Amazon enters the sportswear arena
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Amazon enters the sportswear arena

Online retail giant Amazon is working with some of the world’s biggest athletic apparel suppliers to start creating its own private-label sportswear. The sportswear sector has its fair share of challenges at the moment, and Amazon is sure to shake it up further. One of the areas in which big players in the athletic apparel sector have struggled in the past is in understanding the shift towards online sales – something Amazon is the world recognized expert in.

Amazon’s share price has risen by 34% so far this year

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SOURCE: Yahoo Finance

According to a person with knowledge of the arrangement, Makalot Industrial Co. – a company that produces apparel for Gap Inc., amongst others – is making clothes for Amazon’s own label. And they are not the only suppliers that the Ecommerce giant. Nonetheless, it is early days in the relationship, and long-term contracts have not yet been signed, according to sources.

Amazon’s latest move is reminiscent of its earlier foray into fashion and other industries. The company can easily identify gaps in its inventory and create products to fill them. These own-brand products are often not recognizable as such by consumers, and include a long list of names like Scout + Ro and North Eleven.

These brands are a big earner for Amazon, which prices them competitively, and they are also a motivating force for players in a number of sectors: if you can’t offer something Amazon wants, then the company will do it themselves and become your competitor. Given Amazon’s deep pockets and reams of consumer data, that’s a worrying thought.

Disclosure

Dominion holds Amazon in its Global Trends Ecommerce Fund.


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