Performance - SportsOneSource.com

PSR_0207
2/19/07
3:03 PM
Page 1
Performance
Sports
ts
RETAILER
News and Information for the Running and Triathlon Market
A SportsOneSource Trade Publication
Garmin Nearly
Doubles GPS Sales…
Garmin managed to nearly double the volume of GPS sales during fiscal 2006, with
total revenues jumping from just over $1
billion at the end of 2005 to $1.77 billion
at the end of 2006. Fourth quarter sales
were $611 million, a 91% increase over
last year. Income grew to hit $180 million.
The outdoor/fitness segment revenue
increased 16% to $80 million in fourth
quarter, driven by the expanded fitness
product lines. Gross margin in the division
was flat for the quarter at 56% while operating margins remained stable at 40% of
sales. The company feels that its primary
growth drivers for the future will be in the
running and cycling markets.
Double-digit revenue growth is anticipated
across all business segments in 2007. In
2007, the company expects to invest approximately $150 million in advertising to promote the Garmin brand. Garmin will continue to invest heavily in R&D as well. Garmin
revenues for 2007, are expected to increase
41% to over $2.5 million with earnings per
share growing only 15%, up to $2.70 per
share. This will be due to a decline in operating margins, which should come in at 27%,
down 430 basis points from this year.
The company is anticipating 20% revenue growth from marine and outdoor/fitness. The outdoor/fitness and marine segments are both expected to have flat operating margins next year.
February 2007
Asics Opens Tokyo Running Shop,
Sees Global Sales Jump 17.6%
Shortly after reporting its financial
results for the third quarter of
2006, Asics Corporation extended
its owned-retail operations to
include the performance sports
market with the opening of its
first-ever running specialty store
on February 11. Asics Store Tokyo
opened exactly one week before
Tokyo Marathon 2007, the firstever mass marathon in Japan.
The 280 square meter store is located in Tokyo’s Ginza district, targets ¥150 million
(about $1.5 million) in sales during its first year in operations, and even includes a locker
room with showers for customers to use. The location is close to the Imperial Palace, where
many people go for a run during lunch or after work.
On the aforementioned financial side of things, Asics Corp. saw global third quarter net
sales increase 17.6% to ¥46.8 billion ($397.4 mm) from ¥39.8 million ($339.8 mm) last
year. Globally, sales of footwear increased 21.6%, apparel sales jumped 14.0%, and equipment sales slipped 3.3% during the third quarter. Net income increased 57.3% to ¥5.2
billion ($43.8 mm) for the quarter, from ¥3.3 billion ($28.0 mm) last year. In the U.S., sales
increased 27.5% to ¥9.9 billion ($83.9 mm) from ¥7.8 billion ($66.2 mm) last year.
Operating income for the United States increased 4.5% to ¥934.0 million ($7.9 mm) from
¥894 million ($7.6 mm) last year.
In other Asics news, the company is also updating their branding with a new brand logo
and new slogan. Both are designed to reflect a faster, more modern feel. The new slogan is
‘Sound Mind, Sound Body’ and stems from the meaning behind the Asics acronym,
“Anima Sana In Corpore Sano,” which translates to, “A Sound Mind in a Sound Body.”
“Globally, we feel like this is an appropriate time to update the Asics brand mark. We
wanted the slogan to represent the momentum, increased visibility and success the company is going through right now,” says Gary Slayton, VP of marketing for Asics America
Corporation.
INSIDE PSR:
■ New Balance Targets Specialty Running Retailers
■ The Technology Race: New Electronics Bring
Running Specialty Retailers New Customers
■ Retail Profile: The Running Revolution
■ The Doctor’s Office: The Impact of Running
Shoes on Gait
PSR_0207
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1:54 PM
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Performance
Sports
ts
RETAILER
EDITORIAL
Group Editorial Director
News and Information for the Running and Triathlon Market
CONTENTS
Judy Leand (646-654-5058)
[email protected]
February 2007
Managing Editor
Kris Versteegen (704-987-3450)
[email protected]
10
Contributing Editors
Lou Dzierzak, Andy Kerrigan,
Matt Powell, Marianne Bohnslay,
Dr. Paul Langer
ADVERTISING
Publisher
Samuel Wender (646-654-4464)
[email protected]
Account Managers
Robert Z. Feiner (646-654-4991)
[email protected]
Sam Selvaggio (646-654-7465)
[email protected]
News
3 ■ New Balance Targets Specialty Running Retailers
■
4
Fox River Hires Xany Gibson as Creative Director
President & CEO James Hartford
Chief Information Officer Mark Fine
VP Research & Development Gerry Axelrod
Director Information Management Ruben Desangles
Manager Database Operations Cathy Badalamenti
VP Business Development Bill Bratton
Director Business Development Neil Schwartz
Regional Business Manager Barry Gauthier
Controller, HR Manager Carol Wexler
Nike Inc. Steps Boldly Toward Future
Raynor Inducted Into Running USA Hall of Champions
■ SportHill Promotes Berg
■
■
5
■
■
TNF Places New Focus on Endurance Runners
Spenco Shifts Marketing Execs
Feature
The Technology Race
6
Other SportsOneSource Titles:
New Electronics Bring Running Specialty Retailers New Customers
Sporting Goods Business
Hunting Business
Outdoor Business
The B.O.S.S. Report
Sports Executive Weekly
Footwear Business Update
SGB Update
Outdoor Business Update
Departments
10 Retail Profile: The Running Revolution
14 The Doctor’s Office: The Impact of Running Shoes on Gait
© SportsOneSource, LLC
PO Box 480156 | Charlotte, NC 28269
704-987-3450 | fax: 704-987-3455
6
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New Balance Targets Specialty
Running Retailers With NBx
In an effort to refocus attencushioning
tion on dedicated runners,
New Balance is launching a
multi-faceted program called
NBx, a reference to “running
raised to the X power.” As
part of the initiative, New
Balance has created the NBx
performance
division within the company,
and is rolling out a major
campaign comprised of print
advertising, online elements,
outdoor guerilla advertising,
event sponsorships and inINTRODUCING
store support. On the product
side, the company’s Spring
’07 elite running footwear
Cushioningx
and apparel collection will be
branded NBx.
