Performance - SportsOneSource.com
Transcription
Performance - SportsOneSource.com
PSR_0207 2/19/07 3:03 PM Page 1 Performance Sports ts RETAILER News and Information for the Running and Triathlon Market A SportsOneSource Trade Publication Garmin Nearly Doubles GPS Sales… Garmin managed to nearly double the volume of GPS sales during fiscal 2006, with total revenues jumping from just over $1 billion at the end of 2005 to $1.77 billion at the end of 2006. Fourth quarter sales were $611 million, a 91% increase over last year. Income grew to hit $180 million. The outdoor/fitness segment revenue increased 16% to $80 million in fourth quarter, driven by the expanded fitness product lines. Gross margin in the division was flat for the quarter at 56% while operating margins remained stable at 40% of sales. The company feels that its primary growth drivers for the future will be in the running and cycling markets. Double-digit revenue growth is anticipated across all business segments in 2007. In 2007, the company expects to invest approximately $150 million in advertising to promote the Garmin brand. Garmin will continue to invest heavily in R&D as well. Garmin revenues for 2007, are expected to increase 41% to over $2.5 million with earnings per share growing only 15%, up to $2.70 per share. This will be due to a decline in operating margins, which should come in at 27%, down 430 basis points from this year. The company is anticipating 20% revenue growth from marine and outdoor/fitness. The outdoor/fitness and marine segments are both expected to have flat operating margins next year. February 2007 Asics Opens Tokyo Running Shop, Sees Global Sales Jump 17.6% Shortly after reporting its financial results for the third quarter of 2006, Asics Corporation extended its owned-retail operations to include the performance sports market with the opening of its first-ever running specialty store on February 11. Asics Store Tokyo opened exactly one week before Tokyo Marathon 2007, the firstever mass marathon in Japan. The 280 square meter store is located in Tokyo’s Ginza district, targets ¥150 million (about $1.5 million) in sales during its first year in operations, and even includes a locker room with showers for customers to use. The location is close to the Imperial Palace, where many people go for a run during lunch or after work. On the aforementioned financial side of things, Asics Corp. saw global third quarter net sales increase 17.6% to ¥46.8 billion ($397.4 mm) from ¥39.8 million ($339.8 mm) last year. Globally, sales of footwear increased 21.6%, apparel sales jumped 14.0%, and equipment sales slipped 3.3% during the third quarter. Net income increased 57.3% to ¥5.2 billion ($43.8 mm) for the quarter, from ¥3.3 billion ($28.0 mm) last year. In the U.S., sales increased 27.5% to ¥9.9 billion ($83.9 mm) from ¥7.8 billion ($66.2 mm) last year. Operating income for the United States increased 4.5% to ¥934.0 million ($7.9 mm) from ¥894 million ($7.6 mm) last year. In other Asics news, the company is also updating their branding with a new brand logo and new slogan. Both are designed to reflect a faster, more modern feel. The new slogan is ‘Sound Mind, Sound Body’ and stems from the meaning behind the Asics acronym, “Anima Sana In Corpore Sano,” which translates to, “A Sound Mind in a Sound Body.” “Globally, we feel like this is an appropriate time to update the Asics brand mark. We wanted the slogan to represent the momentum, increased visibility and success the company is going through right now,” says Gary Slayton, VP of marketing for Asics America Corporation. INSIDE PSR: ■ New Balance Targets Specialty Running Retailers ■ The Technology Race: New Electronics Bring Running Specialty Retailers New Customers ■ Retail Profile: The Running Revolution ■ The Doctor’s Office: The Impact of Running Shoes on Gait PSR_0207 2/20/07 1:54 PM Page 2 Performance Sports ts RETAILER EDITORIAL Group Editorial Director News and Information for the Running and Triathlon Market CONTENTS Judy Leand (646-654-5058) jleand@sportsonesource.com February 2007 Managing Editor Kris Versteegen (704-987-3450) kris@sportsonesource.com 10 Contributing Editors Lou Dzierzak, Andy Kerrigan, Matt Powell, Marianne Bohnslay, Dr. Paul Langer ADVERTISING Publisher Samuel Wender (646-654-4464) swender@sportsonesource.com Account Managers Robert Z. Feiner (646-654-4991) rfeiner@sportsonesource.com Sam Selvaggio (646-654-7465) sselvaggio@sportsonesource.com News 3 ■ New Balance Targets Specialty Running Retailers ■ 4 Fox River Hires Xany Gibson as Creative Director President & CEO James Hartford Chief Information Officer Mark Fine VP Research & Development Gerry Axelrod Director Information Management Ruben Desangles Manager Database Operations Cathy Badalamenti VP Business Development Bill Bratton Director Business Development Neil Schwartz Regional Business Manager Barry Gauthier Controller, HR Manager Carol Wexler Nike Inc. Steps Boldly Toward Future Raynor Inducted Into Running USA Hall of Champions ■ SportHill Promotes Berg ■ ■ 5 ■ ■ TNF Places New Focus on Endurance Runners Spenco Shifts Marketing Execs Feature The Technology Race 6 Other SportsOneSource Titles: New Electronics Bring Running Specialty Retailers New Customers Sporting Goods Business Hunting Business Outdoor Business The B.O.S.S. Report Sports Executive Weekly Footwear Business Update SGB Update Outdoor Business Update Departments 10 Retail Profile: The Running Revolution 14 The Doctor’s Office: The Impact of Running Shoes on Gait © SportsOneSource, LLC PO Box 480156 | Charlotte, NC 28269 704-987-3450 | fax: 704-987-3455 6 PSR_0207 2/19/07 3:04 PM Page 3 New Balance Targets Specialty Running Retailers With