Retail: 58
Retail: 173
Monday, October 15, 2018
Volume 2, Issue No. 40

Footwear Insight
DSW Wants Larger Role in Footwear Universe

DSW’s decision last week to team with Authentic Brands Group (ABG), on the acquisition of the operations and intellectual property rights of the 17-year-old Camuto Group in a $375 million deal slated to close in Q4, is part of a broader strategy to expand its reach in footwear with both consumers and other retailers.

“Following the acquisition, our business model evolves from one that is 100 percent focused on North American retail to a model with new revenues from wholesale, licensing royalties and investment income,” DSW CEO Roger Rawlins told analysts last week. “Furthermore, it diversifies our business by increasing our exposure outside the moderate channel to improve department stores, regional chains, independent boutiques, pure play online and digital marketplaces.”

Following the acquisition, our business model evolves from one that is 100 percent focused on North American retail to a model with new revenues from wholesale, licensing royalties and investment income.

The complex transaction will bring DSW’s annual topline close to $3.5 billion after it pays $200 million for Camuto’s operations and $56 million for a 40-percent ownership in an IP joint venture with ABG. The deal also gives DSW the resources to manufacture high-quality men’s and women’s shoes in Asia. DSW will also acquire the licensing rights for Jessica Simpson footwear, the Lucky Brand and Max Studio footwear and handbags and joint venture (JV) participation in the Ellen DeGeneres and Mercedes Castillo brands.

From the transaction, DSW sees its four largest “buckets of growth” coming from other shoe retailers—Dillard’s, Nordstrom and Macy’s among them—in growing their respective footwear businesses; more private label product for DSW which currently generates only about 10 percent of revenues; licensing royalties through its relationship with ABG; and Direct-To-Consumer expansion.

Once the transaction closes, DSW is vowing to “go slow” out of the gate as its team learns the Camuto business, makes sure the Connecticut company’s wholesale partners are serviced properly and plots its longer-term strategy for the business. Camuto Group has been profitable over the last year, Rawlins said, but the footwear business has more recently been challenged by supply-chain constraints. DSW’s ownership will help Camuto return to “more normalized” operations over the next 12- to 18-months.

As for ABG, the global brand management company backed by investor Leonard Green, General Electric, David Simon and Chairman and CEO Jamie Salter, the New York company currently oversees 33 brands in the celebrity, lifestyle and sports categories. Among them: Nautica, Tapout, Spyder, Juicy Couture, Marilyn Monroe, Tretorn, Greg Norman and Elvis Presley. ABG brands generate 40 percent of revenues in international markets and over $8 billion in worldwide retail sales from approximately 50,000 points of distribution. The DSW-ABG JV includes the Vince Camuto, Luise et Cie, Sole Society and Enzo Angiolini brands among others and will focus on licensing the brands across existing lines in footwear, handbags and jewelry and new category development.

Bankruptcy Means Fewer Sears Stores

The 132-year old retailer Sears, which has struggled under mounting debt and slowing sales for years, filed for Chap. 11 bankruptcy protection late Sunday, hours before a deadline to pay $134 million in loans. Ahead of the filing, the Wall Street Journal reported late Friday that the retailer, which hasn’t reported a profit in seven years, would obtain a lifeline of $500 million in emergency financing enabling it to keep open approximately 300 locations through the upcoming holiday season. Under bankruptcy protection, Sears intends to close 142 stores by Dec. 31 on top of 46 set to close by Oct. 31. The fate of another 250 stores would be determined after evaluations. Hedge fund ESL Investments, owned by Sears’ Chairman Edward Lampert, is the “stalking horse” bidder to purchase an unspecified portion of the retailer’s real estate.

Sears hired M-III Partners LLC, a boutique advisory firm, on Oct. 9 as it prepared a reorganization plan. Last week, some investment houses predicted retailers Kohls and Macy’s would be beneficiaries of Sears’ bankruptcy filing.

