Retail: 64
Retail: 184
Monday, September 17, 2018
Volume 2, Issue No. 36

Sports & Fitness Market Grows 2.4 Percent, But Industry Optimism Dips

The top five fastest-growing sports/activities over the past three years were: BMX Bicycling, Cardio Tennis, non-traditional/off-road triathlons, Cross-country skiing and Pickleball, according to the newly released 2018 SFIA State of the Industry Report.

Additionally, total participation in the three major running categories (Running/jogging, treadmill and trail running) rose for the first time since 2013. Winter sports, followed by fitness and team, have seen the largest, three-year average annual growth rates. Meanwhile, the U.S. inactivity rate for those ages 6+ has remained steady at 28 percent over the last three years.

Elsewhere in the 45-page SFIA report, available for sale to non-members, the trade group notes that annual industry growth jumped 2.4 percent in 2017 with most companies said to be: ‘Successful and thriving’, ‘Grinding it Out’ or ‘Challenged.’ The five most important concerns in the industry in 2017 were: Increasing Market Share, Retail Failures, Slower Consumer Spending, Consolidation of Retailers and Material Cost/Availability.

Optimism within the sporting goods industry declined for a second consecutive year in 2017 as 76.4 percent predicted sales growth, according to the report. As a point of reference, 95 percent of survey respondents forecasted industry sales growth in 2015. Of course, much has occurred over the last three years, most notably retail consolidation and the Direct-To-Consumer movement. The Sports & Fitness Industry Association, meanwhile, says brand DTC selling has stabilized at 76 percent.

Key Week Ahead for Future Tariffs, Talks

With Washington and Beijing locked in a standoff on trade, Outdoor Industry Association representatives last week urged members to reach out to their suppliers “to encourage the Chinese government to go to the (negotiating) table with the U.S.”

In a Sept. 13 member webinar, the trade group affirmed pricing and sourcing challenges for its members heading into the Fall19/Winter20 seasons and confirmed some vendors have already decided to raise prices ahead of expected increased tariffs while others have decided to absorb any new duty increases.

“These additional tariffs will hamper the (outdoor) industry and put some products out of reach to some customers,” said Rich Harper, OIA’s Manager of International Trade, pointing to higher tariffs on backpacks and sports bags. On the trade side, the OIA said additional tariffs will make it significantly more difficult for small and mid-size outdoor companies to compete.

Meanwhile, following a tweet last week by President Trump that said the U.S. was “under no pressure” to make a deal with China, the Chinese government was reportedly finalizing plans over the weekend to schedule a Washington visit by Vice Premier Liu He next week The caveat for those high-level talks—The U.S. not establishing a firm date for new tariffs on $200 billion worth of Chinese imports. A final list of those products is expected this week, and it may include some outdoor products. OIA representatives told webinar participants that it encouraged Congressional Republicans to work with the Trump Administration to remove those outdoor products from the list. With $50 billion in Chinese goods already facing additional 25 percent duties, new tariffs on the $200 billion worth of targeted products may be lowered to 10 percent.

Additionally, the U.S. now has less than two weeks to bring Canada into a new North American Free Trade agreement, according to a Sept. 30 deadline established by the administration. The U.S. wants its new trade pact with Mexico finalized before President-Elect André Obrador takes office on Dec. 1. There are no established trade negotiations between the U.S. and Canada this week.

Anta Makes Bid For Amer

Salomon is among the brands owned by Amer Sports. Anta Sports-FountainVest has made a bid for Amer.

The Anta Sports-FountainVest unsolicited $5.3 billion bid for Finnish-owned Amer Sports, if finalized by year-end, would create a $5.3 billion, publicly traded company and provide greater retail access for Amer Sports-owned brands such as Wilson Sports, Arc’teryx and Salomon, particularly in Asia. Additionally, it would provide the new parent with a sizeable footprint in the outdoor segment for growth across the region given 62 percent of Amer’s annual revenues, or $1.94 billion, were generated in the category last year. Ball Sports represented 24 percent ($759.6 mil.) of Amer’s FY17 revenues with Fitness accounted for 13 percent ($419.9 mil.).

