German sportswear maker Adidas has got a new challenger: Carrie Underwood.
The country pop star’s announcement that she will partner with Dick’s Sporting Goods (DKS) to exclusively sell a line of fitness apparel didn’t create a ton of buzz when it was first announced in December. Retailers strike these sorts of exclusive arrangements all the time, angling to differentiate themselves from the pack by selling wares no other retailer has in stock. And Underwood isn’t the first celebrity to tackle this business (actress Kate Hudson also has an athletic gear line).
But what is unusual is who will lose out when Dick’s adds Underwood’s Calia line to its shelves this week: the second largest athletic apparel brand in the world.
Chief Executive Edward Stack said the retailer would be pulling shelf space from Adidas and Reebok (also owned by Adidas) to make room for Calia. Dick’s said the Calia launch, a move to address the red-hot women’s athletic gear market, is the big initiative it has planned for this year. The launch kicks off on Thursday and should help contribute to a 1% to 3% projected increase in same-store sales for the year.
Adidas has faced some serious woes in North America, where sales have tumbled 7% for the first nine months of 2014 despite an overall increase in sportswear gear sales. Observers have said that Adidas has lost market share in the U.S. to Nike (NKE), Under Armour (UA) and other competitors by sticking to a more traditional look that hasn’t resonated with consumers. Adidas, which is setting itself up for the early stages of a turnaround, is due to report full-year results later this week.
It makes sense that famous celebrities would want to jump on the athletic gear bandwagon, which has lured the likes of apparel brands and retailers like Gap (GPS) and Urban Outfitters (URBN). Activewear drove sales growth for U.S. apparel, footwear and accessories in 2014, with dollar sales leaping 8% for the women’s activewear gear, according to research firm NPD Group.
“This is no longer a trend; it is now a lifestyle that is too comfortable, for consumers of all ages, for it to go away anytime soon,” said NPD chief industry analyst Marshal Cohen.
For her part, Underwood said the line was inspired by the desire to have workout clothes that can “seamlessly take me from workouts, to errands, to rehearsals and beyond.” She’s so excited about the launch that her website even features a countdown clock.