ISSUE 1446 NOVEMBER 17, 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
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ISSUE 1446 NOVEMBER 17, 2014
The Weekly Digital Magazine for the Sporting Goods Industry
Contributing Editors Scott Boulbol, Fernando J. Delgado, Bill Kendy, Charlie Lunan Editorial & Creative Director Teresa Hartford teresa@sportsonesource.com Senior Graphic Designer Camila Amortegui camila@sportsonesource.com
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MAKING NEWS
RETAILER OPENINGS
4 Atlanta Track Club and Mizuno Announce Long-Term Partnership America Product Showcase Returning to Outdoor Retailer 5 Confluence CEO Rechner Featured in AOL's This Built America Series Schutt Sports Acquires Additional Assets of Adams USA 6 Movers & Shakers
10 Columbia Sportswear Opens First PFG Store Sorel Opens First Pop-Up Store 11 UGG Opens First High-Tech Concept Store In The Washington, D.C. Area 12 Eddie Bauer Lands Back in NYC Skechers Opens 1,000th Retail Store
PRODUCT FOCUS 2151 Hawkins St. • Suite 200 • Charlotte • NC • 28203 SportsOneSource.com
8 The Outdoors Comes To Manhattan
ON THE COVER: Photo courtesy Kava
SGB Q&A 14 The Passion of Fandom Raphael Peck, President of Fanatics Apparel at Fanatics, Inc.
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AMERICA PRODUCT SHOWCASE RETURNING TO OUTDOOR RETAILER
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ATLANTA TRACK CLUB AND MIZUNO ANNOUNCE LONG-TERM PARTNERSHIP Atlanta Track Club and Mizuno announced an exclusive partnership uniting two Atlanta-based athletic brands guided by their mission to change lives through the power of running. Featuring a long-term commitment from both organizations, the partnership will help the Atlanta Track Club grow the impact of its world-class running events, membership services, programs, and products in the Metro Atlanta area. The first fully integrated sponsorship for the Atlanta Track Club and a first-of-itskind partnership for Mizuno in North America, the agreement will impact all facets of both organizations. Beginning January 1, 2015, Mizuno will be the official footwear and apparel partner of the Atlanta Track Club incorporating the brand in all of its running events, programs, and merchandise. Founded more than 100 years ago, Mizuno has been guided by the core philosophy of contributing to society through sports and grounded by the power of sports to transform individuals and shape communities through positive changes connected to health and physical activity. With this multi-year contract, Mizuno will showcase its commitment to running through its partnership with the Atlanta Track Club and the city of Atlanta. “Atlanta Track Club is a recognized brand not only in the Atlanta community but nationally with the rich history surrounding the AJC Peachtree Road Race,” said Bob Puccini, president, Mizuno USA. “The alignment of our organization’s philosophy and purpose made this partnership a natural decision for Mizuno. We are excited for the opportunities that lie ahead and to be able to make a lasting impact in Atlanta with the Atlanta Track Club.” “As the Atlanta Track Club enters its next 50 years, it does so with the support of Mizuno, one of the world’s most respected running brands,” added, Rich Kenah, executive director of the Atlanta Track Club. “Mizuno will help our Club enhance every program and service that we currently offer to our members and participants and allow us to launch new initiatives designed to get more people moving.” The more than 21,000 members of the Atlanta Track Club and the more than 100,000 participants of Atlanta Track Club’s events and programs can look forward to many benefits from the Club’s partnership with Mizuno. Features of the partnership include Atlanta Track Club branded Mizuno apparel and footwear, the launch of new Atlanta Track Club events including a 2015 cross country meet for high schoolers and open athletes, the addition of a youth track and field team running shoe and apparel included in Club training program benefits, and the availability of the Atlanta Track Club branded apparel at specialty running and sporting goods stores in the Southeast region and online at atlantatrackclub.org. As part of the partnership, Mizuno will also become the exclusive footwear and apparel provider for the Atlanta Track Club’s AJC Peachtree Road Race, the world’s largest 10K. 4 SGBWeekly.com | NOVEMBER 17, 2014
