October 2007 - SportsOneSource.com

Performance
Sports
RETAILER
News and Information for the Running and Triathlon Market
A SportsOneSource Trade Publication
Merrell Sees Strong
Growth in Third Quarter
Wolverine World Wide, the parent company
to Merrell and several other footwear brands
reported that their Outdoor group was “the
most significant contributor”
to the third quarter revenue
increases. Strong Merrell
shipments coupled with
another quarter of Patagonia
footwear sales drove a strong double-digit
increase. The Outdoor Group, which consists
of Merrell footwear and apparel and the
Sebago and Patagonia footwear brands, saw
sales increase nearly 20%.
The Merrell brand as a whole saw sales
increase approximately 16% for the quarter.
Backlog for Merrell footwear was up in the
“strong double-digits” entering the fourth
quarter with the enterprise described as
“taking shelf space from the competition.”
The Track ‘n Trail retail chain, which
is also owned by Wolverine, now has 17
doors open with comp sales for the year-todate period up in the mid- to upper-singledigit range. Merrell footwear accounts for
approximately 50% of all footwear sales in
the store. Management said they’ll open a
“handful” of Track ‘n Trail stores in 2008,
shifting focus to the Merrell concept.
Inside PSR
n The Runner’s Depot
How One Small Retailer Took Over
the South Florida Running Market
n Hydration
It’s All About Getting the Timing Right
n Money Matters
How Outside Financing Can Help
Your Business
n The Executive Track
Paul Heffernan, New Balance
October 2007
Nike Pushes Ahead with IndustryLeading Sustainability Efforts
While many in the industry are aware of Nike’s “Considered” line of environmentally friendly
footwear, there is much more involved in Nike’s efforts than just one collection of products. The
“Considered” team at Nike is actually a think tank dedicated to implementing new sustainable
processes across all of Nike’s products. Unlike many companies and brands that are calling out
their individual “greenness,” Nike’s design philosophy calls for sustainable efforts in products
that look, feel and perform just like their counterparts in the market.
The company feels that by making all of their products more sustainable, they are reducing
their environmental footprint by a greater percentage than if they were to only make the most
sustainable products possible. Every design to come out of Nike’s creative department is
graded on a sustainability scale with four “grades.” The lowest is non-participant, meaning
the designers did not take sustainability into account. “Considered Bronze” is given to
any product that incorporates processes that reduce toxic materials and waste, the use of
environmental materials, and/or the development of new “Change Agents” that solve existing
sustainability problems. “Considered Silver” requires these same criteria, but to a greater
extent, and “Considered Gold” is the most stringent standard.
This score is taken into consideration when deciding
whether or not the product will go into production. Because of this
sustainability report card, Nike designers are learning to “consider” the
environmental impact of every design choice throughout the creative process.
In running, for example, the Air Zoom Feenix has achieved Nike’s “Considered Gold” standard
of sustainability, because it uses water-based adhesives and a wide variety of environmentallypreferred materials like “green” rubber. The shoe’s designers solved several new environmental
problems while going through their creative process, including generating minimal waste during
production of the shoe. While the Zoom Feenix is one of Nike’s flagship models in sustainability,
there is little or no difference in its performance or appearance on the shelf.
Nike plans to have 100% of their footwear product rated “Considered Bronze” by fiscal year 2011.
All apparel will follow in 2015 and equipment in 2020. However, the company is quick to point out that
one of their key lessons in sustainability is to keep what consumers want in mind at all times. They are
dedicated to achieving these goals, but they will do so without sacrificing performance of aesthetics, so
in many cases, the customer won’t even know that they are buying a green product.
EDITORIAL
Group Editorial Director
Judy Leand (646-654-5058)
[email protected]
Art Director
Sean Berthelot (646-654-5346)
[email protected]
Performance
Sports
RETAILER
News and Information for the Running and Triathlon Market
CONTENTS
October 2007
Managing Editor
Kris Versteegen (704-987-3450)
[email protected]
Contributing Editors
Andy Kerrigan, Cara Griffin, Lou Dzierzak
Matt Powell, Richard Holcomb, Dr. Paul Langer
ADVERTISING
Account Managers
Robert Z. Feiner (646-654-4991)
[email protected]
Sam Selvaggio (646-654-7465)
[email protected]
8
Susan Tauster (630-858-1558)
[email protected]
News_________________________________________
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
Eastern Business Manager Barry Gauthier
Western Business Manager Cyrus Severance
Controller, HR Manager Carol Wexler
Other SportsOneSource Titles:
Footwear Business
Hunting Business
Outdoor Business
Sporting Goods Business
Sporting Goods Dealer
The B.O.S.S. Report
Sports Executive Weekly
Footwear Business Update
Outdoor Business Update
SGB Update
Team Sports Update
© SportsOneSource, LLC
PO Box 480156 | Charlotte, NC 28269
704-987-3450 | fax: 704-987-3455
4
6
7
n Asics’ Onitsuka Passes Away
n New Balance Increases Commitment to Komen
n Brooks Appoints Team Sales Manager
n Nike’s Bodecker Promoted to VP of Design
n adidas Confirms London Olympics Sponsorship
n Nike Apple, Sued Over Nike+iPod
n TAF to Open 20 Franchises in Mississippi
n Saucony Parent Company Lays Out Its New Model
n Nike Inc. Growth Surges for Fiscal First Quarter
Features_____________________________________
8
Conquering the Southern Peninsula
Renee Grant
Gives PSR an Inside Look at How The Runner’s Depot
Took Over the South Florida Running Market
10 Hydration Getting the Timing Right
Departments_____________________
14
Money Matters
15
The Executive Track
How Outside Financing Can Help
Take Your Business to the Next Level
10
Paul Heffernan, New Balance Executive Vice
President of Global Marketing
Asics’ Onitsuka Passes Away
Asics Corporation chairman Kihachiro Onitsuka died on
Saturday, September 29 of heart failure in a hospital in Kobe,
Japan. He was 89. Mr. Onitsuka was born on May 29, 1918, in
Tottori Prefecture in western Japan. Concerned at the sight of
the nation’s youth after World War II,
he made it his mission to inspire young
people and chose the world of sports as
a means to fulfill his goal.
