Retail: 58
+1.85%
Retail: 126
+5.07
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Mon, Aug 28, 2017
Vol 1, Issue No. 33
PRESENTING SPONSORS
Tuesday, February 20, 2018
Volume 2, Issue No. 07

Hats Off For Genesco

The struggling Lids Sports Group, which accounted for 29 percent of Genesco’s FY17 revenues but only managed an operating margin of 4.9 percent, is now officially on the block. The decision to put a “For Sale” sign outside the licensed headwear and apparel unit that shrunk its door base by nearly 12 percent over the first nine months of 2017 didn’t surprise any executives asked about it at the Las Vegas trade shows last week. Additionally, no one questioned thought that Fanatics would be the automatic “stalking horse” for the business, where operating profit slid 85 percent during the first nine months of FY17 on a 5.3 percent drop in revenues to $538.5 million and 3 percent dip in comparable store sales. Third quarter store traffic declined double-digits.

Shareholders and ongoing negative trends in the headwear business, which today is more lifestyle- than pro league-driven and without a clear trend driver currently, forced the hand of Genesco. Following a LSG divestiture, the Nashville company will retreat to focus strictly on its core footwear platform that includes the Journeys’ chain.

While admitting Genesco sees “compelling” elements of Lids’ overall business, including its strategic and competitive positions, Chairman, president and CEO Bob Dennis recently confessed to analysts, “…We certainly are not going to invest in a lot of new stores in an environment where we don’t have the visibility of fashion on the hat side and competitive dynamics on the Locker Room side.”

Genesco has tried valiantly to enhance Lids’ appeal to its early teens to mid-20s customers in the face of softer MLB, NFL and NCAA sales trends and their persistent “comfortableness” with online shopping. Efforts have included everything from a 25 percent higher media spend focused on social paid search and affiliate marketing to more in-store only events and an upgraded online embroidery programs that mirrors what’s available at a mall location.

From this vantage point, the best suitor for LSG would be an acquirer interested in retaining only the best “A” location brick-and-mortar leases and shifting the rest of Lids’ business online. Clearly, this strategy would sharply reduce the current 1,177 door count and offer more safeguards against seasonal promotional discounting. If the various professional leagues and NCAA take more control of selling their own licensed products, margins on all items would rise with the new Lids only merchandising high-demand seasonal items in its physical locations.

La-La Land Weekend

Adidas and Nike used the backdrop of NBA All-Star Weekend in Los Angeles over the weekend to showcase celebrities, new looks in a unique pop-up store and technology to sell shoes.

747 Warehouse was The Three Stripes’ two-day basketball culture event in the City of Angels where music, new footwear releases and open source creation collided with a plethora of brand endorsers ranging from athletes to musicians. The company estimated that more than 20,000 people visited 747 where they were treated to everything from an impromptu design session from Kanye West to concerts from the likes of Pharrell Williams, French Montana and Kaytranada. Numerous Adidas athletes made appearances at the downtown Los Angeles location where guest wristbands used a RFID raffle system to purchase exclusive products via a unique SMS alert system.

Nike, meanwhile, hosted a downtown concert and aligned with Snapchat to offer attendees the right to purchase the new, limited-edition AJ III Tinker that debuts next month. Those who spotted and scanned a QR code to purchase the kicks had them delivered the same evening by a local Nike partner.

Footwear Insight
Vans Keeps Rolling; Under Armour Sets More Restructuring

Vans’ parent VF Corp. remains bullish on the youth-culture-focused label, forecasting “high teens” growth for the company in H1/18 as it continues making investments in the business. Senior VFC management says it’s most impressed with the “diversity” of Vans’ growth and the company’s “Not Just One Thing” approach that delivered double-digit sales growth in apparel and accessories and a nearly 200 percent increase in its customs platform in the fourth quarter. Vans’ revenues were up double digits in all geographic regions, including a 39 percent expansion in the Americas. Vans North America’s DTC segment grew nearly 30 percent in 2017 with a 20+ percent comparable growth to