Gregg Ribatt Stride Rite Group Today’s Objectives

Transcription

Gregg Ribatt Stride Rite Group Today’s Objectives
Gregg Ribatt
President & Chief Executive Officer – The Stride Rite Group
Stride Rite Group
Today’s Objectives
Demonstrate the strength of the Stride Rite Group and its brand
portfolio
Illustrate the Stride Rite Group’s opportunities for growth
Show the progress that the Stride Rite Group has made in the past 12
months
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Stride Rite Group Overview
Mission: To be the leader in building a diversified portfolio of fashionable,
premium lifestyle, and performance footwear brands for men, women, and
children across the globe
2007 Sales
Overview
15% SR
Children’s
Wholesale**
FY 2007 pro-forma* sales of $765 million, 87% domestic
28%
Stride Rite
Children’s Retail
Highly diversified distribution with no customer exceeding 3%
of sales
Building upon existing positions of leadership
–
Stride Rite: premier children’s footwear player in the U.S.
–
Sperry: the authentic, original boat shoe growing into a nautical
lifestyle brand
–
Saucony: the technical specialist in running
–
Keds: a global fashion, casual brand
Platforming existing positions into streams of high growth
–
–
Categories
Geographies
13%
Keds
9% Tommy
Hilfiger
16%
Sperry
Top-Sider
19%
Saucony
2007 Distribution
7%
4% All Other
Direct
7%
Sporting
Goods
7%
Off Price
30% Stride Rite
Group Stores &
eCommerce
7%
Athletic
Leveraging capabilities at both Stride Rite Group and CBI
across all brands and businesses
10%
Footwear
17%
Department
Stores
11%
Family
* Collective Brands did not own Stride Rite for all of 2007.
** All children’s footwear sold at wholesale for any brand is captured
in Stride Rite Children’s Wholesale.
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Stride Rite Group
Positioned in Many of the Fastest Growing Footwear Segments
US Footwear Market Growth (CAGR 05 - 07) = 1.9%
By Gender
Segment
By Age
By
Age Group
Group
CAGR (05-07)
Segment
CAGR (05- 07)
Kids
3.6%
0-2 yrs
9.4%
Women
2.2%
7-12 yrs
3.5%
By Consumer
By
ConsumerIncome
Income(HH)
(HH)
Segment
>$75K // yr
yr
•>$75K
CAGR (05- 07)
3.4%
By Price
By
Price Point
Point($/pair)
($/pair)
Segment
>$30/pair
•>$30/pair
By Channel
By
Channel
Segment
2.1%
By Category
By
Category
CAGR (05- 07)
Direct
CAGR (05- 07)
10.4%
Segment
CAGR (05-07)
Low
Performance 8.2%
•LowPerformance
Apparel Specialty
6.5%
Sporting Goods
5.4%
Work
7.5%
Footwear Stores
4.3%
Casual
•Casual
3.9%
Segments with significant Stride Rite Group business
Source: NPD Consumer Panel
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Stride Rite Children’s Group
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Stride Rite Children’s Group
Overview
Mission: Build the world’s premier group of children’s footwear brands
Annual sales over $330 million through retail and
wholesale with 4% U.S. market share in children’s
footwear
Portfolio of premium children’s brands
More than 350 company-owned stores
Multi-channel distribution in over 4,000 doors
Over 11 million pairs sold annually. Largest premium
retailer of children'
s non-athletic shoes
$360
$340
$334
2006
2007
$300
$280
$260
#1 premium brand of children’s non-athletic shoes; #1
brand for first walkers
$240
Sources: NPD, iParenting Media; 2007 A&U Study
$336
$320
Industry recognition for excellence in design, store
performance and consumer communication
#1 rated brand by mother’s in quality, fit, and trust
SRCG Sales (in mil of $)
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Stride Rite Children’s Group
Strategic Direction
Evolving
Historical
Single brand focus Stride Rite
House of brands
– Own: Stride Rite, Keds, Robeez, Saucony,
Sperry Top-Sider, Munchkin
Wholesale and retail (closer to equal mix)
– 2000 – 201 stores (46 leased)
– 53% of business was retail in 2000
– License: Jessica Simpson, Tommy Hilfiger
Wholesale and retail (mix shift into retail)
– 2008 – Over 350 stores (7 leased)
– 63% of business is retail in 2008
Retail through licensed dealers
Owned retail -- multiple formats
– Specialty – 241 doors
– Outlets – 106 doors
– Leased departments – 7 doors
– eCommerce
Ages 0-6
– Baby / toddler
Ages 0-10
– Baby / toddler; boys / girls
Domestic focus
– Limited international business
Global growth
– Proactively develop international by leveraging
Categories
– Single category focus
Categories
Robeez, Stride Rite Group, and Payless
infrastructure and relationships
Multiple categories & lifestyle focus – athletic, dress,
play, casual
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Stride Rite Retail
Store Formats
Stride Rite
Concept Stores
Stride Rite
Outlets
Leased
Departments
Store Front
Store Interior
Number of Locations
241
106
Average Square Feet
Real Estate Type
1,284
Regional Mall
2,237
Outlet Center
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1,367
Macy’s
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Stride Rite Retail
Collections by Stride Rite
New Retail Store Format Prototype to Extend the Franchise
New, larger store (1,700 sq ft) designed to
appeal to boys and girls ages 7-10, in
addition to core customer (ages 0-6)
Expands addressable market (U.S.) 61%
– From $2.3B annually (ages 0-6) to $3.7B (ages
0-10)
Extends life of existing customer base in the
store
– Ages 7-10 represent 50% of store sales vs.