The Outdoor Industry Association (OIA) and Outdoor Retailer will partner for a second time to present the Made in America Product Showcase at the Outdoor Retailer Winter Market 2015, January 21-24, 2015 in Salt Lake City, UT. Building off the success of the inaugural Made in America Product Showcase at the Outdoor Retailer Summer Market 2014, the showcase will again feature products from 30 brands manufacturing product in America. In recognition of the growing interest in domestic manufacturing, the American Product Showcase was launched to draw attention to the U.S. companies who are sourcing domestically and to educate the exhibitors, retailers and media attending Outdoor Retailer about these companies. In addition to the Showcase, the OIA Made in America Working Group will offer Outdoor Retailer Winter Market 2015 attendees a “passport” featuring all 30 participating brands and providing information about trends and challenges in domestic U.S. manufacturing. Passport holders will receive stamps in their passport after engaging with the manufacturers in their booth. Attendees with five stamps will be eligible to enter the Made in the USA product raffle for a chance to win a prize package from the Made in America Product Showcase manufacturers. And for every five additional stamps in a “passport”, passport holders will receive one additional drawing entry. "We were happy to give OR attendees a preview of Exxel Outdoors' new Made in USA mummy and shaped sleeping bags through this gorgeous and cleverly executed showcase,” said Harry Kazazian, CEO of Exxel Outdoors. “The display shined a new light on the wide range of American made outdoor products while letting people know at which booth they could view each product up close and personal." Dave Petri, VP of marketing for Farm to Feet, added, “The Made In America Product Showcase is a great addition to the Outdoor Retailer show. It provides participating companies an opportunity to feature their outdoor gear and highlight the investments they have made in the American manufacturing engine - growing American jobs and the economy.” To learn more about the showcase goals and participation details, visit OIA’s website. The deadline for applications is December 5. The showcase will be located near the East Entrance of the Salt Palace Convention Center and will feature educational information about U.S. sourcing and manufacturing as well as information about participating companies and their products. In conjunction with the Made in America Product Showcase, an educational forum on Made in America trends and challenges will be held January 21 in the Product Zone area at the Outdoor Retailer Winter Market 2015.
CONFLUENCE CEO RECHNER FEATURED IN AOL'S THIS BUILT AMERICA SERIES AOL is featuring Confluence Outdoor CEO Sue Rechner this week in its This Built America editorial series featuring 50 people in 50 states in 50 weeks to celebrate people who have helped create or sustain manufacturing jobs in the U.S. The multimedia series features text, photography, and video to illustrate changes taken by Confluence Outdoor under CEO Sue Rechner who joined the company in late 2007 as it was struggling with quality control problems after consolidating manufacturing of several brands under one roof. “Sue has the skill set to run a billion dollar business,” explained private equity firm and new Confluence Outdoor owners J.H. Whitney managing director Paul Vigano. “She’s really passionate about the outdoors. The industry really needs people like her.” With sponsorship from Ford Trucks, AOL editorial and video teams are exploring all 50 states in 50 weeks to bring 50 stories of the people who are bringing back manufacturing to America. Other companies featured in the series include Ramp Sports of Park City, UT; Denver Tent Co., of Denver, CO; Simms Fishing Products of Bozeman, MT; Liberty Bottleworks of Union Gap, WA, and Shinola of Detroit, MI. To see how Rechner changed Confluence’s culture while sustaining the Confluence culture, visit This Built America, or follow This Built America on Facebook, Twitter, Instagram and Google+. The This Built America platform is produced in coordination with Man Made Content.
Confluence Outdoor CEO Sue Rechner
SCHUTT SPORTS ACQUIRES ADDITIONAL ASSETS OF ADAMS USA Schutt Sports acquired Adams USA’s remaining brands and product lines including the Trace, Bolco, Neumann, and Bucks brands as well as various other product and marketing assets. In 2011, Schutt acquired the Adams USA football helmet and faceguard assets. “This acquisition is important for the growth of our company and represents another important step in achieving our long term strategic vision,” said Schutt President and CEO Robert Erb. “This investment will bolster our product lines providing a broader offering to our customers. It will also ensure that Adams USA, an iconic name in American sporting goods, remains alive and thriving.” Headquartered in Tennessee since it began in 1947, the history of Adams USA is intertwined with the rise of sports and the sporting goods market in America over the past half century. Schutt is the largest domestic manufacturer of football and batters’ helmets in the country. “Schutt is committed to being an American manufacturer, providing quality jobs for American workers, and competing in the global marketplace as an American brand,” said Erb. “With its long history as a domestic manufacturer of high quality products, Adams USA is an ideal fit.”
