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JUNE 12, 2006
She's Not An Also-Ran Now Athletic boutiques that cater exclusively to women are doing a bang-up business Heather Shatz, a swimmer, biker, and runner, spends hundreds of dollars a year on clothes for her exercise habit. But the 44-year-old sales manager for an event production company avoids shopping at big-box sporting goods stores, even those that have added women's departments to the usual male-heavy mix. Instead, she heads for Lucy, a women's athletic store stocked with yoga pants and sports bras with nary a clunky black high-top basketball shoe in sight. "It's woman-friendly, bright, and cheery," says Shatz, after spending $90 on a hooded jacket and two tank tops. "The clothes are in feminine colors, and you feel good in them." 
Aiming to score with customers like Shatz, athletic apparel stores that target women are on the rise. The 28-location Lucy Activewear Inc. is roughly doubling its expansion rate, to 15 to 25 new stores a year; Chico's (CHS ) FAS took a stake in the company last fall. Finish Line Inc. (FINL ) just opened the first four locations of its planned 200-outlet Paiva (FINL ) chain. And Canadian retailer lululemon athletica Inc., which has eight U.S. stores, plans to add eight more this year. The big guys are weighing in, too: Nike Inc., an early player in courting women, has opened 12 NikeWomen stores since 2003 and plans to boost sales through its Web site and retailers like Paiva. Limited Brands Inc.'s (LTD ) Victoria's Secret just launched Sexy Sport, a line of exercise wear in bold colors like canary yellow and purple. Women have often been regarded as an afterthought in sporting goods stores, lost in a sea of XXL royal blue men's basketball jerseys. "The industry's been a good ol' boy industry, run by men for men," says Matthew Powell, an analyst at researcher Sports One Source in Princeton, N.J. They've "done a horrible job of serving women." The potential customer base is huge, but "the question is how often [women] will shop at these stores," he adds. "If there's a great store [a woman] can go to, she may shop more often." FEMALE GYM RATS Indeed, the target audience is growing. Participation in yoga rose 18% last year, to 14.7 million, the fastest growth rate among 19 activities surveyed by American Sports Data Inc. Women aged 25 to 40 are a target, but boomers are also driving the trend. According to the International Health, Racquet & Sportsclub Assn., the latest numbers for gym membership among women aged 45 to 64 show a 51% rise between 2000 and 2004. That's showing up in sales of women's athletic apparel, which in 2004 totaled $4.9 billion, up 8.8% from 2002. According to the Sporting Goods Manufacturers Assn., men's sales were flat. For retailers, the challenge is to create a store that appeals to women without resorting to painting the whole place pink. At Lucy, instead of displaying images of sweaty bodies on the wall, posters bearing calming one-word slogans such as "balance" and "breathe" show silhouettes of women exercising. "The posters are about being happy, vs. being in the Olympics," says Michael J. Edwards, CEO of Portland (Ore.)-based Lucy. To help avoid products that look and feel like shrunken-down menswear, Lucy employs an all-female staff of 25 to design and merchandise its private-label goods, which account for 60% of sales. Part of the task is to address hangups over body image. Among the results: Some tops are two inches longer than regular ones so that women can avoid baring bellies when stretching. And pants are sold only in dark colors. Bright colors "are too noticeable on the hips," says Gigi Munoz, a store manager in Burlingame, Calif. The payoff for privately held Lucy: same-store sales growth north of 10%, says Edwards. The average for specialty apparel stores is about 2%. Annual sales per square foot, at $600, are triple those of traditional sports stores. Lululemon, meanwhile, says sales have doubled for the past three years. With stats like that, the field for women's athletic apparel may quickly become more crowded than a yoga class on Saturday morning.  By Louise Lee
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