Lotto Steps Up U.S. Presence with Etonic Acquisition…

A SportsOneSource Trade Publication
Running Footwear Has
Strong Third Quarter...
Contrary to published reports, the performance running shoe business is alive and
well. Running shoe sales in the third quarter
improved by 8% in dollars and 2% in units.
This yielded an increase in average selling
price of about 6%. The average price for a
running shoe was about $57 in the third
quarter. Regionally, sales were strongest
in the East North Central and Mid Atlantic
regions and weakest in New England, which
has struggled all year. All channels performed well with the strongest results coming from Full Line sporting goods. Men’s performed markedly better than Women’s in the
quarter, up nearly 9% in dollars as opposed
to up 4% for Women’s.
Nike had a very strong quarter with sales up
in the low teens. Nike gained 150 basis points
in share to 45%. New Balance improved in
the high singles on the strong Zip technology
introduction. Asics had an increase of more
than 20%, although there was price erosion
on all key styles. Saucony grew by over 30%.
Mizuno soared, up 85%. Brooks was up by
nearly a third against last year. adidas had
a poor quarter down in the mid-single-digits.
adidas actually gave up its #3 share position
to Asics for the year during the month of September. Asics has shown particular strength
among women, where their share grew in Q3
by over 600 basis points to 18.1%.
Top sellers in dollars for Q3 were Nike Air
Max 360, 180, and 90, as well as Shox,
Asics, GT 2110, 1110, and Kayano, and New
Balance 992 and Zip.
December 2006
Lotto Steps Up U.S. Presence with
Etonic Acquisition…
Lotto Sport Italia has acquired Etonic Worldwide, giving the Italian brand a broader presence in the U.S. and Etonic a platform for future European growth. Lotto, which has been
primarily known as a soccer and tennis brand -- outside of a few years in the late 80’s when
it saw some moderate success in the urban market -- will now have a solid foothold in golf
and running. Terms of the sale were not disclosed, but Lotto Sport Italia said that company
President Andrea Tomat will also become president of Etonic. Tom Seeman, current CEO of
Etonic will maintain his position with the brand as it
transitions under Lotto and going forward.
The current Etonic management team, which is comprised of former Dexter and Etonic golf executives, in
2003 acquired the Etonic name and its golf shoe and
glove business from the Spalding company in a deal
reportedly worth $10 million. Prior to selling Etonic,
Spalding had inked a licensing deal with a company
called Kinetic Sports to produce running and walking footwear under the Etonic name.
That deal ended December 31, 2005, with an inventory sell-off period running to mid-2006.
Etonic said it started shipping their own running product in January 2006.
“We’ve turned [Etonic] around, we re-launched golf in ‘04, we launched bowling in ’05, and
now we have running and walking,” Seeman commented in an interview with PSR. “And
certainly the sales figures would suggest that given that when we first bought it in April of
‘03, for the rest of that year, the nine months of that year, we had $5+ million in sales and
now we’re around $30 [million].”
Seeman sees Lotto contributing to Etonic’s growth in several areas. “Number one, they’re
strong outside the U.S. and we’re naturally stronger within the U.S. A big example would
be, they have a big warehouse in Europe. Right now, we distribute in Europe through distributors who buy a certain amount of product and if something sells well, they can’t really
get anymore in time, because they have to place another order, whereas, if we have a warehouse in Europe and stock our product there, it will help our distribution.”
Lotto sees Etonic as a solid springboard for further U.S. expansion. “The acquisition will for
sure help Lotto bolstering its position in the U.S. through Etonic,” said Andrea Tomat.
(Continued on Page 2...)
INSIDE PSR:
• Store Merchandising: Balancing the
Image of Your Store and Your Brands
• Succession Planning
• Doctor’s Corner: The Myth
of Cushioning
• New Balance Gears Up for the Next
100 Years
While Etonic Refocuses on Running Specialty…
Specialty MARKETwatch
(...continued from cover)
anticipates Lotto’s Italian fashion sensibilities helping the Etonic brand, “They
“We will be able to continue and acceler- have very strong design resources in both
ate our ambitious expansion plans. The
Italy and in China that will help us. In
acquisition
will
generate
China we tended to outsource everything,
important synergies, in
whereas they have a pretty big presparticular in research
ence in China, which will once
and development and
again make us more
also in distribution
valid and powerful.
