issue 1423 june 9, 2014 the weekly digital magazine for...
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ISSUE 1423JUNE 9, 2014
The Weekly Digital Magazine for the Sporting Goods Industry
2 SGBWeekly.com | JUNE 9, 20141
Tefl on® Brand.The Element of Protection.
Products that carry the DuPont™ Tefl on® fabric protector brand not only stand up to the environment, but can use less energy, less natural resources and reduce your carbon footprint.*
With Tefl on® fabric protector, textiles require less washing and lower wash- and dry-temperatures, which extend the life of the clothing and reduce the impact on the environment.**
Tefl on® fabric protector—now more sustainable than ever.
tefl on.com/sgb
*Carbon footprint claim based on testing which demonstrates that treated products require lower wash temperatures and 40% less drying time. **Capstone® repellents for Tefl on® fabric protector utilize short-chain molecules that cannot break down to PFOA in the environment. Capstone® repellents meet the goals of the U.S. EPA 2010/15 PFOA Stewardship Program.
Copyright © 2014 DuPont. All rights reserved. The DuPont Oval Logo, DuPont™, Capstone® and Tefl on® are trademarks or registered trademarks of E.I. du Pont de Nemours and Company or its affi liates.
1
Tefl on® Brand.The Element of Protection.
Products that carry the DuPont™ Tefl on® fabric protector brand not only stand up to the environment, but can use less energy, less natural resources and reduce your carbon footprint.*
With Tefl on® fabric protector, textiles require less washing and lower wash- and dry-temperatures, which extend the life of the clothing and reduce the impact on the environment.**
Tefl on® fabric protector—now more sustainable than ever.
tefl on.com/sgb
*Carbon footprint claim based on testing which demonstrates that treated products require lower wash temperatures and 40% less drying time. **Capstone® repellents for Tefl on® fabric protector utilize short-chain molecules that cannot break down to PFOA in the environment. Capstone® repellents meet the goals of the U.S. EPA 2010/15 PFOA Stewardship Program.
Copyright © 2014 DuPont. All rights reserved. The DuPont Oval Logo, DuPont™, Capstone® and Tefl on® are trademarks or registered trademarks of E.I. du Pont de Nemours and Company or its affi liates.
Copyright 2014 SportsOneSource, LLC. All rights reserved. The opinions expressed by writers and contributors to SGB WEEKLY are not necessarily those of the editors or publishers. SGB WEEKLY is not responsible for unsolicited manuscripts, photographs or artwork. Articles appearing in SGB WEEKLY may not be reproduced in whole or in part without the express permission of the publisher. SGB WEEKLY is published weekly by SportsOneSource, LLC, 2151 Hawkins Street, Suite 200, Charlotte, NC 28203; 704.987.3450. Send address changes to SGB WEEKLY, 2151 Hawkins Street, Suite 200, Charlotte, NC 28203; 704.987.3450
Senior Business Editor
Thomas J. Ryan
917.375.4699
Contributing Editors
Scott Boulbol, Fernando J. Delgado, Bill Kendy, Charlie Lunan
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Teresa Hartford
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Camila Amortegui
Director Media & Event Development
Candice L. Smith
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Northeast
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Katie O'Donohue
Southeast/Midwest
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Group PublisherEditor In ChiefJames Hartford
303.997.7302
2151 Hawkins St. • Suite 200 • Charlotte • NC • 28203t. 704.987.3450 • f. 704.987.3455
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JUNE 9, 2014ISSUE 1423
The Weekly Digital Magazine for the Sporting Goods Industry
JUNE 9, 2014 | SGBWeekly.com 3
MAKING NEWS4 Movers & Shakers
Columbia Sportswear Closes Prana Acquisition
5 The Sports Authority Opens Four Speedo "Shop-Within-A-Shop"
6 By The NumbersRussell Athletic Introduces First Shoulder
Pad System
GIVING BACK8 Dick's Sporting Goods Funds Over
180 Youth Teams
PRODUCT REVIEW10 FFANY Spring 2015
FEATURE14 Adidas Looks to Lead U.S. Soccer
I AM…SGB18 David Labbe,
Senior VP & CFO, Kittery Trading Post
14
10
ON THE COVER: Adidas 2014 FIFA World Cup match ball.The ball, named “brazuca”, means “Brazilian,” or to describe the Brazilian way of life. The ball went through a thorough testing process over a two and a half year period involving more than 600 of the world’s top players and 30 teams in 10 countries across three continents, making it the most tested ball by adidas and ensuring that it is suited to all conditions.
MOVERS & SHAKERS
2XU, the Australian performance and compression apparel brand, named Scott Taylor as its first president for the United States. Taylor comes from Nike and Under Armour.
Adidas said Lawrence Norman, former VP of Adidas Global Basketball, has been named Adidas South Europe managing director. Zion Armstrong, formerly managing director of Adidas Group South Korea, was appointed Adidas Brand director in North America.