“It is sad to lose such a historic and household brand such as Sears,” remarked Gavin Bisdee, VP of global marketing for Zynstra, “but they are not the first retailer to fall by the wayside, and they certainly won’t be the last, either. It is important, however, to remember that it is not a barometer of the overall trends in U.S. retail, despite claims of a ‘retail apocalypse’ over the past year. Recent reports clearly show there have been more store openings than closures in the U.S., and sales in physical stores will still account for 80 percent of retail sales by 2021. That said, change must continue to happen in retail. The bankruptcy of Sears only reinforces the importance of adapting fast to the change in consumer buying habits. Those (retailers) that are adapting fast to omnichannel integration, including the use of stores as distribution and fulfillment centers as well as sales outlets, will be the clear winners. In fact, don’t be surprised to see other retailers looking at Sears’ real estate inventory for their own sales and distribution needs.”

Higher Postal Shipping Rates on Horizon

Amazon will have to pay more to the U.S. Postal Service for delivery of its packages after the holidays under a proposal submitted late last week. Starting Jan. 27, 2019, costs for traditional parcel delivery, the type most used for Amazon orders and other retailers for fulfillment, will rise 9.3 percent. Meanwhile, the cost of lightweight (under a pound) packages would be hiked 12.3 percent and the cost of a first-class stamp would rise to 55 cents.

U.S. retail sales rose a meager 0.1 percent in September from August, below Street expectations of 0.6 percent gain. Year-over-year sales were up 4.7 percent, according to monthly data from the U.S. Census Bureau. Sales in the sporting goods/hobby/musical instrument/book store channel fell 3.8 percent on an adjusted basis in September and were down 2.7 percent for the first nine months.

Scheels has announced plans to open its second Colorado store, in Colorado Springs, in April 2021. The proposed 220,000-sq. ft. location by the employee-owned is planned for the Interquest Marketplace near the Great Wolf Lodge and will be the chain’s 29th door after two stores are opened in 2020 in Eden Prairie, MN and The Colony, TX.

Dick’s Sporting Goods is opening stores this month in Spokane, WA and Greendale, WI and two Golf Galaxy doors in Dublin, CA and Greendale, WI. The four openings will bring Dick’s store count to 733 across 47 states and Golf Galaxy to 96 locations. Also, last week, DKS inked a multi-year extension to its partnership with Pittsburgh-based First Insight, which has assisted the retailer for the last three years with predictive analytics for its design, buying and pricing decisions.

Customers at L.L. Bean’s store in Mansfield, MA over the weekend, drawn to the store by its 20-percent off sale on all Bean footwear and apparel through Oct. 15, were lining up to use “Albert,” a retail footwear scanning system introduced last year by Aetrex Worldwide. The round device measures pressure and sizing, conducts 3-D imaging and has the ability to track gait. Built and developed in Israel, the system is equipped with more than 5,000 sensors, 1,000 infrared LED lights and receptors and 18 digital cameras.

Execs on the Move
New Prez at Vibram U.S.; Fanatics Expands International Team

Left to right: Fabrizio Gamberini, Michael Gionfriddo, Ignacio Beristain Borra

Fabrizio Gamberini, previously CEO for Geox USA and a Nike GM, is the new president and CEO of Vibram USA. He is replacing 20-year company veteran Michael Gionfriddo, who is retiring on Dec. 31. Until then, he and Gamberini will work together to ensure a smooth transition at the North Brookfield, MA company. Gionfriddo has been president of Vibram USA since 2011. Separately, Vibram Corp. has appointed Richard Riegel, a company director since 2015 and the founder and CEO of privately-held Airstream 2 Go, LLC, as Chairman.

At Fanatics, former 18-year adidas executive Ignacio Beristain Borra has joined the company to lead retail, buying and merchandising across Southern Europe. Additionally, Bill Tung, with international experience at both Columbia Sportswear and New Balance, joins as Managing Director for Fanatics Branded International, and Ian Nelson, from Pentland Brands, as product marketing director. Meanwhile, Zohar Ravid joins as director of strategy and M&A.


• Duluth Trading Company promotes SVP Allen L. Dittrich to Chief Operating Officer, a new position at the Belleville, WI-based retailer. A retail industry veteran, Dittrich was previously SVP of retail for Allen Edmonds Shoe and a COO and CMO at the former Gander Mountain.

• Outdoor Industry Association (OIA) hires Patricia Rojas-Unger, VP of public affairs for the U.S. Travel Association, as VP of government affairs. She will lead the trade group’s Washington, D.C. office.

