Sneaker culture is thriving. More than simply a means of covering your feet, shoes, and sneakers are high fashion and are associated with a variety of lifestyles (sports and outdoor activity enthusiasts all have purpose-built shoes to match their hobbies). Certain shoes have become collector’s goods in recent years, and many young people earn money online purchasing and selling limited-edition shoes.
However, the shoe business as a whole is not a high-growth sector. However, with worldwide footwear consumption approaching $400 billion each year and constantly increasing, there is plenty of space for shoe firms to carve out a niche and grow their sales.
Investing in footwear companies
Numerous shoe stocks are long-term value investments that provide slower but more consistent growth and a little dividend yield. Other smaller brands that are trending and benefiting from customer momentum are more comparable to high-growth equities. Simply put, there is a shoe stock suitable for investors of all sorts, GAD Capital notes
The uncontested worldwide leader in shoe soles, the Nike swoosh graces the uniforms of all kinds of sporting teams and all styles of footwear, from daily casual sneakers to the most high-end designer kicks. Additionally, Nike is the parent company of the Converse and Jordan brands.
Nike has grown to become one of the world’s most known companies since Phil Knight began selling running shoes in Eugene, Oregon, in the 1960s. It is still rising, particularly as customers in emerging economies like China gain money and buys more high-end footwear such as Nike.
While it is not the fastest-growing brand on our list, it is nonetheless rising steadily. Nike also distributes a small but growing dividend to those seeking investment income.
Adidas existed before Nike. Although Germany’s leading sportswear manufacturer was long since eclipsed by the swoosh and now lags Nike in yearly sales, it nevertheless comfortably holds the second position in worldwide shoe and athletic wear earnings each year.
Adidas, like Nike, is not the fastest-growing shoe company in the world, and there is no dividend if income is what you’re looking. And, although Nike has fared better than Adidas in dealing with the COVID-19 epidemic (due to its best-in-class direct-to-consumer web selling approach), Adidas is no slouch. Adidas still has a huge runway of expansion (although sluggish growth) ahead of it, from casual apparel to specialty sports shoes to highly sought-after limited-edition sneakers.
Deckers Outdoor shoe items are available at a variety of stores worldwide. Its footwear portfolio includes UGG sheepskin boots, Hoka running shoes, and Teva and Sanuk sandals and casual footwear.
Deckers had been growing steadily over the previous decade, and sales surged during the pandemic, owing to their casual and outdoor footwear. Consumer demand for sandals, multi-purpose footwear, and jogging and trekking equipment is at an all-time high. There is no way of knowing how long Deckers’ double-digit percentage growth will continue, but the company is now the fastest-growing stock in the shoe sector.
Crocs are not for everyone. The soft clogs (made from a patented polymer-based substance) were popular in the early 2000s but fell out of favor after the Great Recession of 2008-2009. While the eccentric shoemaker’s sales stagnated for most of the 2010s, it retained a devoted following – particularly among children and young people. Crocs’ popularity has risen again as a result of the pandemic and the informal “stay-at-home” clothing style it helped establish.
As with Deckers Outdoor, it’s impossible to predict how long Crocs’ double-digit sales surge will continue. However, for the time being, this is an excellent niche clothing and accessories stock to examine.
Back in the day, Skechers was primarily regarded as a discount footwear company. While the firm continues to borrow heavily from its bigger athletic footwear competitors, it has developed a worldwide consumer following of its own. It is a leading office and casual shoe brand offers a considerable selection of running and golfing gear and has even made an impact on street fashion with its large chunky sneakers – particularly in developing nations.
Skechers has been a double-digit sales growth story for years, owing to its inexpensive shoe assortment and international expansion. Following a slight downturn in sales in 2020, Skechers’ progress has maintained as the pandemic’s impacts have subsided.
Stocks of shoes for the long haul
While footwear is not a growth investment subject in general, some brands have lasting appeal and guarantee reliable investment returns. Additionally, since shoes are a style and trend statement, there is always the potential for little upstarts to take off and carve out a sizable niche among buyers. Whichever way you choose to invest in shoes and sneakers, keep in mind to choose companies with long-term development potential.