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America’s athleisure obsession is crushing basketball sneakers

DENVER, CO - APRIL 29: The sneakers of Meyers Leonard #11 of the Portland Trail Blazers during Game One of the Western Conference Semifinals of the 2019 NBA Playoffs against the Denver Nuggets on April 29, 2019 at the Pepsi Center in Denver, Colorado. Copyright 2019 NBAE (Photo by Garrett Ellwood/NBAE via Getty Images)

When the sun sets on one era, it usually rises on another, and from the looks of things, basketball sneakers are in their twilight, while altheisure is in its heyday. Though the sneaker industry as a whole is doing just fine, basketball sneaker sales have been on the decline since mid 2015, and were down 20% in Q1, according to Matt Powell, vice president and senior industry advisor at NPD Group.

“I think we’re in a really rough patch on basketball shoes. When we look at the business globally, the only 2 countries where basketball matters are the U.S. and China — the rest of the world is a small part of the basketball business,” Powell said on an episode of the Yahoo Finance Sportsbook Podcast.

Adidas makes the switch to athleisure

German footwear and apparel maker Adidas (ADDYY) is a prime example of Powell’s point. From 2011-2015, market share growth for Adidas hit a rough patch, and the three-stripe brand was on a steady decline. But in 2016, something changed. Adidas started to focus less on basketball sneakers and more on fashion-forward athleisure silhouettes such as the Stan Smith, Superstar, NMD and Tubular Shadow models. The move paid off, according to Powell. Adidas went from having about 4% market share in 2015 to 11% share last year.

SHANGHAI,CHINA - APRIL 2: A guest is seen on the street attending Shanghai Fashion Week A/W 2019/2020 wearing Adidas sneakers on April 2, 2019 in Shanghai, China (Photo by Matthew Sperzel/Getty Images)

The driving force behind athleisure

UBS analyst Jay Sole says changing tastes are partly responsible for the decline in basketball kicks. “People want to be comfortable,” he explained. “Five to 10 years ago people were wearing baggy pants that you could wear [with] really big basketball shoes, and it still looked pretty cool. Now the trend has been toward skinnier bottoms with narrower legs, and basketball shoes really don’t look good with those kind of pants … So why are basketball shoe numbers really changing? It can be as simple as what kind of pants are people wearing.’”

Sole also points out that the footwear market is a highly consolidated industry, with the top 10 brands owning 60% of the global market share. However he points out that brands like Puma, Champion, and Fila are doing increasingly well in the athleisure space and have more room to grow. “These brands have ways of giving consumers what they want and athleisure is what they want right now.” he said.

According to Yahoo Lifestyle fashion editor Julie Tong, the rise of athleisure goes hand in hand with the rise of the health-and-wellness culture. “As the wellness industry took off, a new guard of men and women sought healthier, active lifestyles—and stylish apparel to match. Gone were the days that you quickly changed out of your gym clothes after a workout, but rather, you wore your “athleisure look” straight to breakfast or lunch to catch up with friends during the weekend. As brands like Lululemon (LULU), Outdoor Voices and Alo Yoga grew in popularity, so did the demand and rise of athleisure sneakers,” she said.

OLD FOURTH WARD, ATLANTA, GEORGIA, UNITED STATES - 2019/03/30: Lululemon Athletica store exterior, Ponce City Market. (Photo by John Greim/LightRocket via Getty Images)

The future for performance shoes

“We are absolutely in an athleisure cycle right now both in apparel and footwear,” Powell said. “For the first 40 or 50 years of what I would call the modern sneaker marketplace, we have always had at least one performance category that has been in fashion and trendy … We’re now going close to 4 years with not having a single performance category in the plus column; we are very much in an athleisure cycle and this a fundamental shift for the industry.”