MARCH 21, 2011
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MARCH 21, 2011
Senior Business Editor Thomas J. Ryan (917.375.4699) tryan@sportsonesource.com
A Weekly Web Magazine for the Sporting Goods Industry
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FEATURE
Contributing Editor Eugene Buchanan
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FEATURES
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SGB QUESTION How Will Inflation Pressures Impact Consumer Spending And Pricing In 2011? PADDLESPORTS FORECAST Steady as She Goes CANOECOPIA ROUNDUP Consumer Show Provides Early Season Barometer Of Boat Sales 2011 PADDLESPORTS PRODUCT RUNDOWN
Team Business Weekly Sportsman’s Busness Weekly Footwear Business Weekly Outdoor Business Weekly
JOB CLASSIFIEDS 18 TOP JOBS OF THE WEEK
Cover photography courtesy of Jackson Kayak
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HOW WILL INFLATION PRESSURES IMPACT CONSUMER SPENDING AND PRICING IN 2011? As prices (such as cotton) rise, and people’s incomes are not going up accordingly, it does not bode well for consumer spending. Consumer reception to price increases? The consumer has still not completely recovered from the recession mentally and they are very cautious and always looking for the best price. With commodities like food and gas they have no choice but to spend, with sporting goods they can CHRIS BUNCH, Owner, Alpine Ski Shop, Sterling,VA always cut back. How will this affect our business? Footwear prices from our top vendors have remained We are still very cautious and as prices rise on oil and fairly static over the past three years, so I don’t think loyal cotton-related products, we believe the consumer is customers will be shocked to see our $100 “sweet spot” going to have less discretionary income. With gas prices rising, people will be more apt to spend money on bikes, skates, and skateboards that do not require trips to the pump. Once you relate to the customer that a skateboard can be purchased for the same amount as a tank of gas, they are more likely to make that purchase, knowing that it will last longer than two weeks, and will not require driving around. It’s how we relate to everything now.
shift to $110. Also, we’re a specialty retailer that dedicates a significant amount of resources for training staff, so making a little more money on each sale is a good thing. Where we’ll need to be careful, is managing our inventory to allow it to turn faster so we’re not too heavily leveraged as a result of cost increases. I think the running industry will be fine though. Running is addictive, and there are more people choosing to participate that need our help. TED KUSHION, Merchandise Manager - Footwear,
Gazelle Sports, Grand Rapids, MI
Pricing increases are never well received, regardless of the reason, so that’s something we’ll be avoiding if we can. In fact, rising costs often force companies to find efficiencies elsewhere to offset those increases, so it can be a net positive effect for businesses over time. As long as inflation is kept in check (and that’s a big “if”), we’re expecting to absorb any rising product input costs and avoid passing them on to the retailer. Obviously, our margins will be compressed a bit, but if consumers have more dollars (albeit they’re worth less) and prices remain the same, I think we’ll be able to make up any margin loss with increased volume. TYSON ANDRUS, Sr. Marketing Machine, Skullcandy
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JERRY WILLIAMS, President, Schuylkill Valley Sports, Pottstown, PA
Inflation will impact and limit consumer spending in 2011. This pressure will turn the economy in a negative direction later in the year. Because of the nature of the camping business it will not be impacted as most. I do think it will affect Christmas 2011 spending in a big way. JOHN JANSCHUTZ, National Sales Manager, Northpole
Across all brands in the footwear marketplace, we have seen entry-level MSRP’s rising, creating new pricepoints at retail such as $55 product moving to $58, $65 product moving to $68, etc. These are not traditional pricepoints, but they have been accepted by retailers and consumers. DEREK GRUNDY, Product Manager Running Footwear, Reebok
So far the price increases in sporting goods has not affected purchases. I do think there is a sensitivity to price increases and they will buy conservatively. Consumer spending may be diminished by gas prices through the summer. DEB HAMMOND, VP Sales, Worldwide Distributors
In the case of running specialty, shoes are an essential so any future decrease will come at the expense of apparel and accessories which unfortunately are the higher margin items in the mix. Therefore, it will be paramount to have a superb consumer experience and very sharp buying habits to stay lean and make sure we close every sale opportunity. Overall, it will be the sharpest businesses and those that adapt quickly that will thrive in the long term. KEVIN SMITH, Owner, Elite Runners, McKees Rocks, PA