Platinum Equity acquired Schutt in December 2010. Jacob Kotzubei, the partner at Platinum Equity whose team led the acquisition, said the latest Adams USA transaction further demonstrates the strong commitment to Schutt’s growth and expansion. “This is another important strategic acquisition that will expand Schutt’s product line and maximize the company’s world class manufacturing and marketing capabilities,” said Kotzubei. “We will continue looking for new opportunities to expand the business organically and through additional investments.” Schutt produces many other protective gear lines in both football and baseball/softball. In addition, Schutt is the Official Base Supplier to Major League Baseball. “Our plan is to revitalize the Adams USA brand and build upon its rich history in the American sporting goods marketplace,” Erb said. “There’s still much that can be accomplished with Adams USA and we believe Schutt is the right partner to help extend its legacy.” Erb added that potential new product lines could be created as a result of the integration, which would be exciting news for the sales forces at both Schutt and Adams USA. “Our sales force will remain in place and will continue to serve the customers who’ve grown to rely on them over the years,” said John Bartlett, director of sales for Adams USA. “Our independent sales groups have always been the key to our success and they’ll continue to represent the Adams USA brand as we go forward.”
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MOVERS & SHAKERS Cascade Designs named Martin Maisonpierre as its new public relations manager where he will be responsible for managing public relations efforts for Cascade Designs corporate as well as its suite of brands including Therm-a-Rest, MSR, Platypus, SealLine, PackTowl, E-Case, and Hummingbird. Prior to joining Cascade Designs, Maisonpierre worked in digital advertising in New York City managing public relations and marketing for R/GA and Critical Mass. Crocs, Inc. tapped McKinney as its global advertising agency of record, effective immediately. The agency's branding and marketing efforts around Crocs' existing "Find Your Fun" positioning will be led out of New York and will focus on markets in the U.S., China, Japan, South Korea, the U.K., and Germany. Feedback Sports, the cycling accessories firm, hired Katie Macarelli as its first marketing coordinator. Macarelli's most recent experience in the cycling industry had been with 303Cycling.com and Bicycle Colorado. Gaiam, Inc. appointed Nancy Taylor, previously senior director of design for Athleta, to the newly created position of VP apparel design. Kohl’s will launch an exclusive line of Gaiam-branded yoga apparel beginning in April 2015. Lucid Optics, a Wyoming-based manufacturer of weapons mounted optics and firearm accessories, hired Blue August as its PR representative to the firearms industry. Nike, Inc. appointed Daric Ashford as president of Nike Golf. Ashford had been VP and GM of Brand Jordan for North America and is a 21-year Nike veteran.
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Outdoor Research named Mountain Stuff as its sales agency in Colorado, Utah, New Mexico, Wyoming, Texas, Oklahoma, Kansas, Arkansas, and Louisiana. West Bay Trading, its sales agency in Michigan, Indiana, Kentucky and Ohio, was named 2014 Brand Champion of the Year. REI hired Ben Steele as the company's first Chief Creative Officer. Steele most recently served as Executive Creative Director at Hornall Anderson in Seattle, a globally recognized brand experience design agency with additional offices in London and New York.
