insideinsight

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insideinsight

INSIDEINSIGHT
TM
SPORTS. SPECIALTY. RETAIL. BUSINESS.
Thinking Inside The Box
Athletic shoes, whose
sales were driven by
Classics last year, get
new tracking website.
PAGE 07
Tuesday,
February 16 / 2016
Outpacing
Growth in U.S. retail
sales to exceed
economic growth in
2016.
Transforming
Delta Apparel
scores strong gains
from Salt Life and
Junkfood brands.
T
he needle on the Adidas AG compass
is moving, helped by rising sales and
profits in many parts of the globe, the
naming of a new CEO and a subsequent rising stock valuation. Since announcing last month that Henkel’s Kasper Rorsted
would become its new CEO Oct. 1, Adidas
AG has erased a discount in its price-to-earnings ratio dating back nearly two years.
Now, weeks before Herbert Hainer’s last
year-end conference call as CEO, Adidas is
on the attack and prepared to live up to its
new FY16 forecast that calls for double-digit
revenue and operating profit growth.
Last week, the company said it had exceeded top- and bottom-line goals for FY15 with
a 10 percent increase in currency-neutral
Group sales to an equivalent of $19.0 billion
on double-digit revenue growth in Western
Europe, China and Latin America. Adidas
brand sales were 12 percent higher for the
year on a currency-neutral basis; Reebok sales
increased six percent.
Still, the Americas, so long dominated by
its arch rival, is one region where the Three
Stripes must show it can just do it better.
Especially with women.
SPONSORED BY:
To that end, the Three Stripes, which
recently unveiled a “I’m Here to Create” ad
campaign highlighting female sports icons
engaging in unconventional forms of training,
is embarking on a women-only subscription
service for premium running and training
products called Avenue A.
There are subscription services in other
product segments. Think Graze for snacks,
Birch Box for beauty products and Bark Box
for items for Fido.
But the specialness of Avenue A, which will
deliver four boxes annually to subscribers
loaded with with three to five premium Adidas products (footwear, apparel and accessories appropriate for the season) at $150 per,
is that it was the idea of an Adidas employee
and developed by small internal team over the
last 10 months.
“…It represents our people starting to look
at and challenge conventional ways of thinking, creating and doing,” said Mark King,
adidas Group North America president, who
netted 442 ideas when he asked his Portland
staffers to “think outside the box” for ways to
improve Adidas’ running business. In the end,
“thinking inside the box” won out. n
Re-Organizing
Deckers Brands
splits portfolio into
two business units.
LISTEN TO
THE PODCAST
Dick Sullivan
The president and CEO of
PGA Tour Superstore takes
a swing at the growth of
the 24-door chain and the
game in 2016.
FEBRUARY 16, 2016 INSIDEINSIGHT
FROM THE EDITOR
Left in the Lurch
I
My faith in
retailers and
their respect
of customers’
valuable time
was restored
days later, at
least for a
little while.
recently came to understand why most men prefer
shopping online than going to the local store for the
same item. It’s called unnecessary waiting.
Brick-and-mortar retailers and businesses bemoan
losing faithful customers to the Net. Then they make them
wait in long lines for a single item or to pick up one they
already paid for at home. Not good customer service.
After deplaning at Orlando International Airport for
last month’s PGA Show, I found myself in line with 20 golf
pros waiting to pick up paperwork for rental cars that were
ordered online. The wait was nearly an hour for most. One
aggravated pro returned to the counter when his designated
car across the street had no keys in it. For another, there was
no vehicle in the space listed on his contract. Agents offered
no apologies for the waits or mishaps.
My faith in retailers and their respect of customers’ valuable
time was restored days later, at least for a little while.
At the Orlando Nike Premium Outlet store, associates,
borrowing a checkout maneuver regularly seen in Apple
stores, began plucking customers out of a long queue and
cashing them out quickly with handheld devices.
The Saturday morning before Super Bowl Sunday, the
local Costco was jammed with carts full of game snacks
and beverages. But every register line was open and
staffed with two associates to assure quick checkouts and
warehouse exits. Not a single customer in line complained.
In contrast, later that day in a supercenter of a large
discounter, three register lines were open despite dozens
of waiting-to-checkout customers. Costco could teach this
retailer a thing or two about how to treat the customer
waiting to pay.
Yes, the checkout experience is vital. Otherwise, brickand-mortar retailers may find themselves dealing with
more of what their online counterparts already contend
with — abandoned carts. n
INSIDE
INSIGHT
VOL.02 NO.04
SPORTS. SPECIALTY. RETAIL. BUSINESS.
EDITORIAL
Editor in Chief
Bob McGee / rmcgee@formula4media.com
Contributing Editors
Retail and Technology
Mark Sullivan / msullivan@formula4media.com
Sports Specialty
Cara Griffin / cgriffin@formula4media.com
Outdoor
Lou Dzierzak / ldzierzak@formula4media.com
Footwear
Jennifer Ernst Beaudry / jbeaudry@formula4media.com
Textiles and Sourcing
Emily Walzer / emilywalzer@sbcglobal.net
Team Sports
Michael Jacobsen / mjacobsen@formula4media.com
Publisher
Jeff Nott / jnott@formula4media.com
DESIGN
Design Director
Francis Klaess
Art Director
Mary McGann
Designer
Brandon Christie
ADVERTISING
Beth Gordon / bgordon@formula4media.com
Jeff Gruenhut / jgruenhut@formula4media.com
Troy Leonard / tleonard@formula4media.com
Katie O’Donohue / kodonohue@formula4media.com
Sam Selvaggio / sselvaggio@formula4media.com
SUBSCRIBE:
store.formula4media.com
INSIDE INSIGHT TM is a trademark of Formula4Media, LLC.
© 2016 all rights reserved. Inside Insight is published on
the first and third Mondays of every month, and is edited
for sports brands and retail management executives. The
opinions by authors and contributors to Inside Insight are
not necessarily those of the editors or publishers. Articles
appearing in Inside Insight may not be reproduced in whole
or in part without the express permission of the publisher.
