The challenger surge: How niche sportswear brands are redefining the game.

Stuart Lang
Aug 15
3 min read

The sports apparel market is booming. North American retail sales of sports-related apparel and footwear are projected to hit $173 billion in 2025, with forecasts climbing to $209 billion by 2029 (McKinsey & Co). But the bigger story isn’t just ***growth*, it’s the rapid redistribution of market share.**

In 2020, Nike, adidas, Puma, Under Armour and Vans controlled 80% of the market. By mid-2024, their share had dropped to 65%. That 15-point shift is being claimed by a wave of challenger brands carving out niches and building fiercely loyal communities.

The rise of the challenger era

Brands like On, Arc'teryx, HOKA, Salomon, and lululemon have grown faster than the industry leaders between 2019 and 2024, collectively taking 3% of the market in five years.

Lululemon > Crossed $1B in sales in the early 2010s and is now the largest women’s apparel brand in the US.
HOKA > Revenue grew 28% in 2024 to $1.8B, up from $1.1B in 2023.
New Balance > Targeting $10B in sales within a few years, up from $6.5B in 2023.
On > Up 46% year-on-year in 2024, blending running performance with lifestyle appeal.

Their shared formula: precision targeting, community-led marketing, and playing outside the rules the big brands wrote.

The next wave: Hyper-niche start-ups

Smaller start-ups are now applying similar strategies but with even greater focus:

FURI > Disrupting tennis by focusing on urban youth and underrepresented communities, building from grassroots rather than elite sponsorships.
DFYNE > Pandemic-born brand selling durable, supportive gym legwear, using scarcity and hype to reach £66.8M turnover by 2025.
Oner Active > Influencer-founded, reaching ~£80M in annual revenue within four years.
Halfdays > Women’s ski apparel brand that grew 86% from 2023 to 2024 through community-driven content.

Lessons from other sectors

Parallels are emerging across adjacent sports-related categories:

Liquid Death > Turned water into a $1.4B lifestyle brand by building cultural identity first.
Peloton & Whoop > Started with niche high-performance audiences before broadening without losing authenticity.
Allbirds & VEJA > Leveraged sustainability to disrupt entrenched footwear players.
YETI > Expanded from niche fishing coolers to a broader outdoor lifestyle brand with premium cachet.

When challenger brands get it wrong

Not every challenger survives:

Outdoor Voices > Raised $57M but struggled with leadership turmoil, store closures, and a steep drop in valuation, eventually preparing for bankruptcy.
SKINS > Early compression-wear innovator that filed for bankruptcy in 2019 after overextending.
One Way Sport > Niche ski equipment brand that failed to diversify and collapsed in 2018.
VO2 Sportswear > UK custom kit start-up that ran out of cash despite six-figure revenues.

Why some win and others fail

From both the success stories and failures, three core principles emerge:

Authenticity is non-negotiable > The most successful brands are rooted in lived experience or a clear cultural mission.
Community builds before sales > Belonging comes first, transactions follow.
Agility beats size > The ability to adapt quickly to cultural and consumer shifts is a decisive advantage.

By contrast, challengers that fail often suffer from:

Funding and cash flow issues.
Leadership instability.
Overreliance on a narrow niche without evolution.
Lack of operational discipline to match marketing ambition.

The road ahead

McKinsey reports that 71% of consumers expect personalised interactions, and 76% feel frustrated when brands don’t deliver. This is where smaller players can outpace the giants.

As the market heads towards the $200B mark by decade’s end, the question isn’t whether the gap will close further - it’s which hyper-focused, authentic brands will become tomorrow’s household names, and which will be cautionary tales.

At Propellant, we work with founders, CMOs and boards to build brands that aren’t just seen - they’re sought after. Brands that have a soul. That means designing platforms that transcend category, unlock cultural relevance, and create new permission for growth.