A SportsOneSource Trade Publication
adidas/Reebok Merger Closed;
Fireman Steps Down
adidas-Salomon AG closed its
acquisition of Reebok International Ltd., creating a new
global sports equipment powerhouse with revenues of approximately €9.5 billion ($11.8 billion) in the athletic footwear, athletic apparel,
and hardgoods categories. The new adidas
Group will closely mirror its larger competitor,
Nike in the categories and sports it services.
February 2006
Fleet Feet Looks to 100 Stores
Fleet Feet, Inc. recorded 22% growth in overall sales in 2005, surpassing $52
million in revenue, compared to $43 million in 2004. Comparative store sales in
2005 were up 14% on top of the 12% increase posted in 2004. Fourth quarter
comps were up in the mid-teens. The franchisor now boasts 67 stores in 32
states, opening six stores in the first half of the year on top of the twelve stores
opened in 2004. They expect to close the Santa Monica store in 2006.
Much of the growth came from
outside of its historically strong
footwear business, with the Bra
FIT program in particular adding
a lot of energy to the women’s
business. Based on the success
of that program, and the brand
partnership program with Moving
Comfort and Champion, it was
probably no surprise that Moving
Comfort walked away with the
Apparel Vendor of the Year award
this year.
Herbert Hainer will remain chairman and CEO
of the company. Reebok Chairman and CEO
Paul Fireman stepped down from his role, but
he will continue in an advisory role to Hainer.
Paul Harrington, Reebok’s former SVP of international operations and chief supply chain officer, has been named president and CEO of the
Reebok brand, replacing Fireman.
Erich Stamminger, chief of the brand’s North
America unit, has been named president and
CEO of Brand adidas. Mark King will remain
president and CEO of TM-aG.
The Personal FIT Process is also
paying big dividends in accessories.
Superfeet reportedly sold
45,000 pair of insoles in 2005,
adding another $35 at a 60%+
margin to every sale.
Reebok shareholders received $59.00 per share
in cash, representing a transaction value of
approximately €3.1 billion ($3.8 billion). The
strategic direction and brand strategy for the
new Group is expected to be announced in
April, along with the positioning of the two
brands, status of the league licenses, and decisions on what will happen with Rockport, Greg
Norman Collection, and The Hockey Company.
The retailer also pointed to its
brand partnership program as a
success. New Balance, which has
been the lone footwear brand participating, saw its share at Fleet
Feet come in around 50% higher
than its national average in running specialty. Brooks has joined
the program for 2006.
The newly formed group expects to realize cost
savings of approximately €125 million ($150
million) by 2009. Even though the deal is eventually expected to help adidas reduce debt the
German company did float a billion dollars in
notes to help fund the acquisition.
Looking ahead, Fleet Feet expects
to have 100 stores by the end of
2008, with seven to nine stores
(Continued on Page 2...)
INSIDE PSR: •
Marathons: Engines of Growth
•
Gear Preview: Technical Running Apparel
and Electronic Accessories
•
PSR Retail Spotlight: Naperville Running Co.
The Strong Get Stronger
Performance Sports RETAILER
is published by SportsOneSource, the
leading provider of business informa-
(Continued from cover...)
planned for 2006 and 10 to 12 more in
2007.
Company CEO Tom Raynor
said that Fleet Feet is projecting 15%
annual growth over the same period.
Cover Story
Jeff Phillips, president of Fleet Feet,
Inc., said that the newer stores really
contributed to the comp store sales
gain for the year, but stores opened
before 1993 still averaged a 9% comp
sales gain for the year, about the same
as the stores opened between 1993
and 1998.
Stores opened between 1998 and 2000
saw comps increase more than 20%
on average, while the stores that
opened since 2000 posted average
comp store sales increases that exceeded 35% versus the previous year.
Asics was the fastest growing footwear
brand in 2005, with sales jumping
45.4% for the year. Mizuno was second in footwear with sales increasing
30.3%, while Brooks rounded out the
top three with a 27.1% increase for
2005
New Balance sales were up 13.1% on
the strength of their brand partnership
program, while Saucony was flat and
Nike (-15.3%) and adidas (-11.5%)
both declined for the year.
Columbia Sportswear must be seeing
this trend play out as well after the
company announced it had acquired
Montrail last month in a deal worth
approximately $20 million.
