ISSUE 1420 MAY 19, 2014
The Weekly Digital Magazine for the Sporting Goods Industry
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Group Publisher Editor In Chief James Hartford james@sportsonesource.com 303.997.7302
ISSUE 1420 MAY 19, 2014
Senior Business Editor Thomas J. Ryan tryan@sportsonesource.com 917.375.4699 Contributing Editors Scott Boulbol, Fernando J. Delgado, Bill Kendy, Charlie Lunan
The Weekly Digital Magazine for the Sporting Goods Industry
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Bradford Shellmammer
who gained acclaim as a designer and co-founder of Fab.com, is Backcountry.com's new Chief Design Officer charged with examining the retailers private label brand positioning. Photo courtesy Backcountry.com
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MAKING NEWS 4 Movers & Shakers Bob Zide and Ira Silberman Inducted into The Sporting Goods Hall of Fame 5 Puma Revenues Stabilize in Q1 Turnaround Continues 6 Joe Namath to Endorse Skechers Relaxed Fit Line 16 Industry Calendar
GIVING BACK 8 Under Armour Pledges $10 Million To Build Breast Health Center
SGB I ONE-ON-ONE 10 Scott Kerslake President and CEO, prAna Living, LLC
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12 Going Private Private Label Brands Destined to Grow Cover photo: Private label XPG Extreme Performance gear by Cabela's. Photo courtesy Cabela's
MOVERS & SHAKERS Billabong appointed Bill Bettencourt to the role of global general manager, RVCA. Bettencourt is returning to the action sports industry after a four-year stint with Sperry Top Sider. Brunswick Corporation named Mark Schwabero to the newly created post of president and COO. Schwabero was most recently president of Brunswick's Mercury Marine engine segment. Chums, global manufacturer of outdoor accessories and apparel, hired Travis Mehn as its new safety director of sales operations, to oversee and manage sales force productivity and growth. Crocs, Inc. named consumer brand management expert Andrew Rees president of the Crocs brand. Rees also will assume the role of principal executive officer until the company's search for a CEO is successfully concluded. Previously, he held senior leadership positions at Reebok International, where he served as VP of strategic planning and VP of retail operations. L.L.Bean appointed two new independent directors to its board Hugh Farrington, former chief financial officer of Hannaford Brothers Co., and Matthew Moellering, CFO and VP of Express, Inc. Pelican International, the maker of canoes, kayaks, and pedal boats, appointed Margaret Kordas as its VP of sales. Wilson Sporting Goods Co. announced the return of Hans-Martin Reh to the company after a 17-year absence, as the general manager of Racquet Sports. His time away included a 14year stint at Nike, where he was most recently general manager of tennis, basketball, indoor, swim, and brand Jordan for Europe, Middle East and Africa. Wilson Sporting Goods Co. appointed Amy Weisenbach as its new VP of marketing, effective May 19. She spent three years at Beam where she led the U.S. Tequila portfolio. Zamst, a leader in sports prevention and protective equipment, announced an endorsement deal with elite mountain climber Melissa Arnot. 4 SGBWeekly.com | MAY 19, 2014
Bob Zide, of Zide’s Sport Shop
Ira Silberman, of Diversified Products
BOB ZIDE AND IRA SILBERMAN INDUCTED INTO THE SPORTING GOODS HALL OF FAME The Sporting Goods Industry Hall of Fame grew to 159 members with the Class of 2014 inductions of Ira Silberman, of Diversified Products, and the late Bob Zide, of Zide’s Sport Shop. The two were inducted on April 29 at the 59th Sporting Goods Industry Hall of Fame Induction Ceremony in Indian Wells, CA. The careers of Silberman and Zide, the founder of Zide’s Sport Shop in Marietta, OH were celebrated during the Induction Ceremony dinner, which took place during the 50th Annual National Sporting Goods Association (NSGA) Management Conference and 16th Annual Team Dealer Summit. “It was wonderful for Ira Silberman and Bob Zide, two leaders and legends in our industry, to receive such a tremendous honor,” said Ken Meehan, NSGA Chairman of the Board and president of Dunham’s Sports. “They did so much during their careers to make our industry better. The support from fellow Hall of Fame members, family members, friends and industry peers helped make this a truly special evening.” Silberman spent 27 years with Diversified Products and led its effort to create a multiproduct company for the in-home use of exercise equipment. Silberman was the inventor or co-inventor of more than 35 U.S. and/or foreign