Garmin said Doug Boessen would join the company July 31 as CFO and treasurer. Boessen recently served as CFO for Collective Brands, Inc.
Icebreaker Founder Jeremy Moon is handing over the CEO title to Rob Fyfe, who has served as executive chairman of the New Zealand apparel company’s board for nine months. A former CEO for Air New Zealand, Fyfe will spearhead plans to double the company's sales over the next five years.
Hi-Tec Sports USA hired Nate McGinnis as VP sales at Magnum Boots and Marit Tegelaar as consumer marketing specialist for Hi-Tec and Magnum Brands.
K2 Sports appointed Ben Wallace VP of U.S. sales, which puts him over sales management teams for K2 Skis, K2 Snowboarding, K2 Inline skates, Ride Snowboards, Line Skis, Full Tilt Boots, Madshus Nordic, Backcountry Access and Atlas and Tubbs snowshoes.
Keen appointed Steve Meineke as president, effective June 1. For the past two years, Meineke served as CEO at Accell North America, a leader in bicycles.
Nike, Inc. said Craig Zanon, currently VP & GM of global basketball, will now lead an expanded and elevated role in the men’s training category as VP & GM of global men’s training. Michael Jackson will take the lead in the basketball category as VP & GM of global basketball
Superfeet named Eric Hayes as the new VP of marketing and product.
CoLUMBIA SpoRTSWEAR CLOSES PRANA ACqUISITION
Columbia Sportswear Company closed its acquisition of Prana Living for a purchase price of $190 million in cash, subject to customary post-close working capital adjust-ments.
Prana will join Columbia’s portfolio of active outdoor brands, which include Columbia, Mountain Hardwear, Sorel and Montrail. It will remain headquartered in Carlsbad, CA as a wholly owned subsidiary of Columbia and will continue to be led by current CEO Scott Kerslake.
Prana sales grew at a compound annual growth rate of more than 30 percent between 2010 and 2013, and are on pace to surpass $100 million in 2014 and generate low double-digit operating margin. North America currently accounts for approximately 95 percent of Prana’s annual sales, suggesting a substantial opportunity to expand by leveraging Columbia’s existing distribution platforms in over 90 countries outside of North America.
“Prana will be a great complement to our existing brands,” said Tim Boyle, Columbia’s president and CEO. “Prana fits Columbia’s strategic priorities to expand into categories that appeal to complementary consumer segments, reduce our dependence on cold-weather products, and leverage Columbia’s global operational platforms to expand across key geographic markets.
Said Kerslake, “With Columbia’s financial strength, operational expertise, and global market platform, we will now be able to reach a much broader audience of socially conscious consumers worldwide.”
Columbia funded the purchase from available cash. In 2014, Columbia expects to recognize incremental Prana net sales of approximately $55 million, which is ex-pected to contribute low double-digit operating margin to Columbia’s consolidated 2014 results, excluding the effect of approximately $4 million in one-time transac-tion fees, and approximately $9 million in amortization of certain acquired assets and other integration costs. In 2015, Prana’s annual sales are projected to increase at a double-digit rate over 2014 with operating margin in the low-teens, excluding anticipated purchase accounting amortization and other integration costs of ap-proximately $5 million, resulting in accretion to Columbia’s consolidated earnings in 2015.
4 SGBWeekly.com | JUNE 9, 2014
JUNE 9, 2014 | SGBWeekly.com 5
THE SpoRTS AUTHoRITy OPENS FOUR SPEEDO “SHOP-WITHIN-A-SHOP”
Speedo USA and The Sports Authority launched a new Speedo Aquatic Zone “shop-within-a-shop” retail concept at four Sports Authority locations in Florida and California.
The 500+ square foot shops at The Sports Authority are located in the Miami and Boca Raton, FL and Balboa and Sherman Oaks, CA stores. The layout lets shoppers explore and shop Speedo products by activity, including aquatic training, fitness, recreation and other water-related sports, with a mix of in-line, end-cap, four-way and wall unit displays. Dive accessories, the Learn to Swim kids water safety line, and new styles from the revamped 2014 footwear and packs collections are also featured. The graphics and merchandising highlight Speedo’s key technologies and its 86-year history of innovation, and help guide visitors in finding the Speedo gear that best meets their needs.
The Speedo Aquatic Zones are part of an expanded partnership with The Sports Authority, which also unveiled an updated Speedo footprint in an additional 218 stores.
“We are excited to expand our partnership with Speedo to include this new shop-within-a-shop retail concept, which will offer our customers the best of the best in cutting-edge swim products,” said Stephen Binkley, chief merchandising officer at The Sports Authority. “The Speedo Aquatic Zones provide an elevated shopping experience for competitive and recreational athletes in the swim community and further strengthens our position as the go-to retailer for all things sporting goods.”
“More and more people are swimming for fitness than ever before,” said Jim Gerson, president of Speedo USA, which is a division of PVH Corp. “Whether you’re racing for a record finish, swimming laps for better health or making memories at the beach, we believe the new Speedo Aquatic Zones at The Sports Authority will help make every water moment better - and inspire even more people to ‘Dive In.’”
