April 19, 2017 / 1:07 PM / 3 months ago

Sainsbury's targets 'Athleisure' market with Russell Athletic tie-up

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A sign is displayed outside a Sainsbury's store in London, Britain December 3, 2015.Neil Hall/File Photo

LONDON (Reuters) - Sainsbury's (SBRY.L), Britain's second largest supermarket group, is aiming to for a slice of the growing "Athleisure" casual sports clothing market through a partnership with U.S. brand Russell Athletic, it said on Wednesday.

Sainsbury's already sells clothing under the Tu own brand, but has stepped up diversification away from its traditional base in food retailing. Last year, it purchased Argos- and Habitat-owner Home Retail for 1.1 billion pounds, securing another avenue of non-food growth while also enhancing its online logistics operations.

The deal with Russell Athletic, part of Berkshire Hathaway's BRKA.N Fruit of the Loom Inc, will put the U.S. company's men's and women's clothing, as well as men's bags, on Sainsbury's Tu clothing website.

It marks the first time Sainsbury's female customers are able to buy branded clothing alongside the supermarket's Tu range. For men, it follows the group's first branded partnership with leisurewear company Admiral in stores and online in 2015.

Sales of "Athleisure" - sports and gym wear - have grown 42 percent over the past seven years and the UK market is worth 7 billion pounds, according to research by Morgan Stanley.

Sainsbury's has expanded Tu aggressively with its sales growing 15 percent over the last two years.

Sainsbury's is currently Britain's sixth biggest clothing retailer by volume and its tenth biggest by value.

Sainsbury's main rivals - market leader Tesco (TSCO.L), Asda (WMT.N) and Morrisons (MRW.L) also sell various clothing ranges.

Reporting by James Davey. Editing by Jane Merriman

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