SGB WEEKLY 1215 by SportsOneSource

ISSUE 1215 APRIL 9, 2012

The Weekly Digital Magazine for the Sporting Goods Industry

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ISSUE 1215 APRIL 9, 2012

James Hartford

Editor In Chief james@sportsonesource.com 704.987.3450 x104

Managing Editor Thomas J. Ryan (917.375.4699) tryan@sportsonesource.com

The Weekly Digital Magazine for the Sporting Goods Industry

Page 12

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NEWS

4 5 6 8

FINISH LINE, GART Join Forces To Target Run Specialty Space SKULLCANDY Signs SI Swmsuit Model Kate Upton As Endorser UNDER ARMOUR Taps Adidas Exec To Drive International Expansion DICKS’S SPORTING GOODS Acquires Top Flite, Invests in JJB Sports PUMA NA Promotes Philippe Gautier to COO

FEATURES 10 12 16 20

NIKE ROOTED IN FOOTBALL NFL UNIFORMS GET A MAKEOVER NFL MAKES A CHANGE WITH NIKE 5-YEAR DEAL RETAILERS ARE BULLISH ON NFL CHANGEOVER

DEPARTMENTS

22 CALENDAR

ADVERTISERS

2 5 6 7 9 21 23 24

SPENCO BALEGA INJINJI SOFSOLE MCDAVID GOALRILLA 2XU OR MARKET

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Copyright 2012 SportsOneSource, LLC. All rights reserved. The opinions expressed by writers and contributors to SGB WEEKLY are not necessarily those of the editors or publishers. SGB WEEKLY is not responsible for unsolicited manuscripts, photographs or artwork. Articles appearing in SGB WEEKLY may not be reproduced in whole or in part without the express permission of the publisher. SGB WEEKLY is published weekly by SportsOneSource, LLC, 2151 Hawkins Street, Suite 200, Charlotte, NC 28203; 704.987.3450. Send address changes to SGB WEEKLY , 2151 Hawkins Street, Suite 200, Charlotte, NC 28203; 704.987.3450

APRIL 9, 2012 | SGBWeekly.com

NEWS

FINISH LINE, GART JOIN FORCES TO TARGET RUN SPECIALTY SPACE Finish Line said the Denver-based Gart Cos., Inc., run by the former owners of Gart Sports, has invested $10 million in Finish Line, Inc.’s Running Specialty Group. The business was formed last year with Finish Line’s acquisition of The Running Company, which operates 19 specialty running shops in seven states and the District of Columbia. Finish Line remains the majority owner of the Running Specialty Group, but its headquarters will be relocated to Denver, where Gart Cos.’ subsidiary, Gart Capital Partners (GCP), will manage all day-to-day operations. Gart will oversee buying, hiring and marketing while also exploring the acquisition of additional running stores from Denver. The Gart group will also operate Run.com, which is being launched through the Running Specialty Group in mid-April. Finish Line will perform back-of-the-house functions, such as receiving, distribution and information technology work for Running Specialty Group. Gart will offer Denver positions to some of the Finish Line employees now working in Indianapolis. Finish Line said it will reveal the minority stake the Gart group attained in its $10 million. Finish Line said the strategic investment pairs Finish Line, a $1.4 billion national athletic footwear and apparel retailer, with GCP, an equity investment partnership that has a proven track record of successfully executing specialty retail rollups. That includes a 12year joint venture with Vail Resorts, Inc. that involved more than 150 ski-related shops generating $200 million in annual sales. Gart Cos., operated by brothers Ken Gart and Thomas Gart, sold its remaining interest through its Specialty Sports Ventures arm to Vail Resorts in April 2010. GCP also owns GolfTEC, Magellan’s/Colorado Ban’n Baggage and Swoozies, plus the Powderhorn ski resort near Grand Junction, CO, as well as real estate holdings along the Front Range in the state. The Gart family had built the Gart Sports chain that merged The Sports Authority in 2003. 4 SGBWeekly.com | APRIL 9, 2012