[of] Lotto’s products,”
They have materiTomat continued.
als expertise that
we have been seeking
Lotto currently has a
and they have several
distribution agreement in the
employees
in Taiwan that
Etonic’s Jepara
U.S. with The DCS Group which
focus on materials.”
expires in 2007. After that, all Lotto products will be distributed by Etonic’s infra- Both Seeaman and Tomat are very posistructure and their existing sales force.
tive about the change and are committed
a young dynamic company. Lotto was
purchased by this current group around
‘99 and they have built it up, much they
way we have started to build up Etonic,”
said Seeman. “So there’s a shared history
there, there’s a shared understanding of
what we’re doing, because they just did it
with their brand.”
to making the cultures work together. “I
think the cultures fit very well. Actually,
the people get along very well. They are
company is set to reach sales in the range
of $30 million in 2006 and to double the
turnover in three years time.”
In addition to the distribution help both
in the U.S. and across the pond, Seeman
SGMA Spring Market to Host ELITE Conference…
The inaugural SGMA Spring Market
(scheduled for June 11-13, 2007 in Las
Vegas), will focus on four categories: Footwear (specifically running shoes), Performance Apparel, Spring Team Sports, and
Fitness (especially home fitness). To further enhance networking and dialogue
within each focus segment and within the
industry as a whole, the show will feature
a series of conferences and events such
as The ELITE Specialty Running Store
Conference and the TAG Buying Show.
In addition, the Spring Market will host
the World Federation meeting and the
SportsOneSource Investor Conference.
The ELITE Specialty Running Store Conference will provide more value-add for
the running specialty retailers making the
trip to Las Vegas to meet with key vendors
including Asics and New Balance, which
have both signed on as key sponsors for
the SGMA Spring Market.
“June will be a key period for the running
community as most shops get their first
look at new product for Spring 2008,”
says James Hartford, president and CEO
of SportsOneSource, LLC. “Our mission is
to provide the platform and events that
make the week a total success for run-
2
Looking ahead, Tomat has big plans for
both Etonic and Lotto. “Our goal is to significantly increase the Lotto presence in
the U.S. as we do consider this area strategically important. As to sales, we expect
important results in the second half-year
of 2007 and to achieve a worldwide sales
turnover of €500 million ($650 mm) by
2010,” said Tomat. “Regarding Etonic, the
2007
ning specialty retailers and vendors by supporting the show with
targeted content, entertainment,
RUNNING SPECIALTY CONFERENCE
and activities that enable all participants in the market to connect and
As for the SGMA Spring Market, President
cooperate, while providing tools that will
Tom Cove stresses that the show was
enable them to compete more effectively.”
developed by the SGMA for its members
and the bottom line is not a main focus.
The ELITE Specialty Running Store Conference, which will run in conjunction
“We are different from lots of other [events]
with the trade show, will deliver content
and a lot of other people do shows well, but
and information specific to the needs of this is all about the members. It’s memthe specialty retailer. The presentations
ber-owned,” says Cove. “The profit initiaover the two-day event will focus on Oper- tive is not the same. We certainly have
ations, Financial, Merchandising, and
to make it a reasonable financial model,
Product Trending.
but the goal is to generate an opportunity for people to do their business and
SportsOneSource has also planned an
to do it better. Any net assets we would
adventure race as part of the ELITE con- get, we’re going to plow right back in to
ference and will have exclusive network- our programs because that’s what we do.
ing receptions and dinners that provide
We’re member-owned, member-driven,
an opportunity for running specialty ven- and member-decided.”
dors and retailers to connect after a busy
day on the show floor.
States Cove, “We want [the show] to be
a good business decision for the people
The ELITE Specialty Running Store Con- involved, who can then feel like it makes
ference will be conducted in the Venetian sense for them to support the industry. A
Ballrooms, and Treasure Island has been
strong, vibrant show that reflects where
designated as the ELITE Specialty Run- the industry should be going, and reflects
ning Store hotel for the duration of the
a relevant, reasonable model of a trade
conference and the trade show.
show, is good for the industry.”
Performance Sports RETAILER
EDITORIAL
Editor-in-Chief
Judy Leand (646-654-5058)
[email protected]
December 2006 • Volume 2, Issue 2
Managing Editor
Kris Versteegen (704-987-3450)
[email protected]
Contributing Editors
Lou Dzierzak, Andy Kerrigan,
Matt Powell
*****
Feature
4
ADVERTISING
Group Publisher
Store Merchandising: Balancing the
image of your store and your brands...
