Sporting and Recreational Goods and Supplies

SIC 5091

Companies in this industry

Industry report:

Establishments in this entry are primarily engaged in the wholesale distribution of sporting goods and accessories; billiard and pool supplies; sporting firearms and ammunition; and marine pleasure craft, equipment, and supplies. Establishments primarily engaged in the wholesale distribution of motor vehicles and trailers are classified in SIC 5012: Automobiles & Other Motor Vehicles. Those distributing self-propelled golf carts are classified in SIC 5088: Transportation Equipment & Supplies, and those distributing athletic apparel and footwear are classified in Industry Group 513: Apparel, Piece Goods, and Notions.

Industry Snapshot

About 10,919 establishments employed 70,046 workers and generated $11.9 billion in sales in this industry in 2009, according to Dun & Bradstreet's Marketing Solutions. A majority of firms were small, with more than 84 percent employing fewer than 10 workers, although about 42 percent of people employed by the industry worked in firms that had more than 25 employees, and almost 20 percent worked in large firms with more than 100 employees.

Organization and Structure

The sporting and recreational goods market is largely seasonal, requiring manufacturers to deliver product lines in a timely fashion in order to take advantage of the limited period of demand for many products. According to a survey of sporting goods buyers by Sporting Goods Business magazine, almost 75 percent of the buyers surveyed bought closer to the selling season, rather than overstocking products during the off-season.

Because of the wide range of sports and other activities served by this industry, many retailers specialized in providing equipment for certain activities, such as fishing, hunting, boating, and so on. Other distributors specialized by market, dealing primarily with team equipment for schools and other institutions. Still others directed their business toward equipment popular in specific regions of the country, such as providing fishing and hunting gear in rural areas. The latter strategy, in particular, gave smaller dealers or distributors an advantage over the superstores and chains, in that such operations could specialize in providing specific regional information, advice, and products.

Background and Development

The wholesale sporting goods industry, including apparel and footwear, enjoyed revenues of nearly $50 billion in 2003, up from $45.6 billion in 1998, despite the sluggish economy of the early 2000s. The meager growth, according to the Sporting Goods Manufacturers Association International (SGMA), was rooted in excess retail capacity and a decline in selling prices, along with consumers' growing tendency to buy on sale.

The late 1990s and early 2000s were marked by rapid consolidation. Like many wholesale industries, wholesalers of sporting and recreational goods were in a relatively weakened position compared to manufacturers, so instead of competing with their prices, they opted to emphasize value-added services not offered by manufacturers in an effort to regain a larger portion of the market. Distributors were quickly forced to streamline their operations, most typically using sophisticated information technology, to implement comprehensive brand- and inventory-management and customer-data services for their clients.

Though it drove many smaller players out of the market, this consolidation carried many advantages for the industry. The remaining competitors boasted greater efficiency, and the economies of scale and flexibility to adjust to manufacturers' and retailers' heightened demands. These firms served their clients with volume discounts, better financing options, and larger warehouses to accommodate a variety of product lines.

Wholesalers spent the early 2000s recovering from a glut of products in the marketplace, which oversaturated the industry with large inventories of high-priced but weak-selling products, particularly in-line skates, ski equipment, metal golf clubs, and equipment for team sports, in which participation remained flat.

Mergers and acquisitions continued at a brisk pace into the mid-2000s, with Gart Sports merging with Sports Authority to create the nation's largest sports retailer chain. Moreover, the industry grew increasingly diversified, with the development of sporting goods tailored to ever-more specific lifestyles. Of particular concern to wholesalers, however, was the growth in the retailers' strength in the industry, which afforded retailers greater leverage in demanding services and concessions.

The wholesale of sporting goods and recreational equipment was estimated at $18.27 billion in 2003. The exercise equipment sector was among the industry's saving graces, with sales of nearly $4 billion in 2003. Sales in this area continued to surf the wave of increased gym membership, which doubled between 1987 and 2003. Clubs, universities, and other institutional settings constantly upgraded equipment and provided a steady market for fitness equipment. Moreover, some fitness products, led by treadmills and stair machines, were particularly popular among individual consumers for use in the home.