Finish Line said the venture builds upon the 2011 acquisition of an 18-store chain of specialty running shops operating under The Running Company banner for approximately $19 million. "The team at Gart understands what it takes to make athlete-driven retail operations a success," said Glenn Lyon, Finish Line's chairman and CEO, on the company's Q4 conference call with analysts. "They know that you must maintain the unique culture of the stores, keep them highly localized, and offer expert staff. We are excited about this venture with a team that obviously shares our vision for this business and is contributing not only management expertise but also capital. We believe this is the optimal way for us to harness the potential of the specialty running market." In a statement, Gart Principal Ken Gart said, "We bring the ability to celebrate the unique culture of independent running stores and maintain what makes them great in their local markets while Finish Line brings the efficiencies of a large scale and expertly run retail operation. We've achieved success using this type of model with Vail Resorts in the ski business and look forward to applying the same dynamics to the world of running as we seek out and acquire additional operators. This is a time of change within specialty running and we are out in front leading it."

SKULLCANDY SIGNS SI SWIMSUIT MODEL KATE UPTON AS ENDORSER Skullcandy, Inc., the performance lifestyle audio brand, announced that 2012 Sports Illustrated Swimsuit cover girl Kate Upton has become the first addition to its crew of Supermodel Ambassadors. The announcement of the multi-year contract with Skullcandy, arrives on the heels of Upton's SI cover and gives the brand all-access to the Sports Illustrated "it girl" in the form of exclusive content, advertising, social media and Skullcandy events. Content plans thus far include a short film and photo shoot both produced in Oklahoma City last week with Kevin Durant and James Harden from the Skullcandy NBA Crew. "Skullcandy has collaborated with some of the worldâ&#x20AC;&#x2122;s greatest athletes and artists and today we're excited to add Supermodels to that roster," Clarke Miyasaki, Skullcandy's VP Global Business Development said. "We look forward to working with IMG Models and couldn't be more thrilled to have Kate on our team." Kate Upton is the first of the "Supermodel Crew" to be announced. The rest of the lineup will be revealed next month when Skullcandy unveils a completely evolved look and product range as part of their 2012 Supreme Sound story.

UNDER ARMOUR TAPS ADIDAS EXEC TO DRIVE INTERNATIONAL EXPANSION Under Armour announced that Karl-Heinz (“Charlie”) Maurath has been named president, Under Armour International, effective September 2012. For the past nine years, Maurath has been in charge of Adidas Latin America as SVP. In this position, he oversaw Adidas, Reebok and TaylorMade subsidiaries and distributors, and was responsible for the fastest growing market within the Adidas Group. Previously, he led the establishment of the Adidas brand in Thailand and Sweden. “Charlie’s international leadership, experience and proven track record of success are among the most impressive in the industry, and I am very excited for him to join the Under Armour family,” said Kevin Plank, CEO and Founder of Under Armour. “Under Armour is deeply committed to continued international growth, and Charlie’s vast global expertise will be instrumental in our progress towards that goal.” Under Armour also appointed James Hardy, Jr. as chief supply chain officer and Fred Knowles, SVP of human resources. Hardy’s diverse business background includes leadership roles at Procter & Gamble, The Clorox Company, ConAgra Foods, Inc., The Dial Corporation and most recently, Hospira, Inc., a spinoff of drug manufacturer Abbott Laboratories. Knowles joins Under Armour from Capital One Financial Corp, where he served as SVP, human resources.

DICK'S SPORTING GOODS ACQUIRES TOP-FLITE, INVESTS IN JJB SPORTS Dick's Sporting Goods completed the purchase of the Top-Flite brand from Callaway Golf Co. The purchase price was not disclosed. "Top-Flite is an established innovative brand that is trusted by golfers at every skill level," said Edward W. Stack, chairman and CEO. "Through this acquisition, we've added a strong, highly recognized name to our portfolio while gaining a valuable competitive advantage in the golf market." In a separate statement, Chip Brewer, president and CEO, Callaway, said the decision to sell Top-Flite reflects the company's decision to focus on its core businesses, specifically Callaway and Odyssey. Separately, Dick's Sporting Goods agreed to make a £20 million strategic investment in JJB Sports, a leading U.K. sports retailer with 195 stores and will purchase £18.75 million in junior secured convertible notes and £1.25 million in ordinary shares of JJB Sports. In addition, Dick's has been granted the option to purchase an additional £20 million in junior secured convertible notes of JJB in connection with a follow-on financing expected to take place in the first fiscal quarter of 2013. Upon full conversion of the notes, Dick's would become a controlling shareholder of JJB. Dick's also gains two seats on JJB's board. Said Stack, "This is an exciting strategic investment that provides us with a valuable introduction into the workings of the United Kingdom sporting goods market from an established company that shares our commitment to serving the needs of core athletes. By partnering with JJB, we will be positioned to share our more than 60 years of operating experience in the United States while gaining insight into the specific needs of U.K. athletes, which will serve as a stepping stone for our company's future growth and development." 6 SGBWeekly.com | APRIL 9, 2012