“The NBx initiative came to
fruition this past fall,” says
Dave
Shelbourne,
New
Balance’s global team leader of
the NBx division. “The launch package for footwear, and $36 to $120 for apparel.
overall New Balance business. We hope to
Driving all of this is a dedicated NBx triple sales within the elite running channel
NBx includes a large in-store presence as
well as online banners and programs. It’s a team that is focused exclusively on the in the next five to six years. In the long
multi-faceted approach.” He adds, “We will running specialty business and is based in term, we want to become a bigger player in
also do some marketing activities around New Balance’s manufacturing and R&D the channel with both footwear and apparel.”
the Boston, New York and Chicago facility in Lawrence, MA, a 45-minute drive
In other company news, New Balance’s
Marathons, and will put on some grassroots from the company’s Boston headquarters.
outdoor footwear initiative is gaining a
New Balance is investing heavily into the stronger foothold, thanks to a new strategic
events, as well.”
The marketing campaign is designed to NBx program because the company wants partnership with W.L. Gore & Associates,
capture the essence of the dedicated runner, to place more focus on the independent maker of Gore-Tex waterproof/breathable
and features photography portraying an performance sports retailer. “This is not a technology. For Fall ’07, New Balance is
actual “day in the life” of real runners— volume-driven initiative. It is more of a offering five models that feature Gore-Tex
those who push themselves to improve their strategic, brand-building initiative,” says XCR: the 1110 trail runner, 1200 hiker,
personal performance. Print ads show a Shelbourne. “NBx accounts for about 2 multi-sport 950 and 1091, and the 977
male and a female runner, along with cam- percent of total revenue in terms of the country walker.
paign tags highlighting key running motivations such as desirex, heartx and dedicationx.
The full campaign tag line reads, “NBx is
everything New Balance knows about
running. Raised to the X power.”
Shelbourne reports that the Fall ’07 NBx
line consists of 14 footwear models: 10 for
Xany Gibson has joined Fox River as including Tommy Hilfiger and The
performance road running and four for trail
creative director. Gibson previously Walking Co. She received her underrunning. There are also 12 apparel pieces,
was part of the product development graduate degree in industrial design
six each for men and women. “For Fall ’08,
team at Mountain High Hosiery in engineering and her MBA from
we may expand apparel and have up to 15
Sand Diego, CA, creating lines for a Instituto Tecnologico de Costa Rica in
styles each for men and women,” he says.
variety of casual and athletic programs Costa Rica.
Retail prices range from $85 to $135 for
Runners are lucky. We get to discover something important.
How good can I really be? That’s pushing yourself to the X.
Welcome to the club.
Look at any marathon field and you know that not all runners are alike. That’s why we’ve
created the ABZORB® family of cushioning technologies. Whether it’s impact protection, durability, or complete
heel to forefoot cushioning like in the 1061, you can run your way. We’ll adapt our cushioning to you.
Find it at newbalance.com.
©2007 New Balance Athletic Shoe, Inc. Printed in the USA.
keyword search: 1061
Specialty NEWSwatch
Everything New Balance knows
about running. Raised to the X power.
The NBX Collection is an elite group of footwear and apparel for runners who push themselves, and their performance, to the X.
Because we push the performance of the entire collection just as far. The 1061 performance cushoning shoe combines two different
types of cushioning from the ABZORB® family of technologies, because one kind of cushioning simply can’t meet all of a runner’s needs.
And the Saba Short uses a Phantom Waistband™ and seamless brief so chafing never hinders your performance. There’s much more to
the NBX story: more products, more technologies and more athletes pushing themselves. Find it all at newbalance.com.