MOVERS & SHAKERS
+1.3%Aided by a strong pickup in April at Famous Footwear and strong performance by its wholesale brands, Brown Shoe reported a better-than-planned first quarter and slightly raised its outlook for the year. The strength in canvas was said to be coming from its junior or missy casual areas and from Skechers. Famous Footwear's same-store sales rising 1.3 percent, lifted by an April gain of 5.5 percent.
+4.1%Hibbett Sports reported first-quarter profits rose 8.3 percent to $28.4 million, or $1.09 a share, matching Wall Street’s consensus estimate. Sales jumped 9.1 percent to $261.9 million. Comps grew 4.1 percent, driven by branded apparel and footwear.
+7.6%Aided by its role as kingpin of the basketball category, Foot Locker reported its most profitable quarter in perhaps its 135-year history. First quarter profits rose 17.4 percent to $162 million, or $1.10 per share. Wall Street's consensus estimate had been $1.06 a share. Sales rose 14.0 percent to $1.87 billion, benefiting from last fall’s acquisition of Runners Point, the German run specialty chain, and a comp gain of 7.6 percent.
-9.0%Blaming the weather and competitive discounting, DSW, Inc. reported first quarter earnings that fell well short of analysts’ estimates while slashing its guidance for the year. Women's shoes; which excludes boots and sandals, comped down 9 percent. Women's sandals were down 12 percent.
-13.3%Genesco, Inc. reported first-quarter earnings on an adjusted basis slid 13.3 percent and came in 10 cents lower than Wall Street's consensus estimate. But the company reaffirmed its guidance for the full year while citing continued strong gains at its Locker Room and Clubhouse stores, some better trends emerging for Journeys and Schuh concepts, and an overall improving sales trend since April’s start.
6 SGBWeekly.com | JUNE 9, 2014
RUSSELL ATHLETIC INTRODUCES FIRST SHOULDER PAD SYSTEM
Russell Brands, LLC introduced “CarbonTek with OS Technology,” its first football shoulder pad system. At the core of the CarbonTek with OS Technology shoulder pad system are two innovative materi-
als combined to provide a protective advantage in an automotive grade foam vest and a 100 percent carbon fiber exoskeleton. The design offers athletes the following attributes: » In the Compression Vest the fabric and design hold the padding close to the body
for added protection; x-ray images are visible when you wear the padded system; it can be used without exoskeleton for non-contact days; includes an odor management system; and is machine washable.
» The Carbon Fiber Exoskeleton offers 100 percent Aerospace-grade carbon fiber that provides 10 percent reduction in weight from other competitor products; it offers better impact management than traditional plastic; it’s molded to fit the body; and a military-grade buckle system gives a secure fit with reduced bulk.
Russell Athletic enlisted the help of industry experts to test the product including sports equip-ment specialists and elite football players. Sports equipment scientist, Dr. Richard Brandt, con-ducted a series of lab tests on impact forces and energy dispersion and in the process developed a new, innovative shoulder pad study (patent pending).
“We subjected the CarbonTek shoulder pad and the best alternative pads to controlled rigor-ous impact tests to determine which pad was most effective in reducing the large impact forces experienced by football players,” Dr. Brandt, founder of Sports Science, Inc. said. “To simulate the collisions experienced by these players, we impacted a pad-protected human torso model, appropriately modified and instrumented, with solid loads chosen to reproduce the large forces encountered in player collisions. In these tests, CarbonTek outperformed the other shoulder pads tested in all assessed aspects of impact dispersion, with the most notable finding being more than 63 percent reduction in the average force felt through the CarbonTek shoulder pad system in a 600-pound impact test.”
Robby Davis, Russell Athletic SVP general manager, said the company felt there has been a void in innovation in the shoulder pad space. He added, “That’s where CarbonTek comes in - we can utilize Russell Athletic’s roots in football and dedication to quality and innovation to create what we believe is a product with superior impact management, a lower profile and a better fit for players.”
JUNE 9, 2014 | SGBWeekly.com 7
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8 SGBWeekly.com | JUNE 9, 2014
The Dick's Sporting Goods Foundation announced the funding of more than 180 youth athletic teams from across the country through its inaugural Sports Matter program. During a five-week fundraising campaign, the Sports Matter initiative raised more than $2 million in donations, and the Dick's Sporting Goods Foundation matched team efforts up to their fundraising goals, totaling more than $4 million in funds going directly to teams facing severe financial challenges.
In March, Dick's Sporting Goods and The Dick's Sporting Goods Foundation announced a $25 million multi-year commitment to support youth athletic programs including donations to local sports teams and the launch of The Dick's Sporting Goods Foundation's Sports Matter initiative. Sports Matter addressed the growing issue of underfunded youth athletics nation-wide through an extensive public awareness campaign and a new proprietary crowd-funding platform in which The Dick's Sporting Goods Foundation matched community donations for participating programs.
