Sportswear brands turn to supply chains to protect margins

Outdoor activities and women’s sports are set to support regional demand.

Sportswear brands are turning to demand forecasting, tighter product ranges, and diversified sourcing to curb excess inventory and offset pressure from higher costs as shoppers resist price increases, analysts said.

Valerie Van Tran, a partner at Delta West Group (Singapore) Pte. Ltd., said brands can protect margins by shifting from fashion-led products to functional apparel that offers durability, comfort, and value.

“As consumers become increasingly value-conscious amid macroeconomic uncertainty, demand for functional apparel is projected to grow 74% by 2033, demonstrating that customers are willing to pay for quality rather than trends,” she told Retail Asia.

She said Uniqlo Co. Ltd. has used this approach to become one of the world’s biggest apparel retailers. Chinese firms such as Shein and PDD Holdings, Inc.’s Temu are also reshaping competition through artificial intelligence (AI)-driven demand forecasting and agile supply chains, Van Tran said.

These systems allow faster product launches, lower inventory risk, and less unsold stock than traditional retail models, she pointed out.

Sportswear brands should invest in AI, digital supply chains, and data analytics to improve demand forecasting, shorten product development cycles, manage inventory, and personalise customer experiences, Van Tran said.

Sportswear companies face pressure to defend growth as higher costs, geopolitical tensions, and cautious consumer spending reshape the global market, Euromonitor International Ltd. said in a July report.

Consumers are becoming more selective, increasing the importance of value, product performance, and durability.

Aditya Kaushik, an analyst at Coresight Research, Inc., said sportswear brands risk losing shoppers if they rely on price increases as consumers become more selective.

“Brands need to give them a clear reason to pay more: better performance, durability, design or service,” he told Retail Asia.

Kaushik said brands should tighten product ranges, drop weaker styles, reduce discounting, and work more closely with suppliers. Diversifying sourcing could reduce exposure to tariffs and disruptions, whilst better forecasting could limit excess stock and markdowns, he added.

Kaushik cited Ralph Lauren Corporation as an example, saying brands should improve their product mix and customer experience whilst using targeted promotions instead of broad discounts.

“That protects value perception whilst keeping margins under control,” he said.

The Asia-Pacific region is forecast to be the fastest-growing sportswear market through 2030, whilst North America, Europe, and the Middle East and Africa will remain the biggest contributors to global value sales, Euromonitor said.

Demand is expected to be supported by outdoor activities, running, racket sports, and the continued growth of women’s sports.