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Puma North America said that Philippe Gautier was appointed COO of Puma NA. Gautier joined Puma North America in 2009 as CFO, after a five year career at PPR in its online business and a background in the automotive industry in multiple international positions. In his new role as COO, Gautier will continue to lead the CFO duties within the organization and now takes on a greater responsibility over the companyâ&#x20AC;&#x2122;s operational functions across all phases of the business and will drive the overall dayto-day performance of the company and the achievement of its strategic targets.

Twit ter.com/sgb_mag

In other moves, Tara McRae, former vice president of marketing, will transition to a newly appointed role of vice president of strategic planning & brand management, she will oversee North American consumer insights and research as well as managing cross-functional strategic initiatives and the management of key brand programs. As part of this move, Puma North America formed the new Brand Management division within the regional team, to complement the brandâ&#x20AC;&#x2122;s global team and to assist with the regional management of licensee and joint venture partners, asset strategy and plans and overall brand alignment across all internal functions, and external partners.

Theo Keetell, formerly director of Lifestyle & Retail Marketing, will advance to senior director of marketing for the North American team.

Plus SGB Weekly is now available on your iPad. Go to SGBWeekly.com to download the reader.

Photo courtesy of Nike

NIKE ROOTED IN FOOTBALL By Thomas J. Ryan

In his opening statements at the NFL uniforms unveiling in Brooklyn last week, Mark Parker, CEO of Nike, Inc., heralded Nike’s deep commitment to innovation and serving the needs of athletes over the last four decades. He also emphasized the critical role the sport of football has played in the brand’s development. The following are the unedited remarks. I want thank you for joining us on such a significant day for the Nike brand. And I want to welcome our special guests from the NFL, in particular the commissioner Roger Goodell and the representatives from each team. 10 SGBWeekly.com | APRIL 9, 2012

More than 30 years ago I began working at Nike as a product designer in our original R&D center in Exeter, NH. My role back then was to find new ways to serve athletes and help them perform better. And that’s still a big part of what I do today. At Nike, our nature is to innovate. And we create a relentless flow of product and services that serve athletes that celebrate the sport and create a deeper connection with consumers around the world. There is no better opportunity for us to do this than in partnership with the NFL in a sport that is at the very heart and soul of Nike. Football is one of those great sports that balance tradition

and innovation. And the games’ greats, coaches like Lombardi and players like Unitas and Rice, come to mind when thinking about the contributions that football has made to our culture and to the world of sport. But at the same time football embraces change at a rapid pace. The game becomes faster and more explosive every year. The training advances. The playbook gets more and more complex. And the product athletes wear has an infinite opportunity to be refined and redeveloped. And this is where Nike comes in. The notion of respecting the past and embracing the future is something we strongly believe in. So we are incredibly excited for this next chapter in our journey in the game of football.

Nike CEO Mark Parker talks to guests during a presentation in New York, Tuesday, April 3, 2012. The NFL and Nike showed off the new look at a Brooklyn film studio. AP Photo/Seth Wenig