Today Asics is the fifth largest sports goods manufacturer, making products not
only for Olympic Gold medalists, but also ordinary people who do sports to keep up a
healthy lifestyle. Over the years, Mr. Onitsuka also held a number of public offices. He
presided over the Japan Basketball Association as its president; and, he was the lifetime
honorary president of the World Federation of the Sporting Goods Industry.
Specialty NEWSwatch
Key Events
4
1949: Onitsuka Co. Ltd. is founded, the first sports shoe company in Japan.
1977: Asics Corporation is formed through a merger of Onitsuka Co. Ltd,
G.T.O. Co., an equipment manufacturer, and Jelenk Co., a sports apparel
manufacturer. Mr. Onitsuka becomes the president and aims to diversify the
business to be more competitive in the global sporting goods market.
1988: Mr. Onitsuka receives Order of the Sacred Treasure.
1992: Mr. Onitsuka becomes chairman of Asics Corporation, a position
he will hold until his death. Publishes My Personal History.
2000: Publishes All You Need to do After Falling Down is to Stand up Again.
Brooks Appoints
Team Sales Manager
Brooks Sports, Inc. has hired Charlie Wilson as
team sales manager. His major responsibilities
include driving the team sales efforts,
developing successful sales programs with
individual team dealers, and working with the
external sales force to provide leadership on all
team sales opportunities within
the dealer channel.
Charlie joins Brooks with
more than 10 years experience
in the athletic apparel industry. Most recently,
he spent two years at InSport as national
team sales manager. During this time, he
helped InSport increase national team sales
by 13% while overseeing sales operations and
marketing logistics for Oregon, Washington,
Idaho, Montana, Maryland, Virginia,
Delaware and Alaska. Prior to Insport,
Charlie spent eight years as account services
manager at SportHill, where he was in charge
of developing new accounts and servicing the
client roster in the Southeast.
New Balance Increases
Commitment to Komen
New Balance will increase their long-term
commitment to Susan G. Komen for the Cure
by donating an expected $1 million (with a
guaranteed minimum donation of $500,000)
from the New Balance Lace Up for the Cure
Collection. The company will also debut a
new advertising campaign to highlight that
New Balance is the longest running sponsor of
the Susan G. Komen Race for the Cure Series.
The Lace Up for the Cure retail promotion
has been extended for 2007 and will now run
all year with a special focus during October,
Breast Cancer Awareness Month.
The company’s new advertising campaign
supporting their efforts with Komen will be
featured in special interest publications such
as Beyond magazine beginning in April. The
campaign will also be integrated into point of
purchase materials at retail locations, as well
as on the company’s corporate website.
“We are extremely proud of our longstanding relationship with Susan G. Komen
for the Cure and are committed to finding
a cure for breast cancer,” says Christine
Madigan, director, global marketing and brand
management for New Balance. “We believe
we can reach a larger number of consumers
and make a significant contribution to breast
cancer education and research.”
Bodecker Promoted to
VP of Design at Nike
Sandy Bodecker was named to the newly created position of vice president of
Nike global design. In his new role, Bodecker will oversee all aspects of design
for the Nike brand, from concept creation to retail presentation. He will report
to Nike brand president Charlie Denson. Nike is
driving global growth through a sharper consumer
focus across six core categories.
“Sandy is uniquely qualified to lead the design
of Nike products and the premium presentation
of the Nike brand to consumers,” Denson said. “Sandy knows how to deliver
an innovative, compelling Nike point of view that creates deep consumer
connections and drives growth. In this new role, Sandy will help ensure we’re
bringing a consistent and relevant Nike experience to the marketplace across our
core consumer categories and retail executions.”
Bodecker joined Nike in 1982 as a footwear wear-test coordinator. Over
the next decade he held a variety of positions in footwear, including product
development manager and director of product development. In 1993, he was
named vice president of advanced research and development for footwear.
Bodecker most recently was vice president of sport culture, one of Nike’s six core
consumer categories. Dermott Cleary, who is vice president of brand marketing
for sport culture, will now lead the category.