Women's participation and interest in sports reached an all-time high during the 1990s and early 2000s. Women's sports enjoyed increasing high-profile media coverage during this period, slowly overcoming years of being relegated to the margins of the sporting world. Team sports--soccer and basketball in particular--saw robust growth in the numbers of female participants. Female basketball players who participated frequently rose from 2 million in 1990 to 2.4 million in 2002. Other sports and related equipment that experienced significant growth due to women's participation were tennis, free weights, step machines, treadmills, step aerobics, stationary bikes, and camping with tents.

Basketball participation remained the most popular team sport in the United States, with the number of frequent players up 14 percent between the mid-1990s and the early 2000s, while bowling was the most popular U.S. sports activity, with 53.2 million participants. Meanwhile, the rise in popularity of both gentler forms of exercise such as yoga and water workouts and extreme sports such as skateboarding and skydiving opened new market niches driving overall industry growth.

Yoga and Pilates enjoyed skyrocketing mainstream acceptance in the early and mid-2000s. The SGMA reported yoga participation jumped 31 percent to 9.1 million in 2001. Meanwhile, Pilates participation leapt 41 percent to 2.4 million. Yoga and Pilates classes were increasingly offered as part of overall fitness programs at health clubs, greatly accelerating participation.

Extreme or action sports were also on the rise in the mid-2000s. Skateboarding, surfing, snowboarding, skydiving, and wakeboarding were a few of the leading segments of this niche. Primarily youth-oriented, extreme sports derived their appeal largely from marketing campaigns advertising a general lifestyle, rather than health or sportsmanship. Skateboarding exploded in popularity, due in large part to increased television coverage and its being marketed as a trendy extreme sport. The SGMA reported 11.6 million skateboarders in 2001, up a full 49 percent from the previous year.

As the twentieth century drew to a close, the sporting and recreation goods wholesale industry dealt with the effects of the economic recession that began in 2007. As expected, sales dropped in conjunction with Americans' disposable income and confidence in the economy. The U.S. wholesale sporting goods industry was estimated to be worth $71.8 billion in 2009, down from $75 billion in 2008.

The top seven team sports in America remained basketball, baseball, outdoor soccer, touch football, slow pitch softball, court volleyball, and tackle football. In 2009, all of these experienced small drops in participation rates, whereas several niche sports experienced gains. These included fast-pitch softball (up 13.8 percent), ice hockey (up 12.2 percent), rugby (up 8.7 percent), beach volleyball (up 7.3 percent), lacrosse (up 6.2 percent), indoor soccer (3.7 percent), and gymnastics (3.6 percent). The five largest categories of sporting goods equipment in terms of sales in 2009 were: firearms/hunting ($3.09 billion); golf ($2.48 billion); fishing ($2.02 billion); camping ($1.70 billion); and optical goods ($1.21 billion), according to the SGMA.

Current Conditions

The SGMA reported that by 2010 the sporting and recreation goods industry was beginning to recover from the economic recession of the late 2000s. SGMA President Tom Cove summed up the industry's status in a May 2010 press release: "For the most part, the drop in sales for the sports products industry in 2009 was a reflection of the challenges which have affected the U.S. economy during the last 12-18 months. ... Generally speaking, sports participation in the U.S. remains strong and steady. We are seeing activities which promote family recreation and are less expensive to play attracting a significant number of participants." Major factors affecting the industry in 2010, according to SGMA, included increased use of the Internet to buy and sell sporting goods. Advantages to retailers and consumers included that fact that "The Internet has more 'shelf space' than conventional brick-and-mortar retail outlets ... and can offer discounts such as no sales tax." Unfortunately for wholesalers, retailers were asking many vendors to absorb the cost of delivery. In addition, manufacturers and retailers were more often selling goods directly to consumers, eliminating the need for the wholesale "middleman."

Other trends affecting the industry included rising costs of transportation and raw materials, which increased the popularity of "just-in-time" supply management. Industry participants also had to ensure that their products met the requirements of the Consumer Product Safety Improvement Act of 2008. Into the 2010s, sporting and recreation goods wholesalers were advised to be aware of the rising senior population in the fitness industry, the increasing popularity of ice hockey and lacrosse as team sports, and Americans' trend toward activities that were inexpensive and could be done in one day, such as kayaking and hiking.