James Hartford (704-987-3450)
[email protected]
Associate Publisher
Samuel Wender (646-654-4464)
[email protected]
Account Managers
Robert Z. Feiner (646-654-4991)
[email protected]
MarketWatch
Sam Selvaggio (646-654-7465)
[email protected]
6
Succession Planning
9
Doctor’s Corner: The myth of cushioning
10
*****
SportsOneSource, LLC
President & CEO
James Hartford
Chief Information Officer
New Balances gears up for the next 100
years
6
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
*****
Other SportsOneSource Titles:
SGB
Hunting Business
Outdoor Business
The B.O.S.S. Report
Sports Executive Weekly
Footwear Business Update
SGB Update
Specialty Market Update
© SportsOneSource, LLC
PO Box 480156 | Charlotte, NC 28269
704-987-3450 | fax: 704-987-3455
Performance Sports RETAILER
3
Specialty FEATURE
Store Merchandising: Balancing the
image of your store and your brands
At Outdoor Divas in Boulder, Colo., merchandising strategy reflects the needs and expectations of a specific customer...
by Lou Dzierzak
I
n the retail environment, every square
foot needs to contribute to the store’s
financial success. Finding the right
balance between an inviting, friendly,
open store layout and maximizing sales
per square foot is definitely a challenge.
Product displays, point of sale
systems, and merchandising play
a key role in creating a personality for the store. In most cases,
the personality is a blend of the
owner’s design elements and display systems provided by shoe and
apparel brands sold at the store.
Branded displays often improve
the visual look of a store. Steve
Kaufman, editor of Visual Merchandising
&
Store
Design
explained, “A lot of small retailers are dependent on what the
brands will give them for point of
sale. Many retailers tend to wel-
4
come that. It’s one thing they don’t have
to go out and get, design, figure out or
get made. For small retailers with small
budgets, limited expertise, and not a lot of
space, the systems provided by the manufacturers have always been valuable.”
While branded displays provide benefits
to the manufacturer and retailer, they can
also be instrumental to the customer. “It’s
important for the brands and it’s important for the retailers but it’s also important for the consumer. Any time you can
help the consumer make things easier to
understand, the display is working. For
us to cut through the clutter and carve
out some space where the consumer can
say there’s Brooks, that makes a lot of
sense,” offered Peter Mannos, Brooks
Sports, director of retail marketing.
Louis Hsiao, president/CEO of Concept Designs, a 12-year-old point of
purchase consulting firm, understands the needs of both retailer and
manufacturer. “There’s an identity
struggle. Stores are trying to establish a consistent look and POP is
designed around specific products.
The problem is compounded by the
sheer number of products they have
to deal with.”
Flexibility is one key to ensuring that
branded displays are used. Mannos,
Performance Sports RETAILER
explained, “Shops are small with limited
space. You have to give them something that
works on slat wall, grid wall and works in
a window. Everything we develop from our
smallest pieces all the way to the fixture program have multiple uses in mind so you are
not limiting the retailer by only giving him
a single use piece. The worst thing in the
world is to give something they can’t use. It
goes right out the back door or put away in
the back.”
The physical structure of a display has to
serve the retailer’s staff as well as the consumer. “Visual merchandising has to be
subtle and instantaneous, it’s important
that you get the message across and get the
customer’s attention very quickly,” Kaufman
said. Understanding how a consumer will
interact with the display influences design
and placement. “It could be set up to be
museum like where it almost visually uninvites the customer to interact with it. After
the customer has interacted with the product, do they understand how to put it back?
Designing for simplicity is a key thing,”
Hsiao explained.
From the retail staff’s perspective, the
mechanics behind the display are just as
important as the product that’s eventually
placed on it. Hsia acknowledged the
concern. “We understand that if a
display is not simple enough to put
up in a couple of minutes, the frustration level in itself may prevent
the display from going up. Quality,
ease of set-up, changeability, flexibility, seasonality; there’s a lot of
different variables that go into display design.”
In the big picture, visual merchandising influences the consumer
the moment they walk through
the door. “All shoppers need basic
information. Where are things,
what’s on sale, what does this cost?
It shouldn’t be a secret. Retailers
should take pains to make sure
those questions are answered,”
offered Kaufman.