"We are thrilled Sports Matter was able to draw nationwide attention to this important funding crisis, while enabling more than 180 teams to keep playing," said Lauren Hobart, director of The Dick's Sporting Goods Founda-tion, SVP & CMO Dick's Sporting Goods. "We believe sports teach valuable lifelong lessons, and we have seen firsthand through this pro-gram the powerful impact athletics has on chil-dren, parents and communities. This has rein-vigorated our steadfast commitment to continue to address the ongoing sports funding issue."
Dick’s noted that billions have been cut from youth sports programs nationwide in recent years and 60 percent of children must now pay a fee to play. An alarming study predicts that by 2020, 27 percent of U.S. public schools will not offer interscholas-tic sports programs. Yet, evidence shows that stu-dents who play sports are significantly more likely
to stay in school and go to college, and prove better at so-cial skills like man-aging emotions, resolving conflict, appreciating diver-sity and resisting peer pressure.
"Every year we're seeing more budget cutbacks in sports, coaches are being eliminat-ed, and fewer players are going out for teams. Sports Matter is doing something about it" said Jon Gruden, former NFL head coach and cur-rent NFL analyst for ESPN who has signed on as a Sports Matter ambassador. "I am proud to be a part of this great program and excited to stay connected to the team I personally donated to save The Twin Valley Raiders."
As a result of Sports Matter donations, programs like the APEX Elites in New Orleans can provide a safe place for children to play basketball, the Mustang Swim Team from Los Angeles will continue to provide children from low income communities a high quality swim program, the Harlem 76ers will offer 145 local students a lacrosse program with no fee, and
DICK'S SpoRTING GooDS
FUNDS OVER 180 YOUTH TEAMS
"We believe sports teach valuable lifelong lessons,
and we have seen firsthand through this program the powerful impact athletics has on children, parents
and communities. This has reinvigorated our steadfast commitment to continue to address the ongoing sports
funding issue."
- Lauren Hobart, director of The Dick's Sporting Goods
Foundation, SVP & CMO Dick's Sporting Goods
CLICK TO PLAY
▲
many other programs will continue to offer access to sports to thousands of young people.
Additionally, to raise awareness for the Sports Matter movement, The Dick's Sporting Goods Foundation partnered with Tribeca Digital Studios and director Judd Ehrlich to create We Could Be King, a film depicting two rival Philadelphia high schools that were forced to merge due to severe budget cuts. The film aired on ESPN channels and ABC throughout April and May, and will be available On Demand in August. ■
GIVING BACK
By Thomas J. Ryan
Lauren Hobart
JUNE 9, 2014 | SGBWeekly.com 9
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10 SGBWeekly.com | JUNE 9, 2014
For Spring 2015, Merrell will be making a big splash around its trail-inspired Capra collection that runs across shoes, boots and apparel. The marketing will focus on motivating people to achieve personal goals outside.
"When we talk about the trail, it means so much more than just des-tination. It's our inspiration," said Martin Dean, creative director at Merrell. "We look up to nature and hold it as our creative muse because nature holds all the answers to the problems we aim to solve with the products we create."
Built to handle steep as-cents to rocky trails, Capra's hiking shoes and boots fea-ture a scrambling design with a Vibram MegaGrip outsole inspired by the dexterity of the mountain goat, offering climber-like traction in ex-treme conditions - wet or dry. A Merrell Unifly midsole is tapered with deep cushioning in the heel and thinner cushioning in the toes for greater feel and agility. Lace-to-toe design moves with the foot while providing stability for ascents of design. It's available in a mid- to low-high Gore-Tex waterproof design. A Capra Sport low-cut with synthetic leather and mesh upper will also be available.
At Patagonia Footwear, a sister brand of Merrell, the “Go Lite, Go Long” collection continues to push the limits on lightweight across hiking, trail and approach. Jamie Barbor, national sales manager, Patagonia Footwear,
said the collection speaks to Patagonia’s mountaineering heritage but continues to draw inspiration from ath-letic’s influence.
A highlight is the EVER-race, designed in partner-ship with ultrarunner Luke Nelson and weighs 7.3 oz. in men’s standard size. New
technologies such as the Forge-Weld construction in the uppers mini-mizes seams and increases comfort. The EVERrace’s Posi-Stride Shank System provides a responsive yet supportive ride, and its Nanotrak rub-ber offers traction and durability. Patagonia Footwear’s overall trail op-tions now come in a 8mm drop midsole to complement its 4mm and 10mm offerings.
In the multi-sport category, the Rover, a winner of Outside Magazine’s 2014 Gear of the year award, gets an update with new colorways. Suit-able for running, biking and climbing, the go-anywhere trail shoe fea-tures a soft-flex 4mm drop midsole to encourage a natural foot strike, an integrated 2mm footbed with Dri-Lex line for temperature and moisture control, and a crash pad heel wedge for meatier cushioning. In the hiker category, the Skorost is an ultralight, low-cut model that feels athletic on the foot but its Posi-Stride Shank System provides a responsive and sup-portive ride to handle the mountain terrain.