Performance Sports RETAILER
Specialty NEWSwatch
adidas Confirms London
Olympics Sponsorship
adidas has become the official sportswear sponsor of the 2012
Olympics in London. adidas said the partnership with London
2012 will be the biggest single investment adidas has ever put
into a UK sporting event. As part
of the deal, adidas will be the
exclusive supplier of branded and
unbranded sports merchandise
to all London 2012 venues and
stores and they will also provide
apparel for the approximately
70,000 volunteers needed to man
the Games.
The celebrations for the 2012
Games are beginning in 2008, as
the London Olympic organizers
will launch a four-year cultural celebration. The organizers
also expect that the Olympic Park construction will be ready
to begin by the time the Beijing Olympics begin, with all site
preparations completed.
Nike, Apple Sued Over Nike+iPod
A Highland, Utah-based shoe company,
Leaper Footwear, has filed suit against
Apple and Nike over the Nike+iPod Sport
Kit. Documents filed in Utah’s District
Court show that Leaper’s founders, Greg
and Kenny Anderson, claim the Sport Kit
violates a 1998 patent, which involves
the use of custom footwear to track
performance, such as running/walking
speed and distances traveled.
According to the lawsuit, Leaper
approached Nike in 2000, suggesting
to the company that it could license
Leaper’s concept. Though the offer
was rejected, the Andersons charge
that Apple and Nike exploited their
idea anyway, announcing Nike+iPod in
May 2006. Leaper seeks an injunction
against the Sport Kit, plus legal fees
and damages.
TAF to Open 20 Franchises in Mississippi
A “veteran apparel retailer” has entered into a definitive
agreement with NexCen to open twenty of The Athlete’s Foot
franchises throughout the state of Mississippi. These TAF stores
will be the first in the state of
Mississippi. Financial terms
of the agreement were not
disclosed, but the arrangement
calls for a minimum of 12 new
TAF stores to be opened within
the next five years.
Earlier
this
month,
NexCen announced a 100store agreement with a master
franchisee.
Both
major
expansion plans resulted from the TAF re-branding effort
announced by the parent company this past June at the TAF
Global Franchise Convention in Las Vegas.
6
Jackson, MS
The entrepreneur inking the deal is described as “an established
apparel retailer” who is aiming to “broaden his current business
through athletic and fashion footwear.” Under the deal, he is
granted the exclusive rights to operate athletic footwear and apparel
stores under the TAF brand, as well as the right to sub-franchise.
He is expected to take advantage of this opportunity to expedite
TAF store development. The first TAF in Mississippi is expected
to open in December of 2007.
Performance Sports RETAILER
Saucony Parent Company Lays Out Its New Model
Collective Brands, Inc., the new parent company behind Saucony
and Hind, gave the market a peek inside its business model at its
recent shareholder meeting, providing investors, analysts and the
media with a pretty comprehensive look at a model that merges once
divergent wholesale, retail and licensing businesses into a cohesive
new structure that leverages the strengths of each area of business,
maximizes revenues, and leverages infrastructure and economies of
scale in the supply chain.
“Collective Brands will be more than simply the sum strength
of our business units’ individual core competencies, expertise and
heritage; we intend to leverage this exceptional foundation to become
the preeminent, consumer-centric, global footwear, accessories and
lifestyle brand company,” said Matt Rubel, president and CEO of
Collective Brands, Inc., at the meeting held in New York.
CBI was formed last month after Payless Corporation
completed its acquisition of The Stride Rite Corporation and its
brands – Saucony, Hind, Stride Rite, Keds, Sperry Top-Sider and
Tommy Hilfiger Footwear, and merged the company into the new
entity that also includes Collective Licensing International, which
Payless acquired earlier this year. During the investor’s conference, Richie Woodworth, president
of Saucony, Inc., said the company has three very distinct and
main areas of focus for the future. First, they will continue to
focus on continued growth in the core running specialty channel.
Woodworth said they now hold the #3 share spot at running
specialty with 12.4% of the market, up from the #6 spot (9.3%)
in 2005, and only 5.6 points behind the #2 spot currently being
held by Brooks (18.0%). Second, they plan to continue to focus
on growing share in the sporting goods and athletic specialty
channels primarily by leveraging their technical heritage and the
momentum they have in the marketplace in running, as well as by
utilizing their heritage in women’s product. Lastly, Saucony sees
the need to “re-energize and re-establish” the Originals business.
Woodworth laid out Saucony’s key goals for market share
growth across the three key areas in running footwear. The
brand is focused on achieving a 17% share in the Stability
category, up from 14.5% last year. They see doing this through
continued improvements in the Hurricane, Omni and ProGrid
Guide products. In the Cushioning category, Woodworth is
working towards a market share goal of 14%, up from 11%
last year, through growth in the Triumph and ProGrid Ride
products. In Stability, the ProGrid Stabil is expected to help
drive share to 12% from 9.1% last year.
Saucony also plans to “elevate” the brand in running specialty by
extending it into apparel for the first time, reiterating a decision made
prior to the CBI acquisition when they announced that the Hind brand
would be deemphasized and sold off in favor of Saucony product.
