Brands are providing plenty of reasons to shop Black Friday through Cyber Monday. For instance, Nike today released its new signature sneaker for NBA star Kyrie Irving, the Kyrie 5, on the SNKRS app for $130. The Swoosh also discounted the baller’s last shoe, the Kyrie 4, by 25 percent via Nike.com.
While sales during the holiday shopping season are par for the course, in recent years, they’ve become a concern of the athletic footwear industry. But experts largely believe the marketplace is in a better place today.
“The promotional environment has improved dramatically over the last year. A lot of that has been the result of working down of excess inventory and at new innovations coming to market that have been selling through at full price,” explained Camilo Lyon, managing director of equity research for Canaccord Genuity.
The cleaning-up of inventory, according to Susquehanna Financial Group analyst Sam Poser, has been attained through catering to the shopper more effectively.
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“The flow of goods and the marketing around those items is beginning to match up better with the way the consumer shops,” he said.
However, The NPD Group Inc.’s senior sports industry adviser, Matt Powell, is skeptical. The insider posted to Twitter on Monday that the year’s holiday shopping season feels more promotional than 2017, and that brands are the ones driving discounts.
Speaking with FN, Powell said he doesn’t expect the athletic retail landscape to look much different from last year.
“It certainly feels to me that [promotions] started sooner and much more aggressively than it has in the past,” Powell said. “My impression was, 2017 was the most promotional holiday we’ve ever seen. Given that fact and that business [this year] is relatively sluggish, my assumption is, retailers and brands are going to have to be aggressive again this year to offset last year, and that seems to be playing out.”
Most of the market’s top brands and retailers with Black Friday online sales are offering modest discounts. Nike has select items for 20 percent off, as well as Foot Locker (whose shares were up more than 11 percent yesterday after posting better-than-expected Q3 profits). And Finish Line has a range of products for 25 percent off.
But others are slashing prices drastically. Adidas and Reebok are both offering discounts of up to 50 percent.
What would offset this need for hefty price reductions, according to Powell, is a big trend, which the industry is missing.
“There are some minor trends that are happening. The dad shoe thing is a thing, but it’s not nearly big enough to change the marketplace,” he explained. “The only thing that’s going to motivate the customer right now is buying stuff on sale.”
And B. Riley FBR an analyst Jeff Van Sinderen agrees.
“There needs to be a driver,” he said. “There are some trends in performance athletic as well as classic/retro brands and styles that are resonating in the sneaker categories that one could argue qualify as hot.”
Because of promotions and no big trends to rely on, Powell believes the season’s sales will be flat and profits will be down.
But Van Sinderen thinks we’ll see an uptick in retail.
“At the end of the day, this should be a pretty good season for athletic categories,” he said. “The athleisure phenomenon remains intact, and there are some great styles out there from the brands that are resonating. Who doesn’t want comfort and style in cool brands at an accessible and discounted price?”
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