As the sportswear market grows through an unpredictable time with giants like Nike reporting slow sales, one sports brand has made the most of this downtime. Retail Week takes a closer look at Deckers Brands and how it’s rapidly gaining market share in the sportswear segment
The sportswear category has hit a few bumps this year as market leaders such as Nike reported slow sales while Adidas has only just begun to find its footing again.
Meanwhile, a relatively new company is making moves. Deckers Brands, which owns brands like Hoka and Ugg, has outperformed the market and reported high double-digit growth in sales.
Retail Week takes a look at who Deckers Brands is, its secret to success and what its next steps could be.
Who is Deckers?
US-based Deckers has built a portfolio of sports and lifestyle brands, mainly in the footwear category. Its hero brands are Hoka and Ugg but the company also owns other footwear brands like Teva, Sanuk, Koolaburra and Ahnu.
The company is listed on the New York Stock Exchange and as of September 2024 has a market valuation of $17.91bn (£13.39bn).
In a trading update for the full year ending March 31, 2024, Deckers’ net sales increased 18.2% to a record $4.28bn (£3.20bn).
Sales in its domestic market increased 16.8% to $2.86bn (£2.14bn) while international net sales increased 21.1% to $1.42bn (£1.06bn) in the same period. The growth was driven by Hoka and Ugg as those brand’s sales increased 34% to $533m (£398m) and 14.9% to $361m (£270m) respectively.
This is evident in the success that Hoka has enjoyed in the UK after it launched its debut store in Covent Garden last year.
Pippa Stevens, apparel analyst at GlobalData, says Hoka’s growth in the UK is due to a rise in the number of running clubs as more and more consumers take up the sport as a hobby.
“Hoka’s strength is partly due to more consumers taking up running as they remain more concerned about their health and wellness, while it has also been investing in comfort and launching more casual designs. This is driving its running styles to become a part of consumer’s regular wardrobes, with many wearing them day-to-day, often alongside fashion-focused athleisure outfits,” she says.
Beth Bloomfield, senior analyst at Lumina Intelligence, explains that the brand’s performance-enhancing designs and competitive pricing have also worked to its advantage.
Seh says: “Much like competitor On, Hoka first gained traction among athletes due to its technology-driven footwear. But collaborations with designers and brands, such as End and Free People, have helped catapult it into the public domain. Its considered pricing makes it an affordable alternative to Nike or Adidas while also offering comfort and style, giving it a wide customer base.”
A lot of Ugg’s success is the result of a resurgence in Y2K fashion trends, says Stevens.
“As well as being popular due to the comfort of its products, Ugg has been having a comeback as a result of the resurgence of Y2K fashion trends and its modernised take on its classic styles, including its Ultra Mini boots and Tasman shoes.
“The brand has also been diversifying its product assortment to offer more styles appropriate for spring and summer and give it year-round appeal,” she says.
With Ugg expecting to deliver 10% growth in sales over the next 12 months, footwear players will be keen to know how it keeps the momentum going in the UK.
Next steps
Deckers’ main brands – Hoka, Ugg, Teva and Sanuk – occupy a 0.6% share of the apparel brand market in the UK in 2023, up from 0.3% in 2021. Its counterparts Nike and Adidas have shares of 4% and 2.7% respectively.
Looking ahead, partnerships with retailers will be key for the group if it wants to expand and build market share in the UK. Hoka understands this need for distribution as it has a wide range of retail partners behind it, says Bloomfield.
“Hoka appears to understand the need for distribution in the UK, choosing a wide variety of retail partners from JD Sports to Office and Marks & Spencer. This gives it the opportunity to be discovered by a wide audience, from sports enthusiasts to fashion lovers.
“Deckers will have honed a keen understanding of the UK market through its Ugg brand, which will help it shape its strategy for Hoka in the region. Ecommerce will be a key focus for the retailer while the brand gains traction in the market”
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