Athleisure Trend Energizes Sales at Old Navy, Foot Locker

The U.S. apparel industry, battered by a slowdown in mall traffic and stagnant wage growth, is still seeing one category thrive: athleisure.

The clothing, which combines athletic and leisure wear, is propelling sales for Foot Locker Inc., Gap Inc.’s Old Navy and Under Armour Inc., thanks to more Americans wearing workout-style gear whether they’re working out or not. An increasing number of women are sporting yoga pants and dressy sweat pants rather than jeans or slacks. And for many guys, sneakers and hoodies have become workwear.

That’s led to a shift away from traditional leisure clothes such as denim and brown shoes and toward gear traditionally worn for pickup hoops or a jog. While this has been happening for a few years, especially in footwear, consumer tastes have recently accelerated toward comfort and no-frills looks. Retailers have taken note, with chains ranging from Macy’s Inc. to Urban Outfitters Inc. pushing deeper into the category.

“You see a lot more women who are wearing tights and exercise pants and exercise tops around,” Ken Hicks, chief executive officer of Foot Locker, said yesterday on the company’s second-quarter earnings call. Women are wearing it outside of the gym because it’s “convenient, and it’s got a better look and is fashionable.”

The broader industry’s sales back this up. While U.S. women’s apparel sales rose 1 percent in the 12 months ended in February, activewear increased 9 percent to $14.5 billion, according to market research firm NPD Group Inc.

More Yoga

Foot Locker, the largest sneaker chain, has improved its women’s business by adding more athletic apparel such as sports bras in its Lady Foot Locker stores. It also started a new chain called SIX:02, which has about 15 locations and is dedicated to yoga and running.

The Lady Foot Locker unit posted a percentage gain in same-store sales in the “high mid-single digits” last quarter, the company said yesterday. That helped Foot Locker post a 7 percent total gain, topping analysts’ estimates.

At Gap, Old Navy was the company’s star performer last quarter, with same-store sales rising 4 percent -- thanks in part to its assortment of cropped track pants and tank tops. Gap dove further into this trend in 2011 when it opened its first Athleta store, a mashup of performance gear and street fashion. The chain is slated to have 100 locations by the end of the year.

Athleisure Help

Under Armour also credited the athleisure trend with fueling growth when the company boosted its annual sales forecast last month and posted its 17th straight quarter of increasing revenue by more than 20 percent.

Under Armour, founded by CEO Kevin Plank as a testosterone-laden company focused on football, has been working to broaden its appeal. It unveiled a redesigned store format last year that ditched a locker-room theme for natural light, cheery colors and 10 times as many mannequins, aiming for customers loyal to Lululemon Athletica Inc. Under Armour has grown into the second-largest U.S. sporting-goods maker, with about 75 percent of its revenue coming from apparel.

“Women are increasingly wearing more athletic product outside the gym,” Plank said on a call with analysts last month. The company plans to cater to that shift, he said, as women find “new end uses for Under Armour.”

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