• Dynamic Brands, the Richmond, VA parent of seven sporting goods brands, adds customer service, operations and production staff. The company is relocating its production and warehouse operations to Pageland, SC from Monroe, NC in Q1/19.

The CEO and president of PHIT America discusses actions taken by the non-profit to the stem the U.S. inactivity pandemic, including GO! Grants toU.S. Schools and the PHIT Act bill before Congress.

The Buzz

Allbirds Inc. now has valuation of $1.4 billion after selling new, unspecified equity to investors last week. The San Francisco-based footwear company, which operates stores in its home city and New York, was valued at $370 million when Tiger Global Management invested more than $50 million last year. Co-founder Joey Zwilliinger told the Wall Street Journal that Allbirds, profitable since its first day, is exploring an IPO “for a variety of reasons.”

American Golf, a specialty golf retailer in the U.K. with 132 locations and an estimated $183 million in annual revenues has been acquired by Endless. The British-based, mid-market private equity firm will acquire 112 of the retailer’s 132 doors and its two ecommerce websites, beating out Sports Direct and JD Sports Fashion with its unspecified bid. American Golf was founded in 1970.

Asics Tiger is reportedly adding robots to a Japanese factory that produces Onitsuka Tiger shoes in early 2019. The robotics, according to the Nikkei Asian Review, will stitch uppers and assume one-third of production at the plant in Tottori Prefecture, eliminating about half of the current factory staff. After perfecting automation in its home market, Asics hopes to introduce robot-driven production in both the U.S. and Europe.

Tubes of the Week

Mon, Aug 28, 2017
Vol 1, Issue No. 33
Numbers In Play
The Sports Insight Index is our opinion of what we think are the 30 most important public companies in the industry, 15 vendors and 15 retailers. Space considerations prevent us from tracking more, but we will make changes over time.
Index base of 100 is key to the closing prices of 12/31/14
Segment losing streak hits six weeks and Index dips below 60. Eight stocks fall, six rise and Sportsman’s Warehouse is flat for the period. The aggregate 4 percent decline for the period is a better performance than the Dow, which dips more than 5.2 percent or more than 1,353 points between Oct. 10-11 and has prognosticators suggesting the market is “entering correction territory.” With Sears’ Chap. 11 bankruptcy appearing imminent, both Kohl’s and JC Penney (not listed) saw their shares get lifts as investors bet both chains will net a sales lift from any Sears’ demise. Dick’s, which saw Morgan Stanley raise its share target price to $36, is expanding its partnership with Pittsburgh-based First Insight, which uses consumer-driven predictive analytics to help the retailer make design, buying and pricing decisions for its branded and private label assortments. Zumiez, which saw Baird lower its rating to “neutral” and target price to $25, reported footwear as its largest comp gainer for the five weeks ended Oct. 6 when overall same store sales were 1.2 percent higher. Transactions were flat, and units were down, but Average Unit Retails (AURs) were higher, the 703-door retailer said.  
With the exception of Puma, which remains locked in a federal patent infringement lawsuit with Nike over the Swoosh’s Flyknit woven-shoe technology, all stocks are red for a second consecutive week. Lululemon’s Chip Wilson has a new tell-all book coming out tomorrow where he rips Under Armour founder and CEO Kevin Plank, insults Diet Coke-drinking women and appears to support children working on some level. In “Little Black Stretchy Pants,” as reported by Business Insider, Wilson writes that he decided against acquiring Under Armour in 2008 after meeting Plank. “I couldn’t see Kevin’s macho philosophy working with that of the Super Girls (a term for lululemon’s target customer)…Under Armour, I thought, had an in-your-face image of winning at all costs, male chauvinism and leaving everybody else in the dust.” Fast forward. Under Armour last week signed NBA star Joel Embiid, a former Adidas endorser, to a multi-year endorsement deal. He, like Steph Curry, will have a signature basketball shoe from the brand. Adidas, which saw its pitchman Kanye West front and center again, this time in an Oval Office visit with Pres. Trump, has snatched the Arsenal soccer club away from Puma starting in July 2019 via a five-year deal worth a reported $391 million. Meanwhile, adidas AG CEO told CNBC that the brand continues to gain share in North America while also acknowledging rival Nike’s market comeback. Reebok president Matt O’Toole ran in the newly named Reebok Boston 10K for Women on Columbus Day in a pair of the brand’s Floatride Runs. The race had been sponsored by Tufts Health Plan for more than 30 years. Nike sees endorser Colin Kaepernick file for a U.S. trademark for a black and white image of his face and hair. Nautilus-owned Octane Fitness introduces an updated version of its workout app designed to work with five of its home equipment models.  