NBx In an effort to refocus attencushioning tion on dedicated runners, New Balance is launching a multi-faceted program called NBx, a reference to “running raised to the X power.” As part of the initiative, New Balance has created the NBx performance division within the company, and is rolling out a major campaign comprised of print advertising, online elements, outdoor guerilla advertising, event sponsorships and inINTRODUCING store support. On the product side, the company’s Spring ’07 elite running footwear Cushioningx and apparel collection will be branded NBx. “The NBx initiative came to fruition this past fall,” says Dave Shelbourne, New Balance’s global team leader of the NBx division. “The launch package for footwear, and $36 to $120 for apparel. overall New Balance business. We hope to Driving all of this is a dedicated NBx triple sales within the elite running channel NBx includes a large in-store presence as well as online banners and programs. It’s a team that is focused exclusively on the in the next five to six years. In the long multi-faceted approach.” He adds, “We will running specialty business and is based in term, we want to become a bigger player in also do some marketing activities around New Balance’s manufacturing and R&D the channel with both footwear and apparel.” the Boston, New York and Chicago facility in Lawrence, MA, a 45-minute drive In other company news, New Balance’s Marathons, and will put on some grassroots from the company’s Boston headquarters. outdoor footwear initiative is gaining a New Balance is investing heavily into the stronger foothold, thanks to a new strategic events, as well.” The marketing campaign is designed to NBx program because the company wants partnership with W.L. Gore & Associates, capture the essence of the dedicated runner, to place more focus on the independent maker of Gore-Tex waterproof/breathable and features photography portraying an performance sports retailer. “This is not a technology. For Fall ’07, New Balance is actual “day in the life” of real runners— volume-driven initiative. It is more of a offering five models that feature Gore-Tex those who push themselves to improve their strategic, brand-building initiative,” says XCR: the 1110 trail runner, 1200 hiker, personal performance. Print ads show a Shelbourne. “NBx accounts for about 2 multi-sport 950 and 1091, and the 977 male and a female runner, along with cam- percent of total revenue in terms of the country walker. paign tags highlighting key running motivations such as desirex, heartx and dedicationx. The full campaign tag line reads, “NBx is everything New Balance knows about running. Raised to the X power.” Shelbourne reports that the Fall ’07 NBx line consists of 14 footwear models: 10 for Xany Gibson has joined Fox River as including Tommy Hilfiger and The performance road running and four for trail creative director. Gibson previously Walking Co. She received her underrunning. There are also 12 apparel pieces, was part of the product development graduate degree in industrial design six each for men and women. “For Fall ’08, team at Mountain High Hosiery in engineering and her MBA from we may expand apparel and have up to 15 Sand Diego, CA, creating lines for a Instituto Tecnologico de Costa Rica in styles each for men and women,” he says. variety of casual and athletic programs Costa Rica. Retail prices range from $85 to $135 for Runners are lucky. We get to discover something important. How good can I really be? That’s pushing yourself to the X. Welcome to the club. Look at any marathon field and you know that not all runners are alike. That’s why we’ve created the ABZORB® family of cushioning technologies. Whether it’s impact protection, durability, or complete heel to forefoot cushioning like in the 1061, you can run your way. We’ll adapt our cushioning to you. Find it at newbalance.com. ©2007 New Balance Athletic Shoe, Inc. Printed in the USA. keyword search: 1061 Specialty NEWSwatch Everything New Balance knows about running. Raised to the X power. The NBX Collection is an elite group of footwear and apparel for runners who push themselves, and their performance, to the X. Because we push the performance of the entire collection just as far. The 1061 performance cushoning shoe combines two different types of cushioning from the ABZORB® family of technologies, because one kind of cushioning simply can’t meet all of a runner’s needs. And the Saba Short uses a Phantom Waistband™ and seamless brief so chafing never hinders your performance. There’s much more to the NBX story: more products, more technologies and more athletes pushing themselves. Find it all at newbalance.com. Fox River Hires Xany Gibson as Creative Director Performance Sports RETAILER 3 PSR_0207 2/19/07 3:04 PM Page 4 Specialty NEWSwatch Nike Inc. Steps Boldly Toward Future Nike Inc. held their bi-annual Investor Day entitled inline stores, factory outlets, and e-com“The Customer Decides” in Portland and made merce, to increase to 15% of sales or $3.5 a number of very important and unusual billion, up from the current 12%, or $1.7 bilannouncements to the attendees. The first lion. With the current $1.7 billion coming from big news was that the company now targets more than 400 company-owned stores and erevenue to reach $23 billion by fiscal 2011, commerce platforms, it would seem that Nike spread across its entire brand portfolio. Several will need to open more than the 100 mall-based industry analysts remarked that it is very doors to double that sales volume. uncharacteristic for Nike to be so bold and so Parker said, “In today’s world, power has shiftspecific in an announcement like this. ed away from traditional brand