Inflation pressures, let alone actual inflation which is on the way, will result in the consumer reevaluating their spending priorities to the point that discretionary income will be less, and the use of those funds/income will be reallocated to spending on necessities. This means less funds/income for spending on desires, and most anything considered “extra” - people will fix their vehicles before buying a replacement; going longer before buying new active footwear and clothing; travelling by car or air, etc. As a start-up company/business, this is a major setback that could result in many start-ups basically not getting started; existing businesses making major cutbacks in inventory to employees. DANIEL S. MARKHAM, Owner, Endurance USA
We may find consumers looking for more promotional items, thus reducing margins. NED BRODY, VP, RA Brody Association
Our biggest issue with inflation will be our cost of doing business rampantly increasing rather than lack of sales. An example would be steadily rising fuel prices that will make predicting shipping costs difficult if not impossible or the countries current debate on health care which is sure to cause more health insurance increases. KEN. R. MORLEY, III, Team Sales Manager, Morley Athletic Supply Co.,
Amsterdam, NY
Due to the political situation in the Middle East, oil may very well hit all of us heavily in the pocketbook, from gas to heat in the near term. How that will affect sales across the board this year is anyone’s guess. Our political ‘experts’ are reactive rather than proactive and we are at the mercy of the oil cartels. I believe that for every additional dollar the consumer spends at the pump or heating their homes will be one less dollar to spend on consumables, be it hard or soft goods. Perhaps a better question would be – how will it impact the industry for 2012? MICHAEL MCGINLEY, President, Rivers West Apparel
Cost increases at retail will impact the consumer shopping the mass channel. They can only buy-to-dollars they have, which is not going up, and will have to buy less of something. The same somewhat applies to mid-tier shoppers, but not as much. They will still have to buyto-dollars but as long as retail prices stay in the current swim lanes, $35 to $39, they will make the purchase. If the lanes are crossed, $39 to $44, they will buy less or trade down. Gas prices will hit everyone, especially those shopping mass and mid-tier. Young shoppers in specialty and upper-end shoppers will keep spending even with retail prices going up 10 percent to 20 percent. Good solid brands are still going to grow. ANONYMOUS, VP, Sales and Marketing, Apparel Manufacturer
I think we are going to get hit with a new wave with gas prices going up and up. It was starting to loosen up a little, but I am cautious right now. Everyone is up on all the increases, but in the school business, budgets are getting tighter, so this is not helping. GEORGE KLINE, President, Bethlehem Sporting Goods, Bethlehem, PA
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PADDLESPORTS FORECAST
STEADY AS SHE GOES MANUFACTURERS HOPE STRONG EARLY SEASON SALES HOLD By Eugene Buchanan
Like a wave rolling toward shore, paddlesports sales of late have had a history of building up early and then crashing down. That was the case last year, when sales started with double-digit growth and faded by mid-summer, and they’re shaping up again that way this year. The good news is the swell is up, with the distant shore of summer still too far away to forecast an ebb. “For us, things are looking up over last year,” says Woody Callway of Legacy Paddlesports. “We feel there will be continued growth through the summer in our Native brand, primarily in the kayak fishing market. Increased gas prices are causing people to recreate closer to home.” Callaway notes that the spike in gas prices two summers ago led to increased sales in the category, and he expects the same this year. The company also is using a new approach to new product. Instead of waiting for the August Outdoor Retailer tradeshow to unveil new offerings, this year it’s introducing them earlier in the sales cycle. “We’re not waiting this year,” he says. “It’s not necessary with today’s communication channels.” Others are hesitant to place too much faith in early season numbers. “Early boat sales are misleading because we’re working with such small base numbers,” says Johnson Watercraft business director Scott Forristall. “Anything that happens at this time of year rarely influences the year’s overall result.” Still he admits that early data shows the company is ahead of prior year sales, and it is already seeing reorders. WEEK 1112 | SGBweekly.com
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Photo courtesy of Jackson Kayak
“The real driver will be an early spring with a lot of sunshine,” he adds. “Our customers have the desire and discretionary dollars to buy; they just need the reason to do so.” He adds that the economy and global conditions are likely to keep consumers cautious, but that this might also lead to higher-end buys throughout the season. That’s certainly what Confluence, whose brands include Perception, Dagger, Wave Sport, Mad River and Wilderness Systems, has encountered. “I don’t think we’re going to light the world on fire this year, but I do think we’ll see solid season growth,” says Confluence CEO Sue Rechner. “And we’re already seeing success in the high-end category, especially in longer touring boats. Consumers seem to be upgrading.” For many, the converse is also true. Emotion Kayaks, a builder of rec boats, is coming off its best year ever and predicting similar sales for 2011. “Many retailers are noting sales of high-end boats increasing, but those on the rec side are also growing,” says Emotion company President Tom Strauss. “We had a super strong preseason and expect a fantastic summer as well. Things seem to be coming back in the right direction.” As for influences that might affect this year’s buy, Confluence’s Rechner says it’s the usual suspects, from Mother Nature to the