Ahnu, which saw sales double in 2013 after tripling in 2012, is ben-efiting from its efforts to position itself as the “yoga shoe of the foot-wear world,” said Jacqueline Van Dine, brand director. Those efforts include the signing up of over 1,000 yoga athletes as ambassadors.
The Karma, a yoga-chic slip-on, is being updated with new, rich-tex-tured materials and fresh designs. Made from soft, supple, full-grain leathers, the travel-friendly flats include a stretchy back heel that
provides a secure fit while making them easy to pack. A sculpted EVA footbed is wrapped in micro-fiber suede to offer a soft feel. Ahnu's sandal collection is also being expanded with metallic continuing to hold appeal across several women's styles.
Ahnu’s Walking on Clouds espadrille features a wrap EVA midsole but stands out for its fun colors. The Noe sneaker looks like canvas but is made of suede to wear like leather. The Sugarpine, which won Fitness Magazine's Best Sneaker Award Winner for 2914, is expanding with new colorways.
Birkenstock continues to consolidate sub-brands under the leadership of David Kahan, who became CEO of Birkenstock USA in May 2013. The change leads to a more athletic push with many sneakers and boat shoes that had been sold under the Footprints label now being sold under
By Thomas J. Ryan
PRODUCT REVIEW
FFANY
Merrell Capra Sport
Merrell Capra Sport Gore-Tex
PatagoniaEVERrace
Ahnu Sugarpine
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12 SGBWeekly.com | JUNE 9, 2014
Birkenstock. The sneakers will still have the cork or EVA footbed but the out-sole is made of TPU.
“You can't play sports" in a Birkenstock sneaker, admitted Shelly Glasgow, director of product de-velopment at Birkenstock USA, but they will offer
significantly more support than the average canvas athletic shoe. One sub-brand, Birki's, that targets a younger demographic is coming out with an expansive denim-inspired collection. Its core sandals continue to experi-ment with a number of bright colors and prints.
Skechers last week signed seven-time PGA Tour champion Matt Kuchar - currently ranked fifth in the world - as the first brand ambassador and face of the Skechers GOgolf line that's already gaining shelf space in green-grass accounts. The line will be expanded for 2015, including a technical fairway shoe with a Go Golf Blade that's expected to sell at $130.
On the run side, Skechers in May signed Kara Goucher, a top American female distance runner over the past decade, to support its efforts to reach women runners. Sarah Haskins, signed by Skechers in February, just won San Francisco's Escape from Alcatraz Triathlon.
Rick Higgins, VP of merchandising & marketing for Skechers Performance Division, said the signings came, as its star men's runner Meb Keflezighi became the first American to win the Boston Marathon this year since 1983. Higgins said the win pushed many specialty run stores that "had been on the fence" to start carrying Skechers.
But Higgins said the product still has to perform and he attributed much of Skechers success to its technology that encourages a midfoot strike. For 2014, Skechers is coming out with the GORun Strada, a more-cushioned shoe that offers "passive stability." The GORun 4 shifts to a two-piece midsole over a one-piece for a more responsive ride and overall has less of a rocker effect than the original GORun but the focus remains on the midfoot strike. A GOMeb Speed 3 with new tooling, updated aesthetics and a roomer toebox also arrives.
Skechers is also coming out with the third-version of its wildly success-ful GOWalk collection, which Higgins described will "scream innovation." Beyond aesthetics, changes include a new vamp and heel counter. But the GOWalk line will still feature Goga Mat Technology with its high-rebound cushioning that has defined the line's comfort experience.
At Muck Boots, its Breezy collection is being expanded to an ankle-boot version after finding success in mid, ballet, mid and tall classifications. While touting the performance expected by Muck Boots, the Breezy collection stands out for its bright colors and adventurous prints. Said Ari Mintz,
Muck Boot’s senior product manager, ‘We’ll take a gingham print and express it in a fun way.”
The collection features Muck’s new XpessCool lining material that keeps the foot cool in warm weather. The Breezy Ankle features a du-rable flex-foam upper that's waterproof while being lightweight. The boot's EVA rubber pod outsole offers excellent traction control on rug-ged ground.
Muck’s sister brand, Puddleton's, is also expanding its popular pack-able rain boots in more colorways while coming out with a version that stands up like a typical rain boot.
Rockport is reviving its XCS midsole technology in a reach way back to its mountaineering days. A pinnacle shoe, called Walk 360, is being
launched with fanfare at Outdoor Retailer Summer Market and is be-ing touted as Rockport’s “most ad-vanced walking shoe ever.”