growth models to Management expressed this goal in a nearly religrowth driven by the power of consumers. No gious format with the symbol “23:11.” one is better positioned than Nike to take advanOver that five-year period the company tage of this. We will drive growth and build expects to get 75% of this growth from the Nike shareholder value by embracing the power of the brand and will be driven by a “consumerconsumer and creating a new marketplace.” defined” strategy. The company will be focused However, Nike still expects the vast majority on “creating premium consumer experiences of its sales to be generated from the wholesale built on product innovation, brand leadership side of its business. Nike’s retail partners are and elevated retail presence.” This elevated expected to generate more than 80% of the $23 retail presence will come through Nike’s billion in anticipated sales in 2011. Nike manexisting Niketown stores as well as a new Mark Parker, agement said that it will work closely with key mall-based retail format that will be rolled out Nike Inc. president and CEO. retail partners to “create more elevated and shortly in several key markets. While this differentiated retail experiences.” The commessage was anticipated in the financial market, the announcement pany expects to begin executing segmented concepts with key was relatively low key. Over the next three years, the company retail partners in the United States over the next two years. anticipates opening approximately 100 mall-based Nike-only Parker was clearly in charge of the show, stating “As the market stores worldwide, half of which are expected in the U.S. over leader, we have the ability and the responsibility to take the industhe next three years. try and our partners to a new and better place. The ability to conThe stated intention of the retail initiative is “to elevate the brand nect with consumers is the single most important competitive experience, position the Nike brand in the world’s premium shop- advantage in our industry today.” ping locations, and test innovative retail concepts that can serve as Parker and Trevor Edwards, Nike VP for global brand and category a growth catalyst for the specialty athletic retail industry.” management, detailed the new category alignment strategy, which is “Becoming a better retailer will help us be a better wholesale headed by Edwards. VPs have been created across footwear, apparpartner,” said Mark Parker, Nike Inc. president and CEO. By 2011, el, and equipment in six core categories: running, basketball, soccer, the company expects Nike direct-to-consumer sales, which include women’s fitness, men’s training, and sport culture. Raynor Inducted Into Running USA Hall of Champions Tom Raynor, chairman and CEO of Fleet Feet, Incorporated, was inducted into the Running USA Hall of Champions at their annual awards dinner in San Diego. Raynor was recognized for his leadership, innovation and outstanding contributions to running. Raynor, who has owned Fleet Feet, Incorporated since 1993, has 30 years of running retail, manufacturing and sports experience. Tom has worked on the vendor side of the business with Nike, Brooks Sports and Wilson Sporting Goods. 4 Tom’s retail experience includes years of operational experience, as well as ownership of multiple running specialty stores. At the awards banquet attended by over 200 leaders from the running industry Raynor said, “I’m honored and humbled by this award and by my inclusion in this wonderful group of people. I accept the award on behalf of the owners of our locally owned and operated stores around the country and want to thank all of my colleagues at Fleet Feet, Incorporated, our store associates and our vendor partners for allowing me to work in such a wonderful and rewarding business environment.” SportHill Promotes Berg SportHill, Inc. promoted John Paul Berg to national & international sales manager. Berg previously worked in accounts services and has also served as the national sales manager. SportHill founder and president, James Hill says, “JP brings a strong background to SportHill in both retail sales and managing our sales network. We look forward to his expanded role as we continue our growth.” Performance Sports RETAILER PSR_0207 2/19/07 3:04 PM Page 5 Dean Karnazes’ 50 marathons in 50 states in 50 consecutive days this year scored media coverage across the country for TNF’s running program and product. Spenco Shifts Marketing Execs Spenco Medical Corporation has made strategic personnel changes within its marketing and research & development teams to better address the outdoor, sports, footcare and medical markets. The Spenco marketing team is now headed by Cindy Mitchell, who has been promoted to consulting, director marketing. Mitchell has been with Spenco since September 2006 as the medical footcare marketing consultant. Mitchell will report to Steven B. Smith, CEO and chairman of the board, Spenco Medical Corporation. Talia Herman has been promoted to marketing manager for sports and specialty while Gerard Mayne is the new marketing manager for medical and food, drug & mass markets. Both Herman and Mayne are responsible for product development and communication strategies in their respective markets. Performance Sports RETAILER TNF Places New Focus on Endurance Runners For the past three years, The North Face has been making a concerted effort to grow their footwear program in the outdoor industry with trail running, hiking, approach and lifestyle products. This past year, the company shifted its tactics somewhat and began to include endurance running in their marketing message and product R&D budget. The company was able to make a major splash in the