Formula4Media, LLC, P.O. Box 23-1318, Great Neck, NY
11023. Tel: 516-305-4709. Annual subscription $249.00
rmcgee@formula4media.com
2
©2016 Formula4Media, LLC
www.insideinsight.com
HOT TOPICS
Differentiated Offers Net Best Results
C
Crocs is increasingly relying on knowledge
of its customers to tailor discounts.
rocs differentiated email offers during the
holiday season, offering some 30 percent
discounts, 20 percent off to others but no
discount to another group. The result: a two
times lift in revenue spent by site user, net of
promotions, says Custora. The statistic points to
the need for retailers to know as much as possible
about a shopper, including when he or she needs
a discount to make a purchase.
“It’s all about understanding what that
customer is going to do next,” suggests
Rick Kenney, head of consumer insights for
Demandware, which regularly offers new insights
on its blog.
One interesting fact about the 2015 online
shopping season in the U.S. — 50 percent of all
sales were generated on Black Friday and Cyber
Monday. That fact, says Kenney, shows retailers
that “they must bring their best early and with
urgency.” The latter could mean noting limited
availability or low stocks on a particular product.
Demandware also believes it’s crucial that
online shoppers be allowed to access their
shopping cart, the so-called “omni-channel wish
list,” from whatever device they access the retailer
from, whether it’s a PC, tablet or mobile device. n
Don’t Push the Panic Button
J
anuary retail sales data released from the U.S. Commerce Dept.
exceeded estimates, prompting some to suggest the U.S. is NOT
headed for a recession despite topsy-turvy markets. Instead,
consumers are showing resilience. Nonetheless, small business owners
last month turned less optimistic about economic prospects prospects,
according to a survey, due to waning optimism over future business
conditions and projected sales. And Wall Street’s negative impact on
401Ks and profit-sharing plans is already said to be hurting sellthroughs
of big-ticket and luxury items such as jewelry and luxury cars.
Still, the current, apparently firming, consumer sentiment could
prove to benefit everyday brands and products as the season moves
into Spring next month. That “sweet space” of brands, according to a
report from Seeking Alpha, includes Foot Locker, Nike, Skechers and
Columbia Sportswear and retailers such as TJX, Target and
Dollar General. n
4
Retail Pressure Mounting
A
seven percent decline in value of
the Chinese yuan over the last year,
according to a a recent published
report, has some apparel chains beginning
to formally request “cost reductions” or
discounts on their open-to-buy orders going
forward. No official word yet if this practice
has surfaced in the athletic apparel business.
It’s more likely large vendors in this space
will buy back leftover or excess merchandise
from a recent quarter to move through their
own DTC channel. Plus-size clothier Avenue,
according to the report, asked its vendors
for a hefty 10 percent discount on all orders
going forward. n
Where Innovation Meets Comfort.
WWW.IMPLUS.COM
©2016 Implus LLC. 2.16
INSIDE RETAIL
Cabela’s New Prez; Retail Ups and Downs
Cabela’s Promotes Scott K. Williams
to President
Scott Williams takes over at Cabela’s.
Scott Williams is elevated for the
second time in six months, likely
signaling that he will be the senior
executive face of the outdoor retailer
going forward and that Cabela’s isn’t
actively pursuing any merger talks or
negotiations to sell its business. More
should be known about the outdoor
retailer’s strategy under Williams Feb.
18 when it reports fourth quarter and
year-end results.
In mid-August 2015, Williams,
president of Fanatics for eight months
until Feb. 2011 and previously a
Walmart executive for almost five
years, was named EVP and chief
commercial officer for Cabela’s,
with the chain’s merchandising,
marketing, e-commerce and real estate
departments all reporting to him.
He stepped into the role as 17-year
Cabela’s veteran Briann Linneman,
then EVP and chief merchandising
officer, announced he was moving into
a strategic advisor role.
With his new president title,
Williams adds responsibility for
all U.S. retail operations and the
company’s Canadian business. Next
6
month, Cabela’s is slated to open its
sixth store in Texas and first in the
Houston market with a 72,000-squarefoot door.
NRF: U.S. Retail Sales to Grow
3.1 Percent in 2016
The annual forecast by the National
Retail Federation of 3.1 percent retail
sales expansion in 2016 is higher than
the 10-year average of 2.7 percent. The
trade group, which also see non-store
sales to increase 6-9 percent this year,
expects overall U.S. economic growth
to be “more of the same and uneven,”
rising 1.9-2.4 percent for the year.
Further, the NRF believes the
prospects for consumer spending
in 2016 are straightforward, with
increased spending largely coming
from a growth in jobs and not as much
from increased wages. Unemployment,
at 4.9 percent in January, is forecast to
decline to 4.6 percent by year-end.
“Wage stagnation is easing, jobs are
being created and consumer confidence
remains steady,” says Matthew Shay,
NRF president and CEO. “So despite
the headwinds are economy faces
from international developments –
particularly in China – we think 2016
will be favorable for growth in the
retail industry.”
Kohl’s Lowers Outlook, May
Be Considering Options
A promotional environment and
heavy discounting in the fourth
quarter impacted margins, revenues
and profits at the specialty department
store. Kohl’s, slated to formally report
fourth quarter results Feb. 25, earlier
this month lowered its profit outlook
range for fiscal 2015 by 10-13 percent.
KSS shares plunged as much as 20
percent to a seven-year low on the
announcement.
In late January, rumors surfaced that
publically traded operator of 1,165
stores might consider a leveraged
buyout or going private.
In a statement, the retailer blamed
a “very slow start” in early November
and “weaker-than-expected demand”
in January due to soft demand
for cold-weather products, for its
changed outlook.
The chain’s fourth quarter
comparable store sales edged 0.4
percent higher. Kohl’s said its online
orders and sales each increased 30
percent in the final periodTotal fiscal
year sales rose 1.0 percent to an
implied $19.21 billion.
Interestingly, the retailer cited
footwear, along with home, as its
strongest category in the fourth
quarter. For both FY14 and FY13,
Kohl’s generated an estimated 9
percent of its annual revenues from
footwear, or an implied $1.71 billion.
Zumiez Reports Tough January
The 658-door action sports chain
had lower sales and comparable store
sales in January, the final month of
its fiscal year. Comp store sales for
the four weeks ended Jan. 30 fell 4.6
percent as total revenues declined 2.2
percent o $43.2 million. Accessories,
men’s, footwear and hard goods each
achieved negative comparable sales
for the period; comps for the juniors’
category were higher last month.