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economy. “Weather-related and economic issues always play a role,” she says, adding that this year’s storm patterns haven’t been overly favorable. “We never really saw a huge decline last year, job erosion has stabilized, and we’ve already seen an uptick in pre-season for 2011. We’re feeling some strength and stability in the marketplace.” Rechner also feels that most buyers will look past curve-balls like gas prices. Others agree, unless it gets too bad. “Usually, fuel costs work in favor of kayaks as a low-cost alternative to fuel-powered water toys,” says Hobie VP of Sales Ruth Triglia. “It will be interesting to see if that holds true if they reach the $5 per gallon range. That could stop people in their tracks.” Still, Triglia adds that Hobie is optimistic about another year of growth, and it’s been ramping up its production capabilities accordingly. She adds that it could also give its electric-powered product a boost. While the impact of the Japanese disaster on the stock market could be yet another factor affecting sales, for now most manufacturers are happy to ride a wave of relative stability. “No matter what happens, people still want to get out and enjoy their time on the water and treat themselves to something special like a new boat, PFD or paddle,” says Werner marketing director Jim Miller. ■
Photo courtesy of Jackson Kayak
CANOECOPIA ROUNDUP CONSUMER SHOW PROVIDES EARLY SEASON BAROMETER OF BOAT SALES By Eugene Buchanan
Protesters on Capitol Hill in Madison, WI might have stolen some of the show’s limelight, but Canoecopia still went off without a hitch March 11-13, giving consumers a taste of 2011 products and those in the industry a barometer of the sales season ahead. More than 20,000 consumers descended upon the annual consumer tradeshow at Madison’s 100,000-square-foot Alliant Energy Center to attend seminars and programs, rub elbows with fellow paddlers and rub fingers on the latest products in paddlesports. And it went better for retailer host Rutabaga than things did for the governor’s office. “The show went really well,” said Rutabaga owner Darren Bush. “It was better than two and three years ago, but down a few points from last year. A hundred thousand or so of our customers were at the capitol protesting.” While Bush also points to higher gas prices possibly affecting attendance, that didn’t stop those who made the trip from attending packed-house programs, clinics, shows, and shopping for new wares, especially on the high-end side. “Sales definitely shifted to higher-end products this year,” says Bush, pointing to robust sales of composite sea kayaks and paddles and Kevlar canoes. “The beginner-oriented products weren’t moving as well.
The sentiment seems to be that if people are going to get involved in paddling, they want to do it right.” One company echoing this trend is Werner Paddles. “We had a show special with our recreational paddles, but we easily up-sold people to our premium and performance core products,” says Werner marketing director Jim Miller. “This shows consumer confidence and a greater commitment to dollars for paddling.” Bush, for one, doesn’t mind the fact that this might mean losing lower-end sales to big box outlets. “We’re not going to spend a lot of time chasing those customers,” he says. “It takes the same amount of time to sell a $1,000 boat as it does a $299 boat. And it’s the $299 boats that end up under people’s decks.” While overall sales might have dipped, some exhibitors fared better than they did in years past, especially in niche categories. “Fishing kayaks and accessories are still in a growth pattern, and we also did very well in the crossover boat market,” says Legacy Paddlesports’ Woody Callaway, citing increased sales for both the company’s Native and Legacy brands. “We also sold more whitewater boats than we have in the recent past.” WEEK 1112 | SGBweekly.com
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OTHER EVENTS
While Canoecopia represents the season’s first barometer of how the industry might fare, other shows also serve as a crystal ball for sales. “We look to early season sales in Florida and consumer events hosted by Mountain Man, Rutabaga, Jersey Paddler and Kittery Trading Post as key indicators for the upcoming season,” says Jim Miller, marketing director for Werner Paddles. “If early season trends holds true, consumers look like they’re ready to spend.”
Photo courtesy of Canoecopia
PADDLE COUNCIL UPDATE
While it opted to hold a conference call rather than its customary Canoecopia meeting, the industry’s Paddle Council is moving forward with plans and programs to better paddlesports participation. Among other things, it’s putting an industry survey together to help determine what can be done on the supply side to increase participation. “We have some funds to spend and we want to make sure to use them in a way that’s useful and fair,” says Paddle Council member Darren Bush.
