Sport Innovation/Skins Sportswear/Background, Current situation and SWOT

Background of the organization

SKINS Compression Garments Pty Limited, headquartered in Riverwood, Australia, was incorporated in 2004, although the idea behind the current technology dates back to 1996. The creator, an Australian skier, had a sports science background and was ambitious to practice sport with the same intensity as when he was younger, while still keeping the same level of freshness. His main idea was that increased blood circulation helps the body perform better. With the usage of the “second skin” and wrapping his muscles into it, he could accelerate blood flow and increase oxygen delivery to working muscles. Consequently, this would improve power, speed, stamina and recovery.

The invention process and design of the first pair of SKINS tights took 5 years. Since then the use of SKINS amongst athletes picked up rapidly and still remains extremely popular. As a matter of fact, SKINS are nowadays a highly sought-after product by discerning sports people in more than 30 countries.

Use of SKINS generates a number of benefits for athletes, what has been highlighted by many studies published in peer reviewed medical journals. SKINS are designed to increase the flow of oxygen to muscles and there are two key ways to achieve this: by gradient compression and superior construction.

Current situation

SKINS Compression Garments Pty Ltd makes performance clothing for athletes and sportspeople.

Company offers tights, jerseys, longs, shorts, racer back and short sleeve tops, jackets, base layers, sleeveless suits, tank tops, and snow garments. The company provides its products[2] for athletics, badminton, baseball, basketball, bodybuilding, climbing, cricket, cycling, fitness, football, golf, hockey, martial arts and combat, recovery and relaxation, rowing, rugby, running, soccer, swimming, tennis, triathlon, walking/hiking, and snow sports. It offers its products through stores in Australia, Austria, Belgium, Denmark, Germany, France, Italy, the Netherlands, Canada, Japan, New Zealand, Switzerland, the United States, and the United Kingdom, as well as online.

The company makes 100,000 units of clothing each month which are supplied to apparel markets in 31 countries. SKINS specializes in compression clothing, designed to prevent injury and enhance performance. Their black, tight gear with yellow stitching is now part of the sports landscape.

The SKINS Compression Garments Pty Ltd is a small company and they have registered handful of personnel in Australia for different responsibilities. The CEO is Jaimie Royston Fuller, also being the managing director of the company with various responsibilities. Warren Hodge serves as a General Manager of SKINS Compression Garments Pty Ltd. The third person is Sales Manager Heath Donaldson and his responsibilities are management and sales. Another person is an accountant Ron McKeller who is responsible for the whole accounting/finance aspect. The fifth person is Marketing Manager Jaime Briety with responsibilities including marketing and management.

SKINS have invested heavily in research to develop an engineered gradient compression, which gives the company a considerable competitive advantage. This is why SKINS is favored by so many top athletes and sporting teams around the globe. In addition, SKINS partners with the Australian Physiotherapy Association and their products are registered as medical devices by the Australian Therapeutic Goods Administration.

SKINS have now a number of professional athletes who use their products on a daily basis. Australian and international high profile athletes sponsorship deals with SKINS include cricketers, netballers, rugby players, athletics, triathletes, climbers, cyclists, mountain-, trial- and hand bikers, tennis players and alpine skiers. Rugby league (NRL) star Johnathan Thurston[3] has used SKINS products now for over 5 years and said: “They have become an essential part of my kit, up there with my boots and headgear! I find that body shots tend to have a lesser impact on me when wearing SKINS during a match: it’s as if my SKINS provide me with some extra cushioning. I also find that my body recovers quicker when I wear SKINS after training and games. For a quicker recovery, I sleep in my SKINS after games and always wear them when flying. They are like my second skin.”

In February 2010 SKINS Compression Garments Pty Ltd and USA Cycling Inc.[4] jointly announced the upgrade of their partnership agreement in order to equip the athletes of USA Cycling. In the beginning in February 2010, SKINS provided its full range of competitive cycling apparel to USA Cycling athletes across the disciplines of road, track, mountain and cyclo-cross. The three-year agreement will remain in place through the 2012 Summer Olympic Games in London. In addition to providing the competitive apparel range, SKINS will continue to provide its recovery compression garments to improve the training, performance and recovery of USA Cycling athletes.

