Retail: 58
+1.85%
Retail: 126
+5.07
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Mon, Aug 28, 2017
Vol 1, Issue No. 33
PRESENTING SPONSORS
Monday, January 15, 2018
Volume 2, Issue No. 02

Holiday Season Sales Numbers Should Pose Some Worry

The sporting goods industry didn’t get invited to the holiday party. It was the only significant segment that failed to show a sales increase, and the annual “Hot Products List” compiled by research firm Hitwise had no sporting goods, footwear or sports apparel items on it as electronics dominated.

Meanwhile, U.S. retail sales for the Nov.-Dec. period rose 5.5 percent to $691.9 billion to beat a National Retail Federation estimate of 3.6-4.0 percent growth and post the best holiday increase since the 2008 recession. December retail sales were up 5.4 percent year-over-year, according to monthly data from the U.S. Census Bureau as sales in the sporting goods/hobby/book/music store segment dipped 1.5 percent for the month on an unadjusted basis and 3.4 percent for all of 2017.

Ecommerce shopping did not disappoint, especially for Hitwise’s “Retail 500” which experienced 1.4 billion visits during the period as overall online transactions hit 412 million. But it should be noted that 75 percent of online visits were made to ‘Top 50’ retailers. Online shopping was steady throughout the season, even in the final week before Christmas when 12 percent of overall visits and 14 percent of transactions took place. That statistic suggests there was considerable opportunity for retailers to grab market share with last-minute transactions, Hitwise said.

Amazon, meanwhile, saw its share of online visits dip 5 percent but number of total visits increase by 350,000 over the two-month period. Hitwise estimates there are currently 38.5 million Americans who are Amazon-exclusive buyers with the 18- to 24-year old demographic a key buying group at the site. It should also be noted that 41 percent of Amazon-only buyers visited Walmart and Target sites during the season. Amazon enjoyed a 7-percent conversion rate versus just under 3 percent for retailers such as Kohl’s and ToysRus. L.L. Bean’s conversion rate was estimated at 6 percent; Zappos at “north of 3 percent.”

While Amazon captured an astounding 70 percent of all online transactions during the holiday season with 81 percent of Americans making at least one purchase from the site, Cabela’s, Academy Sports & Outdoors and Duluth Trading Company each generated over 100 percent year-over-year growth in visitors to their online sites.

On the matter of mobile versus desktop, mobile (59 to 41 percent) had a higher share of visits but desktops (73 to 27 percent) completed the most transactions, Hitwise reported. But there was a 35 percent increase in order volume from mobile during the season. Walmart.com generated 71 percent of its traffic and 40 percent of transactions from mobile devices. Meanwhile, Foot Locker had the 10th most downloaded app in December. Amazon was tops at nearly three million downloads.

Less Customer Friction = Higher Revenues, Profits

A new 30-page report from NTT Data Services, based on a December study of 15 top-tier retailers that include Cabela’s and Dick’s Sporting Goods, points out that only 58 percent of companies measure and track their customers’ experiences with them. Those that do and work to improve all customer encounters will more than likely see improved customer retention, lower costs and both higher revenues and profits. Meanwhile, a 2016 study of online retail purchases found that sellers with the fewest hurdles for customers during the buying experience realized a three-year CAGR of 31.9 percent versus 7.5 percent for laggards in the group.

The new study from the large Japanese IT services firm studied the ability of retailers “to deliver a superior multi-channel experience.” NTT did not identify the retailers after scoring them, but found the top two “leaders” in the group scored best for their respective abilities to offer an intuitive search/filter, a streamlined consumer process that generally took 10 steps or less, strong customer knowledge and the good sense “to set expectations and communicate throughout the process.”

Seven of the 15 studied retailers, which also included Amazon/Whole Foods, Best Buy and Kohl’s, came in with “average” scores and were cited for search and filter capabilities that made it difficult to find products. Meanwhile, the laggards in the group were cited for having busy home pages that were confusing to navigate, above average needed steps and keystrokes by the consumer, not setting expectations or lack of communication with the customer and an inability to fulfill orders due to a poor understanding of inventory. Laggards among the studied retailers averaged 20 percent more steps to complete a transaction.

Among other “Customer Friction Factor” (CFF) findings in the report:
• Half of studied retailers set timing and fulfillment expectations initially, allowing customers to make more informed purchasing decisions.

• One-third of retailers were able to have a product ready for pick-up within one hour of the order being placed; 50 percent could not fulfill an order the same day it was placed; and some stores unexpectedly cancelled orders when fulfillment was not possible.

• Inconsistencies exist within brands with 26 percent of store varying experiences and outcomes across locations.

A link to NTT Data Services report is here:
http://go.pardot.com/l/60932/2018-01-08/fl15c1.

Puma Being Spun Off

The Cat’s next life will be as a public company with a substantially higher free float that will not alter its current business strategy under CEO Bjorn Gulden.

Last week, Puma SE’s majority shareholder, Gucci parent Kering, said it would distribute more than 81 percent of its Puma stake to existing Kering shareholders once the plan is approved at its April 26 annual meeting. The result would be a Puma that is 16-percent owned by Kering and 29-percent held by French holding company Artémis with the remaining 55 percent of shares traded on the open market versus only 14 percent of shares today.

Also, the transaction by Kering, which bought its majority stake in Puma a decade ago for approximately $7 billion, would enable it to focus solely on its luxury brands. Puma is schedulted to report year-end results on February 12.

The Buzz

Columbia Sportswear says six countries will wear the brand during next month’s Winter Olympic Games in South Korea. Besides the U.S. (pictured), Canada, Belarus, Kazakhstan, Brazil and the Ukraine will don Columbia-branded wear for freestyle ski events. Separately, COLM hires Ethan Pochman as VP of marketing.