patents for exercise and sporting goods equipment. Silberman was unable to attend the ceremony but he did send a video to personally thank NSGA members. Former Diversified Products colleague Jim Hoff accepted the Hall of Fame award on Silberman’s behalf. Zide founded Zide’s Sport Shop in 1958 and turned his passion for sports into a commitment to athletes and their teams that continues today. He was the first team dealer in the country to individually fit football helmets and shoulder pads on players from teams at all levels in Ohio, Pennsylvania and West Virginia. Zide passed away in 2003 but 10 members of his family attended the induction ceremony, which included a video tribute to his life and career, an introduction by Fran Davis of Twin City Knitting and an induction speech by Zide’s son John. Seven members of the Sporting Goods Industry Hall of Fame were in attendance – Curt Mueller (Mueller Sports Medicine, 2002), Conny Klimenko (Sevylor, Inc., 2005), Mickey Newsome (Hibbett Sports, 2007), Ron Kruse (Hayden’s Athletic, 2008), Hank Derleth (Ripon Athletic, 2009), Ted Stahl (GroupeSTAHL, 2011) and Randy Ruch (Schuylkill Valley Sports, 2012). Bob Dickman (BSN Sports) was also honored for his service as Hall of Fame Committee Chairman as his four-year term came to an end. Dickman was presented with a plaque from newly elected Hall of Fame Chairman Cathy Pryor (Hibbett Sports). Bruce Ullery (MC Sports) will inherit Pryor’s spot as Hall of Fame Vice Chairman.
PUMA REVENUES STABILIZE IN Q1 TURNAROUND CONTINUES Puma, which is undergoing a turnaround plan that includes reconnecting with its sports heritage, appears to have seen some stabilization on its top-line in the first quarter, with currency-neutral (C-N) sales slipping 0.5 percent versus a decline of 4.7 percent in the fourth quarter. Earnings sunk 25 percent but were in line with expectations. Like many European businesses that rely on overseas sales in foreign currencies, Puma's net profitability is being squeezed by the relative strength of the euro. Continuing to describe 2014 as a “turnaround year” with significant investments in marketing and towards improving its turnaround-time, Puma officials reaffirmed its muted outlook for 2014. Those investments include its fresh signing of the NFL’s number one pick in the draft, Jadeveon Clowney, as well as its deal reached in January to become the official kit partner of the Arsenal Football Club. Revenues are expected to be flat in 2014 with a modest increase in profits against a down 2013. “During the quarter, we continued to make progress towards our mission to become the Fastest Sports Brand in the world and achieved all our key project milestones in this pursuit,” said Bjørn Gulden, CEO of Puma SE. “We know that the repositioning of Puma and the turnaround of the business will take time, but I am convinced that we are progressing well on all our key strategic priorities and that we have initiated the right projects to make 2014 the start of the turnaround." Group sales on a C-N basis declined 0.5 percent to €725.7 million ($995 mm). This represents a decrease in reported terms of 7.1 percent, as currency volatility in Russia, Turkey, North America, Latin America, India and Japan had a negative impact on sales in Euro terms. Sales in the Americas declined 0.5 percent on a C-N basis to €235.2 million ($322 mm), which compares to a 3.5 percent drop in the fourth quarter. Sales in North America improved slightly, while mixed sales performances were seen within Latin America with improvements in Chile and Bjørn Gulden, CEO of Puma SE Argentina and a major decline in Brazil. Reported revenues were down 9.6 percent. In the EMEA region, sales inched up 0.3 percent on a C-N basis to €337.3 million ($462 mm), rebounding from a 7.6 percent drop in the fourth quarter. Russia, Turkey and the United Kingdom continued to deliver strong performances, which offset declines in Scandinavia and France, where wholesale revenues remained weak. Asia/Pacific sales decreased 2.1 percent on a C-N basis to €153.3 million ($210 mm), demonstrating slight improvement over the 2.8 percent decline in the fourth quarter. Sales in China were up slightly, but business in Oceania decreased. Japan also declined, impacted by weaker sales in the Golf category. Puma's gross profit margin declined 60 basis points from 49.1 percent due to negative currency impacts and changes in the regional and product mixes. Operating expenses declined 3.8 percent to €298.2 million ($409 mm) despite higher marketing investments. Consolidated net earnings declined 29.2 percent to €35.6 million ($49 mm).
