Amazon Getting Into the Sportswear Business

Amazon.com is tapping some of the biggest athletic apparel suppliers in existence to enter into the private-label sportswear industry, according to a report in Bloomberg. Makalot Industrial Co., a Taiwanese vendor that produces clothing for Gap Inc., Uniqlo and Kohl’s, is making apparel for the Amazon line, a person with knowledge of the arrangement told Bloomberg. Eclat Textile Co., another Taiwanese supplier, is contributing to the effort as well, which is particularly important as Eclat currently makes clothing for Nike, lululemon athletica and Under Armour, and has expertise in making high-performance sportswear. The project is new and long-term contracts haven’t been signed yet, and the manufacturers are producing small amounts of products as part of a trial for Amazon, said the report. Amazon also has been hiring staff with know-how in private-label athletic apparel, according to the report.

Total Retail's Take: Amazon appears ready to disrupt yet another product vertical: activewear. And no surprise, activewear companies are already struggling to stand out in a sea of competition and discounts. Last month, for example, Nike said it expects sales to decline this quarter in North America. Under Armour also cut its annual sales forecast in August. What's more, after Bloomberg's report last week, shares of lululemon fell 4.9 percent, while Under Armour declined 2.8 percent. Amazon has previously ventured into private-label fashion, offering office clothing, jackets and dresses under names like Goodthreads and Paris Sunday, but pushing into activewear would bring fresh competition to some of the world’s biggest and best known athletic brands.