SGB WEEKLY 1136 by SportsOneSource

SEPTEMBER 6, 2011

The Weekly Digital Magazine for the Sporting Goods Industry

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ISSUE 1136 SEPTEMBER 6, 2011

Group Publisher Bill Garrels bgarrels@sportsonesource.com 303.997.7302

The Weekly Digital Magazine for the Sporting Goods Industry Editor In Chief James Hartford (704.987.3450 x104) james@sportsonesource.com Senior Business Editor Thomas J. Ryan (917.375.4699) tryan@sportsonesource.com Contributing Editor Fernando J. Delgado Creative Director Teresa Hartford Graphic Designer Camila Amortegui Advertising Sales Director Casey Vandenoever (303.997.7302) caseyv@sportsonesource.com Advertising Sales Account Manager Katie O’Donohue (704.987.3450 x110) katieo@sportsonesource.com Circulation & Subscriptions subs@sportsonesource.com Technology Chief Information Officer, Mark Fine VP Research & Development, Gerry Axelrod Manager Database Operations, Cathy Badalamenti

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SportsOneSource Publications SGB TEAM Business Sportsman’s Business The B.O.S.S. Report Sports Executive Weekly SGB Update Footwear Business Update Outdoor Business Update Sportsman’s Business Update Team Business Update SGB Weekly

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Photograph courtesy of Shock Doctor

ZUMIEZ Swings to Second Quarter Profit on Stronger Sales QUIKSILVER, Inc. Back to Double-Digit Top-Line Growth GENESCO Raises Outlook on Strong Second Quarter DSW Lifts Outlook After Strong Second Quarter Results MOVERS & SHAKERS LIDS SPORTS GROUP Sues Former Impact Sports Owners

FEATURES 8 RETAIL MATTERS Team Takes A Look At Several Companies And Their Approach To Product Display To ReachThe Consumer 12 A CHANGING LANDSCAPE

DEPARTMENTS

18 JOB CLASSIFIEDS

SportScanInfo OIA VantagePoint SOS Research SportsOneSource, LLC 2151 Hawkins Street • Suite 200 • Charlotte • NC • 28203 t. 704-987-3450 • f. 704-987-3455 www.SportsOneSource.com

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Copyright 2011 SportsOneSource, LLC. All rights reserved. The opinions expressed by writers & 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.

WEEK 1136 | SGBweekly.com

NEWS

ZUMIEZ SWINGS TO SECOND QUARTER PROFIT ON STRONGER SALES Zumiez, Inc. sustained its second quarter comps rate of 7.5 percent through the last two weeks of August but is anticipating a “very tough economic environment” in the back-half of the year. “We did not anticipate, I think, probably the level of economic uncertainty that has arisen here in the last six weeks” said company CEO Rick Brooks. “The mall has become highly promotional.” Still, Zumiez had planned for deep discounting of denim and was able to maintain merchandize margins at their level of a year ago, Brooks said. The company’s focus on the action sports lifestyle, including skate and snow boards, also helped insulate it from widespread discounting of apparel. “We have a lot of brands you can’t find elsewhere,” he said. Brooks made his remarks during the retailer’s second quarter earnings call with analysts. Zumiez reported sales for the second quarter ended July 30 increased 14.9 percent to $112.2 million from $97.7

million reported a year ago. The growth was driven by both a 7.5 percent increase in comp store sales and the opening of 32 stores since the end of the second quarter of 2010. Footwear, men's, juniors, hard goods, and accessories departments all comped positive in Q2, while boys department comped negative. E-commerce sales rose 116 percent on top of 120 percent in the prior-year quarter. Gross margins rose 200 basis points to 32.2 percent-of-sales. The company posted net income for the quarter of $2.6 million, or 8 cents per diluted share, compared to a net loss of $1.2 million, or 4 cents per diluted share, in the year-ago period. The results for the year-ago include one-time costs of $3.1 million, or approximately 6 cents per diluted share, associated with the relocation of the company's DC and the settlement of a previously disclosed lawsuit.