In Kaufman’s opinion, the biggest
mistake retailers make is overlooking the
perspective and mindset of the customer.
“Shoppers are making hundreds of instantaneous decisions starting with do I want
to walk in, why do I want to walk in, once
inside do I want to stay, which way should I
turn? Why are they coming into your store?
Are they price conscious, brand conscious?
Are they just browsing,
often in a hurry? What
do they want from the
shopping experience?”
Kaufman noted that
when the store understands its core constituency, lighting, music,
and layout can be controlled to make the customer feel more comfortable. Mannon believes
the time pressures of
day-to-day management
pushes store design far
down the list of priorities. “I always encourage
retailers to ask a friend
who can be honest with
them to visit the store
and tell them how they
feel about the store. “It’s
a sea of merchandise, I
feel claustrophobic and
I can’t move through the
aisles, I don’t understand
Performance Sports RETAILER
how you have arranged your merchandise.
One of the healthiest things you can do is to
get that feedback.”
Another common problem is stifling traffic
flow by packing in too much merchandise in
an attempt to generate more sales. “It’s an
easy mistake for retailers to pack every available inch with merchandise. Top, bottom,
ceiling, floor, windows, its image overload.
It’s like Las Vegas inside a 1,200 square foot
store. It’s good to have some negative space
to allow people to walk around and give their
eyes a rest,” explained Mannos.
Kaufman adds, “you can’t show all your
merchandise, be selective and make a quick
emotional connection with the customer.”
Mannon offers another way to increase customer interest. “A lot of retailers need to
remember to rotate their merchandise. Keep
things fresh by taking the same goods and
presenting them in a new way. If the store
looked this way five months ago, repeat customers don’t want to see the same things in
the same spots. Put on the consumer hat.
What’s going to excite me when I come in.”
In the end, knowledge of the customer will
dictate the best way to merchandize the
products the store carries. “Know who the
shopper is and what they want when they
walk in the door. Make it informative, attractive and perhaps modern and interactive,”
Kaufman suggested.
5
Specialty MARKETwatch
Succession Planning:
Are you ready for life after retail?
The romantic ideal of running off into the sunset can be a harrowing prospect in real life.
by Kris Versteegen
S
tarting a small business is one
of the most difficult and most
rewarding experiences a person
can have. Creating, refining, and mastering a successful business plan can take
years. Watching that plan come together
and become a profitable, self-sustaining
business venture makes that work worthwhile. Many specialty running store owners have dedicated their entire lives to
creating their shop and the last thing an
owner wants to do is sell off their inventory and close the doors when it is time to
retire. And yet, without considerable prior
planning, this could easily be the case.
There are several options for retailers to
consider when it is time to retire, each
has advantages and drawbacks. Putting the store on the open market is the
most obvious choice, but depending on
the economic environment, a sale could
be difficult. Another option is to sell to
a trusted employee, but without financing or a third party investor, this option
6
could also be difficult since many shop
employees do not posess the financial
wherewithal to purchase a shop outright.
There are other options that can maintain
the stores integrity and at the same time
guarantee a safe retirement nest-egg for
the founders.
Small and Medium Retail
Smaller retailers may feel that their
options are limited when it comes to planning financing and organizing a retirement
plan that ensures the on-going health of
their business. However, there are several
viable plans that can accomplish both of
these objectives, one specifically designed
for small business owners.
SIMPLE
For small to medium business owners
who are looking for the easiest way to
involve employees in ownership and create a retirement plan for themselves, the
IRS has created a special “turn-key” plan
called the Savings Incentive Match Plan
for Employees, or SIMPLE Plan. SIMPLE
plans were created when Congress passed
the Small Business Job Protection Act of
1996 as a means for small business owners to look after their employees, who
make up nearly 40% of the U.S. workforce. According to the IRS, under SIMPLE, both employer and employee can
make contributions to a 401(k) plan or
Individual Retirement Account. Employers can choose whether or not they want
to offer company stock along with other
stocks and mutual funds.
Perhaps the biggest advantage of SIMPLE
plans is the ease of set-up. The IRS provides all forms for both the employer and
employee and the cost of maintaining a
plan can be kept to a minimum because
little outside help is required. Eligible
employers can start a SIMPLE plan by
using either IRS Form 5304-SIMPLE, IRS
Form 5305-SIMPLE or by using an IRSapproved alternative form provided by a
financial institution. While this plan was
Performance Sports RETAILER
designed to be self-service in nature, it is still
highly advisable to discuss the implementation of any employee savings plan with a
financial consultant, especially if company
stock is included in the 401(k) or IRA.
