Driving these projects is a new group performance division, which was created to coordinate a broader push into the space.
“The mandate for me has been to go out and get our share of the performance market, whether that be footwear, apparel, accessories, or equipment,” Steve Cohen, Accent Group’s new group general manager of performance, told Inside Retail.
Cohen has been with the company since 2009, when Accent Group was still known as RCG Corporation. For the last three years, he was group general manager of The Athlete’s Foot, but after he laid out the business case for a broader performance play to Accent Group’s CEO Daniel Agostinelli, he was put in charge of the new division this past July.
The performance division now houses The Athlete’s Foot, Stylerunner, Saucony, which has been pulled over from Accent Group’s wholesale division, and New Guard, a streetwear brand started by Stylerunner co-founder and CEO Julie Stevanja in 2017.
And there is already talk about acquiring new performance brands, especially in the areas of technical apparel and equipment.
“There are a lot of amazing Australian brands that are starting to find their feet in this market, so there’s definitely an appetite to go out and look at some of those opportunities,” Cohen said, noting that this reflects Accent Group’s approach to growth more generally.
“Accent Group across any division has the appetite for acquisition,” he said.
Accent Group owns and operates a portfolio of retail businesses, including Hype DC, Platypus and The Athlete’s Foot, and sells major global brands, such as Vans, Skechers, Dr Martens and Timberland, in Australia and New Zealand. With over 500 bricks-and-mortar stores and a thriving e-commerce business bringing in nearly $1 billion in total sales in FY20, it is Australia’s biggest footwear retailer.
But it’s not hard to see why Accent Group is starting to look beyond footwear. The closure of gyms and offices due to Covid-19 has driven many people to step up their at-home workouts, and direct their spending accordingly.
The global market for activewear apparel alone is expected to grow by US$157.1 billion between 2020 and 2024, a CAGR of nearly 11 per cent, according to a recent report by Technavio.
Stylerunner and The Athlete’s Foot have already benefited from the activewear boom, according to Cohen, as have other players in the performance space, such as Super Retail Group’s Rebel, which reported a 3 per cent earnings increase in FY20.
Accent Group values the Australian performance apparel market – technical clothing for a range of outdoor activities – at $250 million. The new performance division is tasked with making sure the company gets as big a piece of that as possible.
Toe in the water
The logical place to start, according to Cohen, is with The Athlete’s Foot.
“I bought as much [apparel] as I could from suppliers a few months ago and launched it online to our database,” he explained. “We’re running it out of a mini-warehouse out the back of one of our stores, and we’re really just dipping our toe in the water to see what the response is like from our customers.”
So far, sales have been even stronger than expected.
“We’ve already doubled the original forecast in the business case I put to our CEO,” Cohen said. “Now I’m working as quickly as I can to expand the range even further.”
The core range is primarily composed of technical tops, shorts and tights from Asics, Adidas and New Balance, but there’s also performance clothing from outdoor brands, such as Icebreaker and Salomon, and running gear from the up-and-coming Swiss brand backed by Roger Federer, On Running. Accent Group has an exclusive partnership with On Running to be the destination for the brand in the Australian market.
“I see really big things coming out of that brand globally in the next few years, and we’re onto it early,” he said.
At the same time, Accent Group is bringing in other performance clothing brands exclusively for Stylerunner, which Cohen considers “one of the most exciting businesses in Australia”. A private label range under the Stylerunner brand is also in the works.
“We have a couple of new stores locked away for February, March, but we’re not putting a number on the stores,” he said.
A complete solution
Cohen sees it as his job to find the next big global brand in the performance space and bring it to the Australian market, whether that’s via The Athlete’s Foot, Stylerunner or a digital-only play. While the focus is on apparel right now, he plans to branch out into other categories, such as wearable tech and equipment. And he’d like to offer these products in-store.
“Our existing fleet of stores across Australia and New Zealand are small, but I’ve got aspirations to build bigger stores with a much wider assortment across categories,” he said.
With such an impressive track record of growth in the footwear space, Accent Group will be closely watched by the main players in the performance market. The company’s investment in digital gives it a strong competitive advantage, as demonstrated by the launch of a new category on The Athlete’s Foot’s e-commerce site virtually overnight.
According to Cohen, the company also plans to set itself apart by focusing on brands “with a story to tell” and educating consumers on the importance of investing in the right apparel as part of their overall fitness journey.
“It’s about offering our customers a complete solution. It’s not just about runners, it’s about walkers, it’s about anyone. It’s about trying to help our customers get out more often, whether it’s to walk, run, or go to the park and kick a footy with their kids,” Cohen said.