Historically, socks have not been perceived as a high growth, fashion-forward sector; however, recent trends in M&A demonstrate unexpected strong growth in this market. A recent study conducted by Transparency Market Research shows that growth of the socks market now outpaces the growth of the overall apparel industry. While socks are often thought of as commodity products, growth of the sportswear sector and shifting consumer behavior has transformed the clothing item into an attractive product segment.
The incredible success of footwear companies, such as Nike, Adidas, and ASICS as well as the recent boom in the athleisure and sportswear industry has significantly driven the recent growth of the socks market. According to a recent report from Morgan Stanley Research Global, sports apparel and footwear sales have grown 42% to $270 billion since 2009. The footwear industry will likely see this upward trend continue as an increasing number of consumers place high investment in their health. According to a study from the International Health, Racquet & Sportsclub Association, the total number of Americans with a health club membership grew 2.5% annually from 2012 to 2015, reaching 55.5 million. Increasing awareness among consumers regarding their health will continue to spur growth in the athletic footwear and sportswear industry.
Socks an Attractive Subsector for Investors
As Silicon Valley has risen to prominence over the past decade, its trademark relaxed approach to the work environment has trickled into both the corporate world and popular culture. This development, coupled with the rise of fitness and athleisure, has resulted in a more casual approach to both workwear and streetwear. In addition to athletic footwear replacing more traditional footwear both in and out of the workplace, the socks market has seen strong growth driven by the new idea of socks as a fun, fashion accessory. New market entrants such as Culver City, Calif.-based Pair of Thieves have transformed socks from a boring holiday gift idea to a way for people to express themselves and maybe even match with their kids.
Recent activity in the industry also indicates that the socks market is an attractive one for investors. At the beginning of the month, Sock 101, a start-up providing subscription socks, received $250k in funding from designer Rebecca Minkoff and executive Gary Wassner. The service is modeled off other popular subscription-based companies such as Dollar Shave Club or Blue Apron, and aims to be the worlds largest sock-of-the-month club. In mid-November, the Dallas-based private equity group LongWater acquired Fox River Mills, a designer and manufacturer of socks for the athletic and casual markets. Fox River will be an add-on to Standard Merchandising Company, acquired by LongWater in 2015. Earlier in November, North Carolina-based Twin City Knitting Company, Inc. was acquired by Sock and Accessory Brands Global, a portfolio company of Huron Capital. Twin City is a producer of performance athletic socks as well as customized socks. Huron Capital has stated that they are interested in the socks industry because they view it as relatively stable from a fashion trend standpoint.
So remember, this holiday season do not be afraid to give socks as a gift!