You know, it’s a story that goes back some time for Nike. Bill Bowerman, one of our co-founders who was a personal mentor for me, and in my opinion the greatest American track & field coach ever, was a master of the competitive response. And he never relented in his pursuit of speed, strength and performance. What you might not know is he formed these commitments on the football field, in high school and then in college. Now some of you may know our other co-founder Phil Knight and if you do know Phil, then I think you are very well aware of his incredible passion for football. But more than anything, Phil has been about listening to the voice of the athlete. And when these two men founded Nike on a handshake over 40 years ago, they created a company committed to athletes and fixated - obsessed - on innovation. And that’s how we live and work today. We find new ways to inspire athletes and help them see their potential and then push them to reach it. It’s really what I call the ‘Bowerman’ in all of us. And working with the best makes us better. The insights for the inspiration we get from world class athletes is at the center of how we improve the performance of athletes and then promote the power of sport around the world. That’s what Nike does. And today is opening day for a new era of potential. Today we kick off our partnership with the NFL. Today we begin to deliver product innovation in a way the game has never seen. Amazing on-field, base layer, sideline and practice wear that I believe will reset expectations. Football is a sport that demands excellence from its athletes and no company is more able to serve 1,600 athletes across the league and inspire millions of fans around the world than Nike. The NFL is a league like no other and together we will drive growth across our business and create momentum in the marketplace. We are immensely proud of this partnership and the innovation you will see here today. So I want to thank you for your time and with you all the best for the morning. Enjoy. APRIL 9, 2012 | SGBWeekly.com

The new New Orleans Saints' uniform. Photo AP/Seth Wenig The new Cleveland Browns jersey. Photo by Mike Lawrie/Getty Images

The Denver Broncos design aesthetic will stay true to years past while updating the color-blocking in the neckline. Photo courtesy of Nike

NFL UNIFORMS GET A MAKEOVER By Thomas J. Ryan

The new Tennessee Titans uniform. Photo by Mike Lawrie/Getty Images

While more radical looks are expected to come in the future, Nike believes its performance-technologies in its new uniforms for the NFL will give players an edge in the 2012 NFL season.

Photo by Jason Kempin/Getty Images for Nike

NFL players stand in their new uniforms during the presentation in New York. Photo AP/Seth Wenig

ome seemed disappointed but other loyalists were relieved that except for a complete redesign for the Seattle Seahawks, Nike stuck to the 92-year-old NFL's traditional look of nearly all of the 32 teams for its new Elite 51 uniform launch. Although the uniforms looked more tailored and form-fitting, the big changes largely came from the promised improve stretch, breathability and lightweight technologies. More radical designs were seen as a possibility considering the cutting-edge looks Nike had recently brought to the college level, such as adding a feather print to the shoulders of University of Oregon's Ducks uniforms and a lizard-skin print on the pants of Texas Christian University's Horned Frogs. One hurdle for Nike designers was that changes to the uniforms, which the league will start using in the 2012 season, were in some cases restricted by NFL rules that allow teams to change their jerseys only once every five years.

Many teams also just opted for a more traditional look. Five teams - Carolina, Atlanta, Philadelphia, Oakland and Green Bay - passed on the Nike design completely, including the technologies. Nike will manufacture their uniforms using the previous design. Of course, the Nike swoosh replaces the Reebok vector across all 32 teams. Other redesigns were subtler. The Kansas City Chiefs moved players' numbers from the sleeve to the shoulder pad, while the Chicago Bears increased the thickness of the stripes on their sleeves. Several teams had to change collar designs to accommodate Nikeâ&#x20AC;&#x2122;s new Flywire collar. The Bears also chose to continue to honor its legendary coach George Hallas by enlarging his GSH initials on the jersey sleeve. But a sign of things to come for many could be seen in the complete uniform makeover for the Seattle Seahawks, with the uniforms incorporating the cultural elements of the Northwest both in color and detail, Creative Director of Nike Football and Baseball Todd Van Horne said at the unveiling event. APRIL 9, 2012 | SGBWeekly.com

NFL Commissioner Roger Goodell. Photo AP/Seth Wenig Photo by Jason Kempin/Getty Images for Nike

Seattle Seahawks' Kam Chancellor shows off the new design for gloves. Photo AP/Seth Wenig

The new Seattle Seahawks uniform, foreground, Pittsburgh Steelers, rear right, and Cincinnati Bengals, rear left. Photo AP/Seth Wenig

