Athletic Apparel Companies Win As Consumers become more Attuned to Self-Care - (OTCQB: $GFTX) (OTC: $DKGR), (NYSE: $NKE), (NYSE: $UA) (NYSE: $UAA)
Point Roberts, WA and Delta, BC - August 23, 2019 (Investorideas.com Newswire) Investorideas.com, a leading investor news resource covering sports and retail stocks releases a sector snapshot reporting on the uptrend of athletic and collectible apparel with the rise of social media. This has given fans the ability to become more connected and involved with the athletes and brands they support as well as building consumer health and fitness awareness.
A recent news article discussed athletic apparel stocks reporting, "Athleisure has been the biggest trend in retail over the past several years, helping put athletic apparel stocks on a fast track to big-time gains. The rise of the internet, social media and photo-sharing apps created an unprecedented surge in consumer self-awareness regarding image, health and fitness. As consumers become more attuned to self-care, they simultaneously lead more active, healthy lifestyles ... or at least give off the appearance that they are doing so through Instagram posts. This has likewise led to a surge in athleisure clothing sales, since that is the apparel that best fits this lifestyle."
The article continued, "This isn't a short-term trend - it's secular. Consumers are only becoming more connected, and they are consequently becoming more self-aware. Thus, the underlying consumer desire to become healthier and more active will continue to grow. Consumer demand for athleisure clothing will likewise continue to grow over the next several years."
Following this trend, Authentic Heroes Inc., an innovator of collectible apparel and subsidiary of Global Fiber Technologies Inc. (OTCQB: GFTX) just reported news that they are expecting a vibrant Q4 for 2019 and continuing into 2020.
The company recently announced a new partnership with IMG and its Football Greats Alliance (FGA), an organization dedicated to preserving the legacy of retired NFL athletes. The national partnership will introduce sports fans to a new line of Football Greats collectible apparel that will feature inspirational quotes from former players along with high-quality images, likenesses and historical authentication of game-worn jerseys.
Chris H. Giordano, President and Chairman of Global Fiber Technologies said today: "The second half of 2019 is shaping up to be a watershed year for Global Fiber Technologies Inc. and its subsidiary Authentic Heroes. As we mentioned in our last press release, we signed a licensing agreement with IMG/FGA to produce authenticated limited edition "fanwear" utilizing our proprietary manufacturing process and authentication technology."
"Making these highly unique fanwear jerseys in conjunction with our partnership with IMG/Football Greats Alliance is a trigger event for Authentic Heroes Inc. IMG/FGA is an iconic organization and we hope to culture a very fruitful and long-term relationship with them and the clients they represent."
"In addition to retired football greats we also expect to work with athletes and icons across the entire spectrum of sports from football, baseball, basketball and hockey to soccer, racing, tennis and golf."
"Even beyond sports the opportunities are both boundless and economically prodigious.
Areas such as musical touring bands as well as cultural icons both alive and deceased represent an enormous opportunity for us since the affinity base for such people stretch across the globe as opposed to just the US."
"One of our goals is to bring "affordability" to the collectible clothing enthusiast and we will accomplish that here in 2019 and beyond. We feel our unique offering of collectables will maximize the "value proposition" for both icon and fan. In doing so we will make our mark in the collectable clothing business," Mr. Giordano stated.
Paul Serbiak CEO of Global stated in today's news: "Being able to take an "event worn" garment and "democratizing" the market for wearable collectables utilizing our technology while giving back a percentage of sales to a charitable cause is what Authentic Heroes is all about.
The fan is buying a "piece of history" for a fraction of the price that one would pay for the original garment on a large auction site like Heritage Auctions."
"For athletes and artists alike, we provide a platform for them to receive a substantially greater financial reward for the same garment they would have auctioned just the one time for a single price."
