Saturday, 2 May 2015

A shoe brand no one ever talks about is becoming Nike's biggest threat

Thanks to some recent investments, Skechers is now one of the hottest shoe companies in America.
It's also one of the most underrated, according to a recent report by Morgan Stanley.

"Skechers is a much better company than the Street appreciates," analysts wrote in a recent note to clients.

The company achieved record sales of $2.4 billion in 2014. The share price has more than doubled in the past year.

Morgan Stanley analysts believe Skechers could become the second most popular American footwear brand, ranking only behind Nike.

While the company used to be known for making cheap knock-offs of designer shoes, it has recently started cultivating its own aesthetic.

"The Skechers brand has evolved from a knock-off brand, to more one with its own looks and styles," Morgan Stanley's analysts write.

Skechers also invested in upgrading its factories and distribution centers.

Finally, Skechers also improved its marketing strategy.

The brand hired singer Demi Lovato to promote a line for teens. It also started selling a shoe designed specifically for golf, endorsed by professional player Matt Kuchar.

Athletic apparel and footwear is set to outperform the industry for the next five years.

The number of people participating in running events has grown an average of 9% every year since 2005, according to Morgan Stanley. Data also shows that millennials believe exercise is essential for health, while their parents only focused on diet.

"Increased activity leads to increased athletic apparel and footwear spending," the analysts write. "We see athletic footwear and apparel as more than a fashion trend."

While the popularity of yoga pants and sneakers is often cited as a fashion trend, Morgan Stanley analysts believe that shoppers are hooked on casual comfort.

The analysts believe that shoppers will continue to choose this kind of apparel.
http://www.businessinsider.in/A-shoe-brand-no-one-ever-talks-about-is-becoming-Nikes-biggest-threat/articleshow/47115495.cms

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