In apparel, Asics also took home the
prize for the biggest percentage increase, jumping 64.2% in 2005. Moving Comfort posted a 57.6% increase
to take the second spot and Brooks
delivered a 40.2% increase to round
out the top three.
Nike still has life here in apparel,
growing 22.1% for the year. Hind was
up 5.4% and Sugoi posted a 5.3%
increase. adidas was down 16.8% in
apparel sales for the year.
Fleet Feet said they are seeing more
brand instability than ever, thanks to
the rate of consolidation in the market
and the shifting of brands in their mix.
No wonder there is some apprehension
on the part of Running Specialty Retailers when six out of the top nine
brands at Fleet Feet have been acquired in the last two years.
In 2003, no brand represented more
than 15% of the total sales mix at
Fleet Feet.
While the chart below
represents total sales, Asics now has a
footwear share number in the high
20’s, while Nike received a boost from
it’s apparel business.
The Mizuno
number accounts only for footwear.
Raynor said he sees opportunity for
running specialty brands like Fila,
Montrail and others going forward.
This
appears to be
2005 Footwear & Apparel Brand Share
trending
Fleet Feet, Inc.
across the
RSR chanBrooks
nel as an
19.7%
incre asing
Nike
13.6%
number of
Asics
24.9%
specialty
shops look
Saucony/Hind
for
more
11.2%
adidas
differentia9.4%
New Balance
tion
from
Mizuno*
11.2%
9.9%
the big box
guys
and
family footw e a r
chains.
2
tion in the Sporting Goods industry.
Other SportsOneSource titles include:
The B.O.S.S. Report
Sports Executive Weekly
SnowSports Market Report
Specialty Market RETAILER
Specialty Market UPDATE
Sports Market UPDATE
*****
© SportsNewsSource, LLC
Performance Sports RETAILER is protected under all applicable copyright laws
and is intended for the sole use and benefit
of the subscriber.
Any attempt to copy,
alter, distribute or otherwise copy content
of this copyrighted material is strictly forbidden.
*****
SportsNewsSource, LLC
dba SportsOneSource
PO Box 480156
Charlotte y NC y 28269
704.987.3450
704.987.3455 fax
specialty@SportsOneSource.com
Group Publisher
James Hartford
james@SportsOneSource.com
Group Managing Editor Lou Dzierzak
lou@SportsOneSource.com
Specialty Editor
Kris Versteegen
kris@SportsOneSource.com
Associate Editor
Andy Kerrigan
andy@SportsOneSource.com
*****
Complete content of this publication
and other SportsOneSource products
can also be accessed at:
www.SportsOneSource.com
For sponsorship or advertising
opportunities, contact
SportsOneSource Publishing at:
sales@SportsOneSource.com
Source: Fleet Feet, Inc.
Performance Sports RETAILER
FEBRUARY 2006 • Volume 2, Issue 1
Feature
4
Marathons: Engines of Growth — PSR Takes a Look at the Growth in
Popularity of Marathons and How They Can Help Your Business
MarketWatch
8
Technical Running
Apparel: The future is
here and it has a fleecefleecelined collar
10 How Fast, How
Far, How Long:
Electronic gadgets
keep track of modern
runners’ progress
12
Retail Spotlight:
Naperville Running
Company
NewsWire
14
Industry News
Performance Sports RETAILER
3
Marathons: Engines of Growth...
By Lou Dzierzak
F
Specialty FEATURE
or thousands of runners,
a New Year’s resolution
includes registering for a
marathon. In 2004, 435,000
runners finished the 26.2-mile
journey. Across the United
States, marathons continue to
draw new people to the challenge.
Ryan Lamppa, media director
for Running USA in Santa Barbara, California, reports 2004
hosted a record-setting 58
Marathons with at least 1,000
finishers. Fifteen years earlier, only 26
marathons fit that description.
Mark Winitz, media coordinator for the
San Francisco Marathon notes that
registrations have increased steadily
over the last several years. The 15,000
runners in the 2005 event surpassed
the previous peak set in the early
1980s.”To date, pre-registration numbers for the 29th edition of the San
Francisco Marathon on July 30 are
running 300% ahead of last year,”
Winitz said.
The title of largest American marathon
rests with the ING New York City Marathon. In 2004, 36,562 runners crossed
the finish line. The total even surpassed the 35,868 who finished the
100th Boston Marathon in 1996. The
United States is home for 6 of the 10
largest marathons in the world.