“We need to capitalize, frankly, on the success and the momentum
that we’ve been able
to generate in this
trade channel,” said
Woodworth. “And we
can do it and elevate
and build our brand to a new level by taking our loyal Saucony
consumer, a woman that’s just come in and purchased a Hurricane 9
for $130 off the wall, and not walk them by the apparel category or
have them purchase a Mizuno or an ASICS piece of outerwear. We
want them to hook up.”
Woodworth sees a bigger challenge in sporting goods,
describing it as a “big dog fight.” He said they need to “come
off the wall in a really compelling way” in the channel where
they compete with the “big boys.” While Woodworth feels they
can have an impact in the top running doors at Dick’s and TSA
by leveraging the “market momentum” they have in running
specialty, he feels the bigger growth opportunity in the channel
will come in the “volume price points” in the $50 to $85 range.
He sees doing that by building a “visually compelling technology
story” into these price point shoes where a younger, more maledominated consumer is going to be attracted to them. Woodworth
also expects that the ability to leverage CBI’s sourcing base to
produce better margins in the sporting goods and athletic specialty
channels will be beneficial.
Nike Inc. Growth Surges for Fiscal First Quarter
Nike, Inc. saw contributions from across
the globe in its fiscal first quarter,
posting double-digit sales gains and
operating profit growth in every region
outside of the U.S. Nike management
said that its renewed focus on the
running specialty business is starting
to pay off already, suggesting that the
channel is one of the fastest growing
areas of business in the U.S.
Regarding the U.S., Nike said that they
were up in “every major account across all
channels with the exception of the mall
guys” during the fiscal first quarter. The
urban guys and the independent sporting
goods business were also said to be
performing well. Cancellation rates in the
U.S. were said to have improved a little
over the last few quarters, but inventories
were up in the low-single-digits.
U.S. footwear revenues were up 3.8%
for the quarter, but unit sales increased at
a high-single-digit rate, yielding a midsingle-digit decline in average selling
prices that management attributed to a shift
in product mix away from higher-priced
basketball product. Unit sales growth was
driven by sport culture (fashion athletic),
Jordan and action sports product. Growth
in performance apparel was offset by
declines in Jordan apparel and core basics
such as t-shirts and fleece.
One area that may be helping boost
the U.S. business is owned-retail, which
grew 13% for the quarter on expansion of
stores and a 4% comp stores sales gain at
both the first quality Nike stores and the
outlet stores. U.S pre-tax income declined
2.4% for the period, due primarily to
increased discounts and lower margins
on close-outs.
7
Conquering the Southern Peninsula
Renee Grant gives PSR an inside look at how The Runner’s
Depot took over the South Florida running market.
By Kris Versteegen
Specialty FEATURE
I
n January of 2000, Renee Grant became a runner. At the
time she was operating a specialty dance and fitness retail
shop in Davie, FL and doing well. By the end of the year
she had converted all of her dance inventory to running product
and she was the proud owner of The Runner’s Depot. Today
her small chain of stores is the largest specialty running retail
operation in South Florida.
“I found that I didn’t have the same passion for dance footwear
and apparel that I had for running. I didn’t become a runner until
the beginning of 2000. I joined the local running club
and realized that there wasn’t a running store in the
area. So, some of the other members encouraged me
to open a running store and get rid of this dance store,” she says.
Grant has a long history of business experience. She has a
degree in business administration and accounting which she
first put to use running a printing business for 18 years. She
built up her retail experience running
the dance and fitness store that she
owned for five years.
The core principle behind her success
has been attracting new participants to
the sport. “We are a beginner friendly
runner store. We get a lot of people
coming through the doors that are new
to the sport, because we really try to
create an atmosphere where anyone
can feel comfortable coming in and
asking questions. Going back to before
I opened, a lot of the running stores I
went into were a little intimidating. A
lot of the customers and people working
the floor looked like elite runners and all
of the shoes were overwhelming. So we
really try to cater to our customers and
make them feel comfortable. We make
them a part of our family right away.”
Part of this commitment to the beginner is education and
building community around each of the company’s stores. The
Runner’s Depot organizes in-store clinics and special events that
address every demographic in Florida’s running community.
“We have a running club that we operate out of the store, the
Gold Coast Runners, and we have about 500 members now and
most of them are new runners. We are in a rapidly developing area
of Florida – there are a lot of families moving in. However, there
wasn’t much of a running community, so we took it upon ourselves
to develop that community,” Grant says. “We do a lot of clinics. We
have triathlon clinics. We have swim clinics where we have a guy
come into the store and run through the total immersion program
– he’s had some great turn-out. A lot of the in-store promotional
things we started have really taken off. We do a ladies night with
free wine and chocolate where everything in the store is 15% off.
The last one we held, there were over 100 women. They were
waiting in line outside the store to get in. We also had free massage
and it was just a great ladies night out.”