PRODUCT FOCUS
The Outdoors Comes To Manhattan Leading outdoor brands visited New York City earlier this month as part of Pale Morning Media’s On the Road event to showcase Spring 2015. Here are a few highlights from the collections. Farm to Feet featured its Stylized Hiker series - traditional hiking socks with intricate stripes, swirls, and other details. “Before the introduction of our stylized traditional hikers all traditional hiking socks looked alike, a simple dyed outer nylon knitted with a naturally colored wool yarn to create a heather colored sock,” said Kelly Nester, Farm to Feet president. “Our development team has pushed the capabilities of our machinery to create exciting designs with multiple colors in the durable, proven sock construction that consumers love. There’s nothing like these in the world.” Farm to Feet Bend (above) Highlights included the Bend, $19, and Kittery named for Bend, OR, home to the Conservation Alliance, with a portion of sales going to the organization. Offered in men’s and women’s styles, the Bend is a medium weight crew featuring a space dyed stripe design with full density cushioning throughout the sock. Taking its name from the Maine seacoast town, the Kittery, $18, is a lightweight crew sock with full density cushioning on the bottom and features a wide, multi-color stripe design. Eagles Nest Outfitters (ENO), a leading manufacturer of crafted parachute hammocks and outdoor accessories, showcased its ENO DoubleNest Hammock, $70. Roomy enough for two, the DoubleNest still manages to stuff easily into its attached compression sack. Redesigned to be sleeker, lighter, and water resistant, ENO Twilights, $20, consist of 23 ultraEagles Nest bright LEDs for over 72 hours of Outfitters ENO DoubleNest continuous burn time. Powered by Hammock and three AAA batteries. ENO Twilights SOG, which takes its name from an elite Special Forces military group during the Vietnam era – the Studies and Observation Group, brought out the Survival Hawk, $64, a light, fast, and feature-rich tomahawk with a super sharp blade, paracord wrapped handle, ferrochromium fire starter SOG rod, wire breaker, and prier. Survival With a simple push of a button, the SwitchPlier, Hawk $64 to $89, provides instant one-handed access to the 8 SGBWeekly.com | NOVEMBER 17, 2014
spring-loaded pliers making deployment quick. Features include compound leverage pliers, pocket clip, knife blade, and pocket clip. SOG SwitchPlier High Sierra showcased the Publicpak, with a portion of the proceeds funding The Citypak Project, an organization that provides specifically-designed backpacks for the homeless. Since partnering in 2012, High Sierra and High Sierra Publicpak The Citypak Project have created and distributed more than 8,000 custom-designed Citypak backpacks to the homeless in cities across the U.S. “With each purchase of a Publicpak, our customers are helping support our mission to provide the homeless with a dignified and safe way to carry their belongings,” said Dawn Sicco, VP and general manager, High Sierra. The thin, enveloped-style Publicpak, $50, comes in five colors. The toploading main compartment features a fully padded computer sleeve, integrated tablet sleeve, reflective webbing loop, and open bike lock pocket. Kavu, founded in the Pacific Northwest in 1993, featured women's apparel, including the Layla, an ankle length, woven-cotton, Left to Right: Kavu Layla dress, Spring Breeze jacket and Candace Crew
semi-fitted strapless maxi dress with elastic waist, removable halter straps, and front pockets. The Spring Breeze is a full-zip jacket with hood and drawstring, two lore patch pockets, elastic sleeve cuffs, curved back hem, thick thread, white contrast zipper inside the binding and bar tacks. It's 100 percent polyester woven with mechanical stretch. The Candace Crew (60 percent cotton/40percent polyester) is a semifitted, long sleeve crew with thumb loops. ■
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R E TA I L E R O P E N I N G S
COLUMBIA SPORTSWEAR OPENS FIRST PFG STORE Columbia Sportswear Co. opened its first Performance Fishing Gear (PFG) store at the Avalon Mall in Alpharetta, GA. The first store, approximately 3,176-square-foot shop at its new Avalon Shopping Center, opened October 30. With a clean design, boutique-like feel and digital integration that includes an interactive knot-tying station, the Columbia PFG store will offer Columbia’s wide range of PFG apparel for professional and recreational anglers as well as its expansive PFG footwear featuring razor-siped outsoles and ventilated draining midsoles. The store also offers a full line of accessories that reflect the PFG lifestyle. "Atlanta is an ideal market to launch our first PFG store," said Shawn Cox, Columbia's SVP of retail. "People in the Southeast enjoy a lifestyle that includes a wide variety of outdoor activities anchored around the water and the sun. PFG helps them enjoy those activities longer, whether on college campuses or along coastal waters. We are excited to welcome consumers from around the region to this great new location and to further promote the PFG lifestyle." To help celebrate the launch, Columbia fishing athlete George Poveromo will visit the store on December 6. Poveromo is a nationally recognized saltwater angling authority. He is the executive producer and host of George Poveromos World of Saltwater Fishing on NBC Sports and an editor-at-large for Salt Water Sportsman magazine since 1983. Poveromo also hosts the Salt Water Sportsman National Seminar Series, the nations longest-running and most popular educational course on recreational marine angling.