28% in average Stride Rite store: an 80%
increase
Offers environment specific to pre-tweens,
unlike anything in the market
One more test store to open in 2008
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Stride Rite Children’s Group
Continued Newness and Ideas to Drive Demand and Retain Customers
Longer in Life Stages
Jessica Simpson for tween in casual and
dress
Broader offering of Sperry Top-Sider,
Keds, Saucony for older children
Robeez expanding franchise beyond
booties into hard sole shoes
SuperBall and Slimers shoes for
excitement
among traditional age groups
Andy MacDonald and Anastasia Ashley for
Airwalk addresses older kids in hot skate
market
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Stride Rite Children’s Group
Retail Operational and Efficiency Initiatives Drive Increased Profitability
Sharing Best Practices from Payless Retail Operations
Operational
Excellence
Drive Store
Productivity
• Conversion
• Productivity
– Align staffing with
traffic
– UPT’s, AUR
• Store Visit Metrics
– Compliance
– Scorecards
Brand Marketing
Effectiveness
Merchandising
Efficiencies
Superior In-Store
Experience
New
Customers
Increase trips
Tenure
Productivity
AUR
Best in Class
Service Model
• Acquisition
– Increase frequency
and quantity of
Direct Mail
– Create age
segmented mailers
• Retention
– Elevate customer
shopping patterns
– Retain preferred
customers
• Assortment
Planning
• Store Design and Layout
• Size Optimization
• New Technologies and
Measures
– CSAT
• Cluster
Management
• KPIs
• Training
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Stride Rite Children’s Group
Summary of Opportunities (I)
Platforms for Growth
Expand retail stores
Strategic Rationale
Profitable expansion
opportunities
– replaces loss of
independents
Grow the core
wholesale business
Build off brand equity
and leadership position
in wholesale channel
Initiatives
Continue roll out of Stride
Rite stores
– Collections, outlets, other
concepts
Portfolio management
approach to running the
business
Continued innovation, e.g.