Dollars per transaction and the
average unit retail (AUR) spent was up,
but units per transaction were down.
For all of fiscal 2015, Zumiez said
comparable store sales were down
5.3 percent.
INSIDE FOOTWEAR
Taking Stock In Kicks
Adidas Yeezy Boost 350 Low Oxford
S
neakerheads the world over
have a new “go to” website.
StockX, co-founded by sneaker
data website founder Josh Luber and
Dan Gilbert, founder and chairman
of Quicken Loans and owner of the
NBA’s Cleveland Cavaliers, debuted
days before NBA All-Star Weekend
and some basketball shoe launches
that coincided with the event.
The site, which pitches itself as a
“live bid/ask marketplace, or “stock
market” if you will, for buying and
selling limited edition, high-demand
sneakers. A key service of StockX,
which charges customers a seven
percent fee for selling sneakers on its
platform with a payment processing
company taking another three
percent from sellers on transactions
before they are paid via Paypal.
StockX will only allow unworn,
original boxed sneakers known
as “deadstock” to trade on its
exchanges. And the Detroit
company says it will not settle
“trades” until it has verified that the
sneakers are “100 percent authentic.”
On its launch day, the site
hoped to have more than 15,000
pairs of limited-edition sneakers
representing 3500 models available
Nike Air Max 90 Atmos Duck Hunter
for sale. At day’s end, StockX showed
it had 9574 portfolios representing
112,926 sneakers with a market
value of nearly $43.9 million. The
most popular shoe on Day 1 was the
Jordan 9 retro Statue with 53 sales.
But the biggest Market Mover over
the previous 72 hours was the Air
Max 90 Atmos Duck Hunter Camo
at $1407, up $797, or 129 percent.
The highest price kicks in the
StockX Marketplace? Jordan 4 Retro
Eminem Carhatt’s had no current
price lists, but the last pair sold for
$21,327. A pair of Nike Dunk SB
Low Paris were being hawked for
$10,015; Nike Air Mags “Back to the
Future” for $9012.
There are three Indexes across
the top of the website — the Jordan
Index, the Nike Index and EON
(Everybody Other Than Nike)
Index. The EON, an estimate of
U.S. resell sales over the previous
24 hours for all non-Nike shoes
tracked by site, was up 8.2 percent
on opening day. The Nike Index was
32 percent higher at 170,622; Jordan
was down 5.3 percent to 308,991.
“The online secondary sneaker
market has been around for
than 15 years, and it has grown
exponentially during that time,”
says Luber. “But…it was still using
outdated e-commerce platforms
designed in the ’90’s.”
While it’s still unclear whether
the key athletic brands will embrace
the concept behind StockX, the
betting here is yes. Besides the ability
to trade their wears, site users will
find historical price and volume
metrics, real-time bids and offers,
time-stamped trades and additional
analytics on every model for sale.
There will also be U.S. and global
sneaker news provided. StockX says
it has plans to eventually expand into
other consumer products that have a
natural need for a secondary market. n
U.S. Athletic Footwear
2015 Sales
Based on Dollars
Classics
Cross Training
Hiking/Lite Hiking
Running
Walking
Casual Athletic
h30%
h15%
h8%
h6%
h4%
i5%
Source: The NPD Group, Inc. / Retail Tracking Service
7
IN THE NEWS
Meb Keflezighi will remain
a face of Skechers’
Performance through 2023.
8
Skechers Eyes More Gains
From International, Apparel
Days before its first
sponsored Los Angeles
Marathon, Skechers issued
year-end results showing
32 percent annual revenue
growth to $3.15 billion and
fourth quarter revenues of
$722.7 million that surpassed
Street estimates by more than
four percent. Final period
wholesale revenues in the
U.S. rose eight percent to
$19.3 million and were up
22 percent for the year to
$221.8 million. The fourth
quarter domestic growth,
Skechers said, was fueled by
a 5.4 percent increase in pairs
shipped, a 2.5 percent gain
in average price per pair, a
double-digit increase in kids’
and single-digit improvement
in men’s and women’s.
The company continues
to expect high-single to
low-double digit growth in
the U.S. in first quarter, but
admits no retailer has yet
“ordered deep into the second
quarter” despite the brand’s
steady sellthroughs. Skechers
has tougher comparables to
meet in the second quarter.
The company expects to
accelerate comp gains in
the third quarter with fresh
products at back-to-school
and easier comparisons.
Internationally, Skechers
is forecasting the segment
to account for 50 percent
of its total business over
the next two to three years
versus 40 percent currently.
Much of the increase may be
generated in China, where
FY15 revenues were more
than $220 million in FY15,
up from $86 million in FY14.
International revenues rose
nearly 59 percent in FY15
to $405.2 million despite
currency headwinds in Brazil,
Canada and Chile that will be
alleviated in first quarter via
price increases. The company’s
combined wholly-owned
subsidiary business generated
a 19.5 percent increase in
the fourth quarter and 31.5
percent for FY15 with the
U.K. and Germany generating
the strongest dollar gains and
Benelux and Chile the highest
percentage gains.
Also, Skechers Performance
extends the contract of worldclass distance runner Meb
Keflezighi, 40, through 2023.
He became the official brand
ambassador and consultant
to the divisions first GORun
shoe in 2011.
Meanwhile, apparel, now
showing up in own stores in
the U.S., has the potential to a
bigger part of the company’s
overall business. Skechers’
senior management says it
will two to three years before
the segment has “significant
impact” on the brand’s
overall business.
Hanesbrands Remains
Bullish on Champion
Activewear
HBI is undeterred by a
warmer November and
December that slowed retail
traffic and caused its core
activewear sales to suffer a
12 percent sales decline for
the quarter ended Jan. 2.
Overall Activewear division
sales were down 1.3 percent
to $368.1 million in the final
period but up nearly 11
percent for the fiscal year to
$1.41 billion.
The warm temps and lower
retail traffic into December
prompted retailers to pull
back on re-orders, creating
an inventory buildup for
Hanesbrands. The company,
which remains on the prowl
for additional acquisitions,
says there “is no markdown
risk” from the excess apparel.
