SGB WEEKLY 1133

AUGUST 15 2011

The Weekly Digital Magazine for the Sporting Goods Industry

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Sound relevant to your business Then its time to take a second look at Spenco

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WEEK 1133 | SGBweeklycom 3

Copyright 2011 SportsOneSource LLC All rights reserved The opinions expressed by writers amp 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 7049873450 Send address changes to SGB WEEKLY 2151 HAWKINS STREET SUITE 200 CHARLOTTE NC 28203 7049873450

NEWS 4 ATHLETA Lands In Manhattan MIZUNO CORP Sees Fiscal Q1 Strength In Softgoods Offset Hardgoods Weakness 5 CANNONDALE and Other IBD Sales Stand Out In An Otherwise Tough Q2 At Dorel BY THE NUMBERS 6 EASTON-BELL SPORTS Q2 Net Income Cut As Margins Contract On Product Shifts JOHNSON OUTDOORS Sees Fiscal Q3 Results Hurt By Wet Spring Consumer Anxiety 8 NEW BALANCE Opens First North American Experience Store 9 UNDER ARMOUR Debuts Largest Footwear Campaign MOVERS amp SHAKERS

FEATURES 10 OUTDOOR INDUSTRY Regains Mojo DEPARTMENTS

18 CALENDAR


AUGUST 15 2011

wwwspencocom

Releva

nce

A collection of casual footwear insoles and accessories that are easy to merchandise and sellA 45 year track record of products that keep people healthy and active Great pricing Terrific customer service




10

Editor In ChiefJames Hartford (7049873450 x104)

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Senior Business EditorThomas J Ryan (9173754699)

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Advertising Sales DirectorCasey Vandenoever (3039977302)

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Circulation amp Subscriptionssubssportsonesourcecom

TechnologyChief Information Officer Mark Fine

VP Research amp Development Gerry AxelrodManager Database Operations Cathy Badalamenti

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TEAM Business

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The BOSS Report

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Group PublisherBill Garrels

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Cover photo courtesy of Outdoor Retailer Summer Market

Photo courtesy of Outdoor Retailer Summer Market

4 SGB WEEKLY AUGUST 15 2011

Gap Inc announced the grand opening this week of two Athleta re-tail locations in Manhattans Upper East and Upper West Side neigh-borhoods marking the brands entry into the east coast market Gap said the openings support Athletas plan to open 50 stores by 2013 One store will open on Columbus Avenue on the Upper West Side and the other on Third Avenue on the Upper East Side

Entering New York is a significant milestone for us as we aim to grow our share of the $31 billion womens active wear market said Scott Key senior vice president and general manager of Athleta Thanks to our successful catalog business we know theres a highly concentrated customer base in the New York metropolitan area and we are excited to bring our loyal and new customers two beautiful stores

where they can build strong inspiring communities around the athletic pursuits they love

To mark the opening of the New York City stores Athleta has partnered with Bent on Learning a non-profit organization that of-fers instruction in yoga and meditation to students in grades K through 12 in the New York City public schools and youth centers as a means of reducing stress and improving concentration self-esteem and overall health

The New York locations represent only Athletas third and fourth stores The other two locations are in the San Francisco area a smaller test store opened last year and a flagship store opened in January An additional eight to ten stores are planned is six markets this year

ATHLETA LANDS IN MANHATTAN

Mizuno Corp reported that total fiscal first quarter sales rose 09 percent to yen415 billion ($509 mm) from yen412 billion ($447 mm) in the year-ago quarter Net income increased 565 percent to yen194 billion ($24 mm) or yen156 million per share on a year-over-year comparison due in large part to a decrease of an exchange-rate loss and extraordinary loss last year Operating income was up 62 percent in yen terms to yen320 billion ($39 mm) in the fiscal first quarter

The company said sales of footwear and apparel did well and growth of footwear sales in every region contributed to an increase in profits Footwear sales which grew 55 percent in Japanese yen terms to yen85 billion ($104 mm) represented 205 percent of total sales in the first quarter compared to 196 percent of sales in the year-ago period

Diamond Sports (BaseballSoftball) revenues decreased 14 percent in yen terms to yen125 billion ($153 mm) and Golf sales fell 124 percent to yen558 billion ($68 mm) for the quarter while Apparel sales increased 33 percent to yen728 billion ($89 mm) for the period While revenue

in Europe increased by 05 percent in currency-neutral terms the Americas region which includes the US Canada and Latin America showed an 111 percent currency-neutral increase in revenue and drove the overall business results Currency-neutral revenues in the AsiaOceania region jumped 186 percent for the quarter

In the Americas sales of footwear increased 254 percent led by running shoes and apparel grew 233 percent measured in currency-neutral terms The total region saw revenues increase 05 percent in yen terms to yen666 billion ($82 mm) or an increase of 135 percent in US dollar terms for the period In Japan revenues increased 03 percent to yen299 billion ($366 mm) in the fiscal first quarter Europe revenues totaled yen239 billion ($29 mm) for the period a one percent decline in yen terms while the AsiaOceania region grew 130 percent in yen terms to yen262 billion ($32 mm)

