You are on page 1of 2

Industry analysis on UA I would like to determine a more objective way for concluding industry growth for Under Armour

. So much of the time, growth rates are of speculative nature. Even when they do have some detail, it uses basic qualitative methods that one would learn in a intro marketing class. My goal is to determine, using econometric modeling through excel, industry growth and profitability for UA. Scanning through IBIS World industry reports, and the beurea of economic analysis (bea.gov), the information is aggregated in a way difficult to come to conclusions for sports apparel. Naics codes 31522 and 31523 consist of men and women cut and sew apparel manufacturing. IBIS World has an industry report titled Mens & Boys Apparel wholesaling in the US. Hopefully I can piece together something. The IBIS World industry report gives these stats for men and boys apparel: $38.2bn; profit of $2.9bn; 1.8% expected annual growth between 2012 and 2017. It is in a declining life cycle stage and a high level of competition. According to IBIS, import penetration is large. This is confirmed by BEA.gov stats; In year 2000 mens apparel manufacturing had gross sales of 16.4bn. As of 2010, it had aprox 2bn. The discrepancy between the two sources is due to BEA reporting manufacturing and IBIS reporting wholesaling. This is a statement from UA’s 2012 10K: “ In 2010 73% of net revenues were from wholesale distribution – united state retail chains such as academy sports, dicks, hibbet, models, and sports authority. 23% of net revenues came from direct consumer sales.”

Sales Growth : A fuction of US demographics While UA states they would like to move into foreign athletic apparel, they currently sell 94% of their products to US consumers. Demographics in the United States involve perfect information, unlike consumer taste. It is reasonable to conclude that UA will not be able to sell much to grandmothers, the morbid obese, and other demographics of people.

Demand determinant and consumer preference Given that UA is in the clothing/fashion industry – Seth klarmin – Function of discretionary income World sports apparel industry GIA announces the release of a comprehensive global report on Sports and Fitness Clothing market. The global sports and fitness clothing market is projected to reach US$126. with rapidly aging population. thereby.30 billion by the year 2015. This. spurred by dramatic lifestyle changes. increasing sports participation particularly by women. and demand for stylish. there is a definite emphasis towards healthy lifestyle and activities such as sports. . and is expected to play an instrumental role in driving future growth. offers a strong business case for sports and fitness apparel. functional and versatile sports apparel. In addition. yoga and jogging.