It’s likely some of the basic
cold weather goods, such as
fleece, that didn’t sell will be
carried over for the 2016-17
selling season. The company
will also slash offshore
production where necessary
as it moves to draw down
inventory levels this
fiscal year.
As for the Champion
brand, overall it ended up mid
single-digits for the year in the
sports specialty, mid-tier and
department store channels and
was up higher than that before
the unseasonable weather
hit. Overseas, the company
completed an acquisition of
the Champion business in
Japan last year. That market
should contribute close to
$100 million in revenues for
the brand in 2016. Back in the
U.S., the Champion brand still
has additional distribution
opportunities in the sporting
goods and mid-tier retail
channels, says Hanesbrands
COO Gerald Evans.
Overall, Hanesbrands is
forecasting 11-15 percent
earnings per share growth in
FY16 on 1-3 percent revenue
expansion to a range of $5.85.9 billion.
Delta Apparel Reshaping
Activewear Business
The South Carolina
company, which recently
reported first quarter
revenue growth from all
of its segments with the
exception of Soffe, is actively
transforming its Activewear
business as it continues to
realize strong gains from its
Salt Life and Junkfood units.
Delta had a strong,
positive response to its
fashion basics—fleece, snow
heather and softspun—
that helped fuel growth in
its catalog business. The
company is introducing a
new racerback, tank top
and enhanced color pallet
for spring. Meanwhile,
an expansion of Delta’s
Honduras manufacturing
operations with open-width
finishing is underway with
production set to commence
this month. Besides yielding
an estimated $2 million
in annualized saving from
the project, Delta says the
bigger plant will enable it to
“leverage internal capacity
instead of sourcing fabric.”
As for Salt Life, first
quarter sales rose 21.2
percent year-over-year,
bolstered by strong demand
for long-sleeve T-shirts and
lifestyle designs. A new
Salt Life aims to have
7-12 stores open in So.
California over the next
few years.
Snow Sports Sales Continue to Climb, Despite Headwinds
Snow sports racked up $4.5 billion
in sales last year, with specialty shops
responsible for generating more than
half, according to the SIA Snow Sports
Market Intelligence Report presented
at the annual trade gathering of the
snow sports community held earlier
this month. These are challenging
times for business; weather concerns,
environmental issues, political
transition, changing demographics
and economic sluggishness are all
factors facing snow sports retailers and
manufacturers. Adding to discussions
of climate change and how to engage
today’s Gen X, Gen Z and millennials,
was talk about SIA’s new trade show
dates for 2017, as well as the light
attendance at the 2016 event.
New technologies for apparel
and hard goods were introduced at
the Denver expo. Product for Fall/
Winter 2016 focuses on lightweight
performance, ease of use and comfort
features. In soft goods, versatility is key,
with functional textiles offering a range
of thermal solutions, weather protection
properties, and characteristics ideal for
today’s active consumer, such as base
layers with moisture management and
enhanced breathability in outerwear.
Avalanche safety was a hot topic
as too many lives continue to be lost
to avalanches. Also noteworthy, new
equipment that allows consumers to
stay connected whenever, wherever and
however they choose.
In terms of style trends, designers
drew inspiration from the heyday
of skiwear with garments defined
by color-blocking, bold stripes and
vibrant shades of faux fur trim. Think
the 1970’s minus the disco ball and
that captured the look of much of the
skiwear on display.
— Emily Walzer
Retail Overview:
Specialty Stores:
Online Sales:
total sales,4%
decrease
total sales, 4%
decrease
$2.4B
Chain Stores:
$1.2B
total sales, 13%
increase
$144M
Women’s
Outerwear Sales:
h15%
in dollars jumping
to $783M
Apparel Overview:
Insulated Shells:
Softshells:
up to $710M
down by 7%
h13%
$91M
Regular Shells
Sales:
Baselayers
Sales:
$251M
h15%
to $151M
9
IN THE NEWS
Columbia
Sportswear
FY15 Revenues on a
reported basis
Revenues:
$2.32B
Profit:
$177.9M
Footwear:
$505M
App/Acc/EQ:
$1.82B
U.S.
$1,455M
Columbia
$1,864M
Sorel
$209.2M
prAna
$125.3M
Mtn. Hrdwr.
$116.2M
10
flagship Salt Life retail store
will open in San Clemente,
CA, this summer. Senior
management sees the brand
eventually having 7-12
stores in the So. California
market over the next few
years to help further drive
the brand business. Current
key drivers for Salt Life are
kids, where the product
line has been expanded;
consumer engagement
through social media and
better retail fixturing. With
largest order backlog in its
history, Salt Life has already
lined up new retailers
starting this spring that
includes a national player
that intends to showcase
the brand in some of its
California locations.
Asics Acquires Runkeeper
One of the last remaining
popular independent fitness
tracking apps has been
acquired by the Japanese
sporting goods company
for a reported $85 million.
Asics’ purchase of Bostonbased Runkeeper, which has
more than 33 million users
globally, was revealed on the
same day it released annual
financial results.
Jason Jacobs, the founder
and CEO of Runkeeper,
disclosed in an online
post that the app would be
improved through resources
provided by its new parent.
The eight-year-old business
uses a Smartphone’s GPS
to trace routes, times and
distance and recently added
the ability to support GPS
tracking of Smartphone
on compatible Android
smartwatches.
Asics Corp., meanwhile,
reported an eight percent
decline in annual operating
income to the equivalent
of $226.8 million for the
12 months ended Dec. 31.
Annual revenues were 10.5
percent higher at $3.54
billion. Total Americas’
revenues were 0.6 percent
higher to $1.12 billion, a 3.7
percent increase as reported
by Asics America Corp.
Turning to FY16, Asics is
forecasting two percent top
line growth to the equivalent
of $3.89 billion and a 5.7
percent increase in operating
income in local currency to
$257.9 million. Regionally,
Americas’ revenues are
forecast to dip two percent
to the equivalent of $1.19
billion. Annual sales of
footwear, meanwhile,
are projected to increase
projected to increase 2.9
percent in local currency
billion with running shoe
sales increases two percent to
an estimated $2.08 billion.