QUIKSILVER, INC. BACK TO DOUBLE-DIGIT TOP-LINE GROWTH Quiksilver, Inc.'s fiscal third quarter profit grew nearly 26 percent due to lower interest expense as well as accelerating top-line growth driven by strong demand in the U.S. and currency exchange rates that favorably boosted sales abroad. Quiksilver has reported higher sales for two consecutive quarters, after a string of declines related to economic weakness in some of its biggest coastal markets - California, Florida and Hawaii. On a conference call with analysts, Quiksilver President and CEO Bob McKnight said that despite global economic pressures all three of the company's core brands - Quiksilver, Roxy, and DC Shoes – were seeing strong demand. For the fiscal third quarter ended July 31, Quiksilver reported a profit of $10.4 million, up from $8.3 million a year earlier. On a per-share basis, earnings were flat at 6 cents as the latest quarter on more shares outstanding. Adjusted EBITDA of $52.7 million compared to $53.5 million earned in the third quarter of fiscal 2010. The bottom line benefit from a reduction in interest expense to $15.7 million from $20.6 million. Revenue climbed 14.0 percent to $503.3 million. In the Americas, revenues climbed 10.9 percent to $260.2 million with both wholesale and retail channels up double digits on a percentage basis. Owned-retail store comps were up 21 percent in Q3, while e-commerce sales in the region grew 65 percent. Operating profits were relatively flat at $27.0 million versus $27.7 million a year ago. In Europe, sales gained 16.3 percent to $176.4 million or 2 percent in constant currency. Operating earnings rose to $21.0 million from $15.6 million. In the Asia/Pacific region, sales grew 20.1 percent to 4

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$65.5 million, but fell 3 percent in constant-currency due to the lingering effects of the various natural disasters on top of already weak consumer spending. The region showed an operating loss of $1.97 million against a $1.6 million loss a year earlier. Gross margins fell to 50.7 percent of sales from 52.3 percent of sales in fiscal Q3 last year, largely driven by its Americas business, reflecting higher sourcing costs and some promotional pricing. Regarding brand performance, McKnight said that the Quiksilver brand had been "very strong" across many categories, especially boardshorts and walk shorts. Quiksilver Girls debuted to "great success" in the spring. Winter/Holiday orders for the Quiksilver brand in the Americas, as well as Europe, are both up over last year. After a few challenging years in the junior category, Roxy’s building momentum has been led by its recent success in footwear, which has grown to represent 15 percent of the brand's business. Roxy's upgraded denim and dresses businesses are also seeing encouraging responses. Roxy's winter/holiday bookings in the U.S. are up low single-digits over last year. DC brand revenues from core skate and surf shops in the Americas during the third quarter were up 35 percent compared to last year. The specialty store channel also delivered "very strong growth" for DC men's and boys' apparel. The company reiterated that it remained on track to achieve its longer-term financial objectives this year of generating annual revenues between $2.5 billion and $3 billion and at least $350 million of EBITDA.

GENESCO RAISES OUTLOOK ON STRONG SECOND QUARTER With double-digit comp gains from both its Journeys and Lids segments, Genesco, Inc. narrowed its second quarter loss and raised its EPS and sales guidance for the year. The fiscal Q2 loss shrunk to $392,000, or 2 cents a share, from $3.2 million, or 14 cents a year ago. Excluding asset impairments, compensation expense and other items, EPS from continuing operations basis were 22 cents, compared with a loss of 2 cents. Analysts on average had projected earnings of 10 cents a share. Revenue rose 29.4 percent to $470.6 million as same-store sales climbed 14 percent. Lids Sports Group segment revenues grew 33.9 percent to $177.5 million. Operating profits jumped 57.4 percent to $18.1 million. Comps for the group increased 12 percent in the quarter. E-commerce comps ran up 40 percent for the quarter. On a conference call with analysts, company CEO Bob Dennis said Lids headwear stores had a “very good” quarter, driven primarily by fashion product. Said Dennis, "Action Sports is still big, and a lot of the professional sports done in these snapback styles are extremely popular." Dennis said the company remained “excited” about the growth opportunities for its Lids Locker Room and Clubhouse stores noting that 70 percent of their annual sales come in the second half of the year. Genesco made a small acquisition of a regional fan chain and made one more since the end of the quarter. With the signing of Texas Tech, Iowa State and Iowa as partners in the quarter, Lids college Clubhouse business now operates stores and/or e-commerce sites for 12 major college programs. Dennis said the team sports business “remains a work in progress as we continue the consolidation of the businesses acquired over the past few years,” including two acquisitions last year. Team sports is expected to generate approximately $110 million in sales this year and be profitable. Lids.com generated a 40 percent increase in comp sales for the quarter, which follows a 42 percent gain in Q1. Journeys Group segment revenues increased 15.9 percent to $177.3 million with a 15 percent comp increase. Journey Group’s operating loss in the seasonally-low quarter was cut to $974,000 from $5.1 million. The Group's e-commerce business was up 53 percent. Dennis said strength in the casual category had continued to be a key contributor to strong sales increase. “Recent casual trends remain in our favor, as evidenced by the strong back-to-school results, making us feel good about the prospects for the holiday season,” said Dennis. He added that Journeys is benefitting since the strength in running and basketball is seen as encouraging athletic mall specialty players to focus less on casual.