Industry Leaders

Pool Corporation (formerly SCP Pool), based in Covington, Louisiana, was the world's largest wholesale distributor of swimming pool supplies and related equipment in 2010, with 285 service centers in the United States and Europe. Pool Corporation spent the early 2000s acquiring smaller, regional distributors and building its network. With 3,200 employees, the firm brought in revenues of $1.5 billion in 2009.

Ellett Brothers Inc., based in Chapin, South Carolina, was a leading wholesaler of outdoor equipment. Its network included 800 manufacturers and suppliers as well as 20,000 customers, to which it distributed some 60,000 products for camping, hunting, and marine sports. Other leading industry firms included Gander Mountain Inc. of St. Paul, Minnesota, with 5,605 employees and revenues of $1.0 billion in 2009, and Dayton, Ohio-based Outdoor Sports Headquarters Incorporated (OSHI).

Research and Technology

By the late twentieth century sporting goods distributors were offering clients computer systems that could track, report, and forecast inventory needs and quickly compute sales and profits. The systems offered businesses several unique advantages. Programs could update inventory, track sales taxes, and create mailing lists. Given a certain amount of information regarding individual sales, the system might recommend additional products for the retailer to promote. The OSHI system provided firearms records required by the Bureau of Alcohol, Tobacco, and Firearms, as well as fishing and hunting license records. Furthermore, some programs allowed dealers to access the wholesaler's mainframe to obtain information on the status of the wholesaler's inventory. Other options included allowing the retailer to place an order directly to the wholesaler's computer and quickly learn whether the order qualified for any incentive programs, update prices in the dealers' computers, forecast seasonal sales based on the sales in previous years, track special orders, and generate daily sales reports.

Distributors were also increasingly relying on computerized distribution centers to improve service and profits. Easton Aluminum, the official supplier of equipment to the U.S. Olympic Archery Team, built a 100,000 square foot, state-of-the-art distribution center that served as a model for distributors and manufacturers. Located in Salt Lake City, Utah, this distribution center replaced four warehouses, one for each division of the company, providing a more stable distribution of merchandise in an industry that experienced severe peaks and valleys due to the seasonal nature of sporting goods. The system also allowed Easton to maintain extremely accurate inventory records.

Recognizing that the market is consumer-driven, both manufacturers and retailers used computer technology to gather market and consumer information. Retailers can track customer preferences from point-of-sale (POS) information and use it to manage inventory accurately. Manufacturers can use this same information to react to top-selling products or discontinue shipments of slow-sellers. Both the retailer and manufacturer benefit by reducing the need for inventory build up and markdown.

The Internet became an integral part of business in the late twentieth century, changing how and where consumers shop. The Internet allows retailers to store data regarding customer purchases, birthdays, and demographics. Retailers can use the information to suggest gifts, cross-promote products, and refer users to partner sites. In addition to offering products to consumers, many companies used the Internet to facilitate business-to-business e-commerce such as automating their inventory, offering customer service, distributing products, and utilizing order fulfillment functions. By the mid-2000s, however, industry-specific online stores faced encroachment from mass e-retailers., for instance, launched a sporting goods store in 2003, partnering with a number of online sporting goods companies, including,,, and others. aimed to compete directly with the major sporting goods retailers, offering brand names in a vast array of sporting activities.

Another area of research in the early 2010s included the effects of technology such as cell phones, the Internet, video games, and other technology-related trends on Americans' social, physical, and emotional well-being. Some industry analysts attributed the increase in TV viewing, video gaming, and online social networking to the rise in obesity among American children. Basically, the premise was that children were sitting in front of screens instead of participating in activities that promoted physical exercise, such as team sports. Into the early twenty-first century, the sporting and recreational goods industry worked to find a way to tap into the next generation's high-tech mindset.

© COPYRIGHT 2018 The Gale Group, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. For permission to reuse this article, contact the Copyright Clearance Center.

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