Sporting Goods Brands – Sector report

Sporting goods brands lead the pack

The global sporting goods market continues to perform exceptionally well, supported by rising levels of sports participation in both mature and emerging markets, as well as casual fashion trends (‘athleisure’). More than ever, the consumer is king and brands are finding new ways to engage with them – developing smarter omni-channel strategies and more compelling and innovative customer offers and journeys. In the M&A market there is a healthy appetite for acquisitions. Buyers are using deals to expand product portfolios (cost and distribution synergies), and to extend geographic footprints.

  • The sporting goods market was valued at $471bn in 2018, and is forecast to reach $627bn by 2023, growing at a 7% CAGR2017-2023.
  • Growth rates vary widely between different product groups. In 2018, the highest YoY rates were basketball (+11%), running (+7%), football (+7%), cycling (+6%) and gym-wear (+6%); while the largest by size were cycling ($62bn), gym-wear ($49bn), walking/hiking/camping ($39bn), and running ($33bn).
  • The market benefits from excellent industry fundamentals, however positioning is still key. Some of the leading strategies include growing women’s lines, outdoor, exclusivity & customization, eco-credentials, and direct-to-consumer channels.
  • The top 20 global players and private equity are highly acquisitive. The most active region for deal-making is Europe (c. 50% of total deals), where market consolidation is accelerating. Cross-border acquisitions are also rising, as brands look to grow their international customer bases.
  • There were some headline grabbing deals in 2019. Most notably, the Chinese leader Anta Sports’ (rev: $3.6bn, rising 44% YoY) acquisition of the giant Finnish sports equipment maker Amer Sports (rev: $3.2bn) – a deal that extends Anta’s overseas reach, fulfilling a core strategy to grow by acquiring international brands that complement the Chinese home market.
  • Trading multiples are c. 14.8x EBITDA in 2019, on average. In the European mid-market, double-digit EBITDA is ‘the new norm’.

 

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Alexandre Ebin
Alexandre Ebin
Partner
France

“It’s an extremely positive transaction environment for sporting goods brands here in Europe. Smaller participants are using deals to improve efficiencies in manufacturing & distribution, and to gain access to international markets. While larger players are highly acquisitive, constantly seeking complementary improvements to existing product portfolios.”