Fox River Hires Xany Gibson
as Creative Director
Performance Sports RETAILER
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Specialty NEWSwatch
Nike Inc. Steps Boldly Toward Future
Nike Inc. held their bi-annual Investor Day entitled
inline stores, factory outlets, and e-com“The Customer Decides” in Portland and made
merce, to increase to 15% of sales or $3.5
a number of very important and unusual
billion, up from the current 12%, or $1.7 bilannouncements to the attendees. The first
lion. With the current $1.7 billion coming from
big news was that the company now targets
more than 400 company-owned stores and erevenue to reach $23 billion by fiscal 2011,
commerce platforms, it would seem that Nike
spread across its entire brand portfolio. Several
will need to open more than the 100 mall-based
industry analysts remarked that it is very
doors to double that sales volume.
uncharacteristic for Nike to be so bold and so
Parker said, “In today’s world, power has shiftspecific in an announcement like this.
ed away from traditional brand growth models to
Management expressed this goal in a nearly religrowth driven by the power of consumers. No
gious format with the symbol “23:11.”
one is better positioned than Nike to take advanOver that five-year period the company
tage of this. We will drive growth and build
expects to get 75% of this growth from the Nike
shareholder value by embracing the power of the
brand and will be driven by a “consumerconsumer and creating a new marketplace.”
defined” strategy. The company will be focused
However, Nike still expects the vast majority
on “creating premium consumer experiences
of its sales to be generated from the wholesale
built on product innovation, brand leadership
side of its business. Nike’s retail partners are
and elevated retail presence.” This elevated
expected to generate more than 80% of the $23
retail presence will come through Nike’s
billion in anticipated sales in 2011. Nike manexisting Niketown stores as well as a new Mark Parker,
agement said that it will work closely with key
mall-based retail format that will be rolled out Nike Inc. president and CEO.
retail partners to “create more elevated and
shortly in several key markets. While this
differentiated retail experiences.” The commessage was anticipated in the financial market, the announcement pany expects to begin executing segmented concepts with key
was relatively low key. Over the next three years, the company retail partners in the United States over the next two years.
anticipates opening approximately 100 mall-based Nike-only
Parker was clearly in charge of the show, stating “As the market
stores worldwide, half of which are expected in the U.S. over leader, we have the ability and the responsibility to take the industhe next three years.
try and our partners to a new and better place. The ability to conThe stated intention of the retail initiative is “to elevate the brand nect with consumers is the single most important competitive
experience, position the Nike brand in the world’s premium shop- advantage in our industry today.”
ping locations, and test innovative retail concepts that can serve as
Parker and Trevor Edwards, Nike VP for global brand and category
a growth catalyst for the specialty athletic retail industry.”
management, detailed the new category alignment strategy, which is
“Becoming a better retailer will help us be a better wholesale headed by Edwards. VPs have been created across footwear, apparpartner,” said Mark Parker, Nike Inc. president and CEO. By 2011, el, and equipment in six core categories: running, basketball, soccer,
the company expects Nike direct-to-consumer sales, which include women’s fitness, men’s training, and sport culture.
Raynor Inducted Into Running
USA Hall of Champions
Tom Raynor, chairman
and CEO of Fleet Feet,
Incorporated, was inducted into the Running USA
Hall of Champions at their
annual awards dinner in
San Diego. Raynor was
recognized for his leadership, innovation and
outstanding contributions to running. Raynor,
who has owned Fleet Feet, Incorporated since
1993, has 30 years of running retail, manufacturing and sports experience. Tom has worked
on the vendor side of the business with Nike,
Brooks Sports and Wilson Sporting Goods.
4
Tom’s retail experience includes years of
operational experience, as well as ownership of
multiple running specialty stores.
At the awards banquet attended by over 200
leaders from the running industry Raynor said,
“I’m honored and humbled by this award and
by my inclusion in this wonderful group of
people. I accept the award on behalf of the
owners of our locally owned and operated
stores around the country and want to thank all
of my colleagues at Fleet Feet, Incorporated,
our store associates and our vendor partners
for allowing me to work in such a wonderful
and rewarding business environment.”
SportHill
Promotes Berg
SportHill, Inc. promoted John Paul
Berg to national & international
sales manager.
Berg previously
worked
in
accounts services and has also
served as the national sales manager.
SportHill founder and president,
James Hill says, “JP brings a
strong background to SportHill in
both retail sales and managing our
sales network. We look forward to
his expanded role as we continue
our growth.”
Performance Sports RETAILER
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Dean Karnazes’ 50 marathons in 50 states
in 50 consecutive days this year scored media
coverage across the country for TNF’s
running program and product.
Spenco Shifts
Marketing Execs
Spenco Medical Corporation has made
strategic personnel changes within its
marketing and research & development
teams to better address the outdoor,
sports, footcare and medical markets.
The Spenco marketing team is now
headed by Cindy Mitchell, who has
been promoted to consulting, director
marketing. Mitchell has been with
Spenco since September 2006 as the
medical footcare marketing consultant.
Mitchell will report to Steven B. Smith,
CEO and chairman of the board, Spenco
Medical Corporation.
Talia Herman has been promoted to
marketing manager for sports and specialty while Gerard Mayne is the new marketing manager for medical and food,
drug & mass markets. Both Herman and
Mayne are responsible for product development and communication strategies in
their respective markets.