SuperBall, Slimers, next
generation baby technology
Increase share in
key age groups and
expand end uses
0-2 years: Highest
growth segment;
Robeez well positioned
6-10 years: Underpenetrated today;
Leverage existing
customer base and
increase lifetime value
Expand Robeez beyond
soft sole
Re-launch Stride Rite baby
Add to brand portfolio (e.g.,
Airwalk, Jessica Simpson)
Test larger store with
added brands and agespecific sections
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Stride Rite Children’s Group
Summary of Opportunities (II)
Platforms for Growth
International expansion
Strategic Rationale
Initiatives
Leverage existing Stride
Rite Group and
Collective Brands
platforms
Strategically grow the
business across the
globe
Pursue potential retail
opportunities in
Canada, Central
America, Europe
Robeez international
expansion
Improve operations
Enhance profitability
and customer service
Leverage Payless retail
tools, techniques and
experience
Consolidate Robeez
operations with Stride
Rite
Re-purpose inventory
SKU count
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Sperry Top-Sider
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Sperry Top-Sider
Overview
Mission: To grow into a global nautical lifestyle brand for men, women and children with
footwear, apparel and accessories sold worldwide in multiple distribution channels
Overview
$124 million in 2007 sales
96% of the sales are domestic
Annual sales growth over 20% in each
of last two years; brand continues to
grow at high rate
Department store; marine, outdoor and
specialty store; family footwear store
distribution
Multi-generational appeal and loyal
customer base
$140
Sperry Top-Sider
Sales (in mil of $)
$124
$120
$100
$93
$80
$25
$41
$60
$40
$83
$68
$20
$0
2006
Men'
s
2007
Women'
s
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Sperry Top-Sider
Business Drivers and Growth Platforms
Platforms for Growth
Maintain performance authenticity and
leadership through continued technical
innovation and marine channel distribution
Expand beyond boat shoes to become a
stronger four season, year-round resource
Build on initial success of women'
s Sperry
Top-Sider in image/better department
stores, expanding classifications offered
Expand internationally to become “the”
global nautical lifestyle brand
Expand beyond footwear with apparel and
accessories
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Sperry Top-Sider
Sperry Growth Opportunities Leveraging Existing Strength
2007 Men'
s Domestic Casual and Dress Casual
Footwear Market ($ millions)
2007 Women'
s Domestic Casual and Dress Casual
Footwear Market ($ millions)
Sperry Top-Sider
2.2% share
Top 5 brand
$5.2B
Size of market: $5.2B
2005 to 2007 CAGR: 1.6%
Solid position off which to grow within men’s
Establishing premium products and
distribution
Expanding age reach to younger customers
Growing casual and dress casual beyond
traditional boat shoes
Driving performance category with
innovation
Sources: NPD consumer panel and Company reports
Sperry Top-Sider
1.2% share
$13.5B
Size of market: $13.5B
2005 to 2007 CAGR: 6.0%
Growing in fragmented market that is
2.6X as large as men’s and growing
approximately 4X faster
Building off existing position and premium
distribution
Expanding designs beyond traditional
boat shoes into casual and dress casual
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Sperry Top-Sider
Innovation and Technical Product
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Sperry Top-Sider
Expanding Our Men’s Line
Expanding off authentic boat shoe
heritage
Developing collections for premium
distribution
Expand multigenerational collections
Four-season, year round product
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Sperry Top-Sider
Expanding Our Women’s Line
Leveraging initial offering of
women’s boat shoes
Strong marketplace acceptance
across broad consumer groups
Expanding classifications, moving
toward more dress casual, with
less explicit nautical design
Four season product, year-round
product
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Sperry Top-Sider
Sperry: Creating a Global Nautical Lifestyle Brand
Expand internationally leveraging
existing Stride Rite Group operations
– Infrastructure (organization and facilities)
in Europe
– Opportunities also in Central/South
America and Asia
Drive children’s through Stride Rite
Children’s Group
Mid to longer term
– Expand beyond footwear with apparel
and accessories
– Develop retail boutique concept in key
markets as brand flagship
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Saucony
We are a community of runners. We run with each other, our dogs, our
thoughts, the guy we pass by every day, the road, our friends, our shoes, the
weather, and all of the Saucony employees who obsess about making every
run better. We never run alone.
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Saucony
Overview
Mission: Tirelessly devoted to inspiring every runner on every run, every day.
At Saucony, we run.
Overview:
$145 million in 2007 sales
$150
34% of sales international
Positive momentum in the run-specialty retail channel –
market share increased from 10% to 13% (2005 to 2007)
–
Saucony Sales
(in mil of $)
$145
$145
#3 share in run specialty channel now
Innovative products. Trade awards:
$140
1.
2007 Runner'
s World International "Best Innovation"
Award
2.
2007 Runner'
s World "Best Debut", Grid Sinister
3.
2007 "Shoe of the Year", IRRA for the Omni 6
4.
2008 Runner'
s World - The Editor'
s Choice - "Best Trail
Running Shoe", Xodus
5.
2008 Outside Magazine "Gear of the Year" award for the
Triumph 5
6.