SOREL OPENS FIRST POP-UP STORE Sorel, the winter boot brand owned by Columbia Sportswear, opened its first seasonal branded retail store at 345 W. 14th Street in Manhattan’s Meatpacking District. The store, which opened October 30, will offer Sorel’s extensive range of fall and winter boots through February 2015. A permanent Columbia Sportswear store is also set to open this fall directly next door. The 3,300-square-foot pop-up shop draws its design inspiration from Sorel’s fashion-meets-utilitarian aesthetic. The store features stark contrasts of black and white to allow Sorel’s footwear to take center stage. Sleek modern structural forms create a brand-defining retail experience. “We are thrilled to be opening our first Sorel pop-up shop in New York, the epicenter of fashion and a rich market for Sorel’s core consumer,” said Tim Boyle, president and CEO, Columbia Sportswear. “Sorel boots are a bold combination of fashion, outdoor, protection and style, which makes the Meatpacking District an ideal location. The store will allow us to explore new territory by giving customers direct access to the largest range of fall and winter boots Sorel has ever offered in a brick and mortar location.”
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Brand
Strength Report 2014
Deckers' Omni-Channel commitment on display at first high-tech UGG store in Washington, D.C. Photo courtesy PRNewsFoto/ Deckers Brands
UGG OPENS FIRST HIGH-TECH CONCEPT STORE IN THE WASHINGTON, D.C. AREA Deckers Brands announced the grand opening of its first Ugg Australia technology-driven concept store, located in the Washington, D.C. metropolitan area. Centered exclusively on the consumer, the 2,110-square-foot store serves as Deckers second "Innovation Lab" – the first being the company's Brand Showcase store in Santa Barbara, CA – to test the latest omni-channel models, merchandising approaches, and other innovations that can be deployed across company-owned retail locations. By introducing elements of online shopping into the physical brick-and-mortar store, Deckers is giving Ugg consumers the opportunity to shop the nearly 230 SKUs on display as well as an "endless aisle" of Ugg products across its e-commerce website. The product assortment is further heightened by two popular Ugg customization programs: »»
»»
The "Ugg By You" program places the consumer in control of the design process to make their mark on five classic styles – Classic Mini, Classic Short, Bailey Bow, Bailey Button, and Fluff Flip-Flop. The "Bling It On" program enables consumers to transform their coveted Ugg staples through a selection of dazzling Swarovski crystal patterns and statement-making looks.
Ugg will also introduce radio-frequency identification (RFID) technology that allows customers trying on merchandise to view digitally triggered content on four 65-inch HD touchscreens throughout the store, including product information and options, style tips, videos, related marketing campaigns, and suggested complementary products. Consumers can send SMS texts to themselves with a product link from the HD screens. Ugg sales associates will be equipped with iPads to answer product questions, provide customer service support, and complete e-commerce purchase transactions for items not available on the sales floor. Customers will also have access to free Wi-Fi when they shop so they can connect with their social channels and share their shopping experience. When customers move from the sales floor to checkout, transactions of in-stock merchandise will be completed on tablets – enabling store planners to re-configure the store layout and show even more Ugg branded product. Select Ugg online orders can be shipped overnight for free or picked up in-store. "Omni-channel isn't just a catchphrase for Deckers, it's an integral part of our culture of innovation and our retail strategy – one that we've made investments in for more than five years now – to engage with our consumers with respect to their preferred shopping channel,” said Dave Powers, president of omni-channel for Deckers Brands. “That strategy is on full display at the Ugg store where we are merging the best of digital and physical shopping experiences and setting the foundation for future Omni capabilities across our brands."