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JOE NAMATH TO ENDORSE SKECHERS RELAXED FIT LINE Skechers USA, Inc. signed hall-of-fame quarterback legend Joe Namath to represent its men’s Relaxed Fit from Skechers footwear line. A new advertising campaign featuring Namath will begin in Fall 2014. Namath was the first quarterback to throw for 4,000 yards and was named MVP when he led the New York Jets to victory at Super Bowl III in 1969. Namath retired in 1977 holding seasonal and career records for most games with 300 yards or more passing yards. “Our Relaxed Fit from Skechers campaign has had so much success with one football Joe, that we thought it was time to bring on another,” added Michael Greenberg, president of Skechers. “Joe Namath is one of the first pro football television stars in the world and with fans that go back to his days in Alabama, his personality and familiar face is perfect for our team. We know he’ll be a great asset when it comes to getting the word out about our comfortable Relaxed Fit footwear line.” Skechers has a long history working with sports icons over the years. Advertising campaigns for the brand have also featured Meb Keflezighi, Wayne Gretzky, Karl Malone, Evander Holyfield, Kareem Abdul-Jabbar, Rick Fox, and Ronnie Lott.
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Hall-of-fame quarterback legend Joe Namath
in sleeves, socks, shorts, and shirts
INTRODUCING AIR-CONDITIONED RECOVERY COMPRESSION
MAY 19, 2014 | SGBWeekly.com
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G I V I N G B AC K
UNDER ARMOUR PLEDGES $10 MILLION TO BUILD BREAST HEALTH CENTER Under Armour announced that it has committed a gift of $10 million to provide infrastructure and innovation to the Under Armour LiveWell Center at The Johns Hopkins Kimmel Cancer Center in Baltimore, MD. The gift comes through Under Armour's Power in Pink Campaign, which strives to create awareness around women's breast health and celebrate women who use exercise to stay healthy. The project’s common goal is to elevate awareness of breast health issues and lead the charge on cuttingedge research and diagnostics. The gift is the largest made by Under Armour to any organization and is in keeping with its focus on physical fitness and healthy lifestyles. The money will be used to construct and outfit a state-of-the-art center dedicated to breast health-related programs in the Kimmel Cancer Center's newest facility, the Skip Viragh Outpatient Cancer Building. Slated to open in 2017, the Skip Viragh Building will serve as the primary entry point for cancer care at Johns Hopkins. Located on the top floor, the Under Armour LiveWell Center will provide visitors with advanced clinical care, education, and community services in a convenient and comfortable setting. The center's programs will be offered to women worldwide through distance learning, the Internet and social media. While the center's physical structure will live in Baltimore, its goal is to impact the way breast health is approached on a global level. "Under Armour is deeply honored to partner with Johns Hopkins, a pioneering organization in the advancement of health and innovation," said Under Armour Founder and CEO Kevin Plank. "It is our mission with the Under Armour LiveWell Center to bring the best minds, technologies, and resources in the world together for breast cancer awareness and prevention." 8 SGBWeekly.com | MAY 19, 2014
"The extraordinary gift from Under Armour will allow our experts at Johns Hopkins not only to provide state-of-the-art care and innovative research to individuals with breast cancer and those at high risk, but will also enable us to provide high-quality education to the community in our region and around the world," said Vered Stearns, M.D., co-director of the Johns Hopkins Kimmel Cancer Center's Breast Cancer Program. Launched in 2003, the "Power in Pink" campaign to help educate female athletes about the importance physical activity can play in helping to overcome breast cancer. Throughout the months of September and October, consumers can purchase pink ribbon-imprinted styles at Under Armour specialty stores, online, and select retail locations nationwide, while supplies last. Also, ten percent of process from its "Power in Pink" line of technical tops, bottoms, accessories, and footwear for women and a selection of men's technical apparel are donated to a number of organizations dedicated to the fight against breast cancer. Unique to the program is the annual She's a Fighter Survivor Search. Under Armour encourages survivors and women currently living with breast cancer to share their stories of strength and survival at underarmour.com/powerinpink. Three stories of courage and hope are selected with the individuals becoming the new faces of the "Power in Pink" brand campaign. Overall, Under Amour is committed to contributing a minimum of $2 million through the "Power in Pink" initiative annually to Johns Hopkins to develop the Live Well Center and to support research and innovation in the field of breast health.