Performance Sports RETAILER
TNF Places New Focus
on Endurance Runners
For the past three years, The North Face has
been making a concerted effort to grow their
footwear program in the outdoor industry
with trail running, hiking,
approach and lifestyle
products. This past year,
the company shifted its
tactics somewhat and
began to include endurance running in their
marketing message and product R&D budget.
The company was able to make a major
splash in the national media with Dean
Karnazes’ 50 marathons in 50 states in 50
consecutive days this year. Karnazes was
successful in his quest and in the process
scored media coverage across the country
for TNF’s running program and product.
Steve Rendle, TNF’s president of the
Americas, said that the product, PR and marketing push surrounding Karnazes feat was
considered a strong success. “I think that now
with Dean’s 50/50/50 success, we have been
given permission to address the endurance
running market in a new way. We are looking
at some more road-specific product for
the core endurance athlete, whether that’s
a marathon or more,” he said during an
interview at Outdoor Retailer Winter Market
in Salt Lake City.
The company will be redesigning a large
portion of their footwear line this year to
address this market. The product should be
available to retailers in early 2008 and available
for sale to consumers the following year.
5
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The Technology Race:
New Electronics Bring Running
Specialty Retailers New Customers
by Kris Versteegen
Specialty FEATURE
R
6
unning accessories cover a broad
spectrum of products, from reflective
safety gear to visors to electronics
to hydration. Recently, new advances in
technology are boosting sales of two of
these categories, hydration and electronics.
In many ways, these two categories are
also working together, with hydration
system designs evolving to accommodate
the latest generation of MP3 players and
GPS-enabled fitness monitors.
According to data collected by
SportScanInfo, heart rate monitor sales
increased nearly 30% last year, while sports
watch and stopwatch sales increased 17%.
“
Ed Griffin, owner of Fleet Feet in
Syracuse, NY agrees. “We have been playing around with a lot of different manufacturers that you don’t traditionally see in
running retail stores. Garmin has been huge
on the GPS front and we have always carried some of the Nike products that measure time and distance, but we have really
started to increase our selection in this category.” he says. “We didn’t carry the
footwear that was originally rolled out with
the Nike+ product, but now they have the
Bowerman product and that is more in-line
with what a specialty running retailer like
us would carry. That is driving some busi-
we have also had a big pick-up in other electronics,
like GPS with Garmin, which uses satellites to tell you
how far you are going, how fast you are going, and
your heart rate all in one unit.
Running hydration is another category that is
showing some success. The biggest story has
been the impact of the Nike+iPod product.
Since its introduction, the overall running
accessories category has grown ten-fold.
Christina Leung, product developer for
The Running Room, says that she is seeing
this shift in technology directly impact the
retail floor. “The Nike product is definitely
the most recent piece to hit the market with
their Nano/Nike+ kit, and a lot of people are
picking up on that technology because they
all have Nanos already and now they can
make it do one more thing,” she says.
“However, we have also had a big pick-up
in other electronics, like GPS with Garmin,
which uses satellites to tell you how far you
are going, how fast you are going, and your
heart rate all in one unit. Both of these
pieces have been phenomenal for us. It’s
really brought a new life to running. It’s an
area that is growing and hasn’t really taken
sales away from anywhere else – it’s just
added to the business.”
ness, but I think Nike is still getting that
message across to people.”
This new generation of electronics, particularly the integration of music into fitness monitors, has changed the general
design and functionality for other accessories. Hydration system and pack designers are now looking for new features that
make MP3 players and other electronics
easy to access. Accessory companies are
changing their designs to accommodate
iPods, and the demand for this type of
product continues to grow.
“We have a very fast growing business
here. We just bought a building and are
expanding from 3,000 square feet to 10,000
square feet. Part of the reason for that is we
are just maxed out on what we can carry,
primarily in footwear and accessories,” says
Griffin. “These two areas have seen much
higher growth than any of the other
categories. It seems like it doesn’t matter
what kind of new accessory we bring in, it
continued on page 8
”
Performance Sports RETAILER
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Camelbak
The Alterra is designed to be stable and light while delivering enough capacity for food, shed layers, and water
for several hours of running. In addition, the hydration
compartment has insulation to keep liquid cool for hours
and an integrated waist belt pocket offers on-the-go
access to gel or quick snacks. SRP: n/a
Ultimate Directions
The Access Groove has a single canted
bottle holster with a 0.6L bottle for easy
water access, plus a “personal media
pocket” for easier access to an iPod or
MP-3 Player. An exit port guides
headphone cords while a neoprene
pocket holds MP3 players of all sizes.
SRP: $26.00
Nike
The Nike+ system adds speed and
distance functionality to any iPod or
iPod Nano with an easy “plug & play”
sensor that communicates with an
accelerometer that integrates with an
Nike+ shoe. The kit communicates
directly with the iPod, which can tell
you distance, speed, calories burned
and time on screen, or verbally
through the headphones. SRP: $30
Performance Sports RETAILER
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Suunto
Specialty FEATURE
The T3 (left) and T4 (middle) can be
coupled with Suunto’s Foot POD (right)
to give accurate speed and distance
read-outs in any terrain. The Foot POD
is an accelerometer that mounts on top
of the laces of any running shoe and
communicates with the wrist-top unit
wirelessly. The T3 uses Suunto’s proprietary Training Effect, or “TE Scale” to
indicate the intensity of a work-out.