To order the Brand Strength Report or to customize your personal report, contact Bethany Cooner, Director Market Research The SportsOneSource Group 303.997.7302 x7107 or BSR@SportsOneSource.com
NOVEMBER 17, 2014 | SGBWeekly.com
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R E TA I L E R O P E N I N G S
EDDIE BAUER
SKECHERS
LANDS BACK IN NYC
OPENS 1,000TH RETAIL STORE
Eddie Bauer opened its first retail location in New York City since 2007 on November 6 on Union Square. The store will operate through Valentines Day, when it will close and be transformed into a permanent flagship store to reopen in spring 2015. "Opening a new store in Manhattan is exciting for the brand," said Mike Egeck, CEO for Eddie Bauer. "New York City remains the center of the retail industry and a thriving community of outdoor enthusiasts. We are proud to serve as the city's premier retailer for quality outdoor adventure products." The pop-up holiday store at 100 5th Avenue - located on the Northwest corner at West 15th Street - will focus on the brand's heritage as "the original outdoor outfitter, from the creation of the first down jacket that revolutionized the industry to the innovative, award-winning outerwear, apparel and gear for today's modern expeditions." It will sell a curated selection of gear from its four series - First Ascent, Sport Shop, Travex and Outdoor, as well as select Eddie Bauer footwear styles. In celebration of the opening, the original Eddie Bauer down suit worn by Jim Whittaker, the first American to summit Mount Everest during the historic 1963 expedition, will be on display. Eddie Bauer Mountain Guide and legendary mountaineer, Ed Viesturs, who helped Eddie Bauer develop its First Ascent outerwear and gear line, made an appearance at the opening night event. During the first two weeks of the opening, the pop-up will also feature a Twitter-activated vending machine dispensing Eddie Bauer products, gift cards, and discount promotions to customers who engage in social sharing while shopping using @eddiebauer and #liveyouradventure.
Skechers achieved a new milestone - the opening of its 1,000th Skechers retail store. The company hit its mark last week when it opened a new store in Mexico City, preceded by a store opening in Mexico and two stores in California both earlier last week. Its retail store network now spans six continents and more than 75 countries. “When we opened the first Skechers retail store almost 20 years ago, it was hard to imagine we’d one day hit this amazing milestone that truly showcases our global reach,” said Michael Greenberg, president of Skechers. “Being profitable marketing vehicles, every Skechers store is a living, breathing catalog that offers consumers the largest assortment of Skechers, and now we’re improving that experience with an omnichannel approach to retail in our domestic market. As a key component of our distribution model, Skechers retail stores strategically grow our footprint and combine with marketing to support our wholesale business and build brand awareness worldwide.” The first Skechers retail store opened in 1995 down the street from the company’s Manhattan Beach, CA, corporate headquarters, and its first international stores opened in 2001 in Paris, London, and Tokyo. The company continued its global expansion opening in new markets each year, including earlier this year with its first stores in Angola, Algeria, Belarus, Georgia, Latvia, Libya, and Romania to be followed by Slovakia, Nepal and Zimbabwe later this year. By the end of 2014, an additional 35 to 45 Skechers’ stores will open worldwide bringing the total to 1,050 retail locations.
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With OIA VantagePoint™ access the weekly sales landscape of the outdoor industry and be outfitted with data to guide your company’s strategic decisions. OIA VantagePoint™ is the only weekly retail point-of-sale reporting platform exclusively for the active outdoor lifestyle industry. We swiftly deliver critical trend and detailed business data to brands and retailers. OIAVantagePoint.com • oiavantagepoint@sportsonesource.com • 303.997.7302 @OIAVantagePoint
NOVEMBER 17, 2014 | SGBWeekly.com
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SGB Q&A
THE PASSION OF FANDOM By Fernando J. Delgado
Raphael Peck, President of Fanatics Apparel at Fanatics, Inc.
F
rom A Business Standpoint, What Has Made Fanatics, Inc. So Successful? Our vendor partners are one of the keys to our success. These are the companies that offer us a world-class assortment and a product mix that effectively is wider than any of our competition. They ensure that we have the right products at the right time for our fan base, which is so critical in terms of how quickly trends change in the sports licensed business. We have the brand base that is always offering us great products to buy and, in turn, to offer to our fans. Product and choice is king. Our vendors deserve a lot of the credit for some of that success. Secondly, it’s really about our people. If you look at the last 12 to 18 months, the management team at Fanatics has been upgraded to a worldclass executive team with an enormous amount of experience. We have retooled the organization from marketing, to merchandising, to logistics – top to bottom. And then when you look at our employee base, they are fans, too. They have a passion for sports, and they’re empowered to make decisions. We’re really lucky, because we end up hiring fans and people who are passionate - and love - what they do and just do a great job. Our employees are passionate fans and they are diligently driving to grow our consumer base inside the sports licensed business. I think that’s really important. Another key to our success is our strategic mechanism in garnering licensing rights in partnership with the [professional] leagues to offer fans an incredible experience and product assortment. This makes us special in terms of our ability to offer a wide assortment relative to our rights. Really, it’s our vision for growth, and creating an experience for the fan that 14 SGBWeekly.com | NOVEMBER 17, 2014
SGB spoke with Raphael Peck, president of Fanatics Apparel at Fanatics, Inc., to get a behind-thescenes look at the leading online retailer of officially licensed sports merchandise, how the company approaches the licensed sporting goods market and how it reaches passionate – and fast-moving – fans.