Anta, an official partner of the Beijing 2022 Winter Games, celebrates its 25th anniversary and 12th year as a public company in 2019. While it markets a namesake shoe brand and owns daily shoe manufacturing capacity of 3,000 pairs using only 30 workers, the company’s aspiration is as a global company with a portfolio brands. An Amer Sports acquisition would take Anta a step closer to its objective.

The company licenses the Fila and Descente brands for distribution in China and owns a number of additional sport labels besides Anta in Kingkow, Sprandi and Kolon Sport. Between its licensed and owned brands, the company operated 11,253 single-brand stores across China and elsewhere in Asia in Fila’s case. An acquisition of Amer’s brand portfolio would accelerate Anta’s brand retail presence across Asia. That effort would spark Amer’s sales in region, which accounted for only 14.5 percent of its FY17 revenues, or $452.8 million, compared to 41.8 percent ($1.3 billion) in the Americas and 43.7 percent ($1.36 billion) in the EMEA. Conversely, with Amer in the fold, Anta would find stronger global distribution channels for its existing stable of brands outside of Asia.

For the six months ended June 30, Anta generated 44 percent topline growth to an estimated $1.54 billion and 34 percent improvement in profit to about $282.6 billion.

Inside Retail
Amazon’s Rising Influence

With the longest possible holiday season fast approaching at 33 days between Thanksgiving and Christmas, traditional and specialty retailers received a dose of bad news last week—Amazon’s online dominance is showing no signs of abating. With research firm NetElixir forecasting Amazon’s share of all U.S. online sales in 2018 to rise to 40 percent, up from 35 percent in 2017 and 22 percent in 2014, Wells Fargo research disclosed Amazon is the dominate online apparel and footwear player with a 35 percent share (or 4x the second-largest player), and still pushing with new fashion styles and service efforts (try-on before paying). Both may create greater brand allegiance among the 18- to 34-year old set that made 17 percent of its 2017 online purchases at Amazon. NetElixir research shows that Amazon’s apparel/shoe revenues are up 19 percent in 2018 over 2017, although the Average Order Value is down 3 percent.

Nike, despite its June 29 announced alliance with Amazon, is clearly keeping its online options open and wide. Next month, the Swoosh will begin selling a collection of footwear and apparel products on Walmart-owned as the brand moves to widen its ecommerce net for affluent, urban millennials. No specifics have been disclosed on products that will be available on Jet, but it’s a sure bet the assortment will differ from the Nike offerings available on Amazon or as the company firmly sets a segmented strategy.


• Year-over-year retail sales rose 6.6 percent in August, according to monthly data from the U.S. Census Bureau. Adjusted sales in the sporting goods/hobby/musical instrument/book store segment were down 3.9 percent last month and are off 2.2 percent on an unadjusted basis for the first eight months of 2018.

• NetElixir is forecasting 15 percent ecommerce sales growth during Holiday 2018 (vs. +13% in 2017, +10% in 2016) with 42 percent of all online purchases made through mobile phones. Product listing ads are forecast to drive more than 65 percent of total paid search sales during the season. Additional trends forecast by the Princeton, NJ company include: more voice searches and heavy discounting by larger online retailers that could negatively impact margins for smaller merchants that aim to remain price competitive.

• REI is opening its first store in Alabama, a 20,000-sq. ft. store in Huntsville in Fall 2019.

XOnano co-founder and lead engineer discusses the Orem, UT company’s advanced sensing materials and how they are being utilized in the sporting goods industry and beyond.

What’s Hot? What’s New?

New Balance unveils its TCS New York City Marathon products at select retailers and The collection ranges from $30 retail for graphic T-shirts to$450 for a limited-edition, Expo-exclusive Gore-Tex shell jacket. There are also four performance running shoes in the range, including the new FuelCell Impulse for $135. The NYC Marathon takes place Nov. 4.

Feetures is releasing The Merino 10 collection, an update to its merino sock, consisting of a blend of merino wool and TENCEL fibers that is said to be warmer, drier, softer and more durable. Available in eight different colorways.

Pro-Tec is introducing new helmets, including a collaboration with Volcom and new Classic Lite at $100 retail that has polycarbonate shell with 11 open vents and is said to be 30-percent lighter than the Classic.