The T4 also offers this feature but adds
the “Suunto Coach” feature, which
recommends workouts based on your
personal fitness profile and customizable
goals. SRP: T3 $149; T4 $199;
Foot POD $99
8
continued from page 6
sells. Some of them are more technical
and others are not much more than a belt
clip for you iPod.”
Russell
Gill,
owner
of
the
Charlottesville Running Company agrees
with many of Griffin’s points. “When you
look at the accessories category from a
price point comparison, it is really right up
there with everything else in the store. It’s
changed dramatically – really in just the
last 18 months because it is much more
electronics based now,” he says. “Runners
are looking for training specificity – how
far, how fast, lactic threshold, VO2 Max –
the more information the better, as long as
it’s easy to use. These new GPS-based
products are providing that. It’s easily our
number one growing category, and when
you add music into that it’s just huge.”
While this technology is clearly a selling
point for certain customers, the market is
segmented into different groups. Griffin
pointed out that not everyone who walks
through the front door is ready for the latest
and greatest in fitness technology, but with a
little education, many will find that it makes
the workout experience more satisfying.
“We had an 85-year-old gentleman in
our store today and he was still trying to
figure out how to place a call with his
new cell phone that he just bought. So
with all technology, depending on where
you are in the cycle, it really dictates
what you are willing to buy. For example,
customers who are my son’s age just ask,
‘does it do what I want?’ If it does, then
they buy it. You also have the middle
age consumer who is just figuring the
technology out and needs a little more
education. For them, this type of product
has been very successful.”
Regardless of the average age or
technological aptitude of a customer-base,
specialty running retailers are in a perfect
position to generate sales in this rapidly
growing category. The educational,
service-oriented atmosphere inherent in a
specialty running store lends itself perfectly
to the complexities of almost any type of
new running technology.
Performance Sports RETAILER
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Garmin
The 305 uses a new lightweight design
that “wraps” the GPS antenna around
part of the wrist for a better view of the
sky, improving reception during training.
The ANT wireless heart rate monitor
eliminates cross-talk with other devices
to reliably measure and send heart
rate data and the fact that speed and
distance is measured via GPS allows
triathletes to seamlessly transition
between sports without resetting the
unit. SRP: $376.91
Ultimate Directions
The women’s specific Wink (pictured)
and men’s Wasp are designed for
runners who like to stay out all day. A
1.9L reservoir is coupled with a stable
harness system and an additional six
liters of carrying capacity for food and a
storm shell. The women’s specific
version uses Ultimate Directions’ “S”
shaped shoulder straps with a narrower
neck line and increased padding as well
as a shorter torso length. SRP: $75.00
High Gear
The Enduro 2 Mini (pictured) and Max
are both designed for outdoor athletes
with all the features of a “true running
watch” plus some extras like the
stainless steel plate and mineral glass
lens that make it perfect for the off-road
runner. The chronograph will continue to
run through the longest ultra-marathon,
with a 100 hour limit. MSRP: Mini $60;
Max $70
FuelBelt
The MP3 Hydration Eliminator is a waist pack with two 7 oz
bottles for hydration and a durable neoprene pocket with
headphone jack that fits all MP3 players. The adjustable
cordura straps with front Velcro closure keep the load
stable on- or off-road. SRP: $23.96
Performance Sports RETAILER
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Retail Profile:
Specialty MARKETwatch
The Running Revolution
10
From left: Tim, Heidi and
Chris Schenone, co-owners
of Running Revolution.
by Marianne Bhonslay
R
unning specialists continue to
debate about whether an ardor
for running or an aptitude for
business is the most essential attribute
for retail success. In the case of The
Running Revolution, a relative
newcomer to the specialty landscape,
that discussion seems irrelevant since
the store’s three joint owners are each
accomplished runners with prior career
accomplishments.
With experience ranging from hightech to sales, communications and
customer service, the husband and wife
duo of Tim and Heidi Schenone teamed
up with Tim’s brother, Chris Schenone,
to launch The Running Revolution in
Campbell, CA. Now in its fifth year, the
1,500-square-foot store is rapidly
gaining repute as one of the top running
shops in the Silicon Valley region.
The launch of a specialty running
shop in the competitive Northern
California market in 2002, during the
spiraling economy anointed as the
post-boom bust, appeared risky. Yet,
the Schenones contend that 2002
provided the optimum opportunity to
launch the business.
“The economy was at the bottom,
and it was a courageous decision to
open at that time,” says Chris, 48,
who grew up with his younger
brother, Tim, in the Almaden Valley
section of nearby San Jose. “Studies
have [shown] that successful
businesses often open at the bottom of
an economic cycle. We picked
Campbell and felt we were not
infringing on any other specialty
retailer. This was a pocket that clearly
filled a need. There has to be a
geographical sense of why you are in
your chosen location.”