capitalizes on their fashions and their loyalties. We get it, we love it, and we live it. These partnerships are what allow us to tell fans great stories and push the innovation needle. Our vision for the future is verticalization. It’s a large piece of the puzzle as we manage through speed of change, and our ability to react to a fans’ desire for new product or a change in team and player performance. We strive to listen to the fan in a more effective manner. This is about options, speed, color, brand mark, and an array of options to personalize or customize. What Are Some Interesting Trends That You've Noticed Recently That Are Impacting Fanatics' Business? When it comes to identifying trends, it’s easy to lean on the product piece – newer products and technology in products. But the biggest trend we see isn’t necessarily a product trend. It’s really about the shift to mobile and how much of our traffic is now going to the mobile business. I’ll put this into perspective. Our fan base is using their mobile device to access information and purchase quicker than they ever have before. The thing about sports fans is that they’re absolutely connected to their device, and the way they consume information is at high speed. We’ve looked at maximizing this trend by, number one, bringing in some of the best talent in the Bay Area along with the creation of our new offices – where I sit – in San Francisco. We have new offices here in the South Market Street area to maximize and attract the very best talent in mobile. But if you think about what these guys are doing, they’re really tackling problems to address the shift. The shift of how you purchase on a mobile device,
how you maximize on-screen size and image size to maximize conversion, and how to keep people on the site longer to increase conversion. I think the mobile piece is the biggest shift in the business, and it’s happening really, really quickly. How to maximize on that traffic is a critical trend for us. I’ll give you a couple of examples. Our mobile traffic spiked more than 70 percent after the Super Bowl, World Cup, or March Madness. So think about the critical 12 to 24 hours during and after those events and what happens to all of that traffic. That’s when the passion of the fans is at its highest. Many people can’t get to their desktops and can’t get to their tablets, but they can reach for their mobile device. How do you maximize that, and what do you do with that traffic? I’d day that’s probably the largest piece. Another big trend we’re seeing is personalization and customization. And we love that because a big part of our team’s vision is to address this idea that everybody wants to be different. This can be very challenging because, in the end, teams are made up of their name, their number, and their color. How do give people the opportunity to be part of this culture of team but also create personalization and customization? We are aggressively addressing verticalization opportunities to give the fan the chance to design and configure their own product, as well as create efficient technology platforms so that they can pick a sport to put on the front of their shirt as well as put a name and number on jerseys, fleece, qne t-shirts. This is really important, and a point we want to make. Not only do we see that it’s an important trend, but we love the idea of personalization and customization because we’re a technology and product company. What that platform allows us to ultimately do is to reach the fan and keep them engaged in our site for that much longer. Once they’re engaged that much longer, they tend to make multiple sport-licensed purchases. And they also tend to come back more often based on the fact that you offered them a custom or personalization opportunity. What Are Some Challenges Of The Licensed Retail Business That Might Be Surprising To People In Other Parts Of The Sporting Goods Industry? Nobody has a crystal ball. The biggest issue with the licensed sports business is the lack of predictability. We always say, “A team and a player can go from the penthouse to the outhouse in 15 minutes flat.” And that creates an enormous amount of challenges. I would say the largest issue in the licensed sports business – that’s different from the branded business – is the robust way in which you plan and manage your inventory. There
are two critical components to what you need to look at. Number one is that you want to end every season with an efficient inventory turn. Excess inventory can often result in a much lower-margin business and less profitability. How you end a season reflects on how you start a season, and that interrelates to inventory and the choice that you ultimately make. General lack of predictability is a huge challenge. The second issue, and it’s related to inventory as well, is how do you create incremental opportunities by maximizing your inventory product life cycle in order to capture every sale that’s out there? And for us it’s less about capturing the sale and more about how Fanatics, Inc. looks at it, which is we don’t want to disappoint any fan. When you shop Fanatics or our partner sites, we want to make sure we have the best