The athleisure market is about to become even more competitive as online
retail giant Amazon.com, Inc. (NASDAQ: AMZN) will
begin selling its own branded line of clothes.
According to Recode,
Amazon is developing a line of workout apparel based on several online job postings the company published in December.
Amazon is looking to hire "brand manager" positions who will be responsible for the creation of an "authentic activewear private
label brands that have compelling and unique DNA and deliver amazing consumer valued innovation."
The athleisurewear market is valued at $44 billion in the U.S. alone, although the space has become extremely competitive
resulting in some Wall Street analysts calling
a peak to the growing trend. Nevertheless, Amazon is determined to expand into the market after it unveiled at least eight
clothing brands, including Society New York, a kids line called Scout & Roand a men's line called Buttoned Down that sells
buttoned-down dress shirts for as low as $39.
Amazon likely feels it can win the space that's dominated by industry titans like Nike Inc (NYSE: NKE), Under Armour Inc (NYSE: UAA) (NYSE: UA.C) and Lululemon Athletica inc. (NASDAQ: LULU). Its trove of consumer browsing habits can give it an advantage in developing
new items and products its customers want faster than its competition.
Analyst: Amazon Isn't Looking To Beat The Big Boys
Speaking to Benzinga, Dan Kurnos of Benchmark said that apparel has been the
"holy grail" for Amazon, but 2016 was the first year it aggressively advertised its apparel inventory and made significant
headway.
Naturally, Amazon is looking to push its own white label products whenever it can and market it as an extension of Prime.
However, the analyst suggested that Amazon's end goal isn't to take market share away from the big boys.
"The key here is availability," Kurnos explained. "I don't think it's necessarily about taking market share from Nike and Under
Armour, but what happens when a Prime customer has a cart full of items and can't finish the cart without those yoga pants? I would
wager that contributes to higher abandonment rates, plus, unless Nike or Under Armour have deals with Amazon, Amazon is going to
lose that business.
"In order to be a one-stop-shop, you have to have everything."
Bottom line, Kurnos doesn't believe Amazon is looking to hit a "homerun" with its athletic clothing line, but understands it's a
category the company needs to be active in.
© 2017 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.