Kohl’s Enters Private Label Athleisure Biz: What it Means for the Market

Competition is ramping up in the private label athleisure market.

Two years after Dick’s Sporting Goods entered the value-oriented, performance athletic business with its private DSG label, Kohl’s will introduce FLX in select stores and online in March. The men’s and women’s brand will supplement the banner’s current private and national brand portfolio in the segment that includes Adidas, Champion, Under Armour, Nike, Croft & Barrow and Columbia.

FLX is Kohl’s latest investment in the active and casual apparel segments. Approximately 15 percent of the retailer’s 1,100 doors have increased their active space by 25 percent. Adidas shop-in-shops with curated assortments are in 175 doors, and the Land’s End and Toms brands were added this fall.

As the U.S. retail landscape has changed dramatically in recent years, Dick’s has steadily built its portfolio of private brands to 14 owned and three licensed (adidas baseball/softball, Prince for tennis and Slazenger in golf). In August, Dick’s senior management told analysts that DSG has surpassed Field & Stream as the retailer’s largest private brand and represented the banner’s third largest women’s athletic brand during the second quarter, behind CALIA and presumably Nike. For each of the last two fiscal years, Dick’s private label business has accounted for 14 percent of its consolidated sales, or $1.23 billion in FY19 that would have represented a 4.2 percent increase from FY18’s $1.18 billion in implied private label sales.

Dick’s, aiming to draw new interest in its CALIA by Carrie Underwood private label during the holiday season, has opened two temporary CALIA pop-up shops in Austin, TX; Santa Monica, CA and a third will appear in the Nashville market. All three will be open through Dec. 31.

With most athletic brands continuing to build their Direct-To-Consumer businesses and increasingly focused on protecting their product margins and premium positioning, value-focused private labels provide retailers like Dick’s and Kohl’s with exclusive products for their respective customer basis that won’t infringe on premium-positioned apparel sold by their branded partners.