and Uruguay, has policies designed to protect local manufacturing. These policies require that all equipment and apparel is assembled locally.

The Brazilian market is especially restricted by high import duties, which can reach xx% on outdoor products with a complex array of taxes and tariffs. In March 2010, the Brazilian government imposed an anti-dumping duty of US$ xxxxx on almost all footwear imported from China, which further impacted the market. The effect

Chapter 6 Future outlook

Table 10: Performance outdoor apparel sales in major markets worldwide, 2007-2018 (US$bn)

2007 2008 2009 2010 2011 2012F 2013F 2014F 2015F 2016F 2017F 2018F Total US China Japan Europe Rest of the World

Europe by country Germany UK France Italy Switzerland Russia Austria Spain & Portugal Benelux Others Source: just-style, industry interviews

Size of global performance outdoor apparel market by 2018

The performance outdoor apparel market is set to see continued growth, increasing by xxxx% over the next six years. Indeed, overall, xx% of global suppliers expect to see an increase of revenue of over xx% over the next five years.

In terms of geographic spread, the most significant growth will be seen in North America, Europe and major Asian markets such as Japan and China, although India, a growing power in most consumer areas, is still far behind in this sector. In the US, performance outdoor apparel grew by xx% between 2007-2011 and is expected to see sustained growth over the next five years. The European market is also expected to see growth of around xx% by 2018.

In terms of specific product categories, the fastest growth will occur in underwear, fleece products and weather resistant outerwear which are likely to far outpace other categories.