The Federation of the European Sporting goods Industry (FESI) has unveiled the results of a flagship survey conducted among its members to assess the impact of the current COVID-19 crisis on the sporting goods industry.
The survey shows that the entire sporting goods sector is strongly impacted by the COVID-19 outbreak with 45 per cent of the companies declaring a loss of turnover ranging between 50 per cent and 90 per cent since the beginning of the crisis. A new broader survey exercise examining the effectiveness of economic and policy responses for the sector will be conducted shortly.
The survey was conducted among FESI members – companies and national federations (including members of their national federations) – in order to gather their views and experience of the impact of COVID-19 on their businesses.
It collected responses from a critical mass of the sporting goods industry. Manufacturers and retailers over a geographical area covering the main outbreaks of the epidemic in Europe participated in this exercise. The respondents are composed of 40 per cent of large enterprises (more than 250 employees), 30 per cent of SMEs (between 10 and 249 employees) and 20 per cent of micro-enterprises (less than ten employees).
Neil Narriman, FESI President, said: “The closure of brick and mortar stores all over Europe and internationally, as well as changes of consumers’ behaviour lead to serious drop of sales. Most of our companies are currently struggling to cope with fixed costs (rent, employment costs), which create significant liquidity shortages.”
While national governments and the European Union have put in place economic rescue plans to financially support those affected by the crisis, for some companies the support of the financial sector is not yet fully sufficient.
The results of FESI’s survey also indicates that the current impact of the outbreak on production depends on a wide variety of factors such as: Governments’ social distancing measures, the evolution of the virus in each country, order cancellations from other clients, and the overall clear lack of short- and long-term visibility for the companies.
Jérôme Pero, Secretary General of FESI, said: “In the short term, the sporting goods industry needs strong measures from national governments to address the current liquidity gaps and strengthen their cash flows.
“But it is crucial to also start preparing gradual longer-term strategies now, in order to re-launch the economy sustainably in a safe and coordinated manner once the crisis is over.”
Regarding e-commerce, the survey demonstrates once again that digitalisation is a key driver for the sporting goods industry and that companies with efficient omni-channel retail strategies are better equipped to cope with the crisis. However, the compensation provided by having an e-commerce website remains relatively low compared to the total losses: between zero per cent and 20 per cent for 85 per cent of the respondents.
Since the beginning of the crisis, the sporting goods industry has mobilised and adopted a series of solidarity initiatives to help communities across Europe and the world cope with the crisis. Thirty-five per cent of the respondents to FESI’s survey indicate that their company is producing personal protective equipment (PPE) such as medical masks. Twenty-five per cent have implemented initiatives to encourage physical activity and social distancing, either within their company or through free public access programs/applications.
FESI has shared this report with the European Commission.