"At the same time we are providing the "rocket fuel" for their personal brand that will create a more "bonded" connection between icons and their fans. We fully expect to start to make our mark in the industry in 2019 with our ultimate goal of owing true market share with the 66 million people that comprise the sports memorabilia collectors universe as well as creating the marketplace for collectables in other "virgin" industries like music, world leaders, fallen heroes and beyond. Memorializing greatness is what we do best."
Nike Inc. (NYSE: NKE), one of the leaders in athletic apparel, reported their financial results for its fiscal 2019 fourth quarter and full year ended May 31, 2019 earlier in the summer, with fourth quarter revenues increasing to $10.2 billion, up 4 percent on a reported basis and up 10 percent on a currency-neutral basis. Full year revenue rose to $39.1 billion, up 7 percent on a reported basis and up 11 percent on a currency-neutral basis, as strategic investments in innovation and digital drove global consumer demand led by NIKE Direct in both periods.
"FY19 was a pivotal year for NIKE as we continue to bring our Consumer Direct Offense to life throughout the marketplace," said Mark Parker, Chairman, President and CEO, NIKE, Inc. "Our distinctive innovation and digital advantage led to accelerated growth across our complete portfolio, while our Brand fueled deeper relationships with consumers around the globe."
Diluted earnings per share in the fourth quarter was $0.62 driven by revenue growth, strong gross margin expansion, and a lower average share count, partially offset by higher selling and administrative expense and a higher tax rate. Diluted earnings per share for the full year was $2.49.
"Reflecting on our FY19 performance, it is clear that growth is paramount at NIKE, and that our strong growth is being driven by strategic transformation," said Andy Campion, Executive Vice President and CFO, NIKE, Inc. "Amid foreign exchange volatility, our double-digit currency-neutral revenue growth and expanding ROIC showcase NIKE's unrivaled ability to create extraordinary value for consumers and shareholders over the long term."
Under Armour, Inc. (NYSE: UA) (NYSE: UAA) also announced their financial results for the second quarter ended June 30, 2019.
"Our second quarter results give us increasing conviction that our transformation continues to make solid progress across our business, unlocking efficiencies that are driving greater precision, consistency and repeatability," said Under Armour Chairman and CEO Kevin Plank. "By staying sharply focused on our long-term strategies - driving our premium athletic brand positioning through industry leading innovation, geographic expansion and creating deep connections with our consumers - we are on track to deliver against our expectations in 2019."
Universal Apparel & Textile Company (OTC: DKGR) recently announced receiving a $300,000 order of cargo shorts and was also approached by a wholesaler for 2020 spring and summer clothing. The cumulative value of these orders will be in excess of $2.0 million. The production of the cargo shorts will begin immediately, with the first delivery expected in February of 2020.
Mr. Mahabubul Kabir, CEO of Universal Apparel states, "We are extremely excited about obtaining a contract for the cargo shorts. I am negotiating ferociously to get the order for the 2020 clothing collection and we are also in the process of negotiating multi million contracts to supply t-shirts, long pants, hoodies and thermals for several different, massive wholesalers. In addition, a new potential wholesaler in Florida has been impressed by our products so that we are now competing against several other manufacturers to supply hoodies for sale in that immediate area. The contracts and purchase orders will hopefully be finalized in a short period of time as our reputation precedes us. This will keep our overseas factories at full capacity until the late summer of 2020."
Universal Apparel also worked with athletic celebrities such as Ray Leonard Junior, the son of five time World Boxing Champion and gold medalist, Sugar Ray Leonard, to manufacture an apparel line for his world tour for the benefit of US troops.
The name of Ray Leonard's brand is forthcoming and should be available by the fall of 2019.
Mr. Kabir stated, "It is a pleasure to work alongside such talent as Ray Leonard. I am his father's biggest fan and now his due to his generosity and heart of gold."
As we see more fan/consumer interaction with athletes and athletic brands enabled by technological innovations, we can expect that this increase in brand loyalty and awareness will only continue to rise. Moving forward, the companies able to work with the right athletes/celebrities who have the right exposure will gain the potential to tap into a whole new type of brand loyalty.
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