Weekly Review

Retail Name (Ticker Symbol)
Close on 10/04/18
Close on 10/11/18
% change over week
Big 5 Sporting Goods (BGFV)
Sports Direct (LON: SPD)
Camping World (CWH)
Dick's Sporting Goods (DKS)
JD Fashion (JD)
Foot Locker (FL)
Genesco (GCO)
Hibbett Sports (HIBB)
Kohl’s (KSS)
Macy’s (M)
Sportsman’s Warehouse (SPWH)
Shoe Carnival (SCVL)
Tilly’s (TLYS)
Walmart (WMT)
Zumiez (ZUMZ)
Brand Name (Ticker Symbol)
Close on 10/04/18
Close on 10/11/18
% change over week
Acushnet Holdings (GOLF)
adidas (ADDYY)
Amer Sports (AGPDY)
Callaway (ELY)
Columbia Sportwear (COLM)
Deckers Brands (DECK)
GoPro (GPRO)
lululemon (LULU)
Nautilus (NLS)
Nike (NKE)
Puma (PUMA)
Skechers (SKX)
Under Armour (UA)
VF Corp. (VFC)
Wolverine Worldwide (WWW)

Sports Insight Extra Podcast Series

Nikki Barua

The old way of retail is dead, and there is a massive opportunity to re-invent, proclaims the CEO of Beyond Curious in Los Angeles.

Matt O’Toole

President of Reebok dishes on the brand’s mission and objectives from its headquarters in Boston.

Gabriella Santaniello

Retail expert dishes on what’s going right and wrong in industry today and weighs in on the Walmart vs. Amazon tussle.

Guy Yehiav

The CEO of Profitect addresses the right medicine for changing the paradigm of accountability—prescriptive analytics.

Pat Ryan

Batter Up! The global product director for baseball/softball at Wilson Sports details the new USA Baseball standard that took effect January 1 and what it means when you hit the store this spring looking for a new stick for junior.

Patrick Clark

President of Nextwave, a Buford, GA system integrator, discusses benefits of an on-demand apparel microfactory, a bridge to Just In Time manufacturing, from Sourcing at MAGIC in Las Vegas.

Shawn McBride

Ketchum Sports & Entertainment EVP talks Olympics—impact of three consecutive Games in Asia, social media, corporate guerilla marketing and drawing in younger consumers.

Tyson McGuffin

Tennis pro Tyson McGuffin, 28, talks about the rising popularity of pickleball and how he became a champion in the sport.

Bob Mullaney

The 20-year shoe and retail industry veteran, recently named president and CEO of RG Brands, dishes on the comfort footwear business and Barry’s iconic Dearfoams brand.

Bob Smith

The design consultant who began his 20-year career as a graphic artist for Nike dishes on the blur between lifestyle and performance and the importance of Struktur, the creative conference for active, outdoor and urban design.

Rob & Mike Barnes

The co-founders of Selkirk Sports, a Hayden, ID maker of Pickleball paddles and accessories, dish on the rise of the sport that counted 2.5 million participants in 2015.

Brendan Candon

CEO of SidelineSwap, an online marketplace for used sports gear and equipment, dishes on the market and whether it steps on the toes of traditional, full-line retailers.

Dave McGillivray

The long-time race director and long-distance runner weighs in on marathon participation, the future of event marketing and his latest venture that may bring a marathon to a MLB ballpark near you.

Paul Froio

Reebok’s VP of U.S. Retail and Direct-to-Consumer channels talks about the company’s new South Boston headquarters and adjacent global flagship store.

Aquiles M. Bermùdez P.

The former president of the Dominican Association of Free Zone Companies and current member of the National Commission of Footwear addresses the industry, Dominican Republic’s infrastructure and Footwear Technology Institute.

W. Andrew Martin

The managing director for Baird in Charlotte, NC discusses the M&A climate, consumer loyalty to brands today and the impact of private label.