Riders Sandals conducted a soft introduction of its Dry Eco Foam proprietary cushioning foam last
year and is now expanding it across its Cloud, Plush and other styles. Brad Gruber, Rider Sandals national sales manager, said the EVA-formulated foam compound "far exceeded expectations based on the feel." But a key feature is it doesn't retain water while other foam; frequently described as "Memory Foam," stay wet for hours. Not holding any water also reduces fungal growth. Fitting with the brand's reputation, the foam is recyclable. On the aesthetics side, Rider Sandals is finding some success with a bev-eled approach to the midsole that gives it a 3-D effect.
Blundstone is adding more color to its line, including leathers, which is aimed at its expanding women’s fan base. Tim Engel, national sales manager, said women are buying basic skinny jeans and “then looking to contrast that with more of a call out on their feet.”
Wolverine is coming out with a special 100 Mile Boot made of Michigan Bison in honor of the 100th anniversary of the
col l e c t ion . The brand received an assist from its sister brand, Bates, which focuses on military sales and has plants in the U.S.
A newcomer to FFANY was Joy & Mario, a maker of sporty casual shoes with a surf vibe. The El Monte, CA-based company was the original suppler
of TOMS out of China, but launched its own diverse collection this spring of fashionable yet comfortable espadrille and ballet flats. It features a heavy play on suede, canvas as well as catchy prints and sequin designs. The brand has a long-standing relationship with BCI (Better Cotton Initiative) to insure the highest quality in its uppers. ■
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14 SGBWeekly.com | JUNE 9, 2014
Recent articles have explored how Adidas plans to use its sponsorship of the FIFA World Cup to protect its mar-ket share against apparent gains being made in the soc-cer category by Nike worldwide. But Adidas also wants to use the global sports event as part of its goal to take over Nike’s soccer lead in the North America.
Based on weekly point-of-sale data compiled by SportScanInfo, Adidas and Nike fairly split the U.S. mar-ket in the Athletic Specialty/Sporting Goods segment in the all-important soccer cleat category. Nike took the lead in 2013 but Adidas appears to be regaining lost ground in 2014. In Soccer Hardgoods, the two also control more than 80 percent of the market with a slight lead by Nike.
“We work in sports. We love competition. And it’s a competitive marketplace,” said Ernesto Bruce, director of soccer for Adidas America. “But we are the global leaders in the sport and our mission here in the U.S. is to be the number one undisputed soccer brand in the U.S.”
As a World Cup sponsor, Adidas provides the official match ball and is kitting out nine of the 32 finalists, in-cluding former world champions Spain, Germany and Argentina.
Adidas Group’s CEO Herbert Hainer recently proclaimed a bullish projection for Adidas’ worldwide soccer revenues to reach a record-breaking €2 billion euros ($2.8 billion) in 2014. That should put Adidas firmly ahead of Nike, which indicated that its soccer sales had surpassed $2 billion for its year ended May 2013. Articles about Adidas possibly losing soccer share in its home markets came after Nike reported footwear sales, excluding currency effects, in Western Europe shot up 24 percent for the quarter ended February 28.
Hainer’s projection came after Adidas reported that foot-ball (soccer) sales for the Adidas Brand were up 27 percent in the first-quarter with “impressive double-digit growth rates” in Western Europe, Latin America, Russia/CIS and North America. Adidas expects to sell significantly more balls than at the last World Cup in South Africa four years
ADIDAS LOOKS TO
LEAD U.S. SOCCER
Adidas-athlete Lionel Messi, who plays for Argentina, has broken over 125 records and is the only player to win four world player of the year awards back-to-back. Photos courtesy Adidas
By Thomas J. Ryan
JUNE 9, 2014 | SGBWeekly.com 15
ago and about as many shirts. It also expects to sell 2 million pairs of spe-cial boots designed for the event.
Hainer stressed Adidas is prepared to go "head-to-head" with Nike in soc-cer and is spending a "double-digit million sum" on World Cup advertising, including an extensive push around social media.
"Football is the DNA of our company. We want to clearly show that we are number one in soccer," Hainer said at the press event.
In the U.S., Bruce said Adidas is on track to achieve double-digit growth in 2014. The market is already one of Adidas’ top three markets in overall soccer sales globally and the growth opportunity around soccer remains “massive” in the region, with an expected major lift stemming from the World Cup.
“All the stars are aligning around this World Cup,” said Bruce. “Our own efforts, combined with our strategic partnerships with Major League Soccer and ESPN, are going to turn up the volume in a huge way for this World Cup.”
U.S. viewership should clearly benefit from the fact that Brazil is only one hour behind the U.S. East Coast time zone, according to Bruce. ESPN viewership for the last World Cup in South Africa was up 30 percent versus the 2006 event, despite South Africa being six hours ahead of the U.S. East Coast time zone. Noted Bruce, “A 30 percent increase in viewership is massive, and I can already tell you we are all predicting that type of increase for this World Cup.”
He also considers the event a “a once in a lifetime opportunity to watch some of the best players in the world,” including “potentially some of the best players ever.” These include Adidas-athlete Lionel Messi, who plays for Argentina. Said Bruce, “Lionel Messi is unmatched. He has broken over 125 records and is the only player to win four world player of the year awards back-to-back.”