2008 Runner'
s World "Best Buy" award for the Jazz
$135
$137
$130
2006
2007
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Saucony
Growth Opportunities
Growth Opportunities in the $4B U.S. Running Market: Run Specialty and Technical Running
Strong position (#3) among all brands in the run specialty channel, driven by technical
product leadership
– Higher price points are fastest growing segment in the $4B US market
Maintain and build position with
– Continued technical innovation in products
– Increased service levels - - shadow reps, clinics, spike nights - - with key accounts
– Build apparel business with blend of performance and style
Extending running leadership into adjacent categories such as trail running
4,500
4,000
Price Band
$90 +
$40 - $90
Under $40
3,500
Domestic Running Footwear Market
(in millions of $)
421
477
2,533
CAGR %
2005-2007
587
18.1
2,499
2,476
(1.1)
1,006
958
882
(6.3)
2005
2006
2007
15%
3,000
2,500
2,000
1,500
1,000
500
0
Source: NPD 2007
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Saucony
Growth Opportunities
Innovative Technical Running Product to Expand Position in Run Specialty Channel
Stability
Neutral
Motion Control
Six core franchise models
Fundamentals of Fit, Feel, Ride
Consistency across subsequent
versions
Continual innovation
$90+ market growing at 18% (2007)
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Source: NPD 2007
Saucony
Growth Opportunities
Growth Opportunities in the $4B U.S. Running Market: Sporting Goods Channel
Sporting Goods channel is large and growing
Build off strength in run specialty with technical product
Expand business with leading full service sporting goods channel by
– Visually compelling products and technologies
– Increased marketing support in health/fitness and men’s lifestyle magazines
– Increased service to key accounts
Domestic Running Footwear Market
4,500
4,000
3,500
Dept. Stores
Discount/Mass
Direct
Off-Price
Sporting Goods
Athletic Specialty
Family
3,000
2,500
(in millions of $)
129
167
206
414
993
3.6
110
184
118
181
194
467
238
440
925
906
998
948
915
1,081
1,104
1,124
2005
2006
2007
25%
CAGR %
2005-2007
(0.2) total
(7.7)
5.0
3.1
(5.8)
2,000
1,500
(4.3)
1,000
500
2.0
0
Source: NPD 2007
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Saucony
Growth Opportunities
Visually Compelling Athletic Product Stand Out in Sporting Goods and Athletic Channels
Visually compelling styling and technologies
Younger market
Fundamentals of style, comfort and
price/value
“Win on the wall”
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Saucony
Growth Opportunities
Apparel Leverages Style, Performance, and Distribution Platforms
Integral component of building
Saucony from running shoe leader
into a global running lifestyle brand
–
As much as 30% of sales volume,
based on benchmarks
Opportunity to increase share of open
to buy with existing retailers and share
of wallet with brand-loyal customers
Fashion and performance can reach
consumers beyond core runners
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Saucony
Growth Opportunities
Re-Establishing Originals to Capture Share of Growing Run Style Market
Originals footwear resonates with the
independent younger population
New technical footwear offering creates a
great opportunity develop "run-style models"
Low performance (athleisure) footwear
market is large ($4B, same size as running
market) and growing (9.3% CAGR)
– Women account for 58% of the market
Incremental revenue that does not create
conflicts with the run specialty channel
Source: NPD 2007
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Keds Group
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Keds Group
Overview
Mission: Keds finds inspiration in the people who share our spirit and energy. We believe
there'
s no need for little steps when you can bound confidently forward. Our deep roots as an
American icon allow us the freedom to do fashion with know how and authenticity.
$104 million in 2007 sales
Keds Group encompasses the Keds, Pro-Keds and Grasshoppers brands.
The brands compete collectively in the low performance athletic, casual,
and sandal markets
U.S. market nearly $17 billion at retail
Increases in international business have been offset by declines in domestic
Keds
Large opportunities to expand internationally and through PRO-Keds and
Grasshoppers brands
– International business up 170% since 2004 driven by Keds Women'
s in
Western Europe, Canada, and Australia.