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SGB I ONE-ON-ONE
Photo courtesy prAana
SCOTT KERSL AKE PRESIDENT AND CEO, PRANA LIVING, LLC By Charlie Lunan
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B
y most entrepreneurs’ standards, Scott Kerslake made his mark a full decade ago when he sold his seven-year-old company Athleta to a private equity firm. But his success as CEO of the lifestyle apparel brand prAna, LLC shows he is far from done. Since taking over the reins at prAna in 2010, the company’s sales have grown at an annual compound growth rate of more than 30 percent and are expected to reach $100 million this year. That got the attention of Columbia Sportswear Company, which announced in early May that it had agreed to buy prAna for $190 million, or roughly 2.8 times what the market said the company was worth in 2008. Columbia CEO and Chairman Tim Boyle said he looked forward to working with Kerslake and his team to “unlock prAna’s global brand potential” as more consumers gravitate toward brands that promote healthy, active and sustainable living. Given the focus of this month’s Brand Strength Report Issue, SGB thought it a propitious time to get Kerslake’s take on brand building. Excerpts from our conversation follow.
What tools, metrics and other methods will you use as you try to gauge how far you can extend prAna ’s brand and distribution without undermining, diluting or otherwise jeopardizing it's values? My sense is that extending a brand is a combination of interior signals (intuition) in combination with exterior signals (customer feedback). Measuring the former is challenging because it could very well be that the brand becomes very near and dear to customers in a way that you had not envisioned. So giving it the space to evolve in unexpected ways is important, all the while making sure it doesn’t crash through the guardrails of the principles that are foundational to the brand. Abandoning your foundational values or ‘reasons for being’ is critical. And with respect to exterior feedback from customers, sales metrics (conversion, average order values) speak volumes about how your brand is being perceived and how successful you are at connecting in a rational and emotional way. What one or two brand management mistakes do you guard against most when building a brand? I would say the biggest mistake brands make is losing their compass and reasons for being. I think there are a lot of brands - particularly in social media and techScott Kerslake, President and CEO, nology - that are in search of a prAna Living, LLC business model, like a hammer looking for a nail. The word, ‘no’ is often more important in strategic planning than the word, ‘yes.’ For us, we are very clear on two foundational principles: One, that we come from an active heritage and a big part of our job in designing apparel is to make sure that style is at the forefront of what we do; and two, we are a company that is very value-based and sustainability is a vital focus for us. That is our compass. What’s changed about building a lifestyle brand today compared to when you started athleta in 1997? First and foremost, the active lifestyle category is much more competitive with everyone trying their hand at being an ‘active’ brand. So authenticity becomes even more important, particularly because customers have become more and more discerning. If you are truly authentic, it’s a leg up on the competition, who are just chasing the dollars. Customers have a great B.S. meter and have social media as an extension of themself to communicate their affection or dislike of a brand – and because there are so many brands and transactions are so much easier these days with the Internet – there isn’t a lot of room for mistakes. Every business is hard, but I happen to think a multi-channel apparel business is one of the hardest because it has so many moving parts. You can execute perfectly on 11 of the 12 moving parts, but if you get the 12th wrong, you are sunk.
