The sportswear industry enters 2026 with simultaneous crises at Nike, Lululemon, and Under Armour creating structural openings for upstarts and adjacent players. The convergence of leadership turmoil, shifting consumer preferences, and new entrants signals a potential reshuffling of an industry that had consolidated around a few dominant brands.
The Crisis at Each Major
Nike’s Middle Innings: Worst single-day stock drop in company history (summer 2024) triggered CEO replacement. North America sales rebounded 9% after repairing wholesale relationships with Amazon and Foot Locker, but cultural relevance remains the core challenge.
Lululemon in Crisis: Shares down 44% in 2025 with founder Chip Wilson launching proxy fight, Elliott Management pushing for new leadership, and CEO McDonald stepping down. Return-to-office trends and baggy jeans fashion shift undermined the leggings-as-lifestyle thesis.
Under Armour as M&A Target: Market cap collapsed to $2 billion with shares under $5. Lost Stephen Curry, settled SEC charges, withdrew from expensive college contracts—making it vulnerable to acquisition.
The Insurgents Rising
Tracksmith, Bandit, and Satisfy are gaining credibility among cosmopolitan run clubs as wealth signifiers. They’re nowhere near Lulu’s $10 billion revenue but capturing the cultural energy incumbents lost.
The Licensed Apparel Fragmentation
Olympics, NFL, and US Ski are partnering with Abercrombie, J.Crew, and Lululemon rather than Fanatics exclusively. Sports institutions see opportunity beyond traditional jersey-wearing demographics.
The sportswear shakeout reflects a broader pattern: incumbents that dominated through scale and distribution advantages face disruption when cultural relevance shifts faster than their organizations can adapt.
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For the complete analysis of the sportswear industry inflection point, see The Great Sportswear Reckoning on The Business Engineer.