The forecast for the fiscal year ended March 31 2012 remains unchanged at revenues of yen152 billion and net income of yen250 billion

MIZUNO CORP SEES FISCAL Q1 STRENGTH IN SOFTGOODS OFFSET HARDGOODS WEAKNESS

Photo courtesy of Athleta

1 Million Life is Good reached more than 1 million Likes on its Facebook page During an average month Life is Goods Facebook page receives nearly 29 million post views and over 127000 fan interactions The brand also has more than 36000 Twitter followers

8 amSports Authority held grand openings for six new stores simultaneously on August 13 at 8 am in the major markets of Miami Los Angeles Salt Lake City Chicago and Milwaukee The stores are located in Miami and Vero Beach FL Lakewood CA Salt Lake City UT Orland Hills IL and Glendale WI

52 PercentHeelys Q2 revenues decreased 52 percent to $83 million as a 233 percent gain in domestic sales was unable to offset a 143 percent drop in international sales Most of the increase came from delayed Q1 shipments that spilled over into the second quarter

100 YearsLL Bean hired Weber Shandwick to design and execute an integrated cross-platform communication campaign for the companys upcoming 100th anniversary celebration Returning from a hunting trip with cold damp feet Leon Leonwood (LL) Bean in 1911 enlisted a local cobbler to stitch supple leather uppers to waterproof rubber boots to create the Maine Hunting Shoe marking the start of the company

+25000 AttendeesApproximately 25000 retailers exhibitors and media closed out a record-breaking Outdoor Retailer Summer Market August 4-7 in Salt Lake City UT Net-sold square feet was 456508 representing the highest net-sold square feet for the Summer Market The shows overall footprint surpassed 1 million square feet

+2500 StoresAdidas Group China Managing Director Colin Currie told the China Daily newspaper that the company plans to open more than 2500 additional stores in the next few years in lower-tier cities in China expanding its coverage to more than 1400 cities Adidas sales jumped 308 percent in Greater China in the first quarter to euro268 million ($386 mm) and shot up 409 percent currency-neutral supported by strong growth in all major categories

BY THE NUMBERS

CANNONDALE AND OTHER IBD SALES STAND OUT IN AN

OTHERWISE TOUGH Q2 AT DOREL

Gloomy economic news may be causing parents to use more hand-me-down baby furniture but it is not keeping cycling enthusiasts from buying a new ride according to Dorel Industries Inc which owns Cannondale and other bike nameplates as well as several prominent juvenile product and ready-to-assem-ble furniture brands

The companyrsquos Cycling Sports Group (CSG) which sells Cannondale and other premium bikes in the IBD channel continued to power growth at Dorelrsquos LeisureRecreational segment in the second quarter even as the companyrsquos sales of bikes juvenile and ready-to-assemble furniture products to the mass channel fell

ldquoThe higher-end bikes are selling at a much larger growth rate than the mass market productsrdquo Dorelrsquos EVP and CFO Jeffrey Schwartz said during the com-panyrsquos second quarter earnings call with analysts

Net sales at the LeisureRecreation segment rose 159 percent to $2491 million for the second quarter ended June 30 Organic revenue increased ap-proximately 12 percent for the quarter and 11 percent year-to-date after exclud-ing the impact of exchange rates

Gross profit reached $605 million up 176 percent from the second quarter of 2010 Gross margin rose 30 basis points to 243 percent of sales Operating profits for the segment reached $213 million up 25 percent from a year earlier Operating margins rose 60 basis points to 85 percent of sales

IBD sales grew in all divisions - United States Japan Europe and Australia ndash but were strongest in Europe where they grew 50 percent

Dorel said demand growth is coming both from existing dealers in North America and Europe and from new distribution for all CSG brands that includes both additional dealers and cross-selling to existing dealers

Cannondalersquos new Supersix Evo Flash 29er and Scalpel 29er bikes Schwinnrsquos new Vestige and updated Sierra and Voyager models and GTrsquos new 29ers and graphics are selling well thanks to new designs technology and increased promotional spending The plethora of new models enabled CSG to pass through some higher costs during the quarter something it could not do at its other segments Moreover the company took steps to avoid delays that caused late shipments to dealers in 2010 and 2011

Easton-Bell Sports recorded its sixth consecutive quarter of top-line growth for the second quarter ended July 2 although product launch shifts for certain baseball products along with a negative effect of hockey inventory clearances tightened the companyrsquos margins

Overall sales for the quarter improved 45 percent to $2119 million up from revenues of $2028 million in the year-ago quarter