The term “lifestyle brand” is thrown around a lot in the outdoor industry. What makes a true lifestyle brand in your mind and why is it important? Every human being is different and lives a slightly different lifestyle. For us, we look at a couple of big macro trends that seem to be coming together, and are consistent with our customers - and with a large part of the population. First is that more and more people are leading active, and healthier lifestyles. People care more about their health and whether it’s how much exercise they do or the quality of the food there are putting in their bodies, it’s a much larger priority than it was even 10 years ago, let alone 20 or 30 years ago. Second, people are becoming more aware of how their products are being made: what materials are being used, what chemicals are being used, what type of conditions the products are being made in, and how all of this effects people who are making the products. Consumers are becoming much more conscious and discerning. These are unmistakable trends and this is one of the reasons we define ‘lifestyle’ the way we do. On a broader level, most brands are aspiring to connect with their customers in an emotional way and trying to reflect the values of the people they are serving in both authentic and aspirational ways. How does prAna stack up against larger brands like Lululemon and Athleta in this regard? The difference between us and Athleta is prAna could appeal to a much broader range of customers than it has focused on. It is a multi-gender brand. The men's business is the fastest growing part of the business and there is a lifestyle aspect to the brand. We’ve got a lot of authenticity and heritage here as opposed to many of the brands jumping into it. PrAna has great roots in yoga and climbing. Most people don't think of us as a yoga company or a climbing company. We have a much broader product line and much broader appeal. We have synthetic, very technical product and natural fibers and we are seeing equal growth in both. We’ve built a good mid-layer and outerwear business with very different positioning than others in the space with much more style in all-day-long, or even all-week-long assortments with a little bit more of an urban flair to it. Our sweaters have also done very well and our swim and water collection sales have been off the charts. We are filling a gap in the market that is very apparent to us for an active travel, swim/surf/SUP, go on vacation product that has done very, very well. So in some ways we have a broader range than Athleta. ■
MAY 19, 2014 | SGBWeekly.com
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Going Private Quick. Name the five top selling athletic/outdoor apparel brands in the United States in 2013. Well number one is easy; Nike. The next two are pretty predictable: Under Armour and The North Face. But can you guess number four and five? By Charlie Lunan and William F. Kendy
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didas took the number five spot, but right behind it was private label, according to point-of-sale data compiled by SportScanInfo. And that was down significantly since 2010, when private label apparel brands accounted for a combined 12 percent share of sporting goods apparel sales, put them second – albeit a distant second - behind Nike. In the last three years, private labels have lost about half their share of the market as consumers shifted back to national brands. The change came so fast that Perry Ellis International, Inc. will exit 20 of its lowest margin private label programs representing $62 million in revenues in 2014 so it can focus more resources on its core Rafaella brand. In 2015, Perry Ellis plans to jettison five more private label programs representing $20 million in revenue. Company executives say the largest decline in private label sales has come at mid-tier retailers, where sales of private and proprietary brands fell more than 20 percent as regional department stores focused on reducing inventory amid soft holiday sales. But don’t be mistaken. Private label brands are destined to grow, not shrink, their share of the sporting goods market if big box and online retailers have their way. “Private labels have flattened out in the last year,” said Jamey Boiter, principal in charge of brand innovation for the Charlotte, NC Bolt Group, a company specializing in brand building and product innovation. “A recession helps private labels. In the years 2007 to 2012, high-end shoppers were doing low-end shopping and then moved back up for branded products. But that certainly doesn’t mean private labels are going away.” More Alluring Than Ever One of the primary advantages of private label brands remains promotional flexibility and that has only become more alluring in the last five years as many premium athletic, cycling, ski and outdoor brands have rolled out or tightened up minimum advertised pricing, or MAP, policies and dealer agreements to rein in online discounting. 12 SGBWeekly.com | MAY 19, 2014