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Photo courtesy of Canoecopia
Johnson’s Watercraft division, whose brands include Ocean Kayak, Necky and Old Town Canoes, reported boat sales even with last year’s show, but also saw a shift to higher-end product. “Sales dollars were up as we moved higher-end product,” says Johnson Watercraft business director Scott Forristall, adding that 12-foot day-touring kayaks sold especially well. “The Canoecopia crowd is mature. They’re not first-time kayak buyers; they’ve kayaked for a few years, have done their research and come to the show with specific questions to help them decide which kayak to buy. This year they were definitely looking for improved performance and weight savings. Cost was secondary.” And all this bodes well for the year ahead. “The show felt upbeat,” says Jim Marsh, publisher of Canoe & Kayak magazine. “It feels like the industry is recovering some... Canoecopia gave me the feeling that paddlesports is thriving.” ■ The Alliance Center is planning to add a new ballroom within the next two years that will double its current speaker space. For Information visit www.rutabaga.com.
2011
PADDLESPORTS PRODUCT RUNDOWN By Eugene Buchanan
Despite the economy, world events and other things out of its control, the paddlesports industry still relies on innovation to fuel its growth. This year is no exception, with advancements coming in everything from the stand-up paddleboard (SUP) market to the venerable canoe category. “SUP is the fastest growing segment of paddlesports,” says Werner marketing director Jim Miller, touting the company’s new Bent Shaft SUP Paddle (MSRP $375) with Fuse or Nitro blades. “Our growth in the category has been through the roof.” Boat manufacturers aren’t quite as giddy on the niche. “The SUP market is still slow to come inland,” maintains Legacy Paddlesports’ Woody Callaway. “I think it’s still considered a young person’s purchase.” Still, the company is riding a wave of sales for its 12’3” Versa Board, a half sit-on-top/half SUP creation, 16
SGB WEEKLY l MARCH 21, 2011
as well as additions to its more conventional lines, including the Freeride 57 and 67 from Liquidlogic, which ships in June; and new Coupe and Deuce Coupe crossover sit-ontops, featuring a whitewater hull and springloaded skeg. Despite strong sales of its Ocean Kayak Nalu SUP, Johnson Watercraft is equally cautious about the stand-up scene. “We’re still seeing slow growth in the category, but the market is over-merchandised with product,” says business director Scott Forristall. “There’s a place for SUP product, but we don’t anticipate double digit growth in the category.” Johnson is investing in the rec kayak market with Old Town’s Camden 106 and 120 (MSRP $800/$900); the sit-on-top fish kayak market with the 15’5” Ocean Kayak Trident Ultra 4.7 (MSRP $1,600); and the sit-on-top touring sector with Necky’s Vector 13, the company’s EMOTION'S COMET 110
JACKSON'S ROCK STAR
JOHNSON'S OLD TOWN’S CAMDEN 106
CONFLUENCE WAVE SPORT PROJECT X
first sit-on-top in a decade. “We believe there’s room to push the sit-on-top category into a more performance-type hull,” adds director of marketing Sara Knies. SUP-only companies, meanwhile are gaining traction. “We’ve grown 35 percent,” says C4 Waterman president Todd Bradley, who launches a new line of inflatable iSUPs and the 10-foot, river-running Rapid Rider and 12’6” River Runner this year. On the boat side, innovation continues in both design and manufacturing processes, with weight reduction leading the charge. “Weight is always a big driver of success,” says Sue Rechner, CEO of Confluence Watersports. “Until someone comes up with a better polyethylene, weight will always challenge people. There’s only so much you can pull out of a poly boat.” Confluence notes an uptick in high-end boats and tandems, in both the rec and touring categories. “We’re seeing demand for tandems in places we’ve never seen before,” says Rechner, adding that they’re addressing it with the 14.5-foot Perception Prodigy II (MSRP $1,045), a tandem that’s convertible to paddle solo. “It’s linked to families getting out together more and staying closer to home for vacations.” The company is also investing in whitewater, with its new freestyleoriented Wave Sport Project X (MSRP $1,050), with new volume distribution and outfitting system. On the fishing front comes Wilderness Systems’ Commander 140 Angler (MSRP $1,350) for larger paddlers and longer trips; in canoes comes Mad River’s Journey (MSRP $900),
