NEW YORK (TheStreet) -- "Smart garments," or technology-enabled clothing, is an industry poised to explode in popularity in the next few years, with several well-known sports and clothing brands in a position to take advantage of this up-and-coming category.
Gartner (IT) research direction Angela McIntyre said figuring out the potential shipment numbers is possible, but at this point it is still too early to determine which companies will dominate the smart garment category.
However, it is a good bet Ralph Lauren (RL) , Under Armour (UA) , Adidas (ADDYY) and L Brands' (LB) Victoria's Secret are already experimenting with smart garments of various types and will play a major role as the segment develops.
McIntyre is forecasting the number of smart garments shipped will balloon from about 100,000 in 2014 to more than 26 million by 2016. If this prediction holds true, smart garments will rocket to the top of the wearable product category surpassing sport watches, fitness bands and chest monitors.
Gartner said much of the growth will, literally, come on the backs of relatively few users. Athletes and gym rats need to constantly change their dirty and sweat-soaked shirts and socks, requiring each person to buy several articles of clothing so they will always be ready to go.
Sensoria's fitness socks and app.
Smart garments work by weaving bio-medical sensors into the material. The data are sent via Bluetooth to a smartphone app where the user can check and track heart rate, pulse, running pace and even stride. Gartner said the market is poised for growth because this clothing has just left the testing stage and is working its way into markets where the apparel is primarily popular among athletes and coaches. So the next big customer is the consumer.
McIntyre expects this situation to quickly evolve.
"Starting next year, clothing products with more mass market appeal will start to appear," she said, adding there will be more big brands joining the fray.
However, it's not just the big boys who are competing in this new category. The Redmond, Wash.-based Sensoria, is now selling three garments online: socks, a bra and a fitness t-shirt.
Sensoria is also looking toward the future and during the summer sold a 20% stake to Italian company Reply SpA for a Series A investment round. Reply SA will help Sensoria develop its software development kit, allowing more third-party input into its products.
Once consumers start buying the high-tech clothes, the industry will go beyond measuring athletic endurance and jump into the medical field where respiration, body temperature, signs of stress and even how one's body is interacting with a prescription will be checked.
The wellness field has the potential to push smart garments to an even higher level by not only measuring a person's health, but their reaction to medications and the environment.
Victoria's Secret Heart-rate Monitor Compatible Sport Bra. While not a smart garment it features connection so the wearer can easily attach a heart monitor.
At the time of publication, the author held no positions in any of the stocks mentioned.
This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
TheStreet Ratings team rates UNDER ARMOUR INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate UNDER ARMOUR INC (UA) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, expanding profit margins and compelling growth in net income. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value."
You can view the full analysis from the report here: UA Ratings Report