Retailers have always had a love/hate relationship with MAP policies and generally speaking the bigger they are the more they hate them. On the one hand, they provide a floor under retail prices and dealer margins. On the other hand, they greatly compromise a retailer’s ability to compete, particularly online, where algorithms can suddenly send retail prices plummeting. Some mom and pop retailers complain that interpreting what a brand’s MAP policy does and does not allow can take hours. Moreover, since anti-trust law requires vendors impose MAP policies unilaterally to all dealers to avoid allegations of price fixing, the policies limit how creative a retailer can get with a promotion. This is increasing interest in private label among many mom and pop retailers, according to David Nacke, vice president of merchandising for Nation’s Best Sports (NBS), a buying group serving 300 members operating more than 800 retail sporting goods stores in the United States and Canada that have a combined retail volume in excess of $3 billion dollars. “If a retailer isn’t large enough to meet a minimum order quantity in order to buy direct from a manufacturer they are at a price and margin disadvantage, especially when dealing with the MAP issue,” said Nacke. “Private labeled products offer greater margins then most branded items and more flexibility in pricing and promotion.” NBS is focusing its private label efforts on commodity items where there is an opportunity to offer more value. “Private label products are on the increase and can help fill voids in product offerings and prices but I don’t think they will ever replace national brands,” said Nacke. “Traditional brands are technologically and market driven and private labels are using them as a proving ground.” The View From The Big Boxes That’s certainly been the case with the industry’s largest retailers, which have laid out aggressive plans to expand the private label sales in coming years in a bid to build margin.
Cabela’s-branded gear helped drive up the retailer’s merchandise margin by 170 basis points from 2009 to 2012, when it reached 36.3 percent. In 2013, private label products accounted for 30 percent of Cabela’s merchandise sales, or nearly $1.0 billion, but they will play an even larger role as the retailer rolls out its stores to smaller markets, where its research shows Cabela’s brand equity is as strong, or even stronger, than some of the national brands it carries. “In a market like Dallas, Fort Worth, the Under Armour brand is really big in our stores, whereas in a smaller market, there's more of a bias to Cabela's merchandise,” Cabela’s, Inc CEO Tommy Millner told analysts in late 2013. “So we're going to be really focused on the Cabela's brand in these smaller markets.” In the first quarter of 2014, private label penetration increased to 58.7 percent of Cabela’s softgoods and footwear sales as consumers embraced Cabela’s Guidewear apparel and XPG - Extreme Performance Gear – a line of lightweight outdoor gear that includes boots with Vibram soles, shirts with Cabela’s own Cool Phase wicking fabric and tents made with the same DAC poles found in tents sold by premium specialty outdoor retailers. “We have significant runway still ahead of us particularly in hard goods,” said Millner. “Our goal is to continue to grow that and the reason to grow it is that there is an 800 to 1200 basis point advantage in margin.” Cabela’s hardgoods’ brands include Euro Optics spotting scopes, and Northern Flight Waterfowl bags, decoys and blinds for hunters. Millner has stressed to analysts and investors how the higher margins from private label products are softening the impact on merchandize and gross margins as gun and ammo demand and supply come back into balance. Cabela’s has noted that the 2012 to 2013 boom in firearms sales helped boost margins on some firearms categories by as much as 500 basis points. At Dick’s Sporting Goods, executives expect to grow private brand sales from $730 million in 2013 to $1 billion by 2017. Its strategy has been to build a portfolio under licensing deals that give it exclusive rights to design and sell products under established sporting goods brands. For instance, it has rights