DSW LIFTS OUTLOOK AFTER STRONG SECOND QUARTER RESULTS DSW, Inc. raised its full-year outlook for the second time this year after reporting better than expected secondquarter profits. Same-store sales grew 12 percent in the second quarter, on top of a 12 percent comp increase in the year-earlier period. For the quarter ended July 30, earnings reached $139.9 million, or $3.96 a share, after the benefit of $106.2 million from its merger with Retail Ventures, one-time majority shareholder. Excluding merger related items, adjusted earnings rose to 74 cents a share from 52 cents, beating Wall Street's consensus estimate of 63 cents. Revenue rose 15 percent to $476.3 million. Comps in its the namesake division increased 13 percent. Gross margins widened to 32.7 percent of sales in Q2 from 30.3 percent of sales in Q2 last year. By category, athletic footwear revenues scored an 8 percent increase in the quarter as "explosive growth" in lightweight and technical footwear more than offset declines in toning, said Mike MacDonald, DSW's president and CEO, on a conference call with analysts. The Nike brand in particular drove gains. Women's footwear, its largest category, grew 12 percent and was led by sandals, evening shoes and plain pumps. Men's non-athletic jumped 17 percent, aided by efforts to upgrade brands and fashion content. Accessories grew 23 percent. For the full year, the retailer raised its earnings view again by 5 cents a share from $2.70 to $2.85 a share, excluding the impact of the merger. That compares to 2010 adjusted net income of $2.40. WEEK 1135 | SGBweekly.com

MOVERS & SHAKERS Todd Stanley has joined Reef as director of sales for the U.S. and Canada. Stanley has spent the past five years in the Vans organization and more recently the director of sales for the core/action sports channel. The American Sportfishing Association (ASA) named Kenneth G. Andres as its new industry tradeshow director. ASA manages the ICAST show. Atomic USA hired Bob Collins and Drew Gelinas as Nordic sales representatives for northern New England. Teko Socks named Brian Erickson as its rep in Alaska. Osprey Packs, Inc. promoted Sarah Harper Burke to the position of retail marketing manager. Easton-Bell Sports, Inc., parent of Easton, Bell, Riddell and Giro brands, appointed two new members to its board of directors. David Perdue, CEO of Aquila Group and former CEO and chairman of Dollar General, will join the board and serve on the compensation committee. Michael Wilskey, former brand and marketing executive at Nike, was also named to the board. Currie Technologies has hired bicycle industry veteran Russell Bockin as national sales manager for IBD sales. Costco Wholesale announced that CEO Jim Sinegal will step down at the beginning of 2012. Sinegal will be succeeded by Craig Jelinek, Costco's current president and COO. Glamm Industries, LLC has appointed Walter Sims, former president of Swatch USA as interim EVP of operations. 180s named Calgary-based Xero Seasons, Inc., as its new Canadian master agency. Berghaus, the U.K. outdoor brand, appointed James Harris as its chief operating officer as part of an ongoing restructuring. Harris joins Berghaus from PZ Cussons, where he held the role of head of logistics.

LIDS SPORTS GROUP SUES FORMER IMPACT SPORTS OWNERS

Hat World, Inc., a division of Genesco, Inc. also known as Lids Sports Group, last week filed suit against the former owners of Impact Sports, the team dealer acquired by Hat World as part of its move to build a national team dealer network. The defendants, identified as Thomas Handlen and his two sons, Jeff and John Handlen, joined Hat World to lead the Lids Team Sports division created in 2009 following Hat World’s $4 million acquisition of Impact Sports. The suit alleges that the Handlens violated their contracts and non-compete clauses by starting a rival business and attempting to take customers and employees with them. The suit says that the Handlens traveled to Indianapolis frequently following the acquisition and were in constant contact with Lids Team Sports sales reps. Hat World terminated the Handlens on May 5, 2011 due to “poor performance,” the suit says. The filing went on to elaborate that, “Sales representatives were quitting, communications with Hat World executive management was poor to non-existent, and the Handlens proved to be terrific salesmen but poor businessmen in terms of their ability to actually run the Lids Team Sports business.” Hat World asserts that the Handlens have attempted to rebuild Impact Sports since their termination. The suit says Jeff Handlen contacted World Wide Promotions, the largest customer of Lids Team Sports, and offered to sell its embroidered or printed sports uniforms and apparel. The company would initially offer "generic” brands but would eventually carry top retail brands such as Nike or Adidas, Handlen said, according to the filing. The suit also said the Handlens had unlimited access to business, development and marketing strategies of Lids Team Sports and to other confidential information such as pricing and customer and vendor lists. Beside monetary losses resulting from the Handlens’ conduct, Hat World also will “sustain intangible losses that cannot be remedied by any award” if a temporary restraining award and permanent injunction are not granted, the suit said. The complaint seeks monetary damages and a permanent injunction prohibiting the men from soliciting customers and employees for one year and from disclosing any of Hat World's trade secrets. The Lids Team Sports (LTS) division now does business in 43 states wth 116 roadman reps following a number of additional acquisitions including Anaconda Sports in Massachusetts and Brand Innovators on the West Coast. The division has been designated as a Nike team sports partner in 49 states. Lids Team Sports maintained production and warehouse operations in Madison, WI, the home of Impact Sports, until the division moved in December 2010 to Indianapolis, IN, where Hat World is headquartered.