Messi will be a cornerstone of Adidas’ ‘All In or Nothing’ campaign around the World Cup. His icon line, Messi, is also “doing really, really well and we will continue to do that.”
Other Adidas star players that may offer ‘hot market’ opportunities include Brazil’s Dani Alves, Germany's Mezul Ozil and Uruguay’s Luis Suárez, who just became the first South American to win the English Pre-mier League's player of the year.
Overall, Bruce said that while fandom pales in comparison to other countries where soccer is seen almost as a religion, World Cup fever is “developing at a very rapid pace” in the U.S.
The overall interest in soccer is evidenced by strong attendance at MLS games this year, with average fan attendance of over 18,000 ranked either second or third among professional sports teams. A recent ESPN poll also ranked soccer as the number two favorite sport among 18 to 25 year olds after American football. Another surprising stat is that the U.S. purchases the most tickets to World Cup matches of any country in the world.
Any success for the region’s two most closely followed teams, the U.S. and Mexico, also promises to accelerate fandom around the sport.
Despite Nike’s sponsorship of the U.S. team, Adidas more than wants the U.S. team to perform well. First, Adidas sponsors six players on the team, including Jozy Altidore, Omar Gonzalez and Graham Zusi. But if the U.S. team “does well, then soccer continues to grow,” said Bruce.
Equally important to the U.S. market is Mexico, a team Adidas sponsors and that remains by far Adidas’ number-one jersey in the U.S. With a fervent fan base spread across many parts of the country, Mexican and U.S. team jerseys sold 1:1 in the 2010 World Cup, according to retail feedback
Weekly POS data compiled by SportsScanInfo shows Adidas and Nike fairly split in the U.S. market in the Athletic Specialty/Sporting Goods segment in the all-important soccer cleat category.
SPORTSCANINFO FAST FACT
Adidas Battle Pack
16 SGBWeekly.com | JUNE 9, 2014
received by Adidas. Remarked Bruce, “The Mexican team does exhibitions for us and anywhere that you go in the U.S., that game is sold out.”
Both the U.S. and Mexico face tough draws and are not expected by many to make it past the first round. But Bruce said even if the U.S., Mexico and any of the major teams sees an early knock out, “we feel confident that we’ve got other great teams that people can support.” He also said most U.S. fans have four teams they follow at each World Cup due to their backgrounds built on the diversity of country as well as star players they’ll come to root for.
Moreover, Adidas, ESPN and Major League Soccer are all “going to do a massive job of communicating and selling the sport,” with soccer “defi-nitely going to be prime and center during this World Cup.”
For Adidas, the World Cup will represent the “largest and most compre-hensive launch in the history of the brand for soccer.”
A big focus will be on virtual events that share the most intimate mo-ments from the tournament – pre-game rituals, tunnel walks and team huddles – with fans through @adidassoccer. Bruce said fans would be more connected to this World Cup than ever before.
“We’re going to be highly engaging and accessible from a social and digital standpoint,” said Bruce. “Fans will get to see things they’ve never seen before. They’ll get access to the game and the players on the teams in a very, very unique way.”
Nike also has a formidable team lineup that includes host nation Brazil, England, France, Portugal as well as the U.S. It’s launching its own market-ing blitz around its stars that include Brazil’s Neymar, Portugal's Cristiano Ronaldo, Spain’s Andres Iniesta and Sweden’s Zlatan Ibrahimovic. Nike’s 'Win-ner Stays' video featuring its stars has already racked up more than 78 million views online.
A third contender, Puma, sponsors Algeria, Cameroon, Chile, Ghana, Italy, the Ivory Coast, Switzerland and Uruguay, although it’s not planning a major World Cup program. Its biggest ad campaign to date arrives in August and September, focused on its new 'Forever Faster' branding and heavily featuring its new sponsor, the Arsenal football club.
Adidas expects to be the most visible brand at the 2014 World Cup with its Battle Pack cleat collection worn by all Adidas players, the official Bra-zuca match ball and the brand's lightest team kits for Argentina, Bosnia and Herzegovina, Colombia, Germany, Japan, Mexico, Nigeria, Russia and defending champion Spain.
The Battle Pack collection’s unexpected black and white design features unique shapes and patterns inspired by warrior war paint with a pop of gold color in the stripes representing the FIFA World Cup trophy.
“We talk to athletes every day and transform their insights into
revolutionary cleat technology that will help them perform their best on the biggest sporting stage that exists,” said Bruce. “This collection blends the ultimate in innovative technology with a totally radical design.”
In addition to the Brazuca official match ball, Adidas is also offering the Adidas Brazuca 2014 World Cup Final Ball in a trophy-inspired color. It also recently introduced the micoach Smart Ball, an app-enabled soccer ball with integrated sensor technology that relays data on how hard the ball has been struck, offers visual flight trajectories, depicts ball spin and shows impact points.