Mark Sullivan

The president of Formula4Media, LLC previews The Running Event conference and trade show set for November 28-December 1 in Austin, Texas.

Bryan Smeltzer

The general manager of Zamst Americas talks sports protectives, dispelling some of the consumer and athlete misconceptions about the category.

Emily Walzer

Formula4Media colleagues Emily Walzer, Textile Insight editor, Jennifer Beaudry-Ernst, footwear specialist, and contributor Kurt Gray, owner of SimplyGrayDesign, dish on key trends from the final Outdoor Retailer trade show in Salt Lake City.

Judith A. Russell

Shifting consumer purchasing patterns are vital to understanding today’s marketplace. Russell, a marketing and strategic planning professional, offered up her thoughts at TexWorld in New York on a panel with Sports Insight Extra’s Bob McGee.

Will Decker

Family-owned Silicon Valley firm Plug and Play, which dubs itself the “Ultimate Startup Ecosystem,” has raised over $6 billion in venture funding during its 11 years while bringing corporations, venture capitalists and start-ups together.

Matthew Lyon

In the fragmented hydration market, where price points for performance products are on the rise, HydraPak is an OE supplier to numerous brands and has its own lightweight, flexible products.

Eric Hayes

Superfeet Celebrates 40th Anniversary. The employee-owned company introduces footwear and rolls out a 3D printed insole program.

Shawn Neville

BOA introduces New Tech and Names New CEO. Nothing will constrict Boa Technology CEO Shawn Neville from helping the Denver company improve its customized fit solution.

Waingarten and Frydlewski

No strings attached. The married Argentinean couple has raised nearly $20 million for Hickies, a Brooklyn company addressing how athletic shoes are closed around the foot two eyelets at a time.

Michelle Carmichael

The Co-founder and Managing Partner of Partners Growth, which brings premium brands into the U.S. market, talks Finnish children’s wear brand Reima. 

Brian Beckstead

Six-year old Altra is teaming with Utah State University to develop outdoor design talent.

Declan Condron

Let's Go Hyperwear: Former Equinox personal trainer merges the innovative, functional fitness gear from Austin, TX company with programming for schools, camps and institutions.

Hugues Gontier

Sly and Simple. and its technology enable a retailer to interact with customers in store and track traffic. No beacon required. The CMO explains the benefits of the platform.

Reza Raji

The CEO of Xenio Systems talks about the company’s new platform that tracks where shoppers spend time in physical stores and its patented hyper-positioning technology.

Jacob Torres Espino

The director of export promotion for Mexico’s Guanajuato State government agency addresses the proposed impact of the Border Adjustment Tax by the U.S. and the possibility of a renegotiated NAFTA free trade agreement.

Isabelle Ohnemus

The founder and CEO of EyeFitU, a former investment banker, talks ‘glocal’ assortments, shoppers’ personal sizing and global web payment options.

Tom Cove #2

The president and CEO of the SFIA addresses the most serious threat the industry has faced in the past half-century and the expected re-introduction of the PHIT Act by Congress.

Matteo Scarparo

The Italian global trade expert in footwear talks about the present and future of TheMicam trade show and the potential impact of a Border Adjustment Tax in the U.S. on imported shoes.

Dr. James Eakin

Dr. James Eakin, chief marketing officer and director of U.S. operations for Xenoma, discusses the Japan company’s e-skin shirt and entire wearable category.

Rusty Saunders

Industry senior statesman Rusty Saunders dishes on industry leadership, pressing issues and the inactivity pandemic.

Barbara Barclay

Expert Barbara Barclay, president of RightEye, talks eye-tracking technology and her company’s recent alliance with Major League Baseball and USA Baseball.

Julie Sylvester

Julie Sylvester, Executive Producer at Living in Digital Times, talks trends likely to emerge at Sports and FitnessTech Summit at CES in Las Vegas.

Chris Palmer

Chris Palmer, Founder and CEO of BoxFox, talks excess inventory and solutions for vendors, retailers and distributors.

Susie McCabe

Susie McCabe, SVP of global retail for Under Armour who previously spent 16 years at The Ralph Lauren Corp., dishes on UA’s retail strategy and new Brand House in Boston.