In the first quarter of 2014, private label penetration increased to 58.7 percent of Cabela’s softgoods and footwear sales as consumers embraced Cabela’s Guidewear apparel and XPG - Extreme Performance Gear. Photo courtesy Cabela's
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to use adidas’ trademark on baseball gear, cycling gear under the DBX and Nishiki marks, outdoor apparel and gear under the Field & Stream and Quest brands, golf gear under the Maxfli, Slazenger, Top-Flite and Walter Hagen brands, and performance apparel under the Reebok and Umbro brands. Dick’s has had so much success with Field & Stream that it plans to roll out a new, multi-brand outdoor specialty store concept under the Field & Stream banner to 55 locations by 2017. Recreational Equipment, Inc., the nation’s largest retailer specializing in human-powered outdoor recreation, earned about 20 percent of its sales from its REI branded apparel and camping gear and Novara branded bicycles and cycling apparel in 2013. REI’s Canadian counterpart, Mountain Equipment Co-op, relaunched its brand and introduced a new line of more urban friendly apparel last year as part of a new strategy that seeks to distinguish it from outdoor specialty shops operated by the much larger Forzani Sports Group and a rising tide of online competitors. Could E-tailers Be Next Some foresee the next wave of private label growth in the sporting goods industry coming from pure-play online retailers like Backcountry.com. In March, the outdoor specialty retailer announced it had recruited Bradford Shellhammer, who gained acclaim as a designer and co-founder of Fab.com, as its first chief design officer. Among other duties, Shellhammer has been charged with helping Backcountry design a line of premium base layers in silk and merino wool that will launch this fall. A more ambitious collection that will include some technical pieces will follow in spring 2015. “Brad is one of best design eyes I've come across,” noted Backcountry’s Chief Marketing Officer Scott Ballantyne, who worked with Shellhammer as CMO at Fab.com before joining Backcountry.com in March 2013. “He will help us with style, colors and fabrics and trends. We have a really, really loyal following at Backcountry.com. People really seem to love our logo and we will move it into everyday base layers and technical jackets.” The challenge for Backcountry.com and big box retailers alike is to find the right mix of private label and national brands that provides the choices consumers want. And some categories are more permissive than others. Charlotte brand consultant Boiter advises retailers to use private labels to create a “good, better, best” situation within the halo of national brands that help give them legitimacy and authenticity. “For example, Dick’s Sporting Goods manufacturers Walter Hagen golf clubs at a certain price point, but they also sell TaylorMade and others at different levels,” he said. “It is a channel strategy that allows a retailer to sell a brand and products that a competitor can’t sell at a higher margin. That product choice is another way for retailers to differentiate themselves from their competitors.” In an era when most major sporting goods vendors are intent on growing their direct-to-consumer sales, that’s a strategy that is poised to grow. ■ 14 SGBWeekly.com | MAY 19, 2014
BEYOND T-SHIRTS AND CAPS By Charlie Lunan and William F. Kendy
Dick's Sporting Goods has built up its private brand business in part through exclusive licensing deals with established sporting goods brands. In this photo, all the Reebok Cross Fit Gear is designed and sold exclusively by Dick's Sporting Goods under license with Reebok. A similar licensing agreement with adidas authorized Dick's to make baseball gear under the adidas trademark. Photo courtesy Dick's Sporting Goods