Overall, a striking seahawk still serves as the focal point for both the uniform and the helmet. But the design of the helmet has a new wing pattern and the horizontal graphics across the front of the shoulders replicate the American Indian thunderbird totem poles of the Northwest. The font used for the numbers are now pulled from the Seahawk logo. On the pants, 12 winged icons down the side honor the “12th man,” the team's fans. The colors are also “rooted in the hues of the Seattle environment,” Van Horne stated, pointing to the blues of the nearby Pacific Ocean water, the greens of the evergreen trees and Washington pines, the gray clouds, and the bright white axis inspired by the snowcap peaks of The Olympic Peninsula and Mount Rainier. With the time it takes to come up with designs and gain team approvals, a lag was expected before other teams likewise underwent a radical overhaul and Nike officials said to expect more notable redesigns in coming years. Rumors were in the market that some alternative uniform takes were already in the works. But Nike assured the crowd that the fabrication and performanceled design in the Elite 51 already represent a major change. Beyond tapping into its over 40 years of R&D research, processes like body mapping, motion capture, thermal regulation and sweat mapping guided construction. Designers also spoke in depth to numerous players, including Rams running back Steven Jackson, Jets cornerback Darrelle Revis, Lions defensive tackle Ndamukong Suh, and Lions wide receiver Calvin Johnson to find out what they want in a uniform. They were told players want what they wear to be as lightweight as possible. Added Van Horne, “They want a lockdown fit but with full range of motion.” The result: the base layer is 22 percent cooler while the uniforms are 8 percent tighter in fit, 5 percent drier and are made of more flexible material. Nike officials also said uniforms are 20 to 30 percent lighter than Reebok's 2011 version, despite padding being built into parts of the jerseys and pants. The biggest changes in the uniform reportedly involves the collars, many of which now feature Nike's Flywire design, which has been used for the past few seasons on the college level. The technology promises to eliminate layers, reduce weight, and provide “a lockdown fit for zero grab points from opposing players,” said Van Horne.

Nine teams chose not to adopt the Flywire collar. For those teams, Nike's press releases said they chose “to stay with their traditional design aesthetic as well as their former uniform fabrication for the coming season."

NIKE BRINGS OUT NFL STAR POWER Nike brought out some of the biggest names in the NFL to celebrate its launch of the NFL deal and to showcase its Nike Elite 51 football uniforms for the 2012 NFL season.

OTHER FEATURES IN THE JERSEY INCLUDE:

• Zoned mesh ventilation - provides cooling zones for optimal thermoregulation;

• Zoned strength - high tenacity, stretch material,

• • •

• •

for light weight lockdown strength. Van Horne said while the typical industry standard has two layers of material, the Elite 51 incorporates a single layer that’s stronger, lighter, and more flexible; Cut for mobility - four - way stretch, hydrophobic materials enable range of motion wet or dry; Stretch twill numbers - four-way stretch on numbering system for jersey fit; Customizable baselayer padding - Nike Pro Combat Hyperstrong baselayer with integrated lightweight, deflex padding offering customizable flexible protection; Deflex padding - lightweight, flexible impact protection integrated into top “hit zone” areas; Aluminum D-ring belt - aircraft-grade aluminum D-ring belt reduces weight.

In the baselayer, lightweight padding is integrated directly into the “hit zones” in the Nike Pro Combat. Players also have three baselayer options, “Hypercool,” “Hyperwarm,” and “Hyperprotect,” the last with flexible pads sewn right into the garments. Nike also introduced the Nike Vapor Game Sock, a kneehigh design with arch support, mid and heel fit, and zone cushioning for additional protection, said Van Horne. The Nike Vapor Jet 2.0 Gloves feature an articulated fit combined with Magnigrip on the palms and between the fingers for a tacky grip suitable for all weather conditions. The team logo is featured prominently on the palm when athletes interlock both hands. Finally, the Nike Vapor Talon Elite features adaptive traction, Hyperfuse construction and carbon fiber strength. Not surprisingly, the star athletes Nike brought to the event backed up the attributes, with the talking points including lightweight, breathability, the improved stretch properties that improves a player's mobility, and the sleek fit. New York Giants wide receiver Victor Cruz said, “They're really comfortable, and they can't be pulled or tugged.” “I love them,” N.F.L. Commissioner Roger Goodell said of the uniforms at the launch event. “In talking to the players, they don’t want to take them off.” ■

Detroit Lions' Ndamukong Suh. Photo AP/Seth Wenig

New Orleans Saints' Pierre Thomas. Photo AP/Seth Wenig

Brian Urlacher of the Chicago Bears. Photo by Larry Busacca/Getty Images for Nike

The Denver Broncos' Champ Bailey. Photo AP/Seth Wenig

The following athletes representing each of the 32 NFL teams were in attendance:

AFC Baltimore Ravens, Ray Rice / Cincinnati Bengals, Andy Dalton Cleveland Browns, Joe Haden / Pittsburgh Steelers, Ben Roethlisberger / Houston Texans, Andre Johnson Indianapolis Colts, Robert Mathis / Jacksonville Jaguars, Rashean Mathis Tennessee Titans, Nate Washington / Buffalo Bills, George Wilson Miami Dolphins, Karlos Dansby / New England Patriots, Wes Welker New York Jets, Shonn Greene / Denver Broncos, Champ Bailey Kansas City Chiefs, Dwayne Bowe / Oakland Raiders, Darren McFadden San Diego Chargers, Ryan Matthews

NFC Chicago Bears, Brian Urlacher / Detroit Lions, Ndamukong Suh Green Bay Packers, Jermichael Finley / Minnesota Vikings, Percy Harvin Atlanta Falcons, Justin Blalock / Caroline Panthers, Deangelo Williams New Orleans Saints, Pierre Thomas / Tampa Bay Buccaneers, LaGarrette Blount / Dallas Cowboys, Jason Witten / New York Giants, Victor Cruz / Philadelphia Eagles, Michael Vick / Washington Redskins, Brian Orakpo / Arizona Cardinals, Larry Fitzgerald San Francisco 49ers, Alex Smith / Seattle Seahawks, Kam Chancellor St. Louis Rams, Cortland Finnegan APRIL 9, 2012 | SGBWeekly.com

The NFL Shop at Draft, located on 6th Avenue between 41st and 42nd Streets in Manhattan, will be open for the month of April.

NFL MAKES A CHANGE By Thomas J. Ryan

NFL Commissioner Roger Goodell cutting the store-opening ribbon at the grand opening of the NFL Shop at Draft.

ith boisterous “fan” fare, the National Football League initiated its new five-year licensing deal, with Nike - not surprisingly - bringing all the noise. At Steiner Studios at the Brooklyn Navy Yard, smoke machines, lasers and a host of NFL endorsers – including Michael Vick, Ben Roethlisberger, Larry Fitzgerald and Victor Cruz – were brought out last Tuesday to thumping hip-hop beats to celebrate the unveiling of Nike’s new uniforms for the NFL. The event even overshadowed the NFL’s biggest merchandise effort to date –the opening of a 10,000-square-foot pop-up store on 42nd Street and 6th Avenue in Manhattan. “I have high expectations,” said NFL Commissioner Roger Goodell at the Nike launch event. “When you look at Nike and you look at the NFL, one thing we share in common is we believe in better. We believe we can make football better. We can make athletes’ performance better. And we can make fan apparel better. So when you look at these two brands, this is an opportunity for us to do that.” The five-year licensing deal led by Nike and New Era as well as a few other vendors replaces a ten-year deal with Reebok. The deal was first announced in October 2010. Some Wall Street analysts pegged the annual revenue opportunity for Nike at $500 million with the bonus of Nike’s marketing might, although Reebok churned out about half that last year. Adidas said the loss of the license agreement will result in an estimated revenue loss for Reebok of $200 million to $250 million a year. Last year’s NFL sales for Reebok were said to be held back by the potential NFL strike as well as an admitted strategy by Reebok to less aggressively grow the business during its last year to avoid being caught with excess, unsellable merchandise at the deal’s abrupt conclusion. Charlie Denson, president of Nike brand, told SGB Weekly that sellins are ahead of expectations. “When we first started the project, we had high expectations. But we’ve been thrilled with the initial sell-in