Columbia Sportwear Posts
Strong U.S. Sales Gains in FY15
For the first time,
Columbia’s footwear business
surpassed $500 million in
annual sales, rising 19 percent
in FY15 to $505 million.
Overall, the Portland, OR,
company reported a 27
percent increase in annual net
income to $179.9 million on
11 percent revenue growth to
$2.33 billion.
Key annual metrics
included 21 percent revenue
growth in the U.S. to
$1,455.2 million for the 12
months ended Dec. 31. By
brand on a reported basis,
Columbia sales rose 7 percent
to $1,864.7 million; Sorel
revenues stomped 26 percent
higher to $209.2 million;
prAna annual sales came in at
$125.3 million; and Mountain
Hardwear sales slid 3 percent
to $116.3 million. Columbia’s
apparel/accessories/
equipment revenues
increased nine percent last
year to $1,821.2 million.
Columbia’s intake FY16
outlook calls for mid singledigit revenue growth and
flat to 3.4 percent growth in
net profits. The Columbia
brand is forecast to growth
mid-single digits; Sorel, low
double-digits; PrAna sales
are predicted to increase in
the mid-20 percent range;
and and Mountain Hardware
sales are expected to dip low
single-digits. As for the U.S.,
the company sees low doubledigit growth this year with
direct-to-consumer growth,
especially e-commerce,
outpacing wholesale
expansion.
Wolverine Worldwide Sets
Three New Operating Groups
Most notable among the
senior executive changes is
the promotion of 25-year
company veteran Nick
Ottenwess to president of
Wolverine’s International
Group and the moving
of Richie Woodworth to
president of new Wolverine
Boston Group consisting
of the Sperry, Saucony and
Keds brands.
The Outdoor and Lifestyle
Group, consisting of Merrell,
Chaco, Cat Footwear, Hush
Puppies and Sebago, will
be headed by Jim Zwiers,
most recently president of
International. Zwiers will
also serve as president of
Merrell until the position
is filled.
Meanwhile, the Heritage
Group for the Wolverine,
Bates, Harley-Davidson and
Hytest footwear brands,
will continue to be led by
Ted Gedra. In a separate
development, the company
announced Jim Gabel,
president of the Performance
Group, resigned and is
relocating back to Canada
for personal reasons.
Deckers Brands Reorganizing, Closing Stores
The UGG and Hoka
One One parent, recently
announced a corporate reorganization simultaneous
with its third quarter results
of flat profits at $156.9
million on one percent
revenue growth to $795.9
million for the period ended
Jan. 1. Deckers is currently
forecasting 2.4 percent top
line growth in FY16 to $1.86
billion despite a 230 basis
point decline in gross margin
to 46.0 percent. Hoka One
One sales, year-to-date, were
up a reported 73 percent
through nine months.
Deckers has decided to reorganize its six independently
managed brands into two
business units to reduce costs
and “streamline its market
attack.” The Performance
Lifestyle Group consists of
the Teva, Sanuk and Hoka
brands and will be led by
Wendy Yang, who joined
the company as Teva brand
president last spring. The
fashion lifestyle group, to be
led by a group president to be
named shortly, will operate
the UGG and Koolaburra
brands.
Additional elements of the
shift to two strategic business
units include the shuttering
of Sanuk’s Irvine, CA, office
and relocating the business
to corporate headquarters in
Goleta, CA, and the closing
of Ahnu’s office near San
Francisco as the company
continues to seek strategic
Hoka One One sales were
up 73 percent through
nine months.
NEWS & NOTES
NuDown, the dual gender outerwear
brand that uses compressed air for
custom insulation, signs extreme athlete JT
Holmes, 35, as its first brand ambassador.
VERT, the official wearable technology
of USA Volleyball that measures
accumulated G-Force, jump height and
surge count, strikes a jump and G-Force
analytics contract with the NBA’s Miami
Heat. The Fort Lauderdale, FL, company
already has a contract with the Heat’s
development league team, the Sioux
Falls SkyForce.
NOCSAE (The National Operating
Committee on Standards for Athletic
Equipment) last month approved the
first chest protector performance
standard for baseball and lacrosse for
commotio cordis and voted to move its
proposed pneumatic ram test standard
for youth football helmets to final
status. Meanwhile, a proposed lacrosse
headgear standard is now available for
review at www.nocsae.org.
RISE Talent Acquisition is the name of a
new personnel recruitment and executive
search firm founded by Rey Corpuz. The
industry veteran has worked for Wilson,
Russell, McDavid, Cannondale, Champro
and Mitre.
Thule Group generated a 5.1 percent
constant currency increase in annual
sales to the equivalent of $631.4 million
for the 12 months ended Dec. 31,
2015. Annual profit was equal to $52.7
million. Sport and cargo carrier sales
increased 6.7 percent to $380.1 million;
outdoor and bag sales grew more than
20 percent to $97.9 million; and sales
of bags for electronic devices fell more
than 11 percent to $99.1 million. In the
first quarter, Thule is ramping up a new
U.S. manufacturing site, implementing
phase one of a North America and Asia
distribution center efficiency project and
introducing more mainstream hiking and
trekking packs.
11
IN THE NEWS
IN & OUT
Brunswick Corp. elects Mark Schwabero as its new chairman
and CEO to replace the retiring Dustan McCoy. Schwabero
joined the company in 2004 in its Mercury Marine unit, where
he later served as president and COO.
GoPro names Brian McGee, who joined the company from
Qualcomm last year, as CFO, effective March 11.
Nike names Adam Sussman, a former EA Mobile and Disney
Interactive executive, as its first chief digital officer overseeing
elements across Nike.com, Nike+ and Brand Digital.
Wilson Sporting Goods hires tennis industry veteran Michael
(Mickey) Maule as regional commercial director for Racquet
Sports, Americas. The former ATP-ranked pro tennis player
was national sales manager for Babolat USA.
alternatives for the brand.
Separately, Deckers has
hired a retail consultant to
help it implement operational
improvements to its own
retail business beyond a
decision to shut down 15
percent of the chain, or an
estimated 20 stores.
The brand realignment,
consolidation and retail
closures combined are
forecast to save Deckers
Brands an estimated $35
million in annual expenses.
About 29 percent of that
total, or $10 million, will be
re-invested into the business.