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With a growing presence in retail, sports medicine companies must be effective with their merchandising in a highly competitive market. TEAM takes a look at several companies and their approach to product display to reach the consumer By Fernando J. Delgado

retail stores across the country, sports medicine is more visible than ever. School budget cuts continue to drive parents and student athletes to retail stores to buy protective gear and injury rehabilitation equipment, as the burden of cost has been passed on from the school to the athlete in recent years. Awareness of concussions and the importance of prevention has created an increase in demand for mouthguards, helmets, and pads in all the major high school and collegiate team sports, leading to opportunities for sports medicine companies to expand their presence in the retail setting. In-store point-of-purchase displays have become a key component to retail efforts for many companies, and the appeal and efficiency with which those displays are presented has become increasingly important. Analyzing the merchandising strategies and product displays used by several sports medicine companies reveals many interesting approaches in their efforts to connect to retailers and consumers. The sports medicine market has steadily grown from a niche group of products to a prominent category which is a staple in retail stores. “Sports medicine has grown substantially over the past 10 to 20 years,” says Tom Rogge, CEO and President of Cramer Products. “Sports medicine twenty years ago was frequently behind the cash register, or under the counter. It has gradually come out from under the counter and has made its way into its own section. There are now more dollars being dedicated to packaging and point-of-sale materials.” Due to the competitive nature of retail, sports medicine companies are offering products which must stand out from competing offerings. Display space is often limited, and consumers are sometimes faced with multiple options to address their needs. Rogge explained that Cramer’s approach to merchandising in retail stores is founded in offering not only unique, distinguishable products, but also in establishing relationships by providing quality service to their resellers. 8

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“We’ve gone in and tried to provide proprietary product that differentiates from our competitors, or offer products that none of our competitors have, and hopefully be successful with that retailer and provide a great product,” he stated. “At the same time, we’re trying to build a deep relationship with the customer on a personnel basis - with their buyer, their merchandising people, and if possible, at the highest level between our company and the customer. Hopefully through good packaging and good point-of-sale material, we can expand our offering at the store because of their good experience with us. We’ve been successful at multiple big box stores - such as Dick’s Sporting Goods and Modell’s Sporting Goods - with that strategy.” According to Tim Jahnke, retail national sales manager for Mueller Sports Medicine, catching a consumer’s attention with an effective display presentation and then providing an informative, assuring experience has been a successful approach. “We try to educate the consumer, and merchandise with our stop sign effect,” shared Jahnke, who added that product packaging is also essential to effective merchandising. “Consumers are intimidated by sports medicine, so we want to break it down for them in a short period of time, and make the shopping experience easy.” Providing as much product information in a retail setting for consumers to make better-informed decisions is also a point of emphasis for Shock Doctor. Again, it becomes evident that informational displays and packaging are a priority. “Sports Medicine, or as we call it Performance Sports Therapy, is no different than any other product that has technical features and a range of options for consumers at point-of-sale,“ said Jay Turkbas, VP of product development at Shock Doctor. “We feel that our point-of-sale system and packaging has made it easier for the consumer to reference and find a solution with less confusion.” Turkbas stated that Shock Doctor’s priority

in providing product specifications is vital to helping the consumer make a purchase. “The consumer is the final decision maker in the equation and we can only provide choices, but if the technical and functional differences in choices are difficult to decipher, the consumer may walk away, or worse, not buy the best solution,” he added. According to Turkbas, Shock Doctor provides a central information and solution option spinner that helps inform consumers of the choices in a scale that can be understood easily. The consumer - thanks to performance levels and icons - is led to the correct body part option on the display wall. “It’s very logical and a low stress process,” he said. Technology is also playing a role in merchandising, with Mueller Sports Medicine in particular recently unveiling a feature which is trailblazing for the industry. “One of the things that we’re really excited about - that Mueller is the first to be doing in our category - is adding QR (Quick Response) codes to all of our packaging and in-store signage,” revealed Sarah Stout, marketing director at Mueller. She explained that the scannable QR codes - which are comprised of geometric shapes and originated in Japan in 1994 - are specifically developed for each product. Consumers can use their smart phones to scan a product, leading them to a short video or website which will have instructions for its usage, along with the features and benefits of that particular item. “We’ve seen

“WE’VE GONE IN AND TRIED TO PROVIDE PROPRIETARY PRODUCT THAT DIFFERENTIATES FROM OUR COMPETITORS, OR OFFER PRODUCTS THAT NONE OF OUR COMPETITORS HAVE, AND HOPEFULLY BE SUCCESSFUL WITH THAT RETAILER AND PROVIDE A GREAT PRODUCT,” TOM ROGGE, CEO AND PRESIDENT OF CRAMER PRODUCTS.