national media with Dean Karnazes’ 50 marathons in 50 states in 50 consecutive days this year. Karnazes was successful in his quest and in the process scored media coverage across the country for TNF’s running program and product. Steve Rendle, TNF’s president of the Americas, said that the product, PR and marketing push surrounding Karnazes feat was considered a strong success. “I think that now with Dean’s 50/50/50 success, we have been given permission to address the endurance running market in a new way. We are looking at some more road-specific product for the core endurance athlete, whether that’s a marathon or more,” he said during an interview at Outdoor Retailer Winter Market in Salt Lake City. The company will be redesigning a large portion of their footwear line this year to address this market. The product should be available to retailers in early 2008 and available for sale to consumers the following year. 5 PSR_0207 2/19/07 3:04 PM Page 6 The Technology Race: New Electronics Bring Running Specialty Retailers New Customers by Kris Versteegen Specialty FEATURE R 6 unning accessories cover a broad spectrum of products, from reflective safety gear to visors to electronics to hydration. Recently, new advances in technology are boosting sales of two of these categories, hydration and electronics. In many ways, these two categories are also working together, with hydration system designs evolving to accommodate the latest generation of MP3 players and GPS-enabled fitness monitors. According to data collected by SportScanInfo, heart rate monitor sales increased nearly 30% last year, while sports watch and stopwatch sales increased 17%. “ Ed Griffin, owner of Fleet Feet in Syracuse, NY agrees. “We have been playing around with a lot of different manufacturers that you don’t traditionally see in running retail stores. Garmin has been huge on the GPS front and we have always carried some of the Nike products that measure time and distance, but we have really started to increase our selection in this category.” he says. “We didn’t carry the footwear that was originally rolled out with the Nike+ product, but now they have the Bowerman product and that is more in-line with what a specialty running retailer like us would carry. That is driving some busi- we have also had a big pick-up in other electronics, like GPS with Garmin, which uses satellites to tell you how far you are going, how fast you are going, and your heart rate all in one unit. Running hydration is another category that is showing some success. The biggest story has been the impact of the Nike+iPod product. Since its introduction, the overall running accessories category has grown ten-fold. Christina Leung, product developer for The Running Room, says that she is seeing this shift in technology directly impact the retail floor. “The Nike product is definitely the most recent piece to hit the market with their Nano/Nike+ kit, and a lot of people are picking up on that technology because they all have Nanos already and now they can make it do one more thing,” she says. “However, we have also had a big pick-up in other electronics, like GPS with Garmin, which uses satellites to tell you how far you are going, how fast you are going, and your heart rate all in one unit. Both of these pieces have been phenomenal for us. It’s really brought a new life to running. It’s an area that is growing and hasn’t really taken sales away from anywhere else – it’s just added to the business.” ness, but I think Nike is still getting that message across to people.” This new generation of electronics, particularly the integration of music into fitness monitors, has changed the general design and functionality for other accessories. Hydration system and pack designers are now looking for new features that make MP3 players and other electronics easy to access. Accessory companies are changing their designs to accommodate iPods, and the demand for this type of product continues to grow. “We have a very fast growing business here. We just bought a building and are expanding from 3,000 square feet to 10,000 square feet. Part of the reason for that is we are just maxed out on what we can carry, primarily in footwear and accessories,” says Griffin. “These two areas have seen much higher growth than any of the other categories. It seems like it doesn’t matter what kind of new accessory we bring in, it continued on page 8 ” Performance Sports RETAILER PSR_0207 2/19/07 3:09 PM Page 7 Camelbak The Alterra is designed to be stable and light while delivering enough capacity for food, shed layers, and water for several hours of running. In addition, the hydration compartment has insulation to keep liquid cool for hours and an integrated waist belt pocket offers on-the-go access to gel or quick snacks. SRP: n/a Ultimate Directions The Access Groove has a single canted bottle holster with a 0.6L bottle for easy water access, plus a “personal media pocket” for easier access to an iPod or MP-3 Player. An exit port guides headphone cords while a neoprene pocket holds MP3 players of all sizes. SRP: $26.00 Nike The Nike+ system adds speed and distance functionality to any iPod or iPod Nano with an easy “plug & play” sensor that communicates with an accelerometer that integrates with an Nike+ shoe. The kit communicates directly with the iPod, which can tell you distance, speed, calories burned and time on screen, or verbally through the headphones. SRP: $30 Performance Sports RETAILER 7 PSR_0207 2/19/07 3:09 PM Page 8 Suunto Specialty FEATURE The T3 (left) and T4 (middle) can be coupled with Suunto’s Foot POD (right) to give accurate speed and distance read-outs in any terrain. The Foot POD is an