– Grasshoppers repositioned successfully with better styling, comfort, and
retail performance. Target customer (Women 45+) is one of fastest
growing groups in U.S. due to explosion of baby boomers
– PRO-Keds license negotiated back in house in 2008 and early response
to 2009 brand and product is positive
Strong brand equity can be leveraged – Keds has high brand awareness in
U.S., similar to much larger competitors in target segment (Skechers 97%,
Converse 93%, Keds 88%, and Vans 79%)
$120
Keds Group Sales
(in mil of $)
$110
$104
$100
$100
$90
$80
2006
2007
Source: NPD Consumer Panel YE 2007
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Keds Group
Keds Group Platforms for Growth
Champion
Green
Fun Fashion
Pro-Keds
Extend range of
product to offer
basics to luxury
$30-$100
Create leadership
position in industry
Occupy more of
“her” closet
Build upon
Heritage platforms
Create premium
channel
segmentation
Build business in
wider (non
Champion, Non
Hampton) range of
product platforms
Exclusive
collaborations for
premium boutique
distribution
Launch Keds
Customization –
Keds Studio
Strong online /
community based
marketing
Establish credibility
as fashion resource
Upgraded quality,
design, graphics
and material
application
Grasshoppers
Enable her active
lifestyle with
footwear that
targets her
different wearing
occasions
Improved comfort
and style and
expand price band
from $25 - $40 to
$30 - $70
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Stride Rite Group
Transition Roadmap
Phase II
Phase I
Integrate and
Maintain
the Business
Manage thru merger
transition
Adopt new policies and
procedures
Leverage new corporate
centers
Capture initial synergies
Manage Hilfiger transition
Deliver 2007/2008 results
Phase III (2009+)
Develop/
Execute Brand
Strategies
Enhance
Platforms
Integrate and enhance key CBI
corporate platforms
– Product development
– Sourcing
– Logistics
– eCommerce
Consolidate and enhance
internal SRR platforms
– Global brands
– Europe
– Retail (execution and
format development)
Continue to add talent and
build the organization and
capabilities
Deliver increased effectiveness
and efficiency
Transition new leadership
Refine brand positioning and
target markets
Identify growth opportunities
and accelerate organic growth
Drive international expansion
across all brands
Build capabilities in
apparel/accessories
Build bottom-up, long-term
corporate and brand strategies
Identify and sequence required
investments
Accelerate
Expansion
Leverage what we have built
– Enhanced talent pool
– Efficient platforms and
Infrastructure
– Base of organic growth
and resultant cash flows
Map the market and identify
streams of growth
Develop acquisition criteria
and corporate development
plans
Deliver growth via 3 year
plans which meet or exceed
corporate objectives
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Stride Rite Group
Substantial Integration Progress Since August 2007
Leadership transition
•
•
Corporate leadership
Adding depth within divisions
Organization/structural changes
•
•
•
Global brands established
Sourcing, logistics, store development, treasury, and tax
consolidated into CBI centers
Matrix structure implemented in key support areas
Physical consolidation
•
•
•
Robeez Vancouver operations consolidation into SRCG
European operations consolidation in Amsterdam
US DC consolidation
Strategic focus
•
Implemented bottom-up strategic planning process
•
ROIC/IRR/NPV investment criteria implemented
•
Increased accountability and compensation for driving results
and achieving strategic objectives
•
Premium Airwalk brands added to SRCG stores to address
older children
•
Disney direct to retail discussion initiated
•
•
•
Testing Champion and American Ballet Theater in outlet stores
Implementing retail management best practices
Leveraging Store Development platforms and activities
Partnering for growth
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Stride Rite Group
Tommy Hilfiger License Update
Transition Tommy Hilfiger adult footwear business from Stride Rite to
Tommy Hilfiger on December 31, 2008 at end of term of license
agreement.
Stride Rite is delivering 2008 product collections
Collaborating with Tommy Hilfiger to assure smooth transition; receipt of
certain fees and reduction of certain expenses
Solid 2008 sales trends
In 2009, intend to redeploy assets into other higher-growth Stride Rite
Group businesses while rationalizing overhead
Extended Tommy Hilfiger children’s business for another year,
consistent with our strategy and business model (i.e., licensing brands)
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Stride Rite International
Evolving Into More Strategic and Efficient Organization
Re-aligned organization
–
International focused on market analysis, business development and in-market
coordination/support
–
Brands are managed globally: brand positioning, product development, distribution
strategy, marketing
Consolidating European infrastructure into one Netherlands-based European
headquarters
–
Enables Stride Rite Europe management team to more effectively drive growth
–
Leverages infrastructure across all businesses
–
Creates increased scale
Integration of Robeez Canada with Stride Rite in U.S.
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Stride Rite Group
Summary
Building a high growth organization and culture with strategic approach to running the
business
Develop, attract and invest in talent
Significant growth opportunities across all brands
– Product innovations
– Channel segmentation
– Category expansion
– International initiatives
– Acquisition …over time
Developing more efficient business model
– Best practices across both Stride Rite and Collective Brands
– Leveraging both Stride Rite and CBI resources
– Greater focus on inventory management and expense control
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