The $7 Billion Issue | Athletic Business

The $7 Billion Issue

Source: PHIT America

Is This What Caused Sports Authority, City Sports & Others To Have Issues?

We know all the companies that have gone out of business – The Sports Authority, Sports Chalet, City Sports, & others. We know all the brands that have been sold or declared bankruptcy – Performance Sports, Luke’s Locker, Eastern Outfitters, and Bob’s Stores, for instance.  We have even seen big power brands get slammed in the stock market because of lower than expected results such as Fitbit, Mizuno, and Under Armour. And, many pro and specialty retail shops are either privately or publicly saying, “It is tough out there.”

But why? Is this just a trend or is it a cycle? And, what is ‘The $7 Billon+ Issue?’

There Is One Factor Everyone Acknowledges As a Reason:

Brick & Mortar To Online Sales - For the past few years, I have heard these statements time and time again: “It’s Amazon,” “There’s a shift from brick in mortar to Internet,” and “It is hard to compete with the Internet.”  Yes, there is a definite shift to more Internet-based sales, but…….  

There Is One Big Reason Which Has To Be On Your Radar Screen:

Reversing Physical Inactivity Through Increased Participation – Fewer and fewer people are physically active and playing sports. Do you know we have lost ten million sports or fitness participants in the past five years? And, we have lost seven million serious or frequent sports participants? YES.  It’s sad, but true. In fact, we have gone from 25% of all Americans to almost 28% of all Americans who are ‘couch potatoes’ or totally inactive. More dangerous is that frequent sports participants, the ‘cash cows’ of the industry, have dropped from 34.5% to 31.2% of the U.S. population? Unfortunately, sportsparticipation rates are continuing to decline.

The $7 Billion+ Issue – Twice the Size of The Sports Authority:

Sports Marketing Surveys finds that a physically active person spends, on average, $700 per year more than a ‘couch potato’ on sports apparel, athletic footwear and sporting goods equipment. Frequent sports participants spend even more per year. So, in recent years, as we have lost ten million participants, we also lost $7 billion in retail sales. This does not include accessories and the many other revenue streams which are generated by people who play (and consume) sports.

When The Sports Authority closed down, this represented $3.5 billion in revenue or only ½ of the $7 billion+ that the sports industry has lost. This is why other retailers like Sports Chalet and City Sports will not be here in the future.  The impact on manufacturers and other support industries is dramatic. Unless the ‘Inactivity Pandemic’ trends are arrested, this trend will continue. Like it or not, you will see more businesses in the sporting goods industry fail.

This Is a Trend – Not a Cycle:

I hear the following comments from some of my peers and business associates in the sporting goods industry:  “This is just a correction.” “We are just in a new cycle.” This is my response: “Don’t bet on streaks to end.” I agree that online sales will continue to be more and more part of our future. And, until more people and more companies step up to help create more physically active, fit and healthy Americans, the trend of increasing physical inactivity will continue.

The ‘Inactivity Pandemic’ is Deadly…for Americans…and for the sports & fitness industry.

Want To Help – You Can -- It Is Easy:

Support and invest in NEW player sport and physical activity programs in your communities. But, there is much more you should do. Join the ‘Movement’ at PHIT America. While we have more than 100 companies helping, hundreds of others are sitting on the sidelines and waiting for others to do something.  PHIT America awards GO! Grants to schools throughout the USA. PHIT America has been able to get more than 100,000 kids ‘off the couch’ and physically active in the past two years.  Our programs are working for kids, America and you.

You can help now. We have 445 schools with 225,000 children who want to get physically active, but we need greater support.  We call it the Blitz GO! Grants program. Consider sponsoring a school with a GO! Grant in your area. Contact me, Jim Baugh, Founder of PHIT America at to join our ‘Movement’. Please get in the game of creating physical activity in your neighborhood and community. It is your future and the lifeblood of our future in the sports industry.


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