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“WE FEEL THAT OUR POINT-OF-SALE SYSTEM AND PACKAGING HAS MADE IT EASIER FOR THE CONSUMER TO REFERENCE AND FIND A SOLUTION WITH LESS CONFUSION.” JAY TURKBAS, VP OF PRODUCT DEVELOPMENT AT SHOCK DOCTOR.

a huge spike in usage of the scan codes as soon as we put them in the stores,” she said. Stout believes that providing the consumer with as much information as possible to help them make a decision is important in their approach to merchandising. Placing QR codes on packaging and on the in-store display signage has helped consumers get to the Mueller website and find additional information about the product without leaving the store. “It’s another added benefit which shows the way our society is headed,” added Mueller’s Jahnke regarding the new technological feature. “To be able to scan the data and get information from a small amount of space is really beneficial. In retail, space is everything. The more you can maximize the amount of space on a package to educate the consumer on sports medicine, the better.” While many sports medicine companies look to information to make their products appealing, others, such as McDavid, rely on a different approach. Rey Corpuz, marketing director for McDavid, believes that convenience, simplicity, and a superior product are more important than aesthetics and sales strategies for reaching the consumer in the retail setting. “For the past 14 years, we have merchandised sports medicine as a destination point for our retailers,” said Corpuz. “We give them good, functional products at key price points and a good, better, best offering that meets the needs of their customers. Very simple - very effective. ‘Specials and sales’ don’t sell sports medicine. Injury and need drive sales. It is the ease of choosing the products that we offer our retailers and consumers.” Ultimately, regardless of the methods used by sports medicine companies to merchandise their products, a constant theme among those in the industry is helping the consumer find the product which addresses their concern. “Our objective is to have the consumer make good decisions,” Mueller’s Stout stated. “There are so many products out there that claim to do similar things for a particular part of the body. We want the consumer to be able to make an educated decision on which product is going to take care of their specific need.” ■ 10

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CRAMER WRAP DISPLAY

‘SPECIALS AND SALES’ DON’T SELL SPORTS MEDICINE. INJURY AND NEED DRIVE SALES. IT IS THE EASE OF CHOOSING THE PRODUCTS THAT WE OFFER OUR RETAILERS AND CONSUMERS.” REY CORPUZ, MARKETING DIRECTOR FOR MCDAVID

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WEEK 1136 | SGBweekly.com

ANALYSIS

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A CHANGING LANDSCAPE Despite the sports medicine market growing at retail over the past several years, athletic trainers shifting their allegiances have had a negative affect on team dealers, causing a ripple effect in the industry. TEAM Business checked in with sports medicine companies and team dealers to see how they have responded to changes in the market.

By Fernando J. Delgado

ports medicine has become a vibrant and growing category as consumers make injury awareness, prevention, and treatment a priority. School athletic trainers, seeking to provide the best performance and value for their athletes are no different and represent a key and unique buying group. Interestingly, over the course of the past several years, trainers have moved away 12

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from purchasing their supplies from team dealers choosing instead to deal directly with medical distributors. The resulting change in buying habits by trainers has team dealers faced with diminishing sales and sell-through rates. Similarly, as a result of schools and youth leagues cutting budgets, protective costs are being passed on to parents and athletes, who increasingly have started purchasing sports medicine

