Makalot Industrial Co., a Taiwanese company that makes products for Gap Inc., Uniqlo and Kohl’s Corp., is reported to be making goods for the Amazon line. Another Taiwanese supplier, Eclat Textile Co., who works with Lululemon, Nike, and Under Armour, is also on board, according to SinoPac Securities Corp. analyst Silvia Chiu. What’s significant about them tapping Eclat is that its expertise is making high-performance sportswear, which suggests that Amazon may very well be gearing up to enter into the high-performance athleisure category.
For a company like Eclat, forging an alliance of this nature with Amazon could be very lucrative. According to Chiu, online apparel sales accounted for 19 percent of all apparel sales in 2016, up from 11 percent in 2011, and they are primed for strong growth going forward. Eclat anticipates new clients will contribute as much as 12 percent of 2018 sales.
A Business Insider article this past January reported that Seattle-based Amazon has been manufacturing the sportswear line for months. They even posted jobs looking for candidates who had expertise in private-label athletic wear. That same month, they hired Kirsten K. Harris as a senior brand manager for active apparel.
Despite all the talks coming from various inside sources, Amazon is remaining very hush-hush about the project, as it’s still in its trial stages. While Amazon reps are yet to speak on record about the venture, what is known is that the e-commerce behemoth has had their partners producing sportswear products in small quantities as part of a trial run. And according to Chiu, Eclat began shipments to Amazon in August.
This could mean even more bad news for the already shaky athleisure market, one more competitor in an already overcrowded market. This time competition coming from an online retail giant that has proven it knows how to market its products and drive profit globally. After Bloomberg reported on the news, shares for Lululemon fell as much as 4.9% to $57.55, Under Armour dropped as much as 2.8% and Nike also declined (though its shares did recover at closing, up 0.3% to $50.98).
Amazon has already tried its hands into private-label fashion, under names like Goodthreads, Paris Sunday, North Eleven and Ella Moon to fill gaps in its inventory. They have positioned their products as competitors alongside established brands sold on their site, so that if the well-known brand does not fulfill the customer’s needs the customer can turn to the Amazon brand as an alternative.