The Runner’s Depot Expansion Timeline
2000
irst location
F
opened in Davie, FL
2004
Opened second
Runner’s Depot
in Miramar, FL
2007
Opened third
Runner’s Depot
in Ft. Lauderdale, FL
2000 2007
2003
Expanded
first Runner’s Depot and
entered triathlon market
8
2005
Inked
business
deal to open Vero Beach
Runner’s Depot
2007
Will
open
fourth Runner’s Depot
in Miami Beach, FL
Performance Sports RETAILER
“
“
We are growing pretty fast, but there is really a
demand. We are trying to be more convenient
for our customers.
– Renee Grant
co-owner and president of The Runner’s Depot
At the same time, The Runner’s Depot focuses on the core runner
and racer by organizing and supporting events throughout their market.
“Through our club, we put on - right now it’s just two events per year.
Of course, we also do in-store registration for all of the events held in
our area. We also donate and give away shoes and raffle items to all of
the race organizers and we try to have a presence at every race.”
These different programs, combined with an intimate knowledge
of the local market, allowed Grant to expand her single store operation
into a chain that will soon be able to service the entire South Florida
community. Runner’s Depot expanded its original Davie, FL location
three years after Grant opened the business. At the same time, the
company began to address the triathlon market, which “is growing
by leaps and bounds in South Florida.” At the beginning of 2004,
Runner’s Depot opened its second location in the southern part
of Broward County and this year opened its third location in Fort
Lauderdale. Grant is also opening a fourth location near Miami Beach,
which is under construction and should open by the end of October.
“We are growing pretty fast, but there is really a demand. We are
trying to be more convenient for our customers. We are doing a lot
of free shipping for people outside of our immediate area right now,
and some of our customers are driving over two hours to get to our
locations. We want to make our stores easily accessible for the entire
South Florida market,” she says. “I took on a partner shortly before the
Fort Lauderdale store. So Scott Kirsch came on as a percentage owner
in the business. He had been working in the store for about a year and he
has been a real asset to the business. He’s now my Vice President.”
With a new partner on board to help with the demands of a rapidly
growing retail operation, Grant is also looking ahead and formulating
strategies for state-wide and regional expansion. “I also have an
agreement with a store owner in Vero Beach, FL – it’s not a true
franchise, but he came to me and wanted to open his own store in the
area, but didn’t want to start from scratch. So, he paid for the rights to
use the Runner’s Depot name and I helped him set everything up. He’s
been operating under the same systems and procedures and his shop
has the same look and feel. I am looking into possibly franchising at
some point, maybe within the next five to ten years.”
With two new stores opening in 2007 and some aggressive
growth plans for the future, Grant’s schedule is packed, but like
most specialty running store owners, she still maintains the same
passion for the sport and the running community that prompted her
to shift careers seven years ago.
Performance Sports RETAILER
9
Specialty FEATURE
Getting the Timing Right
with Hydration
10
F
or many retailers, hydration is a rapidly growing category.
According to data collected by SportScanINFO, the overall
hydration category is up in the 30% range for the year-to
date this year with gains in nearly every sub-category. Backpack
hydration systems, such as Camelbak, are showing double-digit
growth, while more running-specific items, such as waist belt
water bottle packs, are showing growth in the 40% range.
Much of this increase is due to some of the innovative designs
that hit the market this year and the recent proliferation of hydration
and energy gel belts. This year the innovation is continuing with
brands like GoLite completely redesigning their entire line of waist
belt hydration packs and several other brands looking at new ways
to integrate electronics.
From a retail perspective, selling hydration packs and belts
can be a seasonal endeavor. According to data collected
by SportScanINFO, sales of waist belt hydration packs
have two peaks throughout the year. Obviously, sales are
stronger throughout the summer months. When looking
at the data in the chart below, which is presented on a
weekly basis, it becomes clear that sales of hydration
waist packs and belts begin to accelerate in early May,
with the trend peaking in mid-July. Most importantly,
sales begin a series of sharp declines by the end of
September. This trend presents itself year after year,
amplifying itself as sales increase.
The second sales spike comes during the Holiday season,
with sales accelerating at the beginning of December,
peaking mid-month, and then drying up again by the first
week in January. Again, this sales spike presents itself
during the same six week period each year.
Armed with this type of weekly sales trend information,
retailers can make sure product is on the shelf early enough
to maximize sales. At the end of the summer season,
The three lines represent sales volume for 2005 (green), 2006
retailers can mark down products and clear out inventory
(orange) and 2007 (blue). The timeline runs along a standard
in late September so they can re-stock and sell new, full
retail calendar from February through January.
margin product for the holiday season.
Performance Sports RETAILER
GoLite (opposite page)
The Hydrospeed features two easy to
access bottles and enough room to stuff a
rain jacket for long runs in temperamental
weather. The whole pack is supported
by GoLite’s proprietary “No Bounce”
suspension system that uses a wide waistbelt platform combined with a bomb-proof
system of compression straps. SRP $50.
Ultimate Direction
The Thunderbolt is for runners that need enough
liquid and fuel for “the long run” with enough
capacity for 30 ounces of fluids and four ounces of
energy gel. SRP: $30.00
Ultimate Direction
The 20 oz. FastDraw Extreme
uses a neoprene band that wraps
around the bottle to protect the
water from freezing and the users
hands from getting ice cold. The
FastDraw has a zippered stash
compartment for keys, snack
money or a gel pouch. An updated
narrower tension-lock hand strap
with reflective webbing makes it
easier to use on the go. SRP $19.