Employee Stock Ownership
Plans
According to the National Center for Employee Ownership, an ESOP is an employee
benefit plan operating through a trust that
accepts tax-deductible contributions from
the company to accumulate company stock.
This stock is then allocated to accounts for
individual employees. This allows employers
to make tax-free contributions during profitable years and employees are given ownership in the company with little or no financial
contribution on their part. The owner then
sells shares of the company to the ESOP, liquidating a portion of the sweat-equity built
into the business over the years.
The ESOP can acquire both new and existing
stock. The trust can also borrow money to
purchase the stock, with the company repaying the loan by making tax-deductible contributions to the ESOP. If the ESOP will own
more than 30% of the company, the selling
owner can defer taxation on the capital gain
from the sale by reinvesting the money into
securities of most U.S. corporations. So, the
liquidated sweat equity can be re-invested
into an IRA, or similar stock-based retirement plan free of taxes.
ESOP’s also provide a dependable buyer for
the company. With an ESOP in place, the
owner usually receives a fair valuation, and
it can be initiated at the decision of the selling owner, rather than relying on market
conditions. For many small retailers, outside
events like rising gas prices can seriously
impact the macro-economic environment.
This can cause owners to delay retirement
until these conditions improve or simply sell
their business for much less than it is worth.
ESOP’s can be implemented early and gradually transfer ownership, creating a stable nest
egg for owners and a reliable, experienced
management team that shares the founder’s
core values for the business.
ESOP’s are expensive to install and maintain
and are financially best suited for large single
store retailers or small chains. Owners can
Performance Sports RETAILER
expect an initial investment of up to $20,000
and annual expenses of several thousand
dollars due to complex legal regulations that
require a tax attorney.
Franchisees
Owning a specialty running store that is
part of a larger franchise can present its own
unique challenges when it comes time to
retire. In some cases, it could be very difficult
to sell a franchised store due to contractual
obligations and various ownership requirements set forth by the franchise. However,
many franchisors have thought through this
issue and already have plans in-place for
their franchisees to retire and still maintain
their store’s presence.
It is important to realize that many of the
terms and conditions attached to a franchised
store are designed with the express purpose
of keeping a store in business once the owner
retires. Closing the doors and liquidating the
inventory is not in the best interest of the
corporate franchisor and many are willing to
help store owners find a qualified buyer or
set up a succession plan that can help the
owner retire. “We spend a lot of time helping our retailers transition out of their businesses –at some point in time everyone needs
to deal with this reality and think about their
ultimate retail exit,” said Tom Raynor, president of Fleet Feet. “Even the people who will
be running their stores until they are carried
out in a box, they need to think about what
happens to the shop once they’re gone.”
Raynor said that there are two questions that
Fleet Feet asks any store owner who is looking for an exit strategy – when do you want
to retire and what is the current valuation
of the business. “There are a limited number
of options for transitioning out of specialty
retail stores. If they are not worth anything,
they are very hard to sell, but they are also
very hard to sell if they are worth a lot. It is
very difficult to find a qualified strategic buyer that is willing to pay the amount of money
many retailers need to retire.”
Fleet Feet works at matching up sellers with
buyers on an individual store basis and even
provides financing for some deals. “Does the
owner want to finance an acquisition for the
buyer? Usually not. If there is a gap between
what the owner wants and what the buyer
(Coninued on Page 8...)
7
Specialty MARKETwatch
(...Coninued from Page 7)
wants to pay, we work on filling that gap,”
said Raynor. “We do some financing of
deals, some brokering, and sometimes a
combination of the two.”
Raynor said they also help non-Fleet Feet
stores transition out of their businesses,
even helping owners set up financing for
their managers to buy-out the business.
“About 18 or 19 of our current store owners are former store employees. They used
a combination of owner – bank financing,
or in some cases we financed the deal,
and in other cases we guaranteed the
loan with the bank,” he said. “Sometimes
we buy the business and allow the managers to buy it back based on earn-outs
and cash flow. Even with non-Fleet Feet
stores we find a buyer for them and they
become part of the franchise.”
Selling Your Business
If retirement is a year or two away, a
direct sale may be the simplest option,
assuming there is a buyer willing to pay.