and we’re very bullish about the future of the program,” he said. While Nike got most of the attention, the deal was also significant for New Era, which landed the exclusive rights for all on-field, sideline and locker room caps. Said Chris Koch, CEO of New Era Cap Co., at the NFL Shop opening, “It’s another great extension of our brand. But I think more important is that players and consumers are going to be able to wear the finest headwear in the world.” Also gaining co-exclusive rights for fan apparel will help New Era build on that side of the business. Koch said New Era had been one of the original NFL licensees on the cap side and sees the deal driving its core business. “It’s been a long 18 months since we signed the deal and we’re locked and loaded,” said Koch. “The product speaks for itself. It’s topof-the-line whether it’s fitted, snap-back or stretch fit. And there’s great performance stories in the on-field stuff and the training collection.” Leo Kane, the NFL's SVP of consumer products, told SGB Weekly at the pop-up opening event that the new structure combines the “best of the old model” adapted for some shortcomings of the changes under the Reebok model. According to Kane, Reebok was the “right partner 10 years ago” when the licensed product marketplace was oversaturated at retail. Marked mostly by the bankruptcy of Starter Corp., many large licensees were struggling with price points and product innovations suffered. Among the changes under the Reebok structure that he believed worked was the decision to shift from four manufacturers of team uniforms to one. Said Kane, “That part of the model we really like. We think it makes sense that there’s going to be only one because you know you’re going to have the Super Bowl winner every year. Some retailers initially didn’t like the move but I think 10 years later they would tell you it’s the right model.” At the same time, Kane said that “Reebok maybe had too broad

rights” under their deal. Added Kane, “Under the Reebok model, they did end up sublicensing out a lot and we didn’t really feel that was the right model for us. There will be little or no sublicensing in this new model.” For example, rights to kids, a typical sublicensed category, was given to Overstuff. Added Kane, “We’ve really gone to almost a totally direct model.” The move also comes as the NFL looks to build a “365-days-a-year brand” given not only the growing popularity of the game globally but growing excitement over the NFL draft in the spring. When the draft went to prime time television on ESPN on Thursday nights in 2010, “the first thing we realized was that retail didn’t go with it,” said Kane. Draft euphoria inspired the pop-up store. Said Kane, “We’ve got great partners like Modell’s and Champs right here on the street, but we felt we were the only one who could give that immersive, total NFL experience.” The NFL also began looking for new partners such as Nike and New Era “to bring the kind of energy that makes sense for us now,” including launching advertising efforts in the typically quiet month of April. Across its licensees, the new structure similarly reflects a search for more “category leaders” to partner with those best positioned to bring top-notch product to each area and better drive each opportunity. “As much as we wanted Nike on the field and on the sidelines, we thought it was important to have New Era for headwear. And while we looked at New Era for sideline headwear, we also wanted to have ’47 Brand for fan gear,” said Kane. “We want to give our fans more choices and we want to give retailers more choices. In every case we wanted to do it with category leaders.” The other four companies involved the new licensing structure are Under Armour (NFL Combine apparel), G-III (outerwear); VF (T-shirts and fleece); and Outerstuff (youth apparel). Carl Banks, president of sports licensing for G-III Apparel, said G-III already had the outerwear license but the new deal expands distribution rights to include sporting goods and mid-tier department stores. The company had more expansive distribution rights under 18 SGBWeekly.com | APRIL 9, 2012

the Reebok-led structure but distribution had become “really restrictive” in recent years. “We’re excited about it,” said Banks. “Obviously the league feels we’re the top outerwear manufacturer out there and we’re able to grow our business at sporting goods and mid-tier again.” Regarding Nike/New Era taking over the deal, Banks said, “I think the NFL has aligned themselves with partners that truly know and understand the culture of sports.” VF Corp. added player and international rights to their former deal. Jim Pisani, president of VF Licensed Sports Group, said the company is looking to build on “strong growth” seen in NFL team apparel sales over the last few years, bolstered by success in more fashionable offerings for fans. “Some of our strongest success has been in women’s,” said Pisani. ”Fashionable styles and graphics, stronger retail commitment and the NFL’s marketing power have teamed to energize an underserved market.” With its media blitz, however, Nike received all the attention last week. The company reportedly paid a premium of $1.1 billion for

its five-year uniform deal. In the doldrums of sports licensing space at the time, Reebok had paid $250 million for its 10-year deal that also included headwear. But Nike officials at the launch event detailed its dedication and long commitment to football – beginning with its first cleat – “The Nike” - in 1972 that led to the AstroGrabber that Dan Fouts wore in the mid-70s to a continuing streak of further innovations on the cleat side over the following three decades. And while the brand’s beginnings started in running and rose to world dominance in basketball, Nike’s tour-deforce last week demonstrated that gaining more authenticity in the sport of football through the uniform deal was critical for the brand. “The NFL has done a tremendous job building their brand and building their game and as we looked at opportunities for our business here in the U.S. that are material, this represented one of the biggest opportunities that we didn’t truly have access to,” said Denson. “That was something that got us pretty revved up.” ■