accelerometer that mounts on top of the laces of any running shoe and communicates with the wrist-top unit wirelessly. The T3 uses Suunto’s proprietary Training Effect, or “TE Scale” to indicate the intensity of a work-out. The T4 also offers this feature but adds the “Suunto Coach” feature, which recommends workouts based on your personal fitness profile and customizable goals. SRP: T3 $149; T4 $199; Foot POD $99 8 continued from page 6 sells. Some of them are more technical and others are not much more than a belt clip for you iPod.” Russell Gill, owner of the Charlottesville Running Company agrees with many of Griffin’s points. “When you look at the accessories category from a price point comparison, it is really right up there with everything else in the store. It’s changed dramatically – really in just the last 18 months because it is much more electronics based now,” he says. “Runners are looking for training specificity – how far, how fast, lactic threshold, VO2 Max – the more information the better, as long as it’s easy to use. These new GPS-based products are providing that. It’s easily our number one growing category, and when you add music into that it’s just huge.” While this technology is clearly a selling point for certain customers, the market is segmented into different groups. Griffin pointed out that not everyone who walks through the front door is ready for the latest and greatest in fitness technology, but with a little education, many will find that it makes the workout experience more satisfying. “We had an 85-year-old gentleman in our store today and he was still trying to figure out how to place a call with his new cell phone that he just bought. So with all technology, depending on where you are in the cycle, it really dictates what you are willing to buy. For example, customers who are my son’s age just ask, ‘does it do what I want?’ If it does, then they buy it. You also have the middle age consumer who is just figuring the technology out and needs a little more education. For them, this type of product has been very successful.” Regardless of the average age or technological aptitude of a customer-base, specialty running retailers are in a perfect position to generate sales in this rapidly growing category. The educational, service-oriented atmosphere inherent in a specialty running store lends itself perfectly to the complexities of almost any type of new running technology. Performance Sports RETAILER PSR_0207 2/19/07 3:10 PM Page 9 Garmin The 305 uses a new lightweight design that “wraps” the GPS antenna around part of the wrist for a better view of the sky, improving reception during training. The ANT wireless heart rate monitor eliminates cross-talk with other devices to reliably measure and send heart rate data and the fact that speed and distance is measured via GPS allows triathletes to seamlessly transition between sports without resetting the unit. SRP: $376.91 Ultimate Directions The women’s specific Wink (pictured) and men’s Wasp are designed for runners who like to stay out all day. A 1.9L reservoir is coupled with a stable harness system and an additional six liters of carrying capacity for food and a storm shell. The women’s specific version uses Ultimate Directions’ “S” shaped shoulder straps with a narrower neck line and increased padding as well as a shorter torso length. SRP: $75.00 High Gear The Enduro 2 Mini (pictured) and Max are both designed for outdoor athletes with all the features of a “true running watch” plus some extras like the stainless steel plate and mineral glass lens that make it perfect for the off-road runner. The chronograph will continue to run through the longest ultra-marathon, with a 100 hour limit. MSRP: Mini $60; Max $70 FuelBelt The MP3 Hydration Eliminator is a waist pack with two 7 oz bottles for hydration and a durable neoprene pocket with headphone jack that fits all MP3 players. The adjustable cordura straps with front Velcro closure keep the load stable on- or off-road. SRP: $23.96 Performance Sports RETAILER 9 PSR_0207 2/20/07 1:54 PM Page 10 Retail Profile: Specialty MARKETwatch The Running Revolution 10 From left: Tim, Heidi and Chris Schenone, co-owners of Running Revolution. by Marianne Bhonslay R unning specialists continue to debate about whether an ardor for running or an aptitude for business is the most essential attribute for retail success. In the case of The Running Revolution, a relative newcomer to the specialty landscape, that discussion seems irrelevant since the store’s three joint owners are each accomplished runners with prior career accomplishments. With experience ranging from hightech to sales, communications and customer service, the husband and wife duo of Tim and Heidi Schenone teamed up with Tim’s brother, Chris Schenone, to launch The Running Revolution in Campbell, CA. Now in its fifth year, the 1,500-square-foot store is rapidly gaining repute as one of the top running shops in the Silicon Valley region. The launch of a specialty running shop in the competitive Northern California market in 2002, during the spiraling economy anointed as the post-boom bust, appeared risky. Yet, the Schenones contend that 2002 provided the optimum opportunity to launch the business. “The economy was at the bottom, and it was a courageous decision to open at that time,” says Chris, 48, who grew up with his younger brother, Tim, in the Almaden Valley section of nearby San Jose. “Studies have [shown] that successful businesses often open at the bottom of an economic cycle. We picked Campbell and felt we were not infringing on any other specialty retailer. This was a pocket that clearly filled a need. There has to be a geographical sense of why