Australian underwear brand Step One has made its first foray into the sleepwear market, launching a small top-and-bottom set range for men.
Called NiteKnit™, the range covers four colourways and is priced at $119 for the set, and is crafted from viscose derived from bamboo.
According to Step One, the range has an eerie, open construction that helps heat dissipate, reducing the heavy, stuffy feeling common with cotton or synthetic sleepwear.
This is one of a few brand extensions Step One has made this year, including launching its own socks range and periodwear undergarments.
The sleepwear market in Australia is estimated to be valued at $74.24 million in 2025, according to Expert Market Research. It is expected to grow at a CAGR of 8.10 per cent between 2026 and 2035 to reach almost $161.77 million by 2035.
The research firm lists Papinelle Sleepwear, Suku Home and Bendon Group as some of the top leaders in the sleepwear space, but did not mention Peter Alexander, which made over $500 million in sales in FY25.
Step One’s move into new categories comes as the brand’s revenue softened over the last two years. Between FY23 to FY24, Step One’s sales lifted 29.7 per cent to $84.5 million. Between FY24 and FY25, its sales growth softened dramatically, lifting just 2.8 per cent to $86.88 million.
More recently, Step One is projecting a sales dive in the first half of FY26 by more than $15 million to around $30 million and $33 million.
The brand’s earnings before interest, tax, depreciation and amortisation (EBITDA) for the first half of FY26 is projected to be a loss of between $9 million and $11 million, reversing an $11.3 million profit in the first half of FY25. This loss will include a $10 million provision for inventory obsolescence.
“The recent sales results were materially below expectations, and our efforts to clear older and slower-moving inventory were not successful,” Step One shared in a recent trading update. “As a result, the company has raised a $10 million obsolescence provision against this legacy stock. This inventory is now fully provisioned, and no further material provisions are anticipated at this stage.
“The combined impact of softer sales and this one-off inventory provision has led the company to reassess its full-year outlook. As the implications of these factors are still being evaluated, the FY26 EBITDA guidance previously provided is withdrawn, and no updated guidance will be issued at this stage.
Step One noted that it will update the market once greater visibility over trading and inventory outcomes is available.