Stores identified for closure
generate less than a 20
percent return on sales, Dave
Powers, president of Deckers
Brands, said.
Amer Sports Banking on
FY16 Improvement
The Wilson, Precor and
12
Salomon parent generated the
equivalent of $137.1 million
in profits in 2015 on 6 percent
constant currency revenue
expansion to $2.86 billion.
Americas’ revenues rose 6
percent to $1.21 billion. Local
currency sales improvement
and higher profits before
taxes are forecast for this
year despite what the Finnish
company calls “challenging
market conditions.”
As Amer stated last year, the
company will retain its focus
on growing its core business
and accelerating in apparel
and footwear, the U.S., China,
business-to-consumer, and
digitally connected devices
and services.
A quick overview of Amer
Sports’ FY15 results with all
percentages in local currency.
• Outdoor revenues rose 8
percent to the equivalent of
$1.72 billion. Footwear was up
14 percent to $519.7 million
with the Americas accounting
for 22 percent of total. Apparel,
buoyed by strong growth from
the Arc’teryx brand, increased
15 percent to $436.3 million.
Winter Sports equipment
sales rose one percent to $451
million.
• Ball Sports’ revenues
rose six percent to
approximately $729.1 million
with Americas accounting
for 45 of business in local
currency. Individual Ball
Sports’ sales were down two
percent to $355.4 million as
double-digit growth from
performance tennis racquets
was offset by a drop in
lower-priced products. Team
Sports revenues, bolstered
by the Louisville Slugger
acquisition, rose 15 percent
to $373.7 million. The gain
was two percent, excluding
Slugger, and 93 percent of
total was generated in the
Americas.
• Fitness annual revenues
dipped three percent to
$402.6 million with the
Americas accounting for 61
percent of total. Through a
new partnership with Mad
Dogg Athletics, Precor will
launch a new line of indoor
cycling equipment this year.
Mizuno Results
Bolstered By Footwear
Revenues were seven
percent higher to the
equivalent of $1.22 billion for
the nine months ended Dec.
31, sparked by 11 percent
growth in footwear to an
estimated $400.9 million.
Nine-month apparel sales
were three percent higher
million; equipment sales
grew nine percent to the
equivalent of $296.1 million.
In the Americas, Mizuno
said it benefited from its
new Wave Enigma 5 and
Wave Rider 19 performance
running shoes and strong
sales of golf irons. Despite a
tough footwear business in
Brazil, the region generated a
nine-month revenue gain of
13 percent to the equivalent
of $207.8 million despite a
significant drop in year-overyear operating profit.
The Japanese company’s
current outlook for the
12 months ending March
31 calls for a 25 percent
decline in net income to the
equivalent of $21.3 million
and total annual revenues of
$1.68 billion, equivalent to a
five percent year-over-year
increase in local currency.
Columbia Co-Branding Trail
Running Products in 2017
All trail running footwear,
apparel and accessories will
be adorned with Columbia
Montrail branding starting
in Spring 2017. Columbia
is upbeat on the notion
of merging the mother
brand’s product innovation,
creation expertise and sales
and marketing resources
with Montrail’s heritage and
reputation for trail running.
Existing Montrail products
will be available to consumers
for the remainder of 2016.
Separately, the company has
struck an apparel deal with
Premier League soccer team
Manchester United to develop
dual-branded outdoor
apparel for hiking, climbing
and mountaineering.
Industry Exec Taking CrossCountry Bike Ride
For PHIT America
Doug Gordon, most
recently a senior executive
for Speedo, is taking a
cross-country tour on his
bicycle to support PHIT
America, the national nonprofit charity dedicated to
creating more active, fit and
smarter kids. His journey
from Charleston, SC, where
he departed Feb. 15, to
southern California near
San Diego, where hopes to
arrive in mid-April, will
serve as a fundraiser for
the charity, with at least 75
percent of money raised
pegged to fund more PHIT
America GO! Grants.
Those interested in
supporting the bike ride
and cause should access,
www.ridedougride.org. To
date, corporate sponsors
of Gordon’s cross-country
adventure are Garmin,
Under Armour and Louis
Garneau. n
Doug Gordon is hitting the
road for PHIT America.
NEWS AND NOTES
loyalty programs spent more on average
than non-participants. Also, the mall program
incentives influenced the duration between
mall visits.
PGA Tour Superstore has opened a
25,000-square-foot interactive store in
Tucson, AZ and intends to open its 25th
location in Sandy, UT, in April.
REI, which currently operates 143 stores in
35 states, intends to open a 27,000-squarefoot store in Rochester, NY, in the fall and
a 25,000-square-foot location, the co-op’s
second in the Sunshine State, in Winter Park,
FL, in Spring 2017.
Sears will accelerate the closing of at least
50 unprofitable Sears and Kmart stores after
reporting fourth quarter sales of $7.3 billion,
down 9.9 percent from $8.1 billion a year
prior and below a Street outlook of $7.4
billion. Comparable store sales were off 6.9
percent and were particularly weak in apparel
where the retailer is promising an overhaul.
Spring, a Chicago promotional company,
reports that its research into 2015 holiday
results shows shoppers participating in malls’
Topgolf Entertainment Group has broken
ground for its third Florida location. The
65,000-square-foot venue is slated to open
REI is opening in Rochester, NY.
in Spring 2017.
Modell’s tapped Miami Dolphin wide
receiver Greg Jennings to go undercover at
the chain’s Times Square New York location
before the Super Bowl. Jennings was the
banner’s sixth “Undercover Associate,”
following fellow NFLers Danny Woodhead,
DeSean Jackson and Ryan Kerrigan and
NBA players Landry Fields and Jrue Holiday.
Watch Jennings at Modell’s:
13
INSIDE TRADE
Trade Groups Want Congress to Pass TPP
T
Estimates
by the FDRA
peg first-year
savings after
implementation
of TPP at $450
million, rising
to $6 billion in
savings at the
end of the first
decade.
14
he Footwear Distributors and Retailers
of America (FDRA) is urging the
lame-duck Congress to consider and
pass the Trans-Pacific Partnership (TPP) free
trade agreement. But most circles contend it’s
highly unlikely.