In June 2010, the Australian Rugby Union[5] announced the latest addition to its portfolio of valued partners after striking a four-year agreement with SKINS. Athletes who use SKINS have also been really successful and when they provided numerous athletes with BioAcceleration Technology compression garments for the 2010 Vancouver Winter Olympic and Paralympics, helping to contribute to some outstanding performances. In total, SKINS European athletes won 5 Gold, 3 Silver and 4 Bronze medals.

Recently, in September 2010, SKINS officially launched their partnership with LI-NING[6]. The joint cooperation will deliver 'LI-NING SKINS', superior quality engineered gradient compression sportswear to the Chinese market. SKINS will utilize LI-NING's distribution network to gain access to the Chinese market and LI-NING will benefit from SKINS' technological research especially as the partnership moves deeper into the fields of R&D and design in the near future. LI NING Company Limited is one of the leading sports brand enterprises in the PRC, possessing brand marketing, research and development, design, manufacturing, distribution and retail capabilities. The Group's products mainly include footwear, apparel, accessories and equipment for sport and leisure uses under its own LI-NING brand. The Group has established an extensive supply chain management system, and a distribution and retail network in the PRC primarily through outsourcing of manufacturing operations and distribution via franchised agents. The Group also directly manages retail stores for the LI-NING brand. This cooperation will also provide additional power and superiority to LI-NING-sponsored Chinese athletes competing on the world stage.

SKINS Compression Garments Pty Ltd head office is now in Switzerland and they have 5 international subsidiaries, which are in Australia, United Kingdom, China, France and Germany. Company also has 16 SKINS distributors[7], which sell their products to 31 countries in Europe, Asia, Oceania and North America. Their products includes now a large number of different products with different styles for various sports and they have own products for male, female and youth customers.

SWOT Analysis

Strengths

SKINS was the first company to sell compression garments’ products. SKINS’ offers a wide range of products for different types of sport. SKINS is currently sponsoring professional teams and athletes. SKINS’ products are recommended and endorsed by the Australian Physiotherapy Association. SKINS' products are also registered as medical devices by the Australian Therapeutic Goods Association. The benefits of SKINS have been supported by a broad number of independent researches. SKINS is using social media to communicate to and inform its customers. SKINS’ products are sold in over 31 countries worldwide through authorized dealers and online stores. SKINS has currently a partnership with LI-NING to enter the chinese market. The management and team of SKINS are passionated about sports and their products. Weaknesses

SKINS is a small company. SKINS' research evidences are controversial. SKINS’ website is not easy to access and not user-friendly structured. SKINS’ distribution network is limited. They do not own distribution stores or showrooms. SKINS’ marketing is mainly aiming at elite athletes. Opportunity

The market of compression market is still a niche market. Hence there is only a narrow number of competitors. There is a huge potential target group for compression garments. Compression garments can be used in different sports and can be suitable for professional athletes as well as for amateurs. The trend of compression garments could turn out to be only a big hype with new future perspective. All kinds of media can be used to improve publishing and marketing of compression garments. Sponsored athletes could increase the media interest on SKINS’ compression garments. The market for recreational athletes and „weekend athletes“ could be a potential new customer group. Using Internet and interactive media can increase the customer relationship between SKINS and its clients base. Since the industry of compression garments is still a niche market and there is always the danger of new big competitors, SKINS needs to use the market potential to maintain its economic and financial stability. Threats

Increasing costs for the production of compression garments could have effects on the financial health of SKINS. The Entry of new competitors especially larger enterprises could increase the competition and take over customer bases. The increase of competition could lead to price wars. New innovation within the compression garment technology could increase the pressure on SKINS and could have effects on sales figures. Next: Technology and innovation