It is often considered a “parachute plan”
by many retailers, but this option carries
the highest risks. There are countless stories of retailers who spent years building
their business with plans to sell it in the
future only to find no buyers. At the same
time, there are stories of profitable retailers who timed the market perfectly and
sold their business for much more than
they thought possible. Unfortunately, the
former is more common than the latter.
The direct sale is considered by many to
be the riskiest option because the valuation of any company is totally dependent
on market conditions and the sometimes
seasonal profitability of the company. As
most retailers have learned, profitability can be heavily dependent on not only
weather, but also the economy, the political climate, and even fashion trends.
There are a wide range of business brokers that specialize in selling small retail
shops and chains, but few do much more
than list “business opportunities” on a
website. Perhaps the most important step
any small retailer can take is to hire a
qualified broker to sell their shop for them.
Only one in every 400 parties who express
interest in a business actually buys that
business. A qualified broker can help sift
through offers and contracts to ensure
the best possible deal. Many buyers may
even hire former owners as consultants to
get the company running smoothly after
the transaction. Consulting fees and conditions of employment can be worked into
the final sales contract. Other than taxes,
commissions or listing fees, there are few
expenses involved with a direct sale and
usually no maintenance fees.
Management Buyouts
Management buy-outs are a form of leveraged buy-out where a retailer’s management team receives funding from a private
equity firm and/or borrows additional
funding to acquire the company from
the original owner. In return, the private
equity firm usually receives a substantial
stake in the business. Private equity firms
generally prefer management buy-outs
over other types of acquisitions because
the company is already established and
the managers running it know the business and the market
it operates in.
“This type of deal can
either be initiated by
the current owner
who is selling the
business or the management team looking
to buy control from
the current owner,”
said Jason Myler, a
financial consultant
with BB&T Capital
Markets. “Depending
8
on the financing source, if it is a sale of
equity, new management can expect to
receive equity in the range of 10% - 30%
of the company’s share. Also, the private
equity firm backing the deal may or may
not require the existing owner to keep a
small equity ownership going forward.
Essentially they may ask the owner to
keep some skin in the game or put his
money where his mouth is regarding the
management team.”
Any size or type of company can go
through a management buy-out, but if
private equity or bank financing is needed, established, profitable retailers with
solid business plans are better suited for
this type of transaction.
The advantages for the selling owner are
clear. The business will continue on with
a trusted management team trained by
the former owner; the lump-sum payment
creates a nice nest-egg to supplement any
retirement savings; and there are no complicated maintenance fees or paperwork
to complete year after year.
The lynchpin in the deal is the acquiring
managers. Some retailers are ill-suited for
this type of transaction because management turnover is high. Without an experienced and motivated management team
to begin the process and take-over when
the owner leaves, this type of arrangement is nearly impossible to execute.
According to Myler, the market conditions
are currently almost perfect for this type
of deal. “Private equity and debt financing
is currently as readily available as ever
historically,” he said. “Who knows how
long this will last, but banks are certainly
extending their credit requirements - particularly in larger and marquee deals and private equity funds continue to raise
record amounts of capital and are eager
to put this money to work in ever-competitive deal processes.”
There are a multitude of options for retailers to consider and different programs
work better for different retailers. Perhaps
the most important rule of thumb is to
plan ahead for retirement even more carefully than planning ahead for the next
season. Otherwise, you could be left with
nothing more than a liquidation sale.
Performance Sports RETAILER
Doctor’s Office:
The Myth Of Cushioning
by Paul Langer, DPM
W
hile I was a podiatry student
working in a running shoe
store, I began to read medical
literature to understand why the runners
I was seeing in the store had such different reactions to the shoes I showed them.
I wondered how is it possible that the
same shoe could be described as too soft
by some and too hard or even just right by
others? What I found in the medical literature was contrary to what I had come
to believe as a runner. In fact it took 6
months of research and reading and rereading dozens of studies before I began to
believe what gait researchers had uncovered. The cushioning of running shoes
can actually cause more problems than
it solves and for most runners stability is
more important than cushioning.