you are in your chosen location.” Any apprehension was further mitigated by the three partners’ collective career experience. “We were all in corporate America up until four-and-a-half years ago,” says Chris, referring to his brother and sisterin-law. “We are not a part of the running store owners that have been doing this for 15 or 20 years, and that looked at [starting] a business as a hobby and rode the wave. We’ve been more businessoriented, and you have to be in a mature market like Northern California.” That commerce acumen was accrued from Tim’s work in sales and customer service for Qwest Communications; Heidi’s five-year stint in technical support with The Integer Group based in Golden, CO; and a 15-year career for Chris in sales and marketing, most recently with the Carpinteria, CA-based Forms & Surfaces prior to launching The Running Revolution. Performance Sports RETAILER PSR_0207 2/19/07 3:10 PM Page 11 “We all went into the business very confident,” says Heidi. “All three of us have a strong work ethic. And I can speak for Tim and I that we never truly enjoyed the high-tech industry.” However, the technical industry experience remains invaluable. “We’ve sold high-end technical products to begin with. We have no fear or trepidation about selling a $150 running shoe. The more gadgetry, the more technology, the more comfortable we are,” says Chris. That business orientation maintains a specific running nuance—one that “ allows the Schenones to boast that at least one of them has run in every shoe The Running Revolution sells. Heidi, 36, who graduated in 1992 from the University of Northern Colorado in Greeley with a degree in dietetics, has competed in 10 marathons, and ran a personal best of 3 hours, 22 minutes in P.F. Chang’s Rock ‘N’ Roll Arizona Marathon in January 2004. Tim, 40, ran cross-country for two years at the University of Colorado at Boulder, where he graduated with a degree in communications in 1995, and cites his personal best marathon as 3:53.37 in Los Angeles in 1990. He now also coaches marathoners. Chris, meanwhile, trained with renowned coach Bill Dillinger at the University of Oregon, where he graduated in 1982 with a political science degree. Although he did not compete on that university’s elite running team, he practiced with the squad. The backgrounds of such a notably ambitious trio are thus far fruitful for the startup retailer. According to Chris, annual sales for The Running Revolution “hover” at around $1 million. Launched with approximately We all went into the business very confident. All three of us have a strong work ethic. And I can speak for Tim and I that we never truly enjoyed the high-tech industry. ” $200,000 of private money and without business loans, the store began earning profits in its third year of operation, Chris adds. Like most running specialists today, the store caters to a clientele that varies from elite athletes striving to trump their own personal bests, to unfit, overworked executives about to embark upon a walking or running regimen on doctors’ orders. According to Heidi, an estimated 10 percent of the company’s sales are derived from elite runners, while approximately 65 to 70 percent of sales are to “average” runners and those “trying to stay in shape.” Walkers account for the remaining 15 percent or so of the store’s business. The bulk—nearly 80 percent—of The Running Revolution’s sales come from footwear, Chris reports. While the Schenones will likely strive to continued on page 12 The Running Revolution caters to elite athletes, average and beginning runners, as well as walkers. Performance Sports RETAILER 11 PSR_0207 2/20/07 1:54 PM Page 12 Specialty MARKETwatch continued from page 11 12 increase apparel sales, which offer higher margins, the prominent footwear business testifies to the owners’ command of the store’s product and a willingness to work with customers to ensure they are running in the proper shoes. “People come into the store and categorically say, ‘You are never going to be able to fit me,’” relates Chris, who, along with his two partners, routinely identifies customers by name, shoe size and brand preference, and also recites the time required for their drive to the store. Yet referrals—a portion of the business built slowly but steadily— remain The Running Revolution’s most reliable asset. “Our business base, day-to-day, is referrals,” says Heidi. The Running Revolution nurtured that base by hosting clinics and health fairs at, for example, local Silicon Valley goliaths such as eBay. The grassroots groundwork paid off. About two years ago, an eBay manager walked into the store with the first of six members of his division, saying he wanted his coworkers to “be more healthy and take less sick days,” recounts Heidi. The eBay manager “escorted” each employee into the store, purchasing running or walking shoes for all of them, she adds, and referrals continue to venture into the store. “They are good operators of the business,” says Jim Hoff, VP of sales for Asics America Corporation, which has supplied The Running Revolution for four years. “They gained ‘Gold Account’ status quickly by the way they represented the brand and the volume they did. They attacked the [local] running community, as well. And their background gives them instant credibility with consumers. They have the ability to talk about pronation or supination, a pain in the leg or a strain. They are able to relate to their customers from a personal standpoint.” In the quest to ensure runners and walkers are exercising in the proper footwear, biomechanics is also a forté The Running Revolution is now in its fifth year of business. of The Running Revolution. Most customers