Ultimate Direction
The Matrix HHS is a completely customizable plugand-play pack that lets athletes tailor it to specific
races and training runs. The included accessory
pouches can be moved or removed to mix and match
the perfect amount of fuel and gear. SRP $50.
Nathan
The Booster Belt is described as “the
evolution of the race number belt.” It
incorporates a unique shock cord system
that carries several energy gels securely.
SRP $16.
Performance Sports RETAILER
11
Camelbak
Specialty FEATURE
The 50 oz. Slip Stream offers external access to the reservoir
for easy filling. A low profile sternum strap keeps the pack in
place when you are on the move. Reflective material on the
pack and harness aids visibility on autumn nights. Camelbak
offers the Thermal Control Kit for cold weather use. The kit
includes a mouthpiece cover, insulated tube cover and 42”
delivery tube. SRP n/a
Nathan
The HPL #008 A.K.A. the Magda Lewy Vest was brought into
existence, because Pittsburgh marathon winner Magda
Lewy was tired of hiding bottles along her training route. The
hydration “vest” carries 1.5 liters of water and minimizes any
impact on speed. SRP $80.
GoLite
The Hydroclutch is the perfect
add-on for the really long days
on the road, or for runners who
don’t like the feel of a pack.
SRP $15.
GoLite
The new Hydrosprint uses the
same “No Bounce Technology” as
its big brother, the Hydrospeed,
but caries one bottle for the light
and fast morning run. SRP $40.
12
Performance Sports RETAILER
A multi-channel round-up of the
running business published
monthly by:
The
Report
and
SEPTEMBER 2007
MARKET OVERVIEW
x For the five-week fiscal September period, Running Footwear sales increased in the low-teens in dollars and mid-singles in units in the Sports
Retailer trade channel.
x Road running product sales increased slightly above the overall trends, while trail running was slightly below.
x Women’s Running sales, which account for approximately one-third of the market, were up in the high-teens in dollars for the fiscal month, but
men’s sales fell in the mid-singles in dollars and mid-teens in units.
RUNNING FW MARKET SHARE ($)* -- Sporting Goods
SEPTEMBER
This Yr*
Point Chg
YTD
NIKE
63.5%
+14.53
NIKE
ASICS
12.3%
-1.97
AMERICAN S.G.
0.4%
+0.22
x In the
channel, the
our trailrsFull Line Sporting Goods
e
o yMen’s
l
i
ing four-week period sawosales
ofhboth
and
a
w
t
w
e
R
kn well, with dollar
in
62.7%
+11.69
Women’sD
product
perform
o you
sellingand unit
ecialty
This Yr*
n g Sp
CHANNEL NOTES
Point Chg
is
eet?increasing.oHowever,
-1.42 the strsales
u whatunits outpaced dollar
y
ll
n
e
w
t
o
sales
for
both
genders,
suggesting
clearance sales
o
st
lling d -3.06
se10.5%
NEW BALANCE
10.0%
-5.33
NEW BALANCE
n rep
o
is
or
a
consumer
opting
for
less
expensive
styles.
ly
n
e
r
io
ning
petit
o you -8.13 untrxy?Road Running product soldofthrough
D
he ratuanlow-teens
c om
t
?
r
ADIDAS
6.3%
-7.69
ADIDAS
6.3%
ls
u
e
o
o
h
n
y
c
n
at
ealt was white thot
aystrong
what
e hRunning
odwith
of the+2.65
rate,o
while
Trail
lty cha egion2.9%
h
w
s
t
o
ia
O
c
n
n
F
e
k
N
p
PUMA
2.3%
+1.64
PUMA
I
s
u
s
n
nate
calikely a result of more
most
Do yo
other r
portS
is in no +0.34
Sgains,
kly upd double-digit
atGoods
ee+0.40
w
n
Sporting
stores addressing the category
SAUCONYpetition 1.6%
SAUCONY
1.6%
o
e
t
t
e
r
a
f
r
com
eive
t Bill B and adding that product to the shoe wall.
can rec els1.1%
BROOKS
1.1%
-1.02 you
MIZUNO
contac+0.08 .
,
w
n
x Nike saw major share gains in the month, most
ho
an
450
etail ch
tion on -0.04ajor rBROOKS
MIZUNO
.987.3 -1.35
a1.0%
41.0%
likely
a result
. of the Nike+iPod product line that
m
0
r
7
o
f
ow
m
in
. N
For
s all-0.44
e
s
has caught many casual runners imaginations. The
r
o
o
r
c
REEBOK
0.5%
REEBOK
0.5%
-0.81
M
a
ss
ow
Bowerman line, focused on specialty shops was
busine
it? Kn
nni
RuASICS
a
Wh y W
AMERICAN S.G.
11.8%
0.4%
also called out as performing well.