“Each day TPP is not in effect is another
day where high footwear tariffs drive
up costs for American consumers, limit
production innovation and stifle job
creation,” Matt Priest, president of the
FDRA, said earlier this month.
His comments came after the U.S. and
11 Pacific partners signed the trade pact in
Auckland, New Zealand, some three months
after negotiations closed and text of the
proposed agreement was published for review
by policymakers, interest groups and the
public. The signing met the 90-day deadline
established early last November by Pres.
Obama when he told Congress he intended to
support the final pact that they can approve
but not amend.
Like the FDRA, the outdoor industry is
a proponent of TPP and cites numerous
advantages to its passage. Among them:
the elimination of U.S. tariffs on certain
outdoor products not made in the U.S.;
expansion of access to global markets for
U.S. manufacturers and the protection of
innovation on products designed, distributed
or manufactured in the U.S.
Estimates by the FDRA peg first-year
savings after implementation of TPP at $450
million, rising to $6 billion in savings in the
first decade.
Also, the Senate last week passed the
Customs Reauthorization bill by a vote of 7520, sending it Pres. Obama for his signature.
The legislation will help facilitate international
trade for U.S. footwear companies and
modernize U.S. Customs & Border Protection.
The FDRA said the bill’s strengthened
trade enforcement is important for gaining
congressional support for TPP.
In a separate trade development, members
of the International Longshoreman’s
Association (ILA) walked off the job at port
terminals in New York and New Jersey that
resulted in a shutdown of the East Coast’s
busiest port on Jan. 29. The sudden shutdown
added to an existing backlog caused on the
East Coast by Winter Storm Jonas, according
to the Outdoor Industry Association.
Reports suggested the one-day strike
was a unified action against the Waterfront
Commission of New York Harbor, an
organization that investigates corruption and
regulates hiring practices among dockworkers.
The walkout occurred some 33 months
before the current contract between the ILA
and the U.S. Maritime Alliance, a consortium
of container carriers, direct employers and
port association serving the U.S. East and Gulf
Coasts, expires on Sep. 30, 2018.
The volume at the Port of New York and
New Jersey hit a record 6,371,720 twenty-footequivalent (TEU) units in 2015 despite a soft
December. The number of loaded imports into
NY-NJ rose nine percent for the year. The Port
Authority and industry officials have been
working for more than two years on an effort
to improve port performance. n
INSIDE TEAM
Delivering the Goods
Watch the celebration video:
T
he race to service displaced
fans the world over has begun.
Thanks to a new relationship
between Dick’s Sporting Goods and
UberEVERYTHING NYC, Denver
fans in the Big Apple and Chicago
had an opportunity to be part of the
celebration immediately after the
Broncos’ victory in Super Bowl 50.
In after-big game stunt, Dick’s
associates invaded the Butterfield 8
bar on East 38th Street in New York
to surprise Broncos fans and patrons
with free championship gear.
NFL fans in eligible zip codes in
both cities placed orders at DSC.com/
rushmyshirt and received official
championship T-shirts the same
night via deliveries by UberRUSH,
with Dick’s picking up the delivery
fee tab. Fans received their orders
in the two hours after the game’s
conclusion. There were plans to
continue deliveries Monday morning
at 9 a.m. if inventory remained.
Across the pond earlier this month,
online licensed apparel retailer
Fanatics, already with ties to all
professional sports leagues in the U.S.,
made news with its acquisition of
U.K.-based Kitbag for $17 million. The
acquisition of the Manchester, England
company, which already operates the
European online stores of the NFL,
NHL and NBA, will make Fanatics
the online provider of some European
soccer clubs, including Manchester
United and Real Madrid.
But, it should be noted, not all pro
league executives are thrilled with
the growing global dominance of
the Kynetic division. When Adidas
takes over the NHL license from
Reebok at the start of the 2017
season, traditional brick-and-mortar
retailers such as the aforementioned
Dick’s will find themselves having to
purchase product from the online
house. It begs the question: If there
is a limited quantity of a hot player
jersey, who gets first dibs?
Wilson Connected Football will debut in the Fall.
opportunity to showcase a beta
version of its new smart football
that will debut at retail this fall after
18 months in development. An
embedded chip will provide players
with stats such as spin rate and yards
thrown and encourage them to get
better via an app on the Smartphone.
No word yet on retail price.
Majestic Athletic’s Flex uniform debuts during
MLB spring training.
Von Miller is face of Adidas’ Freak collection.
Back to Super Bowl 50: game MVP
Von Miller will be the face of Adidas’
new Freak franchise. The All-Pro
outside linebacker will be featured
in a variety of Adidas marketing
initiatives this year and will play a
role in the development of Freak
cleats, apparel and accessories.
At Wilson, the big game in
Santa Clara gave the company an
And with pitchers and catchers
reporting to spring training camps
in Arizona and Florida this week,
Majestic Athletic will use the
occasion to raise the performance
bar of uniforms with its new on-field
Flex Base Uniform System that was
engineered with a lighter weight
twill and uses a patented climate
control Air Belt and mesh panel
ventilation zones on each side of the
jersey. n
15
INSIDE INSIGHT
NUMBERS IN PLAY
Week of 1/26-2/16
n Largest Gainers
Retail
Big 5 SG: Stock has risen
more than 20 percent in last
month, perhaps bolstered
by three positive estimate
revisions.
Brands
Under Armour: Forecasting
25 percent revenue growth in
FY16 to slightly under $5 billion.
l Largest Decliners
Retail
Kohl’s: Has eliminated three
senior management positions
in shake-up: chief digital officer,
SVP of store environment and
SVP of communications/public
relations.
Brands
Fitbit: Another day, another
class-action suit over
alleged inaccurate heart rate
monitoring technology.
The Inside Insight Index is our
opinion of what we think are the 28
most important public companies
in the industry, 14 vendors and
14 retailers. Space considerations
prevent us from tracking more, but
we will make changes over time.
