Dick's Takes On Lululemon, Athleta

Dick’s Sporting Goods is making a big play for women, and says it plans to open a new boutique concept called Chelsea Collective.

The first two stores are scheduled to open next month -- first in Tysons Corner, Va., and then in Pittsburgh -- and will sell a mixture of workout wear, shoes, equipment, accessories and even some beauty products. The idea is to fuse fitness and fashion for “women who are on the cutting edge.”

The women’s athletic-wear business, especially the clothes geared more toward lifestyle or “athleisure” styles, has been on fire lately, with old and new brands muscling their way into women’s closets. Nike, for example — where women now account for some 20% of sales — has said it hopes to increase sales of women’s apparel from $5 billion now to $7 billion in 2017. And at Under Armour, in the midst of its biggest women’s campaign ever, women drive 30% of purchases. 



In terms of physical retail offerings, Dick’s is entering a field dominated by market leader Lululemon, as well as the Gap’s Athleta, and VF Corp.’s Lucy, not to mention fast-gaining online competitors like Fabletics and Sweaty Betty.

Local marketing for each location will begin closer to the grand opening dates, says Lauren Hobart, SVP, Dick’s Sporting Goods/general manager, Chelsea Collective. “Tactics include direct mail, email, social media, digital media and other traditional avenues, and our Web site is also live, which will help us introduce the brand to future customers,” she says.

The new stores will sell clothing from such brands as Nike (which has also opened its own high-profile stores for women in the U.S., China and the UK) and its own Calia, a line Dick’s recently introduced with country star Carrie Underwood, as well as niche brands like Lorna Jane, Spiritual Gangster and ALALA. Other offerings will include brands like Brooks, Hunter Boots, Pure Vida, Le Sport Sac, Philosophy and Evian. 

Hobart describes the store’s core shopper as “the stylish, fitness leader who is on the edge of the latest fitness trends and follows a workout regime that is varied and exciting,”adding that this is a woman who has tossed her jeans in favor of athleisure bottoms, “and wears them not only to the gym, but to run errands, grab brunch, for movie night, shopping, all day — athleisure wear has become a staple in her wardrobe.”

But the real key — in a world dominated by Lululemon’s $100 yoga pants — may well be how well Calia does, with bottoms priced in the $60 range. In its latest take on Dick’s, upgrading the stock to a buy, Sterne Agee CRT points out that sales of Calia are likely to beef up the Pittsburgh-based retailer’s results.

“Calia should be helpful to margins and provide the customer with an alternative to premium priced products from Nike and UA,” writes analyst Sam Poser in his report. “We are hopeful that Calia effectively fills the desired niche … management expects that over time, Calia will become its #3 apparel brand.”

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