Statistics published by Running USA
define the contemporary marathon
runner as 40% female, 43% male with
a median age of 37. Virginia Brophy
Achman, Executive Director of the Twin
Cities Marathon, reports that for the
period 2003-2005, approximately 27%
of registrants defined themselves as
“first timers.”
The face of the new marathon runner is
not someone inspired by historical run-
Growth of Marathon Finishers Since 1976
423,000
400,000
389,000
388,000
366,000
312,000
236,000
ning legends like Bill Rodgers or Alberto Salazar, but by the examples set
by Oprah Winfrey and increased interest in health and fitness. “Participants
are driven by completion goals, not
times,” explains Lamppa.
The strong interest and growth in
marathon participation offers performance sports retailers an opportunity to
build and expand a loyal consumer
base. Rather than invest in small, fully
supported 5 and 10k races promoted at
the store level, owners are aligning
themselves with major market marathons. Brophy explains the symbiotic
relationship between race director and
retailers.
“There are eleven different running
stores in the Twin Cities metro area.
They serve as sources of information
and race brochure distribution, and
many of them have training programs
specific to the Twin Cities Marathon,”
she said. Running stores organizing
training groups are featured as part of
the TCM Training Team Network and
get up to 50 entries as a recruiting
incentive in exchange for volunteering
with chip/bib stuffing. Brophy Achman
reports running retailer sponsorships
tend to be small and focus on a specific
aspect of the event such as the TCM
Charter Club.
120,000
25,000
1976
1980
1990
1995
2000
2001
2002
2003
2004
According to Lamppa, retailers and
race directors both benefit from the
partnerships. “Training programs have
made marathons less intimidating.
The barriers have dropped and more
people are registering for the events.”
Year
4
Performance Sports RETAILER
Technical Running Apparel:
The future is here and it has a fleece-lined collar
W
hile the heart of any specialty
running retail shop is the shoe
wall, apparel has become one
of the key profit centers that can truly
define the look and feel of the shop as a
whole. Like many aspects of performance
running retail, apparel design and development is in a state of flux, with performance features blending with the “athletic
style” look that many runners and nonrunners seek. However simply pushing
the big brands is not enough for many
6
performance retailers. Specialty running
retailers are learning that a proper balance between big multi-sport brands and
highly specialized running brands is a key
to driving sales and distinguishing their
four-way from the big box store around
the corner.
High-performance running apparel does
add a level of authenticity to any shop
and offering a broad selection of raceready apparel is a key point of differentiation for many retailers. But many customers are looking for a balance between fit,
fashion, and performance.
Successful specialty retailers are also
learning that while singlets and Lycra
certainly have their place in the “sub-fiveminute-mile” crowd, an “elite only” positioning can have drawbacks for any shop.
Most apparel manufacturers are catching
on to the trend of adding elements of style
to performance running apparel and are
integrating looser fits and style-oriented
detailing with all of the proven technical
Performance Sports RETAILER
features that high-performance running
apparel offers. This allows customers to
feel as comfortable during their Saturday
morning group run as they do in the coffee shop afterwards.
Footwear Brands Look to
Apparel for Growth
Brooks is addressing this evolving market
with two new apparel lines – Brooks’
Equilibrium features fabric technologies
that balance heat and cold as 20 degree
mornings turn into 50 days. Brooks’ new
Shelter features fabrications that provide
protection from adverse weather conditions for those days when you just need to
get out for a run regardless of the
weather. Motion Jacket, for women only,
fits into the Equilibrium line and is made
for running, walking, errand-running, and
every other motion a woman encounters
in her daily life. The
jacket
is
a
blend of polyester
and
spandex
with a thermal
polyfilled ultrasonic quilted
pattern.
The
jacket also includes an inside pocket that
holds an MP3 player.
To compliment this, Brooks created the
Energy Flare, a new, semi-fitted pant
made of a brushed polyester/spandex
blend. Its versatile flare design performs
in the studio, on the road, trail, and gym.
It also features an attractive slit at the
back ankle, a zip pocket, and gusset.
Brooks’ fabric engineers were also busy
this year and have redesigned their proprietary Aireplex polyester microfiber to
offer a softer look and feel while still providing water resistance with a DWR finish.