Index base of 100
is key to the closing
prices of 12/31/14
16
INDEX
Retail: 81
Brands: 91
i19.4%
i9.2%
change over period
change over period
Big 5 Sporting Goods (BGFV) n
Price on 01/26/16..............$11.48
Price on 02/16/16..............$12.98
+13.0%
adidas (ADDYY)
Price on 01/26/16..............$50.38
Price on 02/16/16..............$50.88
-0.9%
Cabela’s (CAB)
Price on 01/26/16..............$41.49
Price on 02/16/16..............$43.55
+4.9%
Amer Sports (AGPDY)
Price on 01/26/16..............$12.88
Price on 02/16/16..............$26.94
+0.6%
Dick’s Sporting Goods (DKS)
Price on 01/26/16..............$38.11
Price on 02/16/16..............$39.04
+2.4%
Callaway (ELY)
Price on 01/26/16................$8.55
Price on 02/16/16................$8.36
-2.2%
Finish Line (FINL)
Price on 01/26/16..............$18.53
Price on 02/16/16..............$18.49
-0.2%
Columbia Sportwear (COLM)
Price on 01/26/16..............$51.17
Price on 02/16/16..............$58.34
+14.0%
Foot Locker (FL)
Price on 01/26/16..............$66.13
Price on 02/16/16..............$67.68
+2.3%
Deckers Brands (DECK)
Price on 01/26/16..............$47.25
Price on 02/16/16..............$51.77
+9.5%
Genesco (GCO)
Price on 01/26/16..............$64.42
Price on 02/16/16..............$64.79
+0.5%
Fitbit (FIT) l
Price on 01/26/16..............$16.77
Price on 02/16/16..............$14.90
-11.5%
Hibbett Sports (HIBB)
Price on 01/26/16..............$30.96
Price on 02/16/16..............$33.01
+6.6%
GoPro (GPRO)
Price on 01/26/16..............$10.88
Price on 02/16/16..............$11.59
+6.5%
Kohl’s (KSS) l
Price on 01/26/16..............$48.59
Price on 02/16/16..............$42.62
-12.2%
lululemon (LULU)
Price on 01/26/16..............$58.59
Price on 02/16/16..............$59.80
+2.0%
Macy’s (M)
Price on 01/26/16..............$40.18
Price on 02/16/16..............$40.47
+0.7%
Nike (NKE)
Price on 01/26/16..............$61.11
Price on 02/16/16..............$57.79
-5.4%
Sportsman’s Warehouse (SPWH)
Price on 01/26/16..............$12.78
Price on 02/16/16..............$12.35
-3.3%
Performance Sports Group (PSG)
Price on 01/26/16................$7.07
Price on 02/16/16................$7.42
+4.9%
-0.3%
Skechers (SKX)
Price on 01/26/16..............$27.81
Price on 02/16/16..............$31.39
+12.8%
Tilly’s (TLYS)
Price on 01/26/16................$6.68
Price on 02/16/16................$6.62
-0.9%
Under Armour (UA) n
Price on 01/26/16..............$67.63
Price on 02/16/16..............$79.94
+18.2%
Walmart (WMT)
Price on 01/26/16..............$64.00
Price on 02/16/16..............$65.90
+2.9%
VF Corp. (VFC)
Price on 01/26/16..............$58.75
Price on 02/16/16..............$59.60
-1.4%
Zumiez (ZUMZ)
Price on 01/26/16..............$17.93
Price on 02/16/16..............$19.37
+8.0%
Wolverine Worldwide (WWW)
Price on 01/26/16..............$16.20
Price on 02/16/16..............$16.87
+4.1%
Shoe Carnival (SCVL)
Price on 01/26/16..............$23.02
Price on 02/16/16..............$22.94
POP CULTURE
The Social Scene
1.
Giving everyone a
reminder about the
biggest foe.
2.
The Cat pitches
Usain Bolt product
collection.
3.
‘Tis the Season
for fishing!
4.
It’s a groundhog.
It’s a beaver. It’s a
touchdown!
5.
Special jacket
is part of NBA
collection.
6.
Challenging runners
around the globe.
18
MATCH-UP
Vision-naires for the Links
Oakley PRIZM Golf
Oakley is offering six unique styles in its 2016 PRIZM Golf collection,
each promising the wearer sharpened visual acuity, enhanced color
recognition and better ability to see and track moving objects in
SunDog Prime EXT TrueBlue
the periphery. Models are also available in prescription. The
Radar EV shown here uses its PRIZM lenses to filter precise,
SunDog, out of Canada, has unveiled three
narrow bands of color. That enables the golfer to spot grass
models for the golfing set, including two
textures, improving the contrast between the cyans and
Sport performance styles. The Prime EXT is
greens of healthy grass with the yellows, oranges
designed for those looking for a slightly larger lens
and reds of unhealthy grass. Oakley says the
cut for maximum comfort. Sunglasses, worn by LPGA
separation of colors gives players more depth
star Paula Creamer, utilize TrueBlue lens technology
cues to gauge distance for wedge shots and
that incorporates synthetic “melanin and OLP (ocular lens
the ability to easily differentiate grass
pigment) to filter blue light and block ultra-violet light for
conditions and grain direction when
protection and performance. True Blue lens available in brown,
on the green. Pro golfer Bubba
smoke and amber/rose tints. Style, designed to fit medium and large face
Watson dons the Flak 2.0 on
shapes also has a ContourFLEX metal-core adjustable nose pad and cothe Tour. MSRP: $170. n
injected temple tips for non-slip performance and comfort. MSRP: $69.99 n
vs.
19
SPORTSTATS
Paint By Numbers
$523 BILLION
Forrester predicts total online sales will reach this number by 2020, driven by mobile
devices. The research firm also forecasts online sales to grow an average 9.32
percent annually over the next five years.
76%
Percentage of shoppers who interact
with brands before going in-store,
according to Deloitte Digital.
$310
Typical retail selling price of a
Quiksilver snowboard jacket
in the Americas’ region.
244 MILLION
Number of consumers who browsed or bought
online in 2015, a figure forecast to increase to
270 million by the end of decade.
111.9 MILLION
Average number of viewers for Super Bowl 50, short of the
record 114.4 million for 2015 game between Seattle and
New England.
59% 80% 59%
Percentage of retailers who plan to invest
Percentage of Internet traffic in 2019 that
Percentage of B2C marketers who plan
more integrating social media within their
will be video-based.
to increase content marketing budgets in
stores, according to IAB Research.
20
2016, says Content Marketing Institute.

insideinsight

Transcription

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