Basketball Steals Running Dollars

NEW YORK — Will the run or the rebound be more lucrative in 2013?

The running category has surged in recent years, thanks to innovative products such as lightweight shoes and increased consumer interest in the sport. But analysts say not so fast.

Industry observers predict sales of running styles won’t be as robust as in prior quarters, due to excessive minimalist shoes in the market, discounted merchandise and less-than-stellar results from key brands such as Reebok.

What’s more, market watchers noted that winter months historically favor basketball product in February, when the NBA’s All-Star game is played and fewer people run outdoors.

Finish Line Inc. most recently felt the sting of “a shift within athletic footwear trends” after it skewed its product mix too heavily toward running. Company Chairman and CEO Glenn Lyon told Footwear News after its third-quarter report that since the back-to-school season, consumer preferences have moved toward basketball silhouettes and away from running.

“Running was so hot for a while, there needed to be a market correction,” said Matt Powell, SportsOneSource analyst.

He noted mall retailers were bruised the most in the last three months, as sales of running shoes fell. But some channels held their ground during the period, with run specialty up in the low teens and family footwear stores rising in the low single digits.

Even though overall sales in running are flat, experts said the category as a whole remains healthy, particularly for higher-priced technical footwear from brands such as Brooks, Mizuno, Asics and Nike.

But shoppers are giving the biggest bounce to basketball.

“Basketball is king right now,” said Christopher Svezia, an analyst at Susquehanna Financial. “And it won’t slow down anytime soon. We are seeing double-digit growth in basketball.”

Analysts said the hottest parts of the segment are retro styles and kicks attached to marquee players — from classic Jordans to Adidas’ Derrick Rose lines.

What’s driving the basketball business right now is “all the newness,” said Ken Hicks, chairman and CEO of Foot Locker Inc. “Nike is strong, of course, but there’s a lot of newness coming from vendors like Adidas and from Under Armour, which adds excitement to the category.”

But Powell said a closer look at the basketball numbers gives him reason to worry. “A huge portion of the business is concentrated on only a handful of styles,” he said, noting the top 25 basketball styles represent a third of total sales in the category. “We don’t see that kind of concentration in any other category. That makes me worried that it’s not really a full-blown basketball cycle.”

Still, some suggested the athletic market has two strong segments going head-to-head.

“Nothing is bad, it’s more a case of one being better than the other right now,” said Hicks. “We’ve seen times where running is better or basketball is better, but over the past several months, both are doing well. And that speaks to the strength of the industry.”