In a conference call with analysts management said strength was driven primarily by growth in the Team Sports segment where the company continues to build market share in football helmets and equipment reconditioning services Additionally the company said the Easton brand experienced higher sales of baseball bats across all price points as retailers begin to restock their inventory to align with recent rule changes that will take effect in 2012

Sales to the Team side increased 95 percent to $1196 million but were partially offset by weaker glove sales as well as the aforementioned reduced revenue from closeout sales of hockey equipment in preparation for upcoming product launches Management said the companyrsquos BaseballSoftball business reflected demand growth of 30 percent with ldquosubstantial quantitiesrdquo of high-margin bats set to ship in the back half of the year For the hockey segment management noted that the upcoming launch of the RS stick had generated excitement in the market

The company said Riddell football continues to gain market share at both the varsity and youth level with total helmet orders up 37 percent for the quarter as demand increased following a recent study by Virginia Tech that ranked three Riddell helmet models as either five star (Best Available) or four star (Very Good) for concussion resistance

Action Sports segment revenues dipped 12 percent to $925 million partially as a result of reduced demand for snow helmets in the European market due to high retail inventory levels resulting from carryover product from last season Management also pointed to lower sales of cycling helmets and accessories

Those declines were partially offset by increased sales of cycling helmets in the specialty channel growth of sales of the companyrsquos Easton brand of cycling wheels and components increased sales of higher-priced power sports helmets such as the Star RS-1 and newly released Revolver and the introduction of the companyrsquos Giro branded cycling shoes

Q2 NET INCOME CUT AS MARGINS CONTRACT ON

PRODUCT SHIFTS

JOHNSON OUTDOORS SEES FISCAL Q3 RESULTS HURT BY WET SPRING CONSUMER ANXIETY

Johnson Outdoors Inc said a wet and cool spring consum-ersrsquo anxiety over the economy and the federal budget debate hurt its Watercraft and Out-door Equipment businesses in the three months ended July 1 even as fishing and underwater enthusiasts snapped up innova-tions created by its more tech-nology-driven Marine Electron-ics and Dive businesses

The Wisconsin-based company reported total net revenue during the fiscal third quarter reached $1225 million a 12 percent dip compared to net sales of $1240 million in the prior-year quarter Operating profit was $118 million versus $134 million reflecting both lower sales and increased supplier costs Net income was $81 million or 83 cents per diluted share compared to $104 million or $109 per diluted share in the prior-year quarter

Sales at Johnson Outdoorss Watercraft segment (Carlisle paddles Extrasport PFDs Necky Ocean Kayak and Old Town kayaks and canoes) declined 112 percent to $219 million while revenues in the companyrsquos Outdoor Equipment unit (Eureka tents Tech40 and Silva instruments) declined 273 percent due to a 68 percent or $34 million reduction in military sales

ldquoThis year a perfect storm brewed with the weather and economy to stall recoveryrdquo said company Chairman and CEO Helen Johnson-Leipold during the companyrsquos third quarter earnings call with analysts

ldquoWatercraft had a strong sell-in during the first half of the year and our unique trading partner intelligence data shows product is continuing to steadily sell through however the third quarter is all about in-season replenishment and given how late the season started those orders simply didnt materialize as retailers ratcheted back to keep inventory in checkrdquo

Paddlesports dealers appear to have taken a very cautious approach They are just going to be very careful about what inventory they keep on handrdquo she said

More importantly the companyrsquos flagship Marine Electronics and Diving brands nearly offset declines in the Watercraft and Outdoor Equipment businesses during the quarter Johnson-Leipold attributed that to the rapid pace of innovation in the two businesses which has come to rely increasingly on digital technology

ldquoOutdoor enthusiasts are also early adopters - trend settersrdquo she said ldquoThey want the newest piece of equipment designed to make their outdoor experience more fun and enjoyablerdquo


Johnson Outdoors Chairman and CEO Helen Johnson-Leipold

TO MAKE AN APPOINTMENTGRENDENE USA800-509-8889salesgrendeneusacom

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NEW BALANCE OPENS FIRST NORTH AMERICAN EXPERIENCE STORENew Balance opened its first North American Experience Store in New York Citys Flatiron District on August 11 The 4000+ square foot store located at the corner of Fifth Avenue and 20th Street features a Mondo running track and a unique demonstration area where New Balance associates showcase the companys domestic manufacturing capabilities

We are excited to open this store in New York City that pays tribute to our heritage and spirit celebrates our innovation and continues the high standard of retail excellence we established two years ago with our first-ever New Balance Experience Store in Beijing said Rob DeMartini chief executive officer and president of New Balance This store invites consumers from one of the worlds greatest cities to engage with our brands story and the passion of our associates that is 105 years in the making

The stores decor features restored original brick walls floor-to-ceiling columns pays homage to their signature grey color while introducing modern day technology-based of-ferings amidst a red and grey color scheme and vibrant product photography A brand DNA ribbon on the stores ceiling extends 60 feet from the entrance to the back of the store taking the consumer through a chronological journey documenting the brands powerful past present and future using vintage and modern images