+0.20
TOP SELLERS -- RUNNING FOOTWEAR -- Sporting Goods
Top Sellers for SEPTEMBER -- Units
Rank
Brand
Style
Top Sellers for SEPTEMBER -- Dollars
ASP
Rank
Brand
Style
ASP
1
NIKE
K ATTEST VIII WHT/RED/NVY (GS)
$27.17
1
NIKE
W SHOX CLASSIC WHT/GREY
$107.26
2
ASICS
M GT-2120 WHT/NVY/GLD
$84.04
2
ASICS
M GT-2120 WHT/NVY/GLD
$84.04
3
NIKE
W DART V EXTRA WHT/ROSE
$42.79
3
ASICS
W GEL-2120 WHT/PLAT/NVY
$87.58
4
NIKE
M AIR MAX TORCH BLK/BLK/SLV
$74.12
4
NEW BALANCE
M992GL D
$125.02
5
ASICS
W GEL-2120 WHT/PLAT/NVY
$87.58
5
NIKE
M AIR MAX 90 LEATHER BLK/BLK
$87.82
6
ASICS
W GEL-1120 WHT/BLU/BLK
$70.31
6
NIKE
M AIR MAX 90 LEATHER WHT/WHT
$88.46
7
NIKE
W AIR TRI-D BLK/PNK
$56.66
7
NIKE
M AIR MAX TORCH BLK/BLK/SLV
$74.12
8
NIKE
W SHOX CLASSIC WHT/GREY
$107.26
8
NIKE
M SHOX CLASSIC WHT/WHT
$109.01
9
NIKE
M AIR MAX 90 LEATHER BLK/BLK
$87.82
9
ASICS
W GEL KAYANO 13 WHT/BLK/SLV
$120.59
10
NIKE
M AIR MAX 90 LEATHER WHT/WHT
$88.46
10
ASICS
W GEL-1120 WHT/BLU/BLK
$70.31
The Running Report is produced each month by analysts and editors at The
SportsOneSource Group exclusively for SportScanINFO subscribers and retail
reporting partners. All data is compiled utilizing SportScanINFO’s comprehensive platform that presents weekly retail POS data across the Footwear. Apparel,
Licensed Products, Hardgoods, and Outdoor market segments. For more information regarding Custom Reports, contact your Regional Business Manager or
contact us directly at [email protected].
* Important Market Share Note:
SportScanINFO has added a large number of reporting retail rooftops
for 2007 which may make year-on-year comparisons of market share
difficult without utilizing additional data.
Please talk to your regional business manager with any questions on
the new expanded system.
Money Matters
How Outside Financing Can Help Take Your Business to the Next Level
By Richard J. Holcombe
Specialty MARKETwatch
Y
14
Five Key Sources for Outside Financing
Once you have the business plan, it will prove invaluable in helping to raise
our business is up and running. You
the required financing. Here are some sources you can tap into when fundare at a point where you can see that
ing the expansion of your business.
your great idea is working. But you
are suddenly faced with the realization that you
Commercial Banks/Credit Unions typically offer a line of credit based upon the
need to raise capital to grow your business.
value of accounts receivable and inventory.
Inventory and inventory turns are causing
A U.S. Small Business Administration (SBA) loan may work for you if you need
issues with your cash flow. You have hired
help in securing bank financing. The SBA provides a guarantee to banks that
more help and you have looked into finding a
in turn lend to small businesses. Check it out at SBA.gov.
third party to assist you in your operations, but
now your infrastructure must be expanded to
A Purchase Order or Contract Financing is available for projects in which one
include a bigger and better operating system
or two customers have placed large orders with you, and you need cash
to procure the goods (if you are an importer/distributor), or procure the
for your computer. It is obvious that to move
components and assemble the product (if you are looking for a private label
the business to the next level, outside financing
line). The lender uses the purchase order or contract as security, which will
will be required.
be paid back when the product is delivered to your customer.
The first step in this process is to prepare
a business plan. This is the document that
Commercial Finance companies typically will provide more funding that is
will help you acquire the capital necessary to
easier to attain than through a commercial bank or credit union, but at a
grow the business. You can hire a professional
higher cost. Some will lend against proven cash flows.
service to produce a business plan. Or, you can
Investment Banks will lend you money and/or take an equity position in your
write it yourself by going to your local office
company, or find someone or an institution that will do the same. Usually,
equipment store and buying a software package
investment banks charge an upfront fee for their services.
that becomes the template to write your business
plan. Or, you can Google “business plan” to
access online resources. Putting your great idea
Once the funding is in place, the hardest part of this whole
into a formal and formatted plan is probably the most important process is execution. Since you will be operating your business
activity you must undertake.
using other people’s money, it is important to remember that
The easiest and most successful way to raise capital to grow your the true way you ran your business before external funding, in
business is to have a “friends and family night.” Open your place which every dollar counted, because it was your own, now must
of business after-hours and invite your friends, associates and their carry over to using someone else’s money. You secured funding,
friends that may have investment capital available. Present your because your business plan made sense and showed a profit. Now
business plan and blueprint for success to them and let them know you must make it happen! Hiring a hands-on CFO or accountant is
that you are seeking financing.
an important step in controlling costs and maximizing profits.