The Aireplex II Jacket is part of Brooks’
Shelter line and made of 100% polyester microfiber with
Teflon DWR. The
design team made
this piece to be a
soft,
waterand
wind-resistant running shell that features a back vent,
anatomical
styling,
Performance Sports RETAILER
and two front pockets that are MP3
compatible.
New Balance is introducing a
new line of running outerwear. The company’s running apparel designers
came up with the Nemo
Jacket, which is a fully
seam-sealed
Waterproof
Breathable
piece constructed of
Storm DryT fabrics.
This piece is truly
designed for cold and foul
weather running, soft cuff gators protect
hands and arms from wind, while a removable hood stows in the jacket collar.
Zippered hand pockets offer secure storage for everything from the house keys, to
your ID, hotel card, or fuel. A chest
pocket complete with headphone valve
nicely stores an MP3 player so you never
have to be without your favorite tunes on
your run. The Nemo Jacket also features
360-degree reflectivity for improved visibility during the short winter days.
Asics has created three new outerwear
pieces for next season. Headlining the
collection is the Storm Shelter Jacket,
which uses a lighter, softer, quieter fabric,
more waterproofing and breathability, as
well as updated styling. 100% polyester
dobby with 10,000/10,000 mm laminate,
fully seam sealed, front and back ventilation, hand pockets and chest pocket,
stretch cuff gaskets to seal out the elements, reflective piping at front and back
yoke seams, drawcord and cordlock bottom hem closure.
Apparel Brands Step Up
Their Game
Craft is creating different products to address highperformance
athletes,
and runners that end
up at the coffee shop
after the group Saturday
morning
training lap or
any combination in between.
Craft’s latest softshell, the Trail Stretch Jacket
offers every performance and safety feature needed for the longest weekend training day. Hypervent Stretch is designed to
provide mobility, weather protection and
breathability while a pod pocket in the
sleeve and stretch reflective piping offer
some user-friendly features and safety.
For women, the Action Stretch Jacket,
which has many of the same features as
the men’s Trail Stretch, has been turning
heads on and off the road. Craft also updated their classic courier jacket this year
to offer 360 degree reflection, hidden side
pockets, and a fleece inner collar.
Craft has also created a more casual line
of performance apparel. Their Balance
collection uses urban styling to create
pieces like the Balance Hoodie, Pique, and
Flex Pants. Both offer looser fits coupled
with performance fabrics to offer aesthetic
appeal along with top-notch functionality.
Sugoi is looking at new lighter weight constructions that not only keep runners dry
in the worst winter weather, but also stow
away after the storm has blown over. The
Hydrolite Run Jacket offers a new paradigm in weather protection with superlight waterproofness, stretch comfort and
packable performance. Sugoi has taken
an ultralight, translucent, waterproofbreathable laminate with welded seam
technology and stripped away the fabric
layers to create a pack able layer to start a
run or ride on a drizzly or windy day.
SportHill’s new Explorer Zip Hoodie has
all the features you’ve come to expect
from SportHill performance clothing, the 3SP®front panel ensures wind block while the
side
(Continued on Page 8…)
(
7
While Technology Still
Drives the Trends
Continued from Page 9…)
panels and back provide added ventilation and
comfort during cold weather workouts. This
top has the added advantage of a hood for use
during nasty weather.
SportHill’s proprietary 3SP fabric is a super
soft and densely spun polypropylene that performs well over a wide range of temperatures
and weather conditions. The company claims
that it is wind resistant to 35 mph and in the
Explorer this highly protective fabric is balanced with some additional ventilation for
various weather conditions.
The Summit Jacket is SportHill’s ideal jacket
for cold and nasty winter weather workouts.
Styled entirely of 3SP with nylon stretch overlays on the upper chest and shoulders for
added protection from the wind, rain, and
snow, this jacket is designed to handle the
harshest weather conditions. Designed for
performance, the Summit Jacket also adds a
touch of style for all-around winter wear. Details like the inner storm guard, zipper garage,
and elliptical hem with slight tail drop add to
the weather protection while two large zip
pockets and inside drop pockets provide plenty
of storage for the longest runs.
Descente created a wide array of new products
to stand up to the schizophrenic conditions of
the Colorado Front Range. The men’s Solo Run
Jacket incorporates Descent’s Element TriComp three-layer, stretch waterproof
breathable fabric with a vent across
the back for maximum protection from the elements.