products in retail stores. Due to these developments, team dealers and sports medicine vendors have been making adjustments as part of the changing landscape in sports medicine. Athletic trainers at the school level who have shifted purchasing sports medicine products away from team dealers to medical distributors has been gradual although an increasingly common trend. “Over the years, local team dealers sold at retail and to teams, but over the past twenty years or so, more athletic trainers have become true health professionals,” said Tom Rogge, CEO and President of Cramer Products. “They would rather buy their products from a medical supplier as opposed to a sporting goods store. A lot of people who aren’t involved directly in that sector of the business aren’t aware of that.” Jay Turkbas, VP of product development at Shock Doctor, has also noticed the change in the purchasing habits of athletic trainers. “We have found that, in the end, a trainer has and should have ultimate allegiance to the athlete they are treating proactively or post-injury,” observed Turkbas. “The sports medicine solutions that allow them the best results for that athlete are what they should be focusing on. The products that they were accepting in the “traditional” sense may not be the best solutions any longer. It makes sense that there is movement to new alternative sources or distributors if their previous relationships do not support their requirements.” The shift in the way trainers purchase medical supplies has forced sports medicine companies to adapt, as medical distributors have overtaken team dealers for accounts. “We have had to adjust to a few things,” said Cramer’s Rogge. “Many of these medical suppliers are national accounts. They have a catalog and a national sales force and may be part of a multi-billion dollar corporation. They have a lot of resources and capability in terms of putting feet on the ground, putting sales people out there, and stocking inventory. They have a lot of purchasing power. They put pressure on us from a service standpoint and pricing standpoint, and do substantially more volume than we were ever used to doing with any one customer.” Rogge added that another impact of the change on the industry can be seen in company relations, as Cramer deals differently with medical suppliers than with sporting goods dealers. Relationships between sports medicine companies and dealers were previously forged through manufacturer representatives or agents. Now, business between sports medicine companies and large sports medical supply accounts is no longer handled through representatives or agents but instead through direct relationships at the highest level of the company. Many sporting goods companies with growing sports medicine offerings view the changes in the market resulting from athletic trainer purchasing behavior as an opportunity. “For three years we’ve been getting more into the distribution on the sports medicine side,” stated Herb Markwort, president and owner of Markwort Sporting Goods. “It looks very promising right now.” Markwort credits more interaction with athletic trainers as a primary reason for Markwort’s increased presence in the sports medicine market. Specifically, he mentioned that attending the National Athletic Trainers’ Association (NATA) trade show over the past several years

“For three years we’ve been getting more into the distribution on the sports medicine side. It looks very promising right now.” Herb Markwort, president and owner of Markwort Sporting Goods.

has helped Markwort build valuable relationships with athletic trainers. “The NATA show is coming back to St. Louis next June. It’s an advantage for us - with Markwort being based in St. Louis - since that’s where we originally got involved with it a few years back,” said Markwort. “We couldn’t believe how big this show was. We’ve gone to hundreds of shows, and this one surprised us. It’s an interesting crowd - young and energetic.” Markwort said that exposure gained from dealing with trainers and distributors at the show has contributed to increased sales of several of their products, in particular the Vettex Mouthguard, which has had a 30 percent increase in sales this year over last year. Whereas sports medicine companies have had to adjust to dealing more extensively with medical distributors and athletic trainers, team dealers are faced with the adverse economic realities of losing business. For many team dealers across the country, sports medicine products have been a steadily shrinking category. “They are not as important as they used to be,” said Kevin Paul, president of Dumonts Sporting Goods in Canton, OH. According to Paul, both inventory and sales of sports medical products has sharply decreased over the past

several years. He attributed the diminished priority on sports medicine items in his store to lower profit margins, specialization of products which drives teams, trainers, and consumers to deal directly with sports medicine companies and medical distributors, and team dealers and trainers engaging in less direct interaction. “It’s more convenient for schools to hire a trainer directly from a medical background, but the problem is that I don’t see that person,” said Paul. “When I’m calling on the school in the morning, the trainer may not be there because he spends most of his time on-site during after-school hours. It’s more difficult to contact the person who actually buys the medical supplies - unless it’s the athletic director. Schools go more with medical houses and those types of places.” WEEK 1136 | SGBweekly.com

Cramer’s Rogge also shed light on the plight of team dealers, as he explained that several factors are contributing to difficulties for team dealers in sports medicine. One is that sales of medical products offered at lower price points - often in the $10 to $50 range - can be difficult due to lower profit margins. The price points are not as high as a uniform or helmet, so sports medicine products tend to be a lower priority for sporting goods dealers than some of the higher dollar traditional equipment. Another factor is that many of the large national distributors have more buying power, buy in greater volume, sell at lower margins, and that bidding occurs at the school level between distributors and team dealers. National medical distributors are often able to bid at lower prices than the local sporting goods dealer, decreasing profit margins and the incentive for team dealers to pursue inventory. However, not all team dealers have experienced a decrease in business with athletic trainers at the school level. Adam Fish, store manager at Team Sports, Inc. in Holland, OH, said that his business has maintained steady sports medicine sales with trainers - mostly at the high school level - over recent years. He credits long-standing relationships between sales representatives and trainers as the main reason, as trainers have shown loyalty as a result of quality customer service. Despite his store’s success in preserving accounts with athletic trainers, Fish recognized that other dealers around the country have suffered decreases in sports medicine sales as trainers shift their attention to medical distributors, and he believes there are underlying factors for the trend. “Price is the primary reason,” he said. “Trainers may be able to get a better price from medical distributors. Another reason is that the knowledge medical distributors can provide is more specific. As a dealer, we can provide a product, but we may not know too much about it or about alternatives.” Both team dealers and sports medicine company representatives have noticed that some dealers are walking away from the sports medicine business altogether, and that competition and an unfavorable economic climate have slowed dealer entry into the market as well. “It’s always been tough for the independent sporting goods dealer to succeed.” said Herb Markwort. “For most of the past 80 years Markwort has been around, we’ve seen all kinds of people coming into the business to replace the ones that were leaving it. But that trend has changed the past two and a half years due to the recession.” Despite sluggish sales and more limited business in the sports medicine market, many team dealers will remain in the category, and they will continue to adapt in response to market changes. “The dealers who embrace the opportunity will succeed in staying in and building this category,” said Shock Doctor’s Turkbas. “Education about and awareness of the opportunity is important, and those who commit should be able to capitalize on the breadth of existing trainer relationships they have built over the years. But if dealers decide the effort is not worth it, they lose something that they worked hard to maintain for a number of years, which seems unnecessary.” Turkbas believes that it is the job of sports medicine companies to help team dealers understand product benefits in a way that informs their customer’s in14