Runners instinctively seek out well-cushioned shoes to protect from the high
impact forces of running and it’s hard to
argue with how good it feels to put something cushy under the feet. However, gait
researchers have discovered that cushioning comes at a cost. The cushioning of
running shoes may actually interfere with
the body’s ability to efficiently absorb
impact. If cushioning is so good for us,
why are runners experiencing the same
type of injuries at the same rate in 2006
as they did back in the first running boom
of the early 1970’s? Haven’t all these new
“cushioning technologies” made the shoes
better at protecting runners from getting hurt? Some researchers argue that
humans do not need cushioned running
shoes to help absorb impact; rather, the
primary function of running shoes should
be to maximize proper joint alignment so
that impact can be absorbed naturally.
The first concept that must be grasped
when trying to understand how cushioning can have consequences is that runners run differently barefoot than they
do in shoes. Eighty percent of runners
are heel strikers when they run in shoes
but barefoot runners land on the midfoot or forefoot. Why is this? Because
it hurts to land on the heel when runPerformance Sports RETAILER
It’s not about the cushion, but about the stability according to Dr. Langer.
ning barefoot, but it does not hurt when
wearing shoes. Impact is absorbed differently when landing on the heel – bones
and joints work harder in heel strikers to
absorb impact, while muscles and tendons work harder in midfoot and forefoot
strikers. (One way to tell them apart is
that midfoot and forefoot strikers have
much more developed calf muscles than
heel strikers.)
thing as too much cushioning.
All running shoes have less stability than
the naturally functioning foot. Think
about it: runners land with 2-3 times
their bodyweight on a platform of foam
that raises the foot off the ground and
compresses unevenly. The foot will “wobble” from side to side upon impact. This
wobble is one component of pronation.
You might ask, “If cushioning is so bad
then why do some runners get hurt after
the shoe’s cushioning wears out?” The
answer is that running shoes do not wear
evenly – they wear out sooner in the highest impact areas, such as the lateral heel
and forefoot, and this uneven wear begins
to exaggerate the runner’s biomechanical
imperfections that then lead to injury.
Benno Nigg, a Ph. D researcher in Canada, found that runners pronated twice as
much in running shoes as they did when
running barefoot. So, what this suggests
is that a runner who appears to demonstrate a normal arch height and no evidence of overpronation can become an
“overpronator” in a running shoe. Likewise, a runner who overpronates when
walking barefoot will pronate even more
running in shoes. Many neutral runners
think that stability shoes with medial
posts will make them “roll out” (or underpronate) but Nigg and other research has
shown that even stability shoes are less
stable than our feet.
Stabilizing features such as medial posts
may serve only to slightly decrease some
of the inherent instability of running
shoes. There’s almost no such thing as
too much stability, but there is such as
So how much cushioning is too much?
No one can say for sure, but shoes that
allow the feet and legs to function more
naturally keep the feet close to the ground
and have stabilizing features to enhance
natural impact absorption. Thinner midsoles and medial posting are structural
features that assist in natural gait.
As a practicing podiatrist, I place 70-80%
of runners in stability shoes. The only
runners I place (or keep) in cushioned
shoes are those who have consistently
shown that they do not tolerate stability
or those who are currently running injury free in cushioning shoes. It can be
hard to convince runners that they need
to temper cushioning with stability. So, I
always emphasize that they do not have
to sacrifice all of the cushioning they are
used to; they just need to find shoes that
combine the proper amount of cushioning
and stabilizing features.
Paul Langer is a podiatrist with Minnesota Orthopaedic Specialists. He serves on
the clinic advisory board of the American
Running Association and is an editorial
board member of Running & FitNews.
9
New Balance Gears Up For Next 100
by Kris Versteegen
Twenty-five years ago, New Balance intro- who discovered the benefits of running,
duced the 990
challenged themn 1906, William Riley founded the
series. It was the
selves to complete
New Balance Arch Company. Sixty- first $100 athlet- “For more technical product you a marathon, and
six years later, when current chair- ic shoe. In May, would like to think the color won’t committed themman and chief executive officer Jim Davis
a limited special
selves to life long
influence the buying decision, but
bought the company, six employees built edition version
fitness. Passionat the same time an ugly shoe isn’t ate consumer loy30 pairs of shoes each day. In 2004, New of the 992 was
Balance employed 2,600 employees and
introduced
to going to get you anywhere.”
alty to a specific
worldwide sales reached $1.5 billion. That
commemorate
model must be
Bryan Gothie
year, New Balance built 36,000 pairs of
the 25th annitempered against
New Balance Product Manager retailers’ and new
shoes in the United States.
versary of the
series. The Cenrunners’ demand
From the first day in business, New Bal- tennial 992 Limfor innovation.
ance has always addressed the needs of
ited Edition features a special heel wrap
runners. In 1976, four years after Davis announcing the 1906-2006 centennial
Bryan Gothie, New Balance 992 product
purchased the company, Runner’s World
and American flag imagery embroidered
manager explained, “The 991 is the shoe
named the NB 320 its #1 shoe. The brand on the tongue.
most people associate with New Balance,
loyalty earned by New Balance then
the shoe was in the line for four years.
remains strong today.