Tom Cove

On the eve of Election Day, we talk to three leading industry lobbyists on how the results may impact trade in the sporting goods, outdoor and apparel and footwear industries.

Rich Harper

On the eve of Election Day, we talk to three leading industry lobbyists on how the results may impact trade in the sporting goods, outdoor and apparel and footwear industries.

Stephen Lamar

On the eve of Election Day, we talk to three leading industry lobbyists on how the results may impact trade in the sporting goods, outdoor and apparel and footwear industries.

Bill McInnis

The president of Reebok Future discusses the intent of the unit and the brand’s plans to develop footwear in a new way.

Tom Fowler

Polar USA CEO Tom Fowler talks technology and the future of smart wearables.

Paul Schille

TREW CEO Paul Schille dishes on the eight-year old company in the process of completing its Series A round of funding and his dual career.

Jason Kaplan

Milestone Sports CEO Jason Kaplan dishes on the company’s low-cost, wearable pod and how it will help specialty retailers connect.

Duncan Finigan

OOFOS marketing executive talks about the recovery footwear brand and candidly about her courageous personal health journey.

Matt Priest

Footwear Distributors and Retailers of America President Matt Priest the likelihood of the Trans-Pacific Partnership being passed soon.

David and Josh Higgins

ING Source executives dish about compression technology and the Hickory, NC company’s breakthrough OS1st Brace Layer System.

Charles Liberge

Jones & Vining’s Charles Liberge addresses strategies and directions for the iconic brand.

Jim Baugh

PHIT America’s Jim Baugh dishes on the inactivity pandemic.

Sue Dooley and John Daher

Rockport Group senior executives talk about the brand’s fresh start under new ownership that has a major emphasis on versatility.

Josh Shaw

Mission Athletecare CEO Josh Shaw says thermoregulation is the New York company’s singular focus.

Tim Porth

Tim Porth of Octane Fitness talks trends, Zero Runner and the company’s January acquisition by Nautilus Inc.

David Costello

The principal and founder of Rising Tide Associates talks about industry advocate lobbying for the domestic textile and footwear industries.

Steven D’Angelo

The ‘47 brand executive dishes on the Boston company and long-time MLB licensee founded by his father Arthur and his late Uncle Henry.

Pam Gelsomini and CB Tuite

Pam Gelsomini, president, and CB Tuite, VP–sales, discuss the company’s products, partnerships and what’s new for the season ahead.

Kenneth G. Andres

The tradeshowdirector for the American Sportfishing Association casts comments on the activity’s popularity, and trends in fishing.

Dick Sullivan

The principal and founder of Rising Tide Associates talks about industry advocate lobbying for the domestic textile.

Dave Coradini

The VP of sales and sponsorships for Spalding, Dave Coradini talks Shot Tracker and basketball.

Scott McGuire

The executive brand and product innovation leader dishes to F4M’s Emily Walzer on an array of topics.

Kelly Davis

Snow Sports Industries of America’s Kelly Davis talks weather, participation trends and how to handle the psyche.

Kevin Davis

The CEO of Performance Sports Group dishes on new bat standards and Own the Moment.

Gene McCarthy, Pt 2

Gene McCarthy, president of Asics America, speaks to Jen Ernst Beaudry on specialty run and more in the second part of the podcast.

Gene McCarthy, Pt 1

Gene McCarthy, new president of Asics Americas, dishes to F4M’s Jen Ernst Beaudry in the first of a two-part podcast.

Richie Woodworth

Saucony’s Richie Woodworth offers his views on brand’s running business and what it takes to manage through change.

Bruce Cazenave

Bruce Cazenave, CEO of Nautilus Inc., recently ranked 23rd on Fortune’s “Fastest Growing Companies” list.

Tony Armand

Armand is leading USB, created after the April merger of Shock Doctor and McDavid.

Gary Smith

Gary Smith has been at the helm of the Lawrence, MA firm for three years, and his 2016 strategies will broaden Polartec’s scope.

Marty Hanaka

City Sports CEO Marty Hanaka has 42 years in retail, starting at Sears in 1973.

Mike Dowse

Wilson Sporting Goods, one year removed from its 100th anniversary and a major restructuring, has a renewed focus and strategy.