Any apprehension was further
mitigated by the three partners’
collective career experience.
“We were all in corporate America up
until four-and-a-half years ago,” says
Chris, referring to his brother and sisterin-law. “We are not a part of the running
store owners that have been doing this
for 15 or 20 years, and that looked at
[starting] a business as a hobby and rode
the wave. We’ve been more businessoriented, and you have to be in a mature
market like Northern California.”
That commerce acumen was accrued
from Tim’s work in sales and customer
service for Qwest Communications;
Heidi’s five-year stint in technical
support with The Integer Group based
in Golden, CO; and a 15-year career for
Chris in sales and marketing, most
recently with the Carpinteria, CA-based
Forms & Surfaces prior to launching
The Running Revolution.
Performance Sports RETAILER
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Page 11
“We all went into the business very
confident,” says Heidi. “All three of us
have a strong work ethic. And I can
speak for Tim and I that we never truly
enjoyed the high-tech industry.”
However, the technical industry
experience remains invaluable. “We’ve
sold high-end technical products to
begin with. We have no fear or
trepidation about selling a $150 running
shoe. The more gadgetry, the more
technology, the more comfortable we
are,” says Chris.
That business orientation maintains a
specific running nuance—one that
“
allows the Schenones to boast that at
least one of them has run in every shoe
The Running Revolution sells. Heidi,
36, who graduated in 1992 from the
University of Northern Colorado in
Greeley with a degree in dietetics, has
competed in 10 marathons, and ran a
personal best of 3 hours, 22 minutes in
P.F. Chang’s Rock ‘N’ Roll Arizona
Marathon in January 2004. Tim, 40, ran
cross-country for two years at the
University of Colorado at Boulder,
where he graduated with a degree in
communications in 1995, and cites his
personal best marathon as 3:53.37 in
Los Angeles in 1990. He now also
coaches marathoners.
Chris, meanwhile, trained with
renowned coach Bill Dillinger at the
University of Oregon, where he
graduated in 1982 with a political science
degree. Although he did not compete on
that university’s elite running team, he
practiced with the squad.
The backgrounds of such a notably
ambitious trio are thus far fruitful for
the startup retailer. According to Chris,
annual sales for The Running
Revolution “hover” at around $1
million. Launched with approximately
We all went into the business very confident. All three of
us have a strong work ethic. And I can speak for Tim and
I that we never truly enjoyed the high-tech industry.
”
$200,000 of private money and without
business loans, the store began earning
profits in its third year of operation,
Chris adds.
Like most running specialists today,
the store caters to a clientele that varies
from elite athletes striving to trump their
own personal bests, to unfit,
overworked executives about to embark
upon a walking or running regimen on
doctors’ orders. According to Heidi, an
estimated 10 percent of the company’s
sales are derived from elite runners,
while approximately 65 to 70 percent of
sales are to “average” runners and those
“trying to stay in shape.” Walkers
account for the remaining 15 percent or
so of the store’s business.
The bulk—nearly 80 percent—of
The Running Revolution’s sales come
from footwear, Chris reports. While
the Schenones will likely strive to
continued on page 12
The Running Revolution caters to elite athletes, average and beginning runners, as
well as walkers.
Performance Sports RETAILER
11
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Page 12
Specialty MARKETwatch
continued from page 11
12
increase apparel sales, which offer
higher margins, the prominent
footwear business testifies to the
owners’ command of the store’s
product and a willingness to work with
customers to ensure they are running
in the proper shoes.
“People come into the store and
categorically say, ‘You are never going
to be able to fit me,’” relates Chris, who,
along with his two partners, routinely
identifies customers by name, shoe size
and brand preference, and also recites
the time required for their drive to the
store. Yet referrals—a portion of the
business built slowly but steadily—
remain The Running Revolution’s most
reliable asset.
“Our business base, day-to-day, is
referrals,” says Heidi. The Running
Revolution nurtured that base by
hosting clinics and health fairs at, for
example, local Silicon Valley goliaths
such as eBay. The grassroots
groundwork paid off. About two years
ago, an eBay manager walked into the
store with the first of six members of his
division, saying he wanted his coworkers to “be more healthy and take
less sick days,” recounts Heidi. The
eBay manager “escorted” each
employee into the store, purchasing
running or walking shoes for all of
them, she adds, and referrals continue
to venture into the store.
“They are good operators of the
business,” says Jim Hoff, VP of sales for
Asics America Corporation, which has
supplied The Running Revolution for
four years. “They gained ‘Gold Account’
status quickly by the way they
represented the brand and the volume
they did. They attacked the [local]
running community, as well. And their
background gives them instant
credibility with consumers. They have
the ability to talk about pronation or
supination, a pain in the leg or a strain.
They are able to relate to their
customers from a personal standpoint.”