undergo a gait analysis on a treadmill in the store. Given the gadgetry, a sophisticated, analytical approach, and their own personal athletic accomplishments, the three owners strive to create a “lifestylefriendly” running environment, says Chris. Adds Heidi, “We make people feel that every question is a good question. No question is stupid. If you have two feet, you deserve to be in the store.” Perhaps one of the most formidable challenges for the Schenones has been adjusting to the gambling-style method of ordering footwear product. “You’re never sure, year to year, Performance Sports RETAILER PSR_0207 2/19/07 3:10 PM Page 13 which models are going to move,” says Chris. “Writing futures and contracts six months out has been a challenge. We’ve been better than average writing futures. Our relative newness to the industry has been beneficial. We did not come in with preconceived notions. We did not carry the Nike Pegasus for 15 or 20 years, so we stock the shoe wall only with the best shoes available right now. If a shoe doesn’t meet the requirements from year to year, it gets the boot.” “They are good buyers,” notes Asics’ Hoff. “When we talk about the technical aspects of the various features and benefits of products, they understand them.” Even more of a novelty is that The Running Revolution merchandises its shoe wall without prices—no shoe carries a price tag. The owners say their emphasis is on fit, not price, and that few customers complain. “We find price to be an almost non-existing factor,” says Chris. “We perform an individualized shoe fitting process.” Once the price is relayed verbally, the Silicon Valley clientele rarely balks at a $120 or $150 shoe. After all, add the Schenones, this is the technology- Performance Sports RETAILER crazed hemisphere in which runners relish the chance to spend $369 on a Garmin 305 [GPS device], replete with distance, pace and calorie calculator, and a satellite compass. The Schenones profess, however, that they will be the first to inquire as to whether a customer finds enough merit in the additional $40 cost of a $130 shoe, for example, versus a $90 shoe. The store’s average footwear purchase price is $90 to $95. And even when outfitting a hard-tofit foot, says Chris, the store’s policy is to “gently persuade and never coerce.” According to Tim, The Running Revolution’s location—“a baseball throw away” from the Campbell-Los Gatos Creek Trail—offers the retailer a “life-line to the fitness world.” Heidi adds that the store involves itself in an estimated 20 to 25 events each year, including last year’s inaugural San Jose Rock ‘N’ Roll Marathon and the San Jose International Triathlon. All three partners are members of various local triathlon clubs, she adds, and regularly attend those clubs’ meetings. Concludes Chris Schenone, “We all love to run and that translates through our business.” Referrals are a key part of the business. Above, Tim Schenone (wearing a blue Italia jacket) serves store customers. 13 PSR_0207 2/19/07 3:12 PM Page 14 The Impact of Running Shoes on Gait by Paul Langer, D.P.M. Specialty MARKETwatch A runner will land with two to three times their bodyweight on every foot step and take between 1,000 and 1,500 steps per mile. In running, only 1 foot is in contact with the ground at a time and that contact phase lasts for only 0.2 to 0.5 seconds. The shock wave of each foot strike travels through our bones at more than 7,000 MPH according to Cyril Harris, Ph. D. The numbers are staggering if you think about them especially when you multiply them by your bodyweight and weekly mileage. But the human body is amazingly capable of absorbing that impact very efficiently, as long as nothing interferes with the body’s ability to do so. Through a precisely-timed chain of events that occurs on every step our body dampens the vibrations and absorbs the impact forces generated as our feet strike the ground. Pre-activated muscles tense before the foot contacts the ground in anticipation of impact. Next, the plantar fat pad, a specialized cushion on the ball and heel of the foot compresses as the foot contacts the ground then muscles tense further to dampen vibration and stabilize joints. The subtalar joint (the joint under the ankle) pronates and helps convert the vertical impact into a torsional or twisting force as the ankle, knee, hip and spine all flex in sequence to absorb the impact. It is an incredibly complex chain of events that is so specialized that none of us do it in exactly the same way (which is one reason that gait is so hard to study). And of course, the way our body absorbs the impact is influenced by the shoes we wear. Research has shown that shoes alter our natural running gait in a number of ways. The most dramatic differences are seen when comparing barefoot running to running in shoes. Runners in shoes have longer running strides, pronate more (twice as much according to Benno Nigg, Ph.D.) and are more likely to land on their heel. These 3 effects change the alignment of the runners’ joints and also affect the timing of how the joints absorb impact. But since running gait is so unique to the individual these effects are not always predictable. transitions from an artificially hard surface such as concrete to a soft surface such as grass. There is no simple way to predict how a runner will adapt to different shoes or surfaces, and this is the reason it can be more difficult to fit some runners into the right shoes. For the majority of runners, shoes that have some form of stabilizing features such as medial posts or dual density mid-soles will offer more protection than shoes with more cushioning. This is because the more stable shoes, by combining cushioning