If the capital needed to expand your business is far above the net
Note: There are various federal and state laws that regulate how
worth of your existing business, then you may seek out venture capital equity can be secured. Please check with a professional advisor to
investors to fund the business and to grow it substantially. However, be sure you are in compliance.
understand the risk that you will give up a substantial portion of
The Holcombe Group Inc. was recently formed to offer a broad range
ownership in the business, and in some cases control, but this is an
of third-party logistics services to businesses in the apparel, footwear
option to quickly accelerate the growth of your business.
and sporting goods industries and allied areas of gifts, novelties and
When securing equity investments, make sure it is clear if the
promotional items. The company specializes in advising entrepreneurs on
the start-up and development of a business, assisting existing businesses
investor is going to be active in the business or be a silent partner.
to grow, and providing 3PL expertise that ranges from front-end
If active, is it someone who you are comfortable working with?
services of product design and development, brand creation, sourcing,
So, the basic question is, do you want to take on partners or
marketing, advertising and sales, to back-end services of call/service
debt? That is a decision you will have to make and there are no
center operations, warehousing and shipping. The concept and strategy
canned answers. What is right for you may not be right for another
was created by Richard J. Holcombe, a 30-year veteran of the apparel,
footwear and sporting goods industries whose experience includes 18
entrepreneur. You should explore all of the options and choose the
years with business start-ups or companies in need of a turnaround or
one(s) that feel right for you.
revitalization. He played a leading role in brand expansion and product
In more sophisticated transactions, various combinations of debt
acquisition for major apparel and gear companies including Blair,
and equity are used. For example, a combination of a commercial
Gear.com, Chipman-Union, The Rockport Company, and Woolrich. He
loan and friends and family investment, along with some venture
has extensive P&L and board-level experience.
capital, could be a sound plan to fund the growth of your business.
Performance Sports RETAILER
The Executive Track
Paul Heffernan, New Balance
Executive Vice President of
Global Marketing
F
Key Statistics
Started Running: 1968
Weekly Mileage: “three to five hours”
Distance of Choice: “one hour”
Achievements: Three Boston Marathons
Best time, “just over three hours”
Shoe of Choice: NB 1061 with custom orthotics
Performance Sports RETAILER
market. “It was a great experience and we were making some good
running product,” he says. “But Converse is not a running brand.
So, one day I saw an ad that said New Balance was looking for a
product manager. I knew that I needed that job. That was 24 years
ago, and I’ve been here ever since.”
Today, after nearly 40 years of running and tens of thousands
of miles on the road, Heffernan still runs but now it’s primarily for
fitness. “I need an hour,” he says. “A few years ago I had to do a
lot of cross training and give up running for a while, which I hated.
Before that I ran or I did nothing at all. Now, I run a few days a
week; I go to the gym a couple days a week; I play a few rounds of
golf and in the winter I ski.”
With more miles in his legs than most people drive in a year,
Heffernan plans to keep running as long as his body will allow. In
spite of past injuries, he still stays competitive, even though he no
longer competes. “It still frustrates me to see a guy that looks less
athletic than I am flying down the road doing a sub six minute mile.
I keep thinking, ‘I’m the athlete here,’ and I go faster.”
Specialty MARKETwatch
orty years ago, Paul Heffernan was a basketball player
who ran when his coach told him to. This was usually
a form of punishment to condition the team after a lost
scrimmage or if he and his grade school teammates weren’t
pushing themselves hard enough. One day in 1968 he and one of
his friends missed their ride home after basketball practice and
they decided to run home.
“A friend of mine said, ‘do you want to run home?’ All I could
think was that it’s a long way to run but he told me that he did it all
the time, so we did it anyway,” Hefferrnan says. “I ran home and I
was hooked. I loved how it made me feel.”
In high school, Heffernan started competing. “I grew up with
running as an integral part of sports, but I didn’t see it as an
individual event. Then in 1970, I ran a cross country race and I was
doing pretty well until the last half mile when I had to stop and get
sick. Then I realized that running is not as easy as I thought.”
After high school, Heffernan went to Villanova, which was one
of the best running schools in the country at the time. While he
never competed, he was able to train with several of the athletes
that were on the Villanova track team in the 70’s. “I just liked the
idea of long distance running. It kept my weight down; it made me
feel sharp; I felt like I could problem-solve better; I was better to
be with as a person.”
In the 1980’s, while working as a merchandiser for Thom McAn,
Heffernan began to take his training seriously. “I ran three Boston
Marathons back in the 80’s. This was back in the days when mileage
was king and I trained 70 to 80 miles a week. Everyone believed
that if you weren’t doing a lot of miles, you couldn’t call yourself
a runner. This was back when the American icons were driving the
sport. We were all looking at Bill Rogers, Salazar, Jeff Smith, all of
the American athletes who were dominating the international scene.
I would say it was a combination of these people and several others
that really inspired me to push myself in the sport.”
Heffernan’s dedication to the sport had a major influence on his
career. After working for Thom McAn, Heffernan moved over to
Converse to help the brand make their initial foray into the running
Editor’s note: If you would like to nominate an
executive to be featured in this column, please email
[email protected] with your suggestion.
15