SGB WEEKLY SEPTEMBER 6, 2011

CURRENT TRENDS In The Sports Medicine Market Continue To Be Dominated By Prevention, Protection, And Performance

Mouthguards, now seen as an important way to prevent concussions, have experienced a boost in sales over the past year, especially for companies such as Markwort and Shock Doctor. Cramer’s Tom Rogge said that compression items such as sleeves, shorts, and shirts have been in demand and will be a significant part of sports medicine going forward . “We see compression as a new category,” he explained. New technologies continue to improve offerings. Cramer’s Knee Compression Sleeve and Ankle Compression Sleeve, for example, feature graduated compression which stimulates blood flow for athletes in recovery. Rogge also pointed out that the color pink - a symbol of cancer awareness and protection - is being used in products such as tape, wraps, and compression wear and is an increasingly prevalent seasonal trend. Photo courtesy of Shock Doctor

creasing level of sophistication. “Innovation is the foundation of Shock Doctor products, and if we can innovate and solve these needs, then we think this elevates the dealer’s ability to continue to be a viable solution for their existing customer base,” he said. Mueller Sports Medicine also sees opportunity for team dealers to persevere, with an emphasis on educating dealers so they are more comfortable and more specialized when it comes to dealing with sports medicine products. “Yes, team dealers have walked away from the business,” said Tim Jahnke, retail national sales manager for Mueller. “But Mueller has some programs in place to give them the confidence to get their slice of the pie.” ■

Brace Yourselves: McDavid 195 Ultralight Proven to Prevent Ankle Injuries HARD CORE R E S U LT S NEW STUDY SHOWS MCDAVID 195 HELPS PREVENT ANKLE INJURY ATHLETES WHO DON’T WEAR MCDAVID ARE 3X MORE LIKELY TO BE INJURED

EACH INJURY COSTS

A PLAYER $12,000

THE VERDICT IS IN: THE MCDAVID 195 ULTRALIGHT IS A MUST HAVE TO PREVENT LONG-TERM INJURY

Lace-up ankle braces are designed to prevent acute ankle injury in amateur athletes. But until now, that statement wasn’t backed up with any hard-core evidence. A recent study, the most extensive of its kind, shows that lace-up ankle braces, specifically the McDavid 195 Ultralight Ankle Brace, prevents most acute ankle injuries in amateur basketball players. A pair of researchers at the University of Wisconsin Sports Medicine – Tim McGuine, PhD, ATC, and Dr. Alison Brooks – designed the study to demonstrate the positive effect of wearing an ankle brace over a career. The controlled study involved 1460 male and female (ages 13-18) basketball players from 46 high school schools across the country. During the 2009-2010 season, one group (740 student-athletes) wore McDavid 195 Ultralight Ankle Braces exclusively while the other group (720 student-athletes) did not wear any braces. Results of the study show that the athletes who didn’t wear the McDavid lace-up ankle brace showed a rate of injury nearly three times higher than those who wore the brace.

“SEEING MORE THAN THREE TIMES THE AMOUNT OF ACUTE ANKLE INJURIES WITHOUT THE BRACE IS A TELLING STATISTIC,” MCGUINE SAID. “HAVING MORE PLAYERS WEAR A BRACE ON A REGULAR BASIS WOULD HELP PREVENT INJURY.”

Furthermore, the study proves that the effectiveness of lace-up braces is independent of an athlete’s injury history. This combats the previously-held notion (from studies using alternative types of intervention products) that braces are more effective in athletes with a previous history of injury than those without. Each injury costs approximately $11,900 per athlete, in direct and indirect costs, to treat, and in the U.S. an estimated $2 billion was spent on treating high school athletes’ ankle sprain injuries in just one school year. Furthermore, 30% of the athletes who sustain ankle injuries suffer long-term consequences, and these injuries have a severe effect on thier ability to maintain a healthy, active lifestyle. Having athletes wear an ankle brace on a regular basis is proven to help prevent injury and ultimately reduce cost.