In the quest to ensure runners and
walkers are exercising in the proper
footwear, biomechanics is also a forté
The Running Revolution is now in its fifth year of business.
of The Running Revolution. Most
customers undergo a gait analysis on
a treadmill in the store. Given the
gadgetry, a sophisticated, analytical
approach, and their own personal
athletic accomplishments, the three
owners strive to create a “lifestylefriendly” running environment, says
Chris. Adds Heidi, “We make people
feel that every question is a good
question. No question is stupid. If
you have two feet, you deserve to be
in the store.”
Perhaps one of the most formidable
challenges for the Schenones has been
adjusting to the gambling-style method
of ordering footwear product.
“You’re never sure, year to year,
Performance Sports RETAILER
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Page 13
which models are going to move,” says
Chris. “Writing futures and contracts
six months out has been a challenge.
We’ve been better than average writing
futures. Our relative newness to the
industry has been beneficial. We did not
come in with preconceived notions. We
did not carry the Nike Pegasus for 15 or
20 years, so we stock the shoe wall only
with the best shoes available right now.
If a shoe doesn’t meet the requirements
from year to year, it gets the boot.”
“They are good buyers,” notes Asics’
Hoff. “When we talk about the technical
aspects of the various features and benefits
of products, they understand them.”
Even more of a novelty is that The
Running Revolution merchandises its
shoe wall without prices—no shoe
carries a price tag. The owners say their
emphasis is on fit, not price, and that
few customers complain.
“We find price to be an almost
non-existing factor,” says Chris. “We
perform an individualized shoe
fitting process.” Once the price is
relayed verbally, the Silicon Valley
clientele rarely balks at a $120 or
$150 shoe. After all, add the
Schenones, this is the technology-
Performance Sports RETAILER
crazed hemisphere in which runners
relish the chance to spend $369 on a
Garmin 305 [GPS device], replete
with distance, pace and calorie
calculator, and a satellite compass.
The Schenones profess, however, that
they will be the first to inquire as to
whether a customer finds enough merit in
the additional $40 cost of a $130 shoe, for
example, versus a $90 shoe. The store’s
average footwear purchase price is $90 to
$95. And even when outfitting a hard-tofit foot, says Chris, the store’s policy is to
“gently persuade and never coerce.”
According to Tim, The Running
Revolution’s location—“a baseball
throw away” from the Campbell-Los
Gatos Creek Trail—offers the retailer a
“life-line to the fitness world.” Heidi
adds that the store involves itself in an
estimated 20 to 25 events each year,
including last year’s inaugural San Jose
Rock ‘N’ Roll Marathon and the San
Jose International Triathlon. All three
partners are members of various local
triathlon clubs, she adds, and regularly
attend those clubs’ meetings.
Concludes Chris Schenone, “We all
love to run and that translates through
our business.”
Referrals are a key part of the business.
Above, Tim Schenone (wearing a blue Italia
jacket) serves store customers.
13
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Page 14
The Impact of Running Shoes on Gait
by Paul Langer, D.P.M.
Specialty MARKETwatch
A
runner will land with two to
three times their bodyweight on every foot step
and take between 1,000 and 1,500
steps per mile. In running, only 1
foot is in contact with the ground at
a time and that contact phase lasts
for only 0.2 to 0.5 seconds. The
shock wave of each foot strike
travels through our bones at more
than 7,000 MPH according to Cyril
Harris, Ph. D. The numbers are
staggering if you think about them especially when you multiply them
by your bodyweight and weekly
mileage. But the human body is
amazingly capable of absorbing that
impact very efficiently, as long as
nothing interferes with the body’s
ability to do so.
Through a precisely-timed chain of
events that occurs on every step our
body dampens the vibrations and
absorbs the impact forces generated as our feet strike the
ground. Pre-activated muscles tense before the foot contacts the
ground in anticipation of impact. Next, the plantar fat pad, a
specialized cushion on the ball and heel of the foot compresses
as the foot contacts the ground then muscles tense further to
dampen vibration and stabilize joints. The subtalar joint (the
joint under the ankle) pronates and helps convert the vertical
impact into a torsional or twisting force as the ankle, knee, hip
and spine all flex in sequence to absorb the impact.
It is an incredibly complex chain of events that is so specialized
that none of us do it in exactly the same way (which is one reason
that gait is so hard to study). And of course, the way our body
absorbs the impact is influenced by the shoes we wear. Research
has shown that shoes alter our natural running gait in a number
of ways. The most dramatic differences are seen when comparing
barefoot running to running in shoes. Runners in shoes have
longer running strides, pronate more (twice as much according
to Benno Nigg, Ph.D.) and are more likely to land on their heel.
These 3 effects change the alignment of the runners’ joints and
also affect the timing of how the joints absorb impact. But since
running gait is so unique to the individual these effects are not
always predictable.
transitions from an artificially
hard surface such as concrete to a
soft surface such as grass. There
is no simple way to predict how a
runner will adapt to different
shoes or surfaces, and this is the
reason it can be more difficult to
fit some runners into the right
shoes. For the majority of runners,
shoes that have some form of
stabilizing features such as medial
posts or dual density mid-soles
will offer more protection than
shoes with more cushioning. This
is because the more stable shoes,
by combining cushioning and
stabilizing features, are better at
minimizing some of the differences between natural impact
absorption and the changes
caused by shoes.