Smaller features like the
water-resistant
zipper
with reflective zipper
tape, a wind flap, funnel-neck
construction at front, and
the fleeced collar
add even more
comfort and performance,
while
reflective
piping
and reflective chevrons on the sleeves
and center back offer
a measure of safety
when running in more
urban conditions.
8
For women, Descente created the Thermal
D-Lux Hoodie to
add some style
and warmth to
the daily workout. The midweight microdenier
polyspandex
construction
is
brushed inside for
enhanced thermal
qualities, while the hood with built-in wind
collar, the draft flap at the zipper and the extra
long sleeves with built-in thumb openings offer
weather protection in varying conditions.
The designers at Descente paired this with the
new Bliss Capri and the Coldout Run Tight for
heavier weather. The Bliss uses a 6.5 ounce
Micro-Denier Nylon/Lycra fabric that is soft,
supple and luxurious with excellent support, a
contrast waist, contoured side seam and calf
splice and a snug fit from waist to calf. The
Coldout uses Descente’s proprietary Coldout
fabric, which is hi-loft inside for warmth and
closed face outside for wind protection.
While 180s is best known for their behind the
head ear-warmers, the company has been
busy designing a new apparel line specifically
for runners. The new Quantum Vent Jacket
combines the thermal control ability of the
patent-pending Quantum Vent technology
with a lightweight, breathable water –
and wind-resistant shell. While
the running purists may find
this piece over-engineered it
will certainly appeal to any
gear head that needs to
regulate his or her temperature
while
out
training. A large panel
spans the back of
this
lightweight
jacket and is easily
maneuvered with a
quick pull on the
vent cords. When
the vent is opened,
heat is allowed to
escape. In turn, the
vent can be sealed to
insulate.
Performance Sports RETAILER
How Far, How Fast, How Long:
Sophisticated electronics keep track of runners’ progress
A
ccording to the Road Running
Information Center, 423,000 people finished a marathon in 2004.
The nation’s top marathons quickly reach
their registration limits leaving many runners on the outside clamoring for an official race number.
Completing a 26.2-mile journey takes
more than sending in an entry form and
registration fee. New marathon participants understand the difference between
receiving a finisher’s medal and seeing
DNF next to their name in the local newspaper is a commitment to training.
In the past, runners marked their training
progress on kitchen calendars, spiral
bound training logs or spreadsheets created on home computers. Logs usually
were limited to date, distance, pace, and a
few anecdotal notes about the weather or
motivational thoughts. Today, that’s just
the bare basics. The must-have Timex
Ironman found on the wrists of runners a
decade ago has been replaced with technically advanced and sophisticated
watches, chronographs, and heart
monitors.
Yesterday’s
Timex
Ironman
has
evolved
into
10
the advanced Trail Runner Bodylink system. The GPS-empowered Trail Runner
features speed, distance, and time functions with a comprehensive set of navigational aids including heading, altitude,
waypoints, and real time ascent/descent
rates. A Track Back function provides
directions to stored waypoints. A customizable 3-line display format presents a
range of information at a quick glance.
Another model in the Timex line is
the Ironman Triathlon
Target Trainer
Heart
Rate
Monitor. Information tracked includes
the
amount of time
spent within targeted heart rate zones, recovery time and
a display of the average heart rate over
time.
Polar Electro, a recognized leader in heart
rate monitors has introduced a
new line of RS Running Computers. The wrist-mounted RS
Series allows runners to customize their heart rate-based
training. The Polar Sports Zones
enable runners to segment their
training program into five defined zones, each based on a
percentage of maximum heart
rate. RS users can select from more than
30 training programs at Polar’s website.
Also at the site, RS users have access to
training regimens for 5K, 10K, halfmarathon or marathons. Training diaries
are stored online for updates and reference.
The RS200sd model features the Polar
Speed and Distance technology to deliver
continuous running speed and pace.
Data reporting is accurate in all
weather conditions and water resistant up to two meters. Polar offers
additional models with a variety of
functions, features, and price points.
Previously found on only the
most advanced and expensive
instruments, heart rate
monitoring functions
are becoming standard functions across
all brands and models, and new features
are appearing as well.
