WHAT IS Athleisure

Athleisure refers to a fashion trend characterized by athletic clothing that is both comfortable and aesthetically appealing.

BREAKING DOWN Athleisure

Athleisure grew out of the dynamic use of the 'yoga pant.' Though yoga pants were designed for the gym, their comfort and simple look led women to start wearing them in a variety of casual and formal settings. Initially popularized by women, athleisure has branched into men's clothing as well. Additions to the athleisure line-up include leggings, tights, sweatpants, sneakers, hoodies and jackets. Improved textiles have allowed sportswear to become more versatile, comfortable, and fashionable.

Lululemon Athletica Inc. is regarded as the brand that started the athleisure trend, but it didn't stop there. Other early adopters of athleisure include Nike Inc. and American Apparel Inc. Athleisure as a market continues to grow, replacing traditional activewear and even cutting into jeans sales. Companies like Levi Strauss & Co. and Kate Spade & Company are rushing to release products to fit the market. As with any product trend, companies are struggling not to be left behind, and investors can capitalize on this opportunity.

The Impact of Athleisure

The popularity of athleisure has led to major gains for companies who followed the trend. For example, Lululemon experienced 16-percent growth in overall sales in 2015, jumping from $391 million in 2014 to $453 million, according to Forbes. The company's share price dropped significantly in years prior, but Lululemon's turnaround has been dramatic, due in large part to the rising popularity of athleisure and Lululemon’s positioning as center of the trend.

The trend has carved out a niche for itself in the clothing industry, with an estimated market size of $44 billion in the U.S. in 2016. The athleisure trend and its influence on fashion and the clothing industry continue to be a primary driver of growth opportunity for the apparel industry. For example, in 2017, non-activewear sales declined while activewear apparel continued on its growth trajectory, according to the NDP market research group. While athleisure continues to grow, it did not make as as steep a rise in 2017 as it did past years. Dollar sales for athleisure increased 2 percent to $48 billion, which amounts to 22 percent of total industry sales. While sales of both men’s and women’s activewear grew in 2017, women generated much of the energy behind the category’s growth, reaching $21.9 billion in sales with a 4-percent increase over 2016, according to the NPD.