It may sound counterintuitive,
but more cushioning is almost
never the answer to most running injuries. When treating an
injured runner in clinic, I always keep in mind that their body is
very capable of absorbing impact very efficiently if it has proper
alignment. So I most often recommend shoes that have a
combination of stability features with the cushioning. The
stability features help maintain alignment by decreasing pronation.
Occasionally, I will consider stabilizing the shoe by adding a
firm insole - not a cushioned insole - or an orthotic.
While assessing pronation involves much more than looking at
the arch, there does seem to be some vague correlation between
arch height and pronation. Since pronation occurs very early in the
impact absorbing chain of events, selecting the proper category of
shoe is, for now, the first and best starting point for helping a runner.
Do not recommend more cushioned shoes to runners who are
injured. Instead - when appropriate - help them by steering them to
a more stable shoe or to a firm insole in their current shoe.
Paul Langer is a podiatrist and serves as a clinical
faculty member at the University of Minnesota
Medical School.
Advisory
Research has also found that runners unconsciously change
their running gait in response to different shoes. For example,
they might land more on the forefoot in a firmer shoe and land
on the heel in a softer shoe. This same effect occurs when a runner
14
Board
He is a member of the Clinic
of
the
American
Running
Association and is the author of Great Feet For Life:
Footcare and Footwear For Healthy Aging.
Performance Sports RETAILER
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Page 15
RUNNING SPECIALTY CONFERENCE
See N
2008 R ew Spring
unning
P
at SGM roduct
A
Spring
Marke
t!
Fast Facts on THE ELITE Running Specialty Conference
When was the first THE ELITE Running Specialty Conference held?
THE ELITE Running Specialty Conference was first conducted in
November 2004 in New York City to coincide with the New York City
Marathon. It then moved to Austin, TX, in November 2005.
Where is it this year and when?
THE ELITE Running Specialty Conference will be held June 11-13, 2007
at the Venetian hotel in Las Vegas, NV. There will be a welcome reception
on Sunday evening, June 10, as well.
Why did the conference move from its November dates?
November made a lot of sense when the conference was first held in
conjunction with the NYC Marathon because so many retailers and manufacturers were already attending the race and expo. The conference was
moved this year to a twice-a-year event to coincide with the key product
launch periods for the running market. June is a critical time to review new
Spring 2008 footwear product, and January 2008 is an important time to
review the Fall apparel offerings and footwear updates.
How else has THE ELITE changed?
The conference has been opened up to more running specialty shops and is
also open to sales reps that call on those shops. The reps play an integral role
in the relationship between the shops and the brands and it’s important for
them to attend, as well.
Who will be attending THE ELITE?
The conference is only open to running specialty stores and to any
manufacturer that services the running specialty market.
Is there an expo at the conference?
THE ELITE has partnered with the SGMA Spring Market, providing retailers
and manufacturers with a better opportunity to showcase and review new
Spring ’08 product and any last-minute needs for the Fall ’07 season. The
conference will be held in the Venetian ballrooms, and the SGMA Spring
Market is at the Sands Expo, which is connected to the Venetian.
Where will we stay during the conference?
The Treasure Island hotel has been designated as THE ELITE Running
Specialty Conference headquarters hotel for the June event. It is across the
street from the Venetian and the Sands and is connected by a convenient sky
bridge. The opening night reception, a Monday party, and the Tuesday banquet will all be held at Treasure Island, as well.
How can a retailer receive an invitation to attend?
Just contact Michelle Libby at 561.615.0240 x237 or e-mail your request
to: [email protected].
How can a manufacturer get involved?
Contact Sam Wender at 646.654.4464 or e-mail him at:
[email protected].
Where can I find more information?
Just go to the Web site at: www.EliteRunningConference.com.
The Elite On Line Resource Center:
www.eliterunningconference.com
Brought to you by:
Performance
Sports
RETAILER
News and Information for the Running and Triathlon Market
PSR_0207
2/19/07
3:14 PM
Page 16
RUNNING SPECIALTY CONFERENCE
SAVE THE DATE
THE ELITE Running Specialty Conference, 3rd Edition
JUNE 11-13, 2007
The Venetian in Las Vegas, NV
Co-located with SGMA Spring Market
THE ELITE Running Specialty Conference
is an excellent blend of panel discussions,
presentations, and open dialogue with the ultimate
purpose of sharing ideas to improve the specialty
running channel. The program functions in a positive,
proactive spirit of cooperation between top retailers
and manufacturers.
Spring t
w
e
N
e
uc
Se
g Prod
n
i
n
n
u
2008 R SGMA
at
t!
Marke
Spring
Brought to you by:
Attendance is by invitation only.
For retail invitations please contact:
Michelle Libby at 561-615-0240 x237
[email protected]
For sponsorship opportunities please contact:
Sam Wender at 646-654-4464
[email protected]
The Elite On-Line Resource Center:
www.eliterunningconference.com
Performance
Sports
RETAILER
News and Information for the Running and Triathlon Market