Beyond screenprinting T-shirt blanks or embroidering baseball caps, there seems to be little mid-sized hunt and fish, outdoor, ski and cycling shops can offer customers in the way of private label products. But the times, they may be a changing, according to Mike Mendoza, marketing director for 3D Industries, which owns a factory in China that makes rain gear and technical bags and manufactures apparel for a wide range of motorsports, surf and other sports brands. Mendoza said Chinese manufacturers are on the verge of offering blanks for brands and retailers that want to create their own technical apparel, including waterproof/breathable outwear. He foresees a day when retailers will be able to use online “configurators” to customize technical outerwear and other apparel just as consumers do today to customers for everything from Timberland boots to Princeton Tec headlamps. “That's definitely on the horizon,” said Mendoza. “In fact we are looking at just that; specializing in serving that independent specialty channel. China is getting a lot more intelligent on the manufacturing side. They are becoming much more intelligent about trends and then turning that into a blank.” While that could be a an opportunity for large pure-play online retailers, most independent retailers said they still can’t get the numbers to work on private label. “As much as we’d like to get into private labels, at this time we don’t have critical mass in customer demand, the time and revenue we need to source product under our own banner,” said Jason Larsen of Al’s Sporting Goods in Logan, UT, a full line sporting goods store. “We’ve encouraged our buying group, which is NBS to pursue private labeling because it puts us in a position to offer products that are a little more unique.” Jay’s Sporting Goods, a Michigan-based hook-and-bullet retailer with significant online sales, opted to pass on private labeling after a careful analysis. “We considered the private labeling option and specifically decided not to get into that area,” said Jay’s President, Jeff Poet. “We didn’t find that many holes in product lines or a segment of the market that didn’t have product or price options.” Poet has stayed the course of partnering and working with the branded products and taking advantage of the market equity and support they offer. “A lot of research and promotion goes into the establishment of an accepted brand and we felt additional products would just dilute and cloud up the merchandise mix,” said Poet. “There is product education, sales and marketing support and other tools that we can utilize to help us sell nationally branded products.” ■ MAY 19, 2014 | SGBWeekly.com
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For full year calendar go to sportsonesource.com/events
TRADE ASSOCIATIONS | BUYING GROUPS
CALENDAR
Athletic Dealers of America 1395 Highland Avenue Melbourne, FL 32935 t 321.254.0091 f 321.242.7419 athleticdealersofamerica.com National Shooting Sports Foundation Flintlock Ridge Office Center 11 Mile Hill Road Newtown, CT 06470 t 203.426.1320 f. 203.426.1087 nssf.org National Sporting Goods Association 1601 Feehanville Drive / Suite 300 Mount Prospect, IL 60056 t 847.296.6742 f 847.391.9827 nsga.org Nation’s Best Sports 4216 Hahn Blvd. Ft. Worth, TX 76117 t 817.788.0034 f 817.788.8542 nbs.com Outdoor Industry Association 4909 Pearl East Circle / Suite 300 Boulder, CO 80301 t 303.444.3353 f 303.444.3284 outdoorindustry.org
Photo courtesy prAna
JUNE
SEPTEMBER
11-12
Altanta Shoe Market Atlanta, GA
3-8
NBS Fall Semi - Annual Market Fort Worth, TX
17-19
Licensing International Expo Las Vegas, NV
4-6
Imprinted Sportswear Show (ISS) Orlando, FL
26-28
Sports, Inc. Summer Team Dealer Show Nashville, TN
10-12
Interbike International Trade Expo Las Vegas, NV
16-17
SFIA Industry Leaders Summit Chicago, IL
JULY 8-11
NBS Summer Market Austin, TX
10-13
European Outdoor Trade Fair Friedrichshafen, Germany
15-17
ASI Chicago Chicago, IL
18-20
A.D.A. Spring Show Reno, NV
AUGUST 6-9
Outdoor Retailer Summer Market Salt Lake City, UT
14-16
Sports Inc. Outdoor Show Nashville, TN
16 SGBWeekly.com | MAY 19, 2014
OCTOBER 7-9
OIA Rendezvous Asheville, NC
NOVEMBER 15-16
A.D.A. Fall Show Palm Springs, CA
23-25
Sports, Inc. Fall Team Dealer Show Las Vegas, NV
Sports & Fitness Industry Association 8505 Fenton St., Suite 211 Silver Spring, MD 20910 t 301.495.6321 f 301.495.6322 sfia.org Snow Sports Industries America 8377-B Greensboro Drive McLean, VA 22102 t 703.556.9020 f 703.821.8276 snowsports.org Sports, Inc. 333 2nd Avenue North Lewistown, MT 59457 t 406.538.3496 f 406.538.2801 sportsinc.com Sports Specialists Ltd. 590 Fishers Station Drive / Suite 110 Victor, NY 14564 t 585.742.1010 f 585.742.2645 sportsspecialistsltd.com Team Athletic Goods 629 Cepi Drive Chesterfield, MO 63005 t 636.530.3710 f 636.530.3711 tag1.com Worldwide 8211 South 194th Kent, WA 98032 t 253.872.8746 f 253.872.7603 wdi-wdi.com
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