NEW ERA LANDS THE EXCLUSIVE RIGHTS FOR ALL ON-FIELD, SIDELINE AND LOCKER ROOM CAPS FOR THE NFL "Players And Consumers Are Going To Be Able To Wear The Finest Headwear In The World” - Chris Koch, CEO of New Era Cap

R E TA I L E R S A R E BULLISH ON NFL CHANGEOVER By Thomas J. Ryan

While retailers had little issue with the way Reebok was running the business, many looked forward to the handoff to a new group of vendor partners, particularly with Nike leading the way. New headwear from New Era hit the stores on April 1 in time for the NFL draft with Nike jerseys arriving at the end of April. Bob Dennis, president and CEO of Genesco, Inc, the parent of the Lids chain, pointed to how Nike “has been very innovative” in jerseys on the college side. “But just the simple newness that they're going to promote will be very helpful to the business,” Dennis said late last month at an investor conference. “New means fans need to refresh what they are going to wear to the stadium.” At the same time, he welcomed New Era taking over as the official On Field headwear partner for the league. He added, "There is no comparison to what New Era can do with their brand in terms of driving the business. And with New Era in the NFL business, we have the best opportunity to drive it from being strictly a seasonal business, which is what it has been in the past, to just trying to hit a 12-month business.” He added that New Era brand “represents a lot to the fashion part of the customer in the headwear business and so we think that will resonate very nicely.” At Foot Locker, Inc., Dick Johnson, EVP for retail stores, first noted how Reebok positively "took a very fragmented NFL business and brought it all together and created a sharp point around the league." But he felt it was time for a change after ten years. Speaking at the company's annual investor meeting held last month, he added, "I think that the change will be very good and we'll invigorate the business across our Champs' business, certain markets where Champs will be the preferred retailer in the mall with the NFL business and we're excited about that." The company banner websites have a strong opportunity to capitalize on the fan gear opportunity given its ability to carry deep assortments across all 32 teams. "I think there will be a lot of excitement, a lot of innovation," added Johnson. "It will be an interesting match for the NFL, which is a pretty tried and true organization. Some of the innovative things that Nike brings, I envision a few collisions where there probably won't be as much innovation as we necessarily like to see across all the teams. I think from a uniform perspective, I think from a lifestyle perspective, where Nike will bring some of the NFL flavor into the lifestyle environment, it will be very positive for the league and for licensed product in general." Ross Tannenbaum, CEO and president of Dreams, Inc., the parent of FansEdge.com, expects Nike's marketing might bring attention to NFL 20 SGBWeekly.com | APRIL 9, 2012

gear but he likewise sees the switch bringing freshness to the jersey category. "When the jerseys come out, if you own a jersey from the last 10 years, it's not going to have the Nike swoosh on it," Tannenbaum said on Dreams' Q4 conference call in late March. "There will be some percentage of people that are going to want to rush out and get the new Nike product. They're also going to unveil hopefully something that's really nice looking from a fashion approach that's going to also motivate people to buy." He added that while Reebok had been more restrictive on distribution than the former arrangement, Nike's "even much more restrictive" on who can sell NFL related and sideline apparel. Said Tannenbaum, "More and more people are going to be pushed to buying it from the handful of people that are allowed to sell it, which will hopefully mean more business for us as well." Still, others didn't see a material impact from the changeover longer term. "Nike and Reebok are both creative companies, and we have good relationships with both," said Ken Meehan, president of Dunham's Sports. "We expect to continue to get a good supply of NFL product that sells well." He noted that the NFL still controls the deal as before. And while having strong vendor partners such as Nike helps, relationships with local teams are just as important in supporting the fan business for retailers. Michael Murray, buyer, Front Row Sports in Las Vegas, sees little change, noting that Reebok also had ample capital. "People are going to continue to buy the jerseys no matter what happens," said Murray. "Let's say a player signs with somebody, you're going to have to go out and get that jersey, and it wouldn't matter if it's a Nike or a Reebok. If someone likes a player enough - a Peyton Manning or a Tim Tebow, for example - they're going to get that jersey regardless of what's on the sleeve." ■

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