Boardriders sees Moody’s issue a review of its credit rating for a possible upgrade following its signing of a definitive agreement to acquire Billabong Intl. Ltd. for approximately $155 million in a transaction set to close in April. The credit service said the proposed deal “could potentially drive material cost savings over time.”

Golf Datatech releases a report on Amazon’s impact on the U.S. golf equipment and apparel markets. The study, based on data collected in the fourth quarter from 1,200 serious golfers, examines a number of areas, including importance of Amazon Prime in making a golf purchase decision and analysis of golf product categories purchased on Amazon.

Tubes of the Week

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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
Retail
The Dow Jones 30 rose more than 205 points to a new high on the final day of the period as six stocks rose and nine fell. Nonetheless, the Retail Index remained flat for the week. Walmart made some major noise, hiking the minimum wage for its workers to $11 an hour and abruptly closing 63 Sam’s Club stores across the U.S. Also, it was reported that WMT is expanding its in-store “Scan and Go” service to 100 doors across 33 states. Finish Line, meanwhile, saw Sports Direct increase its holding to 35 percent, according to a public filing, and Big 5 reported disappointing fourth quarter results with a comparable store sales drop of 9.4 percent. Genesco disclosed that comparable store sales (in store and direct) at its Lids Sports Group were down 14 percent quarter-to-date through January 4 as same store sales within the Journeys Group increased 10 percent and overall ecommerce sales were up 17 percent on a comp basis. Sportsman’s Warehouse sees Robert W. Baird issue a “buy” on the stock while the shares are downgraded to “hold” by BidaskClub. Goldman Sachs is neutral on SPWH. Macy’s lays off 400 as it shutters three California stores, and Kohl’s reports 6.9 percent comparable store sales growth for the holiday period as it reiterates that physical stores “remain critical” to its strategy.
Brands
Index holds steady for the week as five stocks fall and 10 rise for the period. Macquarie reported that Nike’s major offensive to market share from Adidas and Under Armour is on the horizon but admitted company still faces pressures in North America. Under Armour senior executive told a CES audience that the company remains focused on innovation. Adidas, which inked a new five-year agreement with U.S. Soccer Coaches Association, has two buildings totaling 843,000 square feet under construction in Hanover, PA. Patagonia, with a 360,000-square-foot warehouse, will be a neighbor. VF Corp. announces a strategic collaboration with North Carolina State that will support student development and advance apparel and textile innovation at the parent of The North Face, Timberland and others. Nautilus is partnering with LIFT Digital to give Bowflex customers free personalized training lessons.

RETAIL: 58

42.43%

BRANDS: 113

13.06%

Retail Name (Ticker Symbol)
Close on 01/04/17
Close on 01/11/18
% change over week
Big 5 Sporting Goods (BGFV)
BGFV
$7.25
$6.05
-16.65%
Sports Direct (LON: SPD)
SPD
$511.53
$502.61
-1.74%
Camping World (CWH)
CWH
$45.05
$44.83
-0.49%
Dick's Sporting Goods (DKS)
DKS
$30.72
$32.56
+5.99%
Finish Line (FINL)
FINL
$13.24
$13.64
+3.02%
Foot Locker (FL)
FL
$46.31
$46.30
-0.02%
Genesco (GCO)
GCO
$33.00
$35.10
+6.36%
Hibbett Sports (HIBB)
HIBB
$20.95
$24.75
+18.14%
Kohl’s (KSS)
KSS
$54.68
$61.12
+11.78%
Macy’s (M)
M
$24.49
$26.30
+7.39%
Sportsman’s Warehouse (SPWH)
SPWH
$6.10
$5.41
-11.31%
Shoe Carnival (SCVL)
SCVL
$26.33
$26.41
+0.30%
Tilly’s (TLYS)
TLYS
$14.25
$14.63
+2.67%
Walmart (WMT)
WMT
$99.54
$100.02
+0.48%
Zumiez (ZUMZ)
ZUMZ
$22.95
$22.40
-2.40%
TOTAL
ZUMZ
$956.39
$962.13
+0.60%
Brand Name (Ticker Symbol)
Close on 01/04/17
Close on 01/11/18
% change over week
Acushnet Holdings (GOLF)
GOLF
$20.58
$21.09
+2.48%
adidas (ADDYY)
ADDYY
$102.80
$100.59
-2.15%
Amer Sports (AGPDY)
AGPDY
$27.19
$27.42
+0.85%
Callaway (ELY)
ELY
$13.74
$14.17
+3.13%
Columbia Sportwear (COLM)
COLM
$72.02
$73.24
+1.69%
Deckers Brands (DECK)
DECK
$78.96
$81.70
+3.47%
Fitbit (FIT)
FIT
$5.98
$5.72
-4.35%
GoPro (GPRO)
GPRO
$7.57
$6.15
-18.76%
lululemon (LULU)
LULU
$79.85
$79.00
-1.06%
Nautilus (NLS)
NLS
$12.95
$13.05
+0.77%
Nike (NKE)
NKE
$63.44
$64.29
+1.34%
Skechers (SKX)
SKX
$38.25
$38.69
+1.15%
Under Armour (UA)
UA
$14.75
$14.13
-4.20%
VF Corp. (VFC)
VFC
$75.46
$77.19
+2.29%
Wolverine Worldwide (WWW)
WWW
$31.40
$31.77
+1.18%
TOTAL
ZUMZ
$644.94
$648.20
+0.51%

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. BlueFox.io 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.