The Nike Triax Elite HRM accurately
measures heart rate using the standard
chest strap. Two sensitive electronic sensors send heart rate information to the
watch wirelessly. Users can program target heart rate zones with audible out-ofzone alerts and training software that
helps track progress. Wireless Mac and
PC connections documents data over
time.
Performance Sports RETAILER
Introduced in January 2005, the
Suunto t6 is designed specifically
for target heart rate training.
Suunto uses physiological research from the Finnish KIHUResearch Institute for Olympic
Sports as the basis for measuring results. Runners using
the t6 can record and track
information comparable to sophisticated laboratory tests. The
t6 measures seven body parameters: EPOC, (Excess Post-exercise
Oxygen Consumption), training effect,
heart rate, energy consumption oxygen
consumption, ventilation, and respiratory
rate.
The primary functions of the Suunto t6
include a heart rate monitor with a memory of over 100,000 heartbeats, watch,
stopwatch, timer, altimeter, and barometer. The Training Manager PC
software includes analysis tools, logbook, and
a calendar. An altimeter, barometer, calendar, temperature gauge,
and pressure sensor are
supporting functions.
The Suunto t6 offers users the ability to track, calculate, organize, and upload an indi-
vidual’s training session data.
Supporting software allows
the user to analyze and interpret historical data and
plan future training sessions. In January 2006,
Health magazine named
the Suunto t6 as the Best
of Fitness Gear in their
second annual Best of Fitness Product Awards.
The Acumen Hydra-Alert HRM
with Fluid Check adds a new
dimension to heart rate based training.
The Hydra-Alert technology monitors air
temperature, humidity, and heart rates to
accurately gauge the degree of fluid loss
during a workout session.
Acumen calculates and displays fluid loss
in ounces/milliliter and as a percentage of
total body weight lost in fluid ounces/
milliliter. Understanding and
managing
hydration
levels helps runners
maintain
performance levels throughout a training session. Resting heart
rate and VO2 MAX
data is stored for analyzing training results.
The Hydra-Alert offers a comprehensive
list of functions to assist runners in monitoring their progress during daily runs.
Secondary functions include three programmable target zones with visual and
audible alarms, count down timer, 50-lap
memory, heat index, stopwatch, and an
alarm. Acumen’s simple initial programming and rechargeable batteries add
value.
The Running Information Center reports
only 26% of finishers in 2004 marathons
finished in less than four hours. Slower
runners and walkers are no less committed to crossing the finish line than their
faster counter parts. The Brunton PedPulse pedometer measures heart rates
while tracking steps and calories burned.
Time, chronograph, and pulse measurement functions are included.
I’ve Got This Cool Merch, But How Do I Sell It?
At running specialty stores, sales associates know every detail about the shoes
they sell. But what about technical electronics like heart monitors, chronographs,
and other sophisticated fitness monitoring
devices? How do they respond when a
customer points to the computer on their
wrist and asks, “show me how it works?”
Customer questions are expected and
anticipated. “We try to understand all the
products from each vendor, but we will
have one person who is an expert in each
product. Whether it’s a Timex, Polar or
Nike, someone will call and say I’ve had
this for a week and need some help with
it,” he said.
Felix Lugo, shoe specialist at Luke’s
Locker in Dallas, Texas reports electronics
are becoming very popular. “Everybody is
hungry for information. How fast am I
going? What’s my heart rate at this mile
marker? Over the holidays, these were
our fastest selling accessories.”
Melissa Cunningham from Marathon
Sports in Cambridge, Massachusetts
notes that most electronics buyers know
what they want. “They are harder to sell
to people who do not have a prior interest.
Even after exploring product options,
customers still look for guidance and
training.”
At Luke’s Locker, product training goes
beyond literature reviews and after store
hours clinics. “When a new product
comes out we ask a staff member to take
the product out, wear it, run with it, and
let us know how it performs,” Lugo said.
Performance Sports RETAILER
At Marathon Sports, sales associates take
time to understand the customer’s expectations. “It’s comparable to a shoe fitting.
It isn’t something that is sold in five minutes. We sit them down and talk through
it,” Cunningham explained.
From the manufacturer’s perspective,
consumers appreciate in-store training.
“They want to have a fairly good understanding of how to work the tool before
they leave the store. More and more
Americans are not into reading instructions, they want to sit down and play with
it and figure it out,” reports Tom Weth,
national sales manager for Fitness Products at Timex.
