Trends & Features

Gap widens between sick and healthy

The first snapshot of how the sports and leisurewear market is changing as a result of the UK economic slowdown has been released by industry analyst Plimsoll Publishing.

The findings suggest that the brunt of the downturn is being felt by almost a third of the companies in the market. Surprisingly, over a third of those surveyed have been largely unaffected, maintaining their financial strength, margins and some even managing to increase sales.

The study surveyed the UK’s Top 682 sports and leisurewear firms, based on their latest financial performance. Highlights extracted from the analysis show:

• The market is showing no overall growth, compared to growth of almost four per cent this time last year.

• 189 companies have seen their sales decline, some by as much as 20 per cent.

• 259 companies have seen their sales increase, some by as much as 15 per cent.

Says David Pattison, senior analyst at Plimsoll: “The recession seems to have accelerated a shift in the market. Some companies have clearly been affected by those that have swapped to low-cost alternatives or by the loss of a key client. Others are clearly benefiting from this move.”

According to the Plimsoll report, overall profitability in the sector is currently slim, with most companies reporting profits of less than one per cent. However, the gap between the very profitable and those missing out is widening:

• 411 companies have seen their profits fall, with one in three currently losing money.

• 271 companies have increased profitability, with some reporting margins of over five per cent.

David Pattison believes this is down to a number of factors: “The recession has been a good thing for a number of companies. It has sharpened their management and improved the accountability of the directors, so much so that these reorganisations are already leading to an increase in profitability.

“However, for those that have yet to come to terms with this changing market, times are tough and they risk falling further behind the successful competition unless they respond to this changing market.”

‘The Plimsoll Analysis – Sports & Leisure Wear’ analyses each of the 682 companies in the industry individually and rates each company on their financial performance.

Copies are available to order by calling Clair Sherwood-Parkin on 01642 626422. A pdf version of the report costs £350 (plus VAT) and readers can claim a 10 per cent discount.

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