available in two sizes, and Ultralite editions of its Explorer 16 and Malecite, taking the weight issue to heart by coming in at 43-48 lbs. And in paddles it debuts Adventure Technology’s new Synapse Ferrule, allowing paddlers to reset their paddle angles on the fly. Stalwarts in the whitewater niche, meanwhile, continue to branch out into other channels. Whitewater frontrunner Jackson Kayak debuts the Rock Star (MSRP $1,050-$1,200) in carbon and plastic and Rogue (MSRP $900) for flatwater and whitewater, but is also further penetrating the recreational/sea-touring category with the Journey (MSRP $1,300 w/ rudder), as well as the fish kayak market with the angler-specific Coosa (MSRP $800-$1000). Other companies continue to invest in the burgeoning fish kayak sector. “The fishing category continues to build momentum with each passing day,” says Hobie vice president of sales Ruth Triglia, adding that the company began shipping its Mirage Oasis (MSRP $2,700) and Odyssey (MSRP $850-$1,200) at the end of 2010. “Being our core business, sit-on-tops remain a strong, growing segment for us – and we’ve got some great new products up our sleeve that we plan to unveil at OR.” Testament to the sit-on-top sector’s strength can also be found in Emotion Kayaks, which is riding its new 11-foot, price-point Comet 110 (MSRP $400) to record sales. “We are still in double-digit growth for the ninth year straight,” says company president Tom Strauss. ■ WEEK 1112 | SGBweekly.com
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Job Classifieds
Visual Merchandising Coordinator Outdoor Research, Inc.
Designer / Equipment Mountain Hardwear
Direct Marketing Representative Penguin Brands, Inc.
The main objective of the Visual Merchandising Coordinator is to support sales through creating instore brand environments that drive sell-through, establish and execute trade show booth flow and collaborate on the brand development objectives established by Director of Commercial Sales. The postion is based in Seattle, WA.
Equipment is the heart and soul of Mountain Hardwear and we have a legacy of leading the industry in all equipment categories. The Equipment Designer position requires individuals to create industryleading, innovative products and collections as part of a multi-disciplined team. These products must satisfy the demands of our consumers and customers and represent truly innovative designs.
Penguin Brands is searching for the right individual to assist in the Company’s success through direct marketing efforts, unique selling opportunities, and creating incremental sales through outreach to current and potential customers. Develop relationships with Nathan accounts to support direct marketing efforts, product launches, and capitalize on opportunistic selling events.
Customer Service Supervisor LaCrosse Footwear, Inc.
Senior Footwear Product Line Manager Columbia Sportswear
Responsibilities include providing quality and efficient customer service to customers through the daily management of team employees to include motivating, recognizing, rewarding, coaching, counseling, training, mentoring and problem solving. Additional responsibilities include assisting the manager with development, analysis and implementation of new programs directly related to customer service.
The candidate will work with the Footwear General Manager and other Product Line Managers to establish the vision, strategies and seasonal concepts for a portion of the global footwear business. Responsibilities include introducing innovative, profitable, new products that will entice our target consumer. Additional responsibility include identifying long-term trends and opportunities based on analysis of product.
Business Unit Manager / Volleyball Footwear & Bags Mizuno USA
Senior Vice President of Sales DC Shoes
Market Manager Hunt / Tackle - Florida Dick's Sporting Goods
Product Manager / Running New Balance
DC Shoes, the industry leader in action sports footwear and apparel, is looking for a Senior VP of Sales to help continue to lead our strategic and expansive growth. The position is responsible for leading and overseeing DC Footwear and Apparel brand sales for the Americas and directly responsible for leading the strategic planning process, setting and achieving quarterly and annual revenue targets, profit goals, product initiatives and leading all sales efforts.
This position is responsible for the development and execution of strategic and tactical efforts that support the seasonal marketing and merchandising plans for Hunt/Tackle within the Florida markets. As a field liason with cross-functional stakeholders, this position drives effective business processes designed to achieve positive competitive store sales and differentiates Dick's Sporting Goods within the competitive environment.
As a Product Manager/Running, you will work in crossfunctional teams to successfully develop, design, manage, merchandise, and drive a product line that meets business plans and long term visions. You will develop and execute a business plan, while taking into account manufacturing, cost, and market requirements. You will monitor and ensure that the budget is followed.
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Responsibilities include, but are not limited to, vendor/ supplier selection, price negotiations, product lifestyles, demand forecasting and inventory classification. Responsibilities encompass all of the functions of market analysis and product creation, while ensuring that the budgeted market share, revenue, operating income and gross margin goals are achieved within the product category.
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