As more runners add electronics to their
fitness equipment list, product training
can translate initial interest into sales.
When educated about product advantages, price becomes a non-issue. Felix
Lugo from Luke’s Locker is amazed by the
increase in sales. “People don’t blink at
the prices reaching over $200. Once they
understand what they will get out of it,
they really go for it,”
11
PSR Retail Spotlight:
Naperville Running Co.
By Lou Dzierzak
Retailer PROFILE
Some people know what
they want to do early in life.
Kris Hartner decided to
open his own running store in eighth grade. Not just a whim
either, he had business cards designed and printed right
away. Bringing the dream to reality took a little more time
and work. In 10th grade, Hartner started learning the running retail business at Gary Bjorklund Sports in Minneapolis
and stayed through graduate school. He received a Masters
degree in biomechanics, specializing in footwear. “Then I
went to work for Reebok and adidas in various areas - R&D,
sales, sales management, product,” he explained.
Naperville Running Company opened in 2000. The 1,400
square foot store keeps almost 4,000 pairs of shoes in stock.
“We spend a lot of time watching the inventory, keeping it up
to date and well stocked. Our ‘dated’ product is normally well
under 100 pairs at any time during the year,” Hartner reports. Naperville Running Company carries dozens of brands
of shoes, apparel and accessories. All selected to cater to
runners’ needs.
Differentiating the store from his competitors is as carefully
considered as his career path. “The number one priority is
our staff. We hire very friendly runners who enjoy working
with people. Secondly, we have almost every technical running shoe from all of the major vendors and we carry them in
sizes 1-16, widths 2A through 4E,” Hartner explained.
Maintaining a knowledgeable sales staff is one of the constant challenges facing the Naperville Running Company.
Hartner describes the incentives used to retain staff and
build loyalty. “We offer 401k, profit sharing, and I try to be as
flexible as possible in scheduling. It can be a bit of challenge
with the variety of staff we have. We even have a professor in
biomechanics from a local college that helps out in the summer and on weekends.”
Hartner has been involved in running long enough to see the
boom, bust, and return to boom cycle of interest in running.
In the 80’s, Hartnet remembers days when only one or two
customers would visit the store. “I once did a net negative
day, one customer, one return!” he recalled.
From his perspective the customer has changed over time
from a well-informed, educated runner who didn’t need
much help to newcomers looking for information. Hartner
expands on the differences, “today, a majority of our customers are recreational runners/joggers/walkers/marathoners.
They are like sponges soaking up all you can offer them in
regards to training and racing.”
Hartner’s insistence of customer service plays a significant
role in creating long-term customer relationships.
“We now spend two or three times as much time with our
customers as we did twenty years ago. There are also five
times as many shoes to pick from!” he said.
Naperville, Illinois gets its fair share of winter weather. Instead of slowing down, sales shift from footwear to outerwear. Road running shoes with protective uppers are strong
sellers.
Building a brand image and reputation for the store begins
with the staff. “The biggest marketing tool we have is our
employees and how they interact with our customers on a
daily basis. For the most
part our customers love the
experience they have at our
store and they are our best
advocates,” he reports.
Naperville Running Company is an active sponsor in
local running events. Almost
every weekend of the year,
Hartner sponsors or supports races with registrations ranging from 200 to
5,000. Instead of spending
on newspaper, magazine or
radio advertising, Hartnet
invests in human resources.
“I've found it much more
beneficial to increase our
payroll expenses than our
advertising budgets.”
12
Performance Sports RETAILER
Industry News
Saucony Drives 13%
Sales Jump at Stride Rite
Specialty NewsWire
The Stride Rite Corporation net sales
for the fourth quarter and full year of
fiscal 2005 were $131.7 million and
$588.2 million, increases of 13% and
5%, respectively, compared to the same
periods in the prior year. Fiscal 2005
contained 52 weeks compared to the 53
weeks in 2004, which had one extra
week in the fourth quarter. The fourth
quarter of 2005 also included $23.2
million of Saucony net sales for the 11
weeks subsequent to the September
16, 2005 acquisition date.
The fourth quarter net loss totaled $3.1
million or 8 cents per diluted share, a
decrease compared to the net income of
$51 thousand or 0 cents per diluted
share in the fourth quarter of 2004. Net
income for the 2005 fiscal year totaled
$24.6 million, a decrease of 4% from
the $25.7 million reported in the comparable period in 2004. The fiscal 2005
diluted earnings per share of 66 cents
were flat versus last year.