The Buzz

False ‘Made in USA’ claims were at the heart of recent Federal Trade Commission actions. Patriot Puck in Farmingdale, NY, which also does business as Underground Sports Inc., Hockey Underground and Ipuck Hockey, has agreed to stop making false ‘Made in USA’ claims for its products since virtually all of them are sourced in China. Also, the FTC has charged Sandpiper of California and PiperGear USA of falsely claiming in ads, promotional materials, product labels and on social media that their backpacks travel bags, wallets and other products are made in the U.S. In fact, 95 percent of Sandpiper’s products are imported as finished goods and 80 percent of PiperGear’s products are imported as finished goods or contain significant imported components.

Rossignol names Scott Rittschof, a bike industry veteran with prior experience at Cycling Sports Group and Pon Bicycle Group, as SVP of its global bike division. He will manage the Rossignol Group bike business that includes the Felt, Rossignol and Time brand. Following his appointment, the company announced the departure of Bill Duerhing,Co-founder and president of Felt.

United States Soccer League is initiating aleague-wide licensing program in the coming season headed by former MLS and Starter licensing veteran Stu Crystal. The effort will include all USL Division III clubs and will aim to streamline licenses for independent clubs. The initial efforts will focus on fan-facing categories such as apparel, accessories and novelties with opportunities to partner with industry-leading licensees in each category.

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 falls for second consecutive period, although less than last week as only three rise and 12 decline. The more than 1 percent drop was worse than the Dow’s flat performance for the period. JD Fashion, preparing a “differentiated multichannel” test in the U.S. ahead of the peak holiday season, is forecasting a $440-$451 million revenue contribution from Finish Line for the partial year. In its first seven weeks of JD ownership ended July 29, Finish Line contributed an operating profit of about $6.26 million on revenues of $234.6 million. Dick’s brings its door count to 733, ahead of Q4, with openings in FL (2), AZ and IN. Macy’s will hire 80,000 temporary workers for the holiday season, including 23,500 at its online order fulfillment centers and 1,500 for its customer service call centers in three cities. Like Macy’s, Kohl’s intends to offer discounts and gift cards to seasonal staff. Target (not in Index) is increasing its seasonal hire total 20 percent year-over-year to 120,000. Sports Direct Intl., the parent of Bob’s Stores and EMS, lost its Chairman Keith Hellawell last week. He resigned after the retailer’s board was accused of poor governance. More troubles for the U.K.-based retailer emerged as reports suggested three of the ‘Big Four’ accounting firms, including KPMG and PricewaterhouseCoopers, removed themselves for SPD audit consideration, citing concerns over reputational risk and potential conflicts of interest. A U.K. agency is currently investigating Sports Direct’s FY16 audit by Grant Thornton.
Segment rebounds with a flat week, with seven up and eight down for the period, after declining nearly 2 percent in the previous period. Amer Sports was the biggest gainer as publicly-traded Anta Sports is working with an Asian private equity firm on a potential $5.3 billion bid for the parent of Salomon, Wilson Sports and Arc’teryx among others (See story elsewhere in SIX.) Nike, six days after its annual shareholders’ meeting and weeks after unleashing its controversial Colin Kaepernick “Just Do It” campaign nets six consecutive days of all-time high stock prices. Also, the Swoosh announces plans to partner with Walmart’s, starting in NYC next month, as both the brand and retailer aim to court more urban millennials. In a separate development, Brand Jordan strikes a partnership with France’s Paris Saint-German soccer club for expansion onto the professional soccer pitch. VF Corp. intends to grow its Vans business to $5 billion by FY23, representing 10-12 percent growth over the next five years and including about $3 billion Americas’ revenues. Under Armour releases its signature Misty Copeland apparel line and first sneakers in its collaboration with A$AP Rocky. Puma parties with Big Sean in its new Miami Select Shop where it debuted his new capsule collection. Adidas will reportedly re-up its endorsement deal with U.S. Open winner Naomi Osaka. The 20-year old also endorses Yonex racquets. Deckers sees an Illinois federal judge rule that “ugg” is not a generic term for type of sheepskin boot, paving the way for the company to sue rivals who try to piggyback on the brand’s success.





Weekly Review

Retail Name (Ticker Symbol)
Close on 09/06/18
Close on 09/13/18
% 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 09/06/18
Close on 09/13/18
% 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.