and stabilizing features, are better at minimizing some of the differences between natural impact absorption and the changes caused by shoes. It may sound counterintuitive, but more cushioning is almost never the answer to most running injuries. When treating an injured runner in clinic, I always keep in mind that their body is very capable of absorbing impact very efficiently if it has proper alignment. So I most often recommend shoes that have a combination of stability features with the cushioning. The stability features help maintain alignment by decreasing pronation. Occasionally, I will consider stabilizing the shoe by adding a firm insole - not a cushioned insole - or an orthotic. While assessing pronation involves much more than looking at the arch, there does seem to be some vague correlation between arch height and pronation. Since pronation occurs very early in the impact absorbing chain of events, selecting the proper category of shoe is, for now, the first and best starting point for helping a runner. Do not recommend more cushioned shoes to runners who are injured. Instead - when appropriate - help them by steering them to a more stable shoe or to a firm insole in their current shoe. Paul Langer is a podiatrist and serves as a clinical faculty member at the University of Minnesota Medical School. Advisory Research has also found that runners unconsciously change their running gait in response to different shoes. For example, they might land more on the forefoot in a firmer shoe and land on the heel in a softer shoe. This same effect occurs when a runner 14 Board He is a member of the Clinic of the American Running Association and is the author of Great Feet For Life: Footcare and Footwear For Healthy Aging. Performance Sports RETAILER PSR_0207 2/19/07 3:12 PM Page 15 RUNNING SPECIALTY CONFERENCE See N 2008 R ew Spring unning P at SGM roduct A Spring Marke t! Fast Facts on THE ELITE Running Specialty Conference When was the first THE ELITE Running Specialty Conference held? THE ELITE Running Specialty Conference was first conducted in November 2004 in New York City to coincide with the New York City Marathon. It then moved to Austin, TX, in November 2005. Where is it this year and when? THE ELITE Running Specialty Conference will be held June 11-13, 2007 at the Venetian hotel in Las Vegas, NV. There will be a welcome reception on Sunday evening, June 10, as well. Why did the conference move from its November dates? November made a lot of sense when the conference was first held in conjunction with the NYC Marathon because so many retailers and manufacturers were already attending the race and expo. The conference was moved this year to a twice-a-year event to coincide with the key product launch periods for the running market. June is a critical time to review new Spring 2008 footwear product, and January 2008 is an important time to review the Fall apparel offerings and footwear updates. How else has THE ELITE changed? The conference has been opened up to more running specialty shops and is also open to sales reps that call on those shops. The reps play an integral role in the relationship between the shops and the brands and it’s important for them to attend, as well. Who will be attending THE ELITE? The conference is only open to running specialty stores and to any manufacturer that services the running specialty market. Is there an expo at the conference? THE ELITE has partnered with the SGMA Spring Market, providing retailers and manufacturers with a better opportunity to showcase and review new Spring ’08 product and any last-minute needs for the Fall ’07 season. The conference will be held in the Venetian ballrooms, and the SGMA Spring Market is at the Sands Expo, which is connected to the Venetian. Where will we stay during the conference? The Treasure Island hotel has been designated as THE ELITE Running Specialty Conference headquarters hotel for the June event. It is across the street from the Venetian and the Sands and is connected by a convenient sky bridge. The opening night reception, a Monday party, and the Tuesday banquet will all be held at Treasure Island, as well. How can a retailer receive an invitation to attend? Just contact Michelle Libby at 561.615.0240 x237 or e-mail your request to: retailinvites@SportsOneSource.com. How can a manufacturer get involved? Contact Sam Wender at 646.654.4464 or e-mail him at: swender@SportsOneSource.com. Where can I find more information? Just go to the Web site at: www.EliteRunningConference.com. The Elite On Line Resource Center: www.eliterunningconference.com Brought to you by: Performance Sports RETAILER News and Information for the Running and Triathlon Market PSR_0207 2/19/07 3:14 PM Page 16 RUNNING SPECIALTY CONFERENCE SAVE THE DATE THE ELITE Running Specialty Conference, 3rd Edition JUNE 11-13, 2007 The Venetian in Las Vegas, NV Co-located with SGMA Spring Market THE ELITE Running Specialty Conference is an excellent blend of panel discussions, presentations, and open dialogue with the ultimate purpose of sharing ideas to improve the specialty running channel. The program functions in a positive, proactive spirit of cooperation between top retailers and manufacturers. Spring t w e N e uc Se g Prod n i n n u 2008 R SGMA at t! Marke Spring Brought to you by: Attendance is by invitation only. For retail invitations please contact: Michelle Libby at 561-615-0240 x237 retailinvites@SportsOneSource.com For sponsorship opportunities please contact: Sam Wender at 646-654-4464 swender@SportsOneSource.com The Elite On-Line Resource Center: www.eliterunningconference.com Performance Sports RETAILER News and Information for the Running and Triathlon Market