Also supporting Adidas’ U.S. push in soccer is its sponsorship of MLS, with all 19 teams wearing Adidas uniforms. While the World Cup arrives every four years, “we celebrate the MLS every day,” Bruce said. Another major outreach will be made this August in Portland, OR at the MLS All-Star game, with an MLS All-Star squad facing Bayern Munich.
“We work in sports. We love competition. And it’s a competitive marketplace. But we
are the global leaders in the sport and our
mission here in the U.S. is to be the number one undisputed soccer brand
in the U.S.”
- Ernesto Bruce, director of soccer for Adidas America
Adidas also partners with the MLS around investments in youth academies to support U.S. player development. Said Bruce, “Soccer investment in youth player development is going to prove to be transformational. It’s not only investing in more and more young players to help train them to become professionals one day, but also investing in coaches and youth facilities. We market and promote that with MLS players such as Jozy Altidore and Omar Gonzalez.”
Bruce also believes the World Cup has “the potential to again reignite and increase participation.” Soccer in the U.S. has seen more modest growth or even small declines in recent years in both indoor and outdoor participation since 2009, according to SFIA.
He said Adidas already has controls over 60 percent of the youth club business in the U.S. Adidas is also planning ongoing “nonstop and relent-less innovation coming for months ahead post World Cup.”
Overall, Bruce believes Adidas has reached a “tipping point” with soc-cer in the U.S. with the momentum building since it released its first kits around the World Cup in November.
“No one knows the game like we do,” said Bruce. “We’ve been at the fore-front of every major soccer innovation for nearly 90 years and the World Cup has featured Adidas for more than half a century. There’s nothing like the energy and excitement of World Cup and we’re bringing fans right into the heart of the action.” ■
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It’s easy to mistake David Labbe as chief merchandiser at Kittery Trading Post as he explains how the company expects to restore sales to $1,000-per-square-foot in the wake of its latest expansion. During a visit in 2013, he was as jazzed about how the company was selling fudge by the ton from a kiosk under a stairwell as he was about its reputation as a top paddle sports, snow sports and shooting sports dealer. After 28 years, his fingerprints can be found everywhere at KTP; from its register wraps and new POS system to the T-shirts it gave away to celebrate its 75th anniversary in 2013. He has helped three CEOs from two generations of the founding Adams family navigate recessions, gun control legislation and $4 gas to grow the company’s annual sales from $16 million in 1986 when he arrived at the company to more than $55 million in 2013. In an industry increasingly dominated by national chains and online retailers, family-owned-and-run KTP remains a destination not just for the region’s campers, hunters, fishermen, paddlers and skiers, but for thousands of tourists who flock to nearby beaches and upper Maine for vacations each year.
You’re clearly passionate about retailing, but what are your passions outside of work? I have been playing golf since I could walk and that is my true passion. Whether it is playing every course on my bucket list, collect-ing logo golf balls or scorecards, watching the Golf Channel, playing on the ‘Corporate Tour,’ which is slang for all charity tournaments, corporate golf outings or any other golf round that gets you out of the office. When did you begin collecting the balls? I started collecting logo balls when I joined the Corporate Tour. KTP noticed and gave me a new rack for my 15th anniversary and then another rack for my 20th year. That one is not quite full yet. They owe me one for my 25th year.
What are your criteria for adding to the collection? Any golf course I play for the first time, I purchase a logo ball and it goes directly in the rack. I also receive corporate logo balls from various vendors and business
contacts which get added as well. I have a few logo balls in the collection of courses I have never played given to me by friends, and few logo balls found while playing golf, but very few. Lastly some friends try to add to my collection by throwing logo balls my way or occasionally when I am in the woods I might find an interesting logo ball, and I do mean occasionally not often.
What's your favorite or most unusual ball and why? I have one ball that has a piece of a cactus sticking out of the ball. That happened tee-ing off in Scottsdale, AZ. I also happened to save the Hogan golf ball I used to score my only hole in one when I was 15 years old.
What's your goal with the collection? I have over 200 balls and would like to double that amount by the time I retire.
What are the top three balls you are seeking? St Andrews, Pebble Beach and Brandon Dunes. I played Pebble Beach when I was 22 and saved the scorecard, but not the logo ball.
How many rounds of golf do you play a year? Before the expansion and when my four boys were home a ton, I carried a 2 handicap and was Club Champion at Wentworth by the Sea in 2002. Now, I play a couple times a week April through October and am playing to a 9 handicap. I always heard if your handicap was under a 10, you should get fired from your job, but that has not happened to me.
Who is one of your personal heroes or favorite pro athletes and why? Jack Nicklaus. To win 18 majors, it takes character, dedication and the ability to handle pressure. What is something most people don't know about you that might surprise them? I like to play acoustic guitar and sing.
DAVID LABBE, Senior Vice President and
Chief Financial OfficerKittery Trading Post
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