BOTTOM LINE: IF YOU ARE WEARING A MCDAVID 195 ULTRALIGHT, YOU’LL SPEND MORE TIME “IN” THE GAME AS OPPOSED TO “WATCHING” IT.

RESEARCH PROVEN TO REDUCE ANKLE INJURIES BY

66%

Research proves that one in ten of your players will get injured this season. Why not reduce the odds?

Dwyane Wade pictured in 195 Ultralight and HEXPAD®

Source: UofW Madison, Brooks/ McGuine Study, 2011

McDavidUSA.com

EVERY JOURNEY BEGINS WITH A GREAT JOB.

HAVE YOU LANDED YOURS?

FOR INFORMATION CONTACT 704.987.3450 OR SPORTSJOBS@SPORTSONESOURCE.COM

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Job Classifieds TO READ THE FULL JOB DESCRIPTION, PLEASE CLICK ON JOB TITLE

Manager - Technical Design Academy Sports + Outdoors

Manager Apparel Development & Production CHAMPRO Sports®

Academy Sports + Outdoors is currently seeking a Manager – Technical Design located in our corporate Katy, TX office. Responsibilities include providing technical design support for Academy Private Label apparel, creating garment specs in Gerber Web PDM, ensure size and fit consistency within the brand and across product categories, oversee development and consistency of P.O.M.'s and grade rules in Gerber Web PDM. Extensive domestic and international travel required.

Champro seeks a qualified Manager of Apparel Development & Production for their corporate office in Wheeling, IL. Responsibilities for all aspects from creation to production of athletic apparel. Must be able to guide the process in working with multiple overseas factories. Will work internally with others to deliver quality and timely delivery of finished goods.

Mechanical Engineer – Footwear Easton-Bell Sports

Web Developer LaCrosse Footwear, Inc.

Accessories Designer Life Is Good, Inc.

This person is responsible for engineering individual products and complete product lines of moderate to extreme levels of difficulty/complexity for which few precedents exist through the use of shape, accent details, color, ergonomics and other design techniques in coordination with other cross-functional teams. They will be in charge of all product validation and testing associated with the development group including lab and field testing including protocol development & establishment.

LaCrosse Footwear, Inc. seeks a front-end web developer who is an expert in building standard-based websites driven by HTML/CSS and Javascript, The person will be working with a small internal team on existing web projects from mobile, to ecommerce, to digital development of ongoing marketing campaigns.

The Accessories Designer will design and develop artwork for a range of categories including bags, hats, ceramics and home goods. Candidates must possess a wide range of design capabilities including a strong understanding of trends, color, fabric and styling; possess technical design skills and have a thorough understanding of the accessory market.

VP of Marketing Louisville Slugger

Apparel Merchandising Manager – America’s LO Columbia Sportswear

The Vice President of Marketing is a results-oriented, consumer-focused marketing executive who can lead and manage the strategic marketing plans of the H&B and Bionic brands. The position, which reports to the CEO, is responsible for delivering plans to drive profitable sales growth for the brands and build the brands for year-over-year success.

Provide strategic direction to sourcing and product development. Build and manage the America’s source base to deliver profitability, on-time execution, quality and SMP goals. Provide leadership to the merchandising team to achieve product development, commercialization goals and delivery execution of product to global markets.

Community Marketing Manager – Buffalo/Western/Cent Dick’s Sporting Goods

The Community Marketing Manager is a field position responsible for supporting, creating, executing, and evaluating events, programs, and marketing strategies at the local and territory level. This person establishes and maintains relationships with corporate Marketing Associates as well as Regional Vice Presidents, Regional Directors, District Managers and all Store Management within assigned territories.

Regional Merchandise Manager 24 Seven The candidate will utilize merchandising/product line management/product development skills, experience and knowledge of product creation process to assist in the creation of product lines/products primarily in sporting goods, athletic and outdoor soft goods and hard goods on a global and regional level. Will provide vision and product direction to fulfill product needs and revenue expectations of that particular region/country.

EVERY JOURNEY BEGINS WITH A GREAT JOB HAVE YOU LANDED YOURS? FOR INFORMATION CONTACT 704.987.3450 OR SPORTSJOBS@SPORTSONESOURCE.COM

SGB WEEKLY AUGUST 29, 2011

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Durability you can wear.

C O SU SA A

B The Apparel Collection. Including new CORDURA® Naturalle™ fabrics. Styles, colors and textures designed from the skin, out. Get comfortable at cordura.com/apparel.