The 990 series carried millions of runners
Every time we went to update it, we decided to put it off for another year, because
Paul Kidd (center) with his brother (left) and father-in-law, Arthur Hall (right).
it was doing so well. Don’t try to fix something that’s not broken. It was a real
challenge to create an update that had
enough changes to warrant a new purchase but at the same time not alienate
anyone, because we had a winning package. It was a big challenge for the entire
team to try to address both those needs.”
Specialty MARKETwatch
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The 992 includes many of New Balance’s
best technologies like Abzorb SBS cushioning in the heel and forefoot, C-Cap
forefoot and polyurethane in the heel for
support, and N-durance outsole for maximum durability.
Long known for color choices of grey,
white and navy, tech and function take
priority over fashion at New Balance. The
‘F word’ is getting some attention today.
Gothie offered, “For more technical product you would like to think the color
won’t influence the buying decision, but
at the same time an ugly shoe isn’t going
to get you anywhere. Designing for fashion requires making sure you are hitting
the trendy colors and that you are using
the meshes that are not only functional,
but give a nice aesthetic appeal. At the
end of the day, the consumer is going to
be drawn to what looks good on the wall.
That being said, when they take it off the
wall, if you can deliver the performance
and fit they are looking for, you’ve won.”
Performance Sports RETAILER
Prompted by retailers and consumers, a
refreshed attention to design and details is
coming to New Balance. “It’s an interesting
time for us. We’ve always had the function
aspect down and for the last few years we’re
starting to pay a little more attention to the
design. The challenge is finding the balance
between the two. We’re still maintaining the
function aspect but finding ways to incorporate design elements,” Gothie said.
New Balance’s width story has been integral
to the success of the brand.
“It’s the one thing we are known for more
than anything else,” Gothie said.
A strong point of competitive differentiation
and a clear consumer benefit, New Balance
has continued to invest in making the selection of widths work.
Gothie described the approach taken by
New Balance, “Over the last few years, we’ve
focused on that. Now we can achieve a better
fit through the width. One of the ways we’ve
done that is by building the sole units on
multiple width platforms. We build a narrow
and medium on one sole unit and a wider
sole unit for the larger ones so that you get
a more true fit.”
The running market continues to draw
new enthusiasts every day. New Balance,
like most running-oriented brands, created
broad lines to address the needs of different
kinds of runners. Newcomers require special
attention to make their introduction to running successful.
New Balance Through the Ages
New Balance made its first athletic footwear foray in 1938 with a running spike made
for the Boston Brown Bag harriers, a local running club. The cost? $7.00. By the
early ‘40’s, New Balance was custom manufacturing athletic shoes for running, baseball, basketball, tennis, and boxing.
In 1960, New Balance unveiled the Trackster (top), the first running shoe available in
multiple widths.
In 1976, the 320 (second
from top) splashed into the
running scene with a #1 rating from Runner’s World and
quickly accelerated sales to
$1.3 million.
The 990 (third from top)
launched in 1982 and was
the first athletci shoe to
retail for $100. Initial projections called for 5,000
pairs in the first year. In
just six months, the company received orders for
50,000 pairs.
The 8515 (below)
features NB Zip, New
Balance’s patented
responsive
cushioning
technology
supported by strategically located shockabsorbing struts.
Gothie discussed New Balance’s approach,
“New runners are a big focus for us. The
education is the most important part. We
have to make sure they are not turned off
to the sport because they were put into a
wrong shoe and have a bad experience. It’s
important for consumers to go to the performance sport retailers to make sure they get
fit in the correct type of shoe.”
The limited edition 992 celebrates a century
of innovation and brand loyalty. Like a runner training for a marathon, the road ahead
offers new experiences.
“We are definitely seeing things change faster. In the last couple of years, all the brands
are stepping up their game,” Gothie said.
Performance Sports RETAILER
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