Perez Resigns as Nike
CEO; Parker Steps-Up
The Board of Directors of Nike, Inc.
appointed Nike brand co-President
Mark Parker as the company's new
president and CEO following the resignation of William D. Perez. Parker also
succeeds Perez on the company's Board
of Directors.
The board and Perez mutually agreed
to end his relationship, citing differences regarding leadership between
Perez and Phil Knight. In naming
Parker as CEO and a director, the
board turned to a seasoned Nike veteran with 27 years of experience at the
company. Perez joined Nike in December 2004 after a long career with S.C.
Johnson, based in Racine, Wisconsin.
Pearl Provides Top-Line
Relief to Nautilus Q4
Nautilus, Inc. pointed to trouble in its
domestic manufacturing and operations groups in the fourth quarter as
the primary reason for a sales decline
14
in its Direct channel and a plunge in
the bottom line for the quarter. Total
net sales increased 6.9% to $181.3
million for the fourth quarter ended
December 31, compared to $169.6 million for the corresponding period last
year, but $8.9 million of that total was
attributed to the Pearl Izumi business.
Hardgoods sales were up just 1.7% for
the period. Net income fell more than
80% to $2.8 million, or 8 cents per
diluted share, from $14.2 million, or 42
cents per diluted share, for the fourth
quarter of 2004. The Specialty Retail
channel, which includes fitness specialty retailers, grew 14% in the quarter
to $23 million.
New Balance Refutes
Labor Committee Claims
The National Labor Committee recently
released a report alleging a New Balance Factory in Hongyuan violated
several labor codes, including mandatory 14 to 15.8-hour shifts, no regularly scheduled weekly day off; and 96
hour work weeks. However, according
to New Balance, the company does not
contract, nor has ever contracted product at the Hongyuan factory identified
in the NLC/CLW press release.
The factory that does produce New
Balance product is located in Houjie,
Dongguan City. This factory is closely
monitored by a New Balance Compliance Team including a Compliance
Manager for China and a Compliance
Specialist.
Oakley Sued for Razrwire
Patent Infringement
USAmerican LLC of Beverly Hills has
filed a patent infringement lawsuit
against Oakley, Inc. and Motorola, Inc.
in the U.S. District Court for the Central District of California alleging that
the "Razrwire" sunglasses and headset
combination infringes U.S. Patent No.
4,902,120 ("the '120 patent").
The '120 patent was filed in November
1988 by Frank Weyer, an attorney and
engineer, who was annoyed by his earphones falling out while jogging. After
the '120 patent issued in February
1990, Mr. Weyer formed a company,
American Innovative Products, Inc., to
market his invention. Advertising in
running magazines and at running
events, Mr. Weyer sold several thousand pairs of his combined sunglasses
and earphone product, which were
called "Cruisers."
InSport awarded $2 mm
U.S. Marine Contract
Congress' Fiscal Year 2006 Department
of Defense Appropriations Act has
passed and includes $2 million in
funding for U.S. Marines base layer tshirts designed and manufactured by
InSport International, Inc. of Beaverton, Oregon.
InSport partnered with Malden Mills
Industries of Lawrence, Massachusetts
in the development of innovative yarns
and fabrics that form the InSport Polartec Power Dry with X-Static T-Shirt.
The Congressional earmark will fund
procurement of approximately 200,000
of these anti-microbial, moisture removing base layer garments for U.S.
marines in cold weather combat.
Sporting Goods Wholesale
Sales Up Over 2004
According to the Sporting Goods Manufacturers Association, wholesale sales
of sporting goods equipment, sports
apparel, and athletic footwear were
slightly stronger in 2005 than they
were in 2004, upt 6.8% to $55.7 billion
from $52.2 billion. In 2006, sales are
projected to reach $59.5 billion – about
a 7% gain in sales.
Athletic footwear shipments were up by
nearly 9% to $10.9 billion. Fueling
growth were more sales in lowperformance, fashion-oriented shoes
and expensive, high-performance models. Fitness equipment experienced an
increase of 6% to more than $4 billion.
About 80% of sales were for the home
market. The market for fitness-related
products is expanding as baby boomers
age. In 2006, this segment of the population of 77 million people will be 42 to
60 years old.
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