assortment, greatest value in price available, and we want to have your size, your color, and your team in stock. This is very delicate because, at the end of the day, the sports licensed business has many more styles and SKUs than are available with the traditional branded business. For example, think about the branded business and think about a basic running t-shirt that comes in three different colors and ships three different times in one season. That basic running tee probably releases averaging nine colors over six months. If you took that same example for a collegiate team t-shirt, you’re probably taking that one design and have to find a way to probably build it in up to 26 different colors with over 300 different collegiate logos on the front of that shirt - and then find a way to re-invent it twice a year. So the scale and scope of what we’re dealing with is so enormous compared to the branded business that it creates extra levels of challenges as it relates to how you manage your inventory life cycle and the amount of designs you want to make available to the consumer. We see this at Fanatics as a massive opportunity to begin to shift the model towards making sure that we have the right product and that we can manage through our inventory in an effective way so that at the beginning of each season there’s always fresh, new, great stories available for our fan base. What Is The Outlook For Fanatics Over The Remainder Of 2015? Which Products And Categories Do You Expect To Sell Well During This Holiday Selling Season? We see both organic and incremental growth this year, and we remain bullish on the remainder of the year, which is critically important because that period is what we call a perfect storm – there’s college football, MLB Playoffs, NHL, and NBA seasons starting, and then of course there’s the NFL in mid-season. And in the midst of all of that, there’s Thanksgiving and Christmas; which, of course, really creates some interest and excitement. NOVEMBER 17, 2014 | SGBWeekly.com
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We’re continuing to listen to the fan. Through that, we’re looking to expand our product offerings and create ways to reach our consumer fan base in a much more meaningful way. The way we use our data with regards to the fan becomes really important in terms of where the trends are and how you ultimately speak to them. Our jersey business continues to trend very well for us. And inside of the jersey business, I’ll just call out again that personalization and customization continues to trend very, very well for us. It gives our customers the opportunity to come and shop for something unique and makes for a great gift-giving item over the Holiday season. Superstars In The Pro Leagues Are Obviously Always Big Sellers In Terms Of Jersey And Licensed Team Merchandise Sales. Has There Been Any Sort Of Pickup In Lebron James Jerseys Since His Move Back To Cleveland? With Derek Jeter's Recent Retirement And The Fanfare Surrounding It, Have You Noticed Any Uptick In Jeter-Related Merchandise? Superstars are a part of the fabric of our culture. Everybody needs a hero, and that hasn’t changed. I think what has changed is the speed and the scale of media and what that does to create social platforms to make and break superstars. Again, there’s no crystal ball here. At the end of the day, though, the metrics don’t change around this particular rule, which is - if you’re winning, we’re selling. And so great performance, and winning, is
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what this is all about. That’s what we’re seeing when you think about some of the biggest recent stories this year. Let’s take a look at Cleveland and the NBA. We’re excited about the Cleveland Cavaliers business. As a result of LeBron’s decision to go back home, LeBron’s been our top-selling NBA player this year, and the Cavs have been our topselling team overall as well. Which is pretty remarkable relative to a superstar moving teams. To put that in perspective, just in September, the Cavs business was up more than 450 percent versus the same period last year. That’s a metric and a statistic that’s remarkable when you think about the importance of a superstar of LeBron’s caliber moving teams. Another great example is Derek Jeter who was the feel-good story of Major League Baseball this season. That’s generated an enormous amount of interest. Derek has been the best-selling player on Fanatics.com overall since April 1st. Clearly, he’s one of those superstars, just like LeBron, that crosses geography. These athletes aren’t just New York or Cleveland-driven. [As of October 1], Jeter merchandise overall is up over 1,000 percent in sales versus the same period last year, so that’s another incredible statistic. When you think about Jeter, there are fans in all 50 states and more than 30 countries that are buying Jeter products. Guys like Jeter and LeBron are global icons, and therefore they’ve literally helped our sales. We love these stories. They’re feel-good, and we want to be able to offer an incredible assortment to help the fan to be part of these stories. ■
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