Photo courtesy of New Balance



Will Manzer CEO of Eastern Mountain Sports has assumed the chairmanrsquos position at Outdoor Industry Association where he is expected to focus much of his attention on protecting federal funding for public lands conservation and outdoor recreation infrastructure targeted for elimination by House Republicans He replaces Dan Templin CFO at VF Outdoor Inc Brown Shoe Co has made four strategic additions to the leadership team within its American Sporting Goods (ASG) division appointing Jim Hoff as VP sales across all ASG brands Alan Vickers as VP international Brad Little as VP amp brand manager Avia and Nevados and Jorge Cabrera as VP athletic product development Zumiez hired Marc Stolzman as its new chief financial officer and corporate secretary effective August 8 Stolzman was formerly the CFO of Blue Nile Inc Easton Bell Sports hired Kimberly-Clark veteran Laura Moore as SVP of corporate communications

Shock Doctor said that Minnesota Vikings wide receiver Percy Harvin was an endorser

TAG Heuer ended its endorsement agreement with Tiger Woods when it expired last month

MOVERS amp SHAKERS

UNDER ARMOUR DEBUTS LARGEST FOOTWEAR CAMPAIGN

Under Armour released its first footwear-oriented campaign entitled ldquoFootsteps highlighting its Charge RC shoe The effort uses star athletes including the NFLrsquos Tom Brady and Cam Newton elite track and field runner Monica Hargrove and UFC fighter George St Pierre

The campaign was shot by director Peter Berg who developed the Emmy Award-winning television series Friday Night Lights TV commercials run on MTV BET and ESPN while online and print distribution will include Facebook Yahoo Sports and STACK Magazine

Weve captured athletes in their authentic training environment showcasing Under Armours commitment to performance and innovation in a voice that is unique to the brand said Steve Battista senior vice president brand Under Armour Our new line of footwear is helping athletes create footsteps not just hear them

The Charge RC shoe which launches in December combines Under Armours proprietary HeatGear performance materials along with Micro G foam for a light yet supportive shoe A limited distribution of the collection debuts in October at select retailers including City Sports and Dicks Sporting Goods


OUTDOOR INDUSTRY REGAINS MOJO

WHILE MANY A STOCK PORTFOLIO WAS SIDESWIPED LAST WEEK THE OUTDOOR INDUSTRY BY ALL INDICATIONS REMAINS BULLISHBy Thomas J Ryan


The 2011 Outdoor Retailer Summer Market in its 15th year in Salt Lake City UT marked a full recovery from the doldrums of previous shows following the 2008 financial collapse Running from August 4-7 the event drew crowded aisles and smiling faces serving as a testament to the vitality of the outdoor industry and a renewed vigor around the appeal of the outdoor lifestyle With new exhibitors showing in the run and action sports markets and traditional outdoor space looking to reach the growing crop of retailers attending the show it was a hot ticket

Early returns had the show posting a 10 percent attendee increase over the prior year A demand for exhibitor space was so strong that Nielson Exhibitions erected a new 25000 square foot exhibitor pavillion across from the entrance to the Salt Palace for 165 new exhibitors according to Kenji Haroutunian Outdoor Retailer show director More than 25000 buyers were expected to attend for the first time but the number exceeded that by 10000 Overall net-sold square feet was 456508 representing the highest net-sold square feet for the OR Summer Market The shows overall footprint surpassed 1 million square feet

The show began on a gloomy note The Dow Jones Industrial Average crashed on the second day -- largely due to concerns over the US debt crisis -- and by Friday night Standard amp Poors lowered the nations AAA credit rating the first downgrade in US history and a dramatic vote of no confidence for the worlds largest economy and its political leadership

No matter the mood on the show floor remained upbeat as many of the industrys participants regained their confidence after deftly weathering the recent recession and scoring strong financial gains over the last year While overall participation in some traditional activities like multi-day hiking rafting and rock climbing remain challenging strength in activities like running hiking and biking as well as the whole multi-sport and done-in-the-day trends are said to be bringing a wider group of consumers to outdoor specialty The outdoor lifestyle continues to grow in appeal to help brands reach the much-larger casual opportunity Technical innovation and the welcoming of more color and other fashion touches continued to spark many categories

Keens CEO James Curleigh was particularly enthused about the energy in the footwear space

Theres more energy in footwear than Ive seen in the last ten years he said Whether its the toning trend that came - wherever it goes - it was an innovation And then at the other end of that spectrum is minimalism and thats an innovation Then youve got all these different dynamics happening with big deals like Timberland -- the great success story of America -- now being purchased by VF Corp Thats energy in itself or Sanuk the coolest sandal that isnt a shoe gets sold to Deckers Theres business energy theres brand energy theres innovation energy and theres consumer conversations around footwear Thats awesome

Todd Spaletto president of The North Face Americas said the past two years have proven the resiliency of the outdoors

James Curleigh CEO Keen

Todd Spaletto President The North Face Americas


I think people love the outdoors and the

industry tends not to get as affected by really good times or really bad times said Spaletto If you look over the past two years or even to a 20-year history when there have been economic swings the outdoor industry has tended to do better than average both because our core consumer stays with those activities and then others turn to the industry for less-expensive staycations and people get back to hanging more local with their families Our activities allow people to do that Were not in the jetliner business with cruises to Europe

While less expensive the appeal however is because many outdoor activities are right outside our back door and easy to access while providing the potential for vast enjoyment and fulfillment

Running for example has done great because you just get a pair of shoes and go said Spaletto Hiking and running to me are very similar Theyre fairly low-cost of entry and a great escape Some of my favorite moments are when Im on a morning run or on a hike to get away from the CNBC ticker at the bottom of the TV screen

Dan Nordstrom President amp CEO at Outdoor Research said he made his initial investment in Outdoor Research in 2003 at the time of the recession driven by the dot-com crash and was loudly questioned on the soundness of the timing of the investment But he said the industry weathered that recession and again somewhat comfortably managed this last one

I think the outdoor industry serves a need that people just donrsquot walk away from said Nordstrom You can walk away from a trip to Disneyland or postpone it but the recreational experience we offer is a huge proposition What the typical outdoor experience means to you versus what you spend to do it is just a really good relationship versus spending a lot of money at a resort And resort-type things got hit hard in this last recession I

think were all very fortunate to be in this business and its shocked me how the industry in general has sailed through what otherwise globally is the most challenging global economy in our lifetime

The outdoor industry is coming off a particularly robust year In 2008 the holiday period was virtually a liquidation bloodbath for most retailers Stores were packed with inventory but consumers dramatically pulled back spending following the abrupt arrival of the financial crisis By spring 2009 the consumer started spending again but shell-shocked retailers had ordered too lean leading to empty shelves and missed opportunities Holiday 2010 turned out to be the perfect storm as consumer spending gained further momentum and stores were smartly filled with merchandise Coupled with efforts to cut costs and increase efficiencies to weather the recession profits appear to have been particularly strong for many players in the outdoor world

The stubborn labor market and macro-economic challenges splayed across the news pages appear to having some impact on some consumers

Fran Allen SVP of global sales at New Balance said the footwear brands core specialty accounts seem to be doing quite well and look to be positioned for a strong year but he pointed to some caution by a few of the bigger chains that he talked with at the show

For example I asked a bunch of them how back-to-school was doing and they all said It hasnrsquot started yet said Allen That was a common answer and school has actually started at some places in the South I dont think they were trying to be flip I think the consumer is waiting before they buy It casts a kind of malaise over everything despite the fact that theres a lot of great product out there

He still remains upbeat largely because running remains such a popular activity Fortunately runners keep running regardless of the economy said Allen Its such

a simple exercise and you really just need a good pair of shoes and clothing that fits your needs and youre ready to go Its not like you have to buy a club membership like golf And it doesnt have to be time-consuming Not many people can say Ill play golf at lunch-time because youre going to be gone five hours Plus add all the discussion about obesity in America and it looks like more and more people are looking to participate in running I think thats a core reason why Real Run is doing well

Dan Nordstrom President amp CEO of Outdoor Research


SmartWools President Mark Satkiewicz also said that while the outdoor industry has seen a strong recovery the economic rumblings have at least some anxiousness over holiday

We had a fourth quarter that was unbelievable said Satkiewicz Everybody did were no exception The first half has gone well for us Were extremely excited about the back half of the year but the consumer macro climate is just okay Most of our customers are doing fine but once it gets to August theres the trepidation about how the weather will play out how inventories will be and what they can take etc I would say its not like the back half of 2008 or 2009 and its not as strong as the fourth quarter of 2010 but who can expect that People were just so lean and consumers were coming back a little bit

Nonetheless he said SmartWool remains optimistic largely because of the innovations they are bringing to market particularly on the apparel side

We still need great weather and all those things but were providing far more options and solutions for our consumers than ever before said Satkiewicz If someone was a fan of the SmartWool brand theyre going to get more and more opportunity to connect again maybe in a way that they hadnt in the past or in a way theyrsquove been wanting from us

Polartec has been growing briskly and its global director of marketing Nate Simmons attributes that to a variety of innovations in the apparel space as well as operational efficiencies He noted while apparel may not be finding any necessarily breakthrough innovations at the level of Vibrams FiveFingers its delivering enough to convince consumers to replenish their closets

Innovation takes a lot of different forms observed Simmons It can be hitting a certain price point it can be a different texture it can be totally aesthetic or it can be performance-based

On the performance side he noted that four different technologies around waterproof breathable were launched in the industry last year Minimalism also played a role in apparel for technical brands looking to reduce weight and meet multiple-options he noted For instance Polartecs NeoShell has waterproof properties yet breathes enough to span a wider-range of temperatures Said Simmons So you donrsquot wear a soft shell and carry a hard shell You can get away with carrying one shell because it gives you enough breathability to do what you want to do

Finally more colors much of it inspired by Europe are feeding the opportunity around lifestyle apparel

Mark Satkiewicz President Smartwool

Nate Simmons Global Director of Marketing Polartec


Its not purely technical it crosses over to everyday wear said Simmons Its more textures more colors and more variety but you still have performance

Equally bullish on apparel was Brooks Sports President and CEO Jim Weber who noted that a Wall Street analyst Jeff Kleinfelter predicted that a replacement cycle in apparel was ready to spike as consumers had delayed purchases Brooks is seeing its apparel business running up 40 to 50 percent so far this year Weber likewise seemed more encouraged that running again perseveres during tough times

People are running and theyre buying running shoes We made the cut said Weber As consumers are obviously nervous running and running shoes have made the cut If you look just at marathon participation the running lifestyle is in the mix Because of that our category is very healthy at specialty and at national accounts

One concern of Webers is that many brands are coming into the running footwear space driven by the barefoot and lightweight trend

Three years ago we saw that happening in tech running Everybody started showing up at the trade shows and the number of brands that entered the running market three years ago was massive Now we have all that plus more hitting the lightweightminimalist side of things

Moreover he said while lightweight is here to stay and will influence everything we build for runners a lot of people are turning to lightweight styles as a casual lifestyle option A lot of it is not being run on and thats a wave that is big right now but its going to crest and break They always do Its hard to know how long that piece of it will last

Webers biggest concern in the current market appears to be ever-increasing sourcing costs Brooks raised prices on its Adrenaline

franchise shoe to $110 for Spring 2012 up from the key price point of $100 Brooks is being pushed to increase that further for 2013 Its brutal he said

Geoff OKeeffe VP of global sourcing at American Recreation not unexpectedly had soaring costs on his mind as well

Theres been unprecedented inflation in raw materials and labor rates in China Vietnam and elsewhere Exchange rate is now an issue Freight costs have gone up Come spring consumers are going to be looking at 5 percent to 30 percent price increases across the board on various costs of goods

He was also upbeat on the state of the outdoor business and particularly stoked at all of the new companies such as Neon and Sherpani bringing innovation to protected categories like tents sleeping bags and packs

Big Agnes was one of those not so long ago I have a lot of respect for those companies because thats a hard go when youre up against the established brands It keeps us honest said OKeeffe Thats a sign of vitality in our industry that I really like

OrsquoKeefe also credited Gregory with helping bring color and other patterns to equipment categories Said OKeeffe I followed a woman into a show who had flowers on her backpack and I thought Weve got to wake up He said Kelty has been finding a strong following among younger consumers for its Heritage collection

OKeeffe also recognized that car camping and base camping are proving to be an increasingly easy way to experience the outdoors for younger as well as older groups but believed the longer hike will always remain a cornerstone of the outdoor experience

Theres something transformative when you spend two weeks in the wildernessrdquo said OrsquoKeefe It will change you It will change your mind and it will show you your heart

Hi-Tec Sports CEO Ed van Wezel said the increasing arrival of action sports running surf and other pursuits at recent shows proves this is a hot industry everyone wants to be involved in But he said it only reflects the bigger opportunity the outdoor industry has become

If you walked the Outdoor Retailer show 10 years ago people were walking around with backpacks and carabineers with ropes and chalk in their hands said van Wezel But now youve got skateboarders surfers runners triathletes etc Its basically the outdoors not just running hiking and biking Its that out-of-your-door solution for the enjoyment in your life And thats this industry

Brooks Sports President and CEO Jim Weber

PEOPLE ARE RUNNING AND THEYRE BUYING

RUNNING SHOES WE MADE THE CUT

- JIM WEBER

Where Strategic Decisions Begin

A Service of The SportsOneSource Group

SportScanInfocom


Van Wezel also believes Hi-Tec is particularly suited to capitalize on what he calls the sportification of the industry marked by the presence of Saucony and New Balance now at the show as well as Merrells success with its Barefoot series While some brands come from a heavy backpacking ski boots or down jackets background he believes Hi-Tec is well positioned because the brand comes from a sports heritage Hi-Tec is also positioned just below the big price points to feed todays demand for value He said the multi-sports trend is helping outdoor brands reach the new breed of outdoor consumer on both the performance and casual side

The boundaries are getting very blurred on whats skate whats surf and whats outdoor Youre seeing a hybrid of outdoor inspired footwear which is great because youre not being defined by a 250-pound backpacker to be an outdoor brand anymore That for us is a huge opportunity And for us the stars are aligning

Keens Curleigh also believes the multi-sport trend is opening up opportunities to get people exploring numerous activities that often lead to deeper commitments in many pursuits including recruiting advocates for traditional outdoor activities like the multi-day hike and rafting tours The bigger opportunity he sees is addressing the overall casualization movement being seen across the world

Casual can be driven from fashion It can be driven by athletics It can be driven from outdoor or action sports I believe its going to be driven by outdoor said Curleigh I think outdoor has a more authentic casual point of entry Its not white tennis shoes on the American tourist in Paris Its the casualization of the color palette functionality and the durability and comfort that is built in

Curleigh said whether all the new brands and categories on

the OR show floor are good for the industry is really a question of motivation If the motive is fish where the fish are its just a smart business decision said Curleigh

He believes the industry has to be careful that it is not going through those periods where theres so much noise and the consumer gets confused When he was in the ski business in the early 90s the industry went from straight skis to shaped skis but a variety of terms and marketing approaches left the consumer confused As a result at a point of intense innovation in the ski business industry sales actually declined He said the same pattern may be occurring around different footwear approaches

You can walk into some stores and hear you need an overbuilt dynamic toning platform to do all these things The next store says Oh no you need to get your feet closer to the ground and go minimal Finally the next store says Oh no you need toe protection and metatomical support At a certain point theyll say Im confused Im just going to wear my Chuck Taylors Thatrsquos what cant happen

Curleigh also said one of the core reasons Keen has been successful is because its original Newport model remains one of its best sellers While its easier than ever to jump on a trend he said any brand coming to outdoor specialty and Outdoor Retailer has to bring some iconic product to the market

If a brand comes here and brings a meaningful point of view it actually helps provide clarity for the consumer in choice Im okay with that Thats the fun fight

Spaletto said The North Face brand has found an invitation to connect across many outdoor pursuits including running mountain biking and traditional outdoor sports including yoga And he said the OR show is proving equally welcoming to a wide range of authentic outdoor activities

If you look over a ten-year period at which trade shows have done well and which are almost extinct the trade shows that have done well have an authentic culture and personality and I would put the Outdoor Retailer show at the top of the list said Spaletto When you look at an outdoor show versus an apparel show or a shoe show the shows that are doing well are really the ones that stand for a core authentic and tangible activity I think as long as theres relevant core adjacencies to outdoor it works Running for example makes sense Some of our climbers are the best runners we have because you need to run to train to be a better climber I think the outdoor retailer show is one of the best shows out there

THE BOUNDARIES ARE GETTING VERY BLURRED ON WHATS SKATE AND WHATS SURF AND WHATS

OUTDOOR- ED VAN WEZEL

Ed van Wezel CEO Hi-Tec

RUN

eccousacom

To experience the SS12 ECCO Collection visit us at WSA Outdoor Retailer Atlanta Shoe Show and FFANY eccousacom - 8008863226

NATURAL MOTION GOES OFFROAD

SS12 BIOM TRAIL

930_SS12_Trail_print_mechindd 1 7811 1024 AM

Athletic Dealers of America1395 Highland AvenueMelbourne FL 32935t 3212540091f 3212427419athleticdealersofamericacom

National Sporting Goods Association1601 Feehanville Dr Suite 300Mount Prospect IL 60056t 8472966742f 8473919827nsgaorg

Nationrsquos Best Sports4216 Hahn BlvdFt Worth TX 76117t 8177880034f 8177888542nationsbestsportscom

Outdoor Industry Association4909 Pearl East Circle Suite 200Boulder CO 80301t 3034443353f 3034443284outdoorindustryorg

SGMA 8505 Fenton StreetSilver Spring MD 20910t 3014956321f 3014956322sgmacom

SnowSports Industries America8377-B Greensboro DriveMcLean VA 22102t 7035569020f 7038218276snowsportsorg

Sports Inc333 2nd Avenue NorthLewistown MT 59457t 4065383496f 4065382801sportsinccom

Sports Specialists Ltd590 Fishers Station Dr Suite 110Victor NY 14564t 5857421010f 5857422645sportsspecialistsltdcom

Team Athletic Goods629 Cepi DriveChesterfield MO 63005t 6365303710f 6365303711tag1com

World Wide Distributors8211 South 194thKent WA 98032t 2538728746f 2538727603wdi-wdicom

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16-18 EORA Greenville Primary Expo Greenville SC

22-24 EORA Killington Primary Expo Killington VT

22-24 MAGIC Show Las Vegas NV

SEPTEMBER

7 Surf Expo SUP Demo Orlando FL

8-10 Surf Expo Orlando FL

9-11 NBS Fall Semi-Annual Market Ft Worth TX

12-13 Interbike Outdoor Demo West Boulder City NV

12-14 EORA Lake Placid Expo Show Lake Placid NY

13-16 WDI Worldwide Fall Show Portland OR

14-15 MRA Paddle amp SUP Demo Gull Lake MI

14-16 Interbike Int Trade Expo Las Vegas NV

14-16 Health amp Fitness Business Show Las Vegas NV

OCTOBER

4-6 OIA Rendezvous Portland OR

6-7 The Retailing Summit Dallas TX

NOVEMBER

1-4 NASGW Annual Meeting amp Expo Reno NV

2-4 TAG FallWinter Show Kansas City MO

3-4 NBS Fall Market Mobile AL

12-14 ADA Fall Buying Show Kansas City MO

20-22 Sports Inc Athletic Show Las Vegas NV

DECEMBER

5-7 MRA December Market Lansing MI

JANUARY

10-12 ATA Show Columbus OH


17-20 SHOT Show Las Vegas NV

18 Outdoor Retailer Demo Solitude UT

19-22 Outdoor Retailer Winter Market Salt Lake City UT 25-28 PGA Merchandise Show Orlando FL

26-29 SIA Snow Show Denver CO

29-21 ISPO Munich 2012 Munich Germany

30-31 SIA On-Snow DemoFree Ride Fest Winter Park Resort CO FEBRUARY

1-2 NBS Spring Semi-Annual Market Fort Worth Texas

CALENDAR For full year calendar go to sportsonesourcecomevents


A layered approach to comfort and durability

Presenting The Apparel Collection including new CORDURAreg

Naturalletrade fabrics Now yoursquore covered from head to toe

Get comfortable at corduracomapparel

copy 2011 INVISTA CORDURAreg is a registered trademark of INVISTA for durable fabrics Property of INVISTA

wwwspencocom

Releva

nceA collection of casual footwear insoles and accessories that are easy to merchandise and sellA 45 year track record of products that keep people healthy and active Great pricing Terrific customer service








18 CALENDAR


AUGUST 15 2011

wwwspencocom

Releva

nce





10















SGB

TEAM Business


The BOSS Report


SGB Update





SGB Weekly


SportScanInfo

OIA VantagePoint

SOS Research





Page
























BY THE NUMBERS



















PRODUCT SHIFTS














VISIT US AT



11-3120indd 1 71411 400 PM











MOVERS amp SHAKERS


































































- JIM WEBER



SportScanInfocom

















RUN

eccousacom



SS12 BIOM TRAIL












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NOVEMBER






DECEMBER


JANUARY





















18 CALENDAR


AUGUST 15 2011

wwwspencocom

Releva

nce





10















SGB

TEAM Business


The BOSS Report


SGB Update





SGB Weekly


SportScanInfo

OIA VantagePoint

SOS Research





Page
























BY THE NUMBERS



















PRODUCT SHIFTS














VISIT US AT



11-3120indd 1 71411 400 PM











MOVERS amp SHAKERS


































































- JIM WEBER



SportScanInfocom

















RUN

eccousacom



SS12 BIOM TRAIL












TR

AD

E A

SS

OC

IAT

ION

S |

BU

YIN

G G

RO

UP

S

AUGUST




SEPTEMBER










OCTOBER



NOVEMBER






DECEMBER


JANUARY






































BY THE NUMBERS



















PRODUCT SHIFTS














VISIT US AT



11-3120indd 1 71411 400 PM











MOVERS amp SHAKERS


































































- JIM WEBER



SportScanInfocom

















RUN

eccousacom



SS12 BIOM TRAIL












TR

AD

E A

SS

OC

IAT

ION

S |

BU

YIN

G G

RO

UP

S

AUGUST




SEPTEMBER










OCTOBER



NOVEMBER






DECEMBER


JANUARY

























PRODUCT SHIFTS














VISIT US AT



11-3120indd 1 71411 400 PM











MOVERS amp SHAKERS


































































- JIM WEBER



SportScanInfocom

















RUN

eccousacom



SS12 BIOM TRAIL












TR

AD

E A

SS

OC

IAT

ION

S |

BU

YIN

G G

RO

UP

S

AUGUST




SEPTEMBER










OCTOBER



NOVEMBER






DECEMBER


JANUARY



















VISIT US AT



11-3120indd 1 71411 400 PM











MOVERS amp SHAKERS


































































- JIM WEBER



SportScanInfocom

















RUN

eccousacom



SS12 BIOM TRAIL












TR

AD

E A

SS

OC

IAT

ION

S |

BU

YIN

G G

RO

UP

S

AUGUST




SEPTEMBER










OCTOBER



NOVEMBER






DECEMBER


JANUARY



























MOVERS amp SHAKERS


































































- JIM WEBER



SportScanInfocom

















RUN

eccousacom



SS12 BIOM TRAIL












TR

AD

E A

SS

OC

IAT

ION

S |

BU

YIN

G G

RO

UP

S

AUGUST




SEPTEMBER










OCTOBER



NOVEMBER






DECEMBER


JANUARY













































































- JIM WEBER



SportScanInfocom

















RUN

eccousacom



SS12 BIOM TRAIL












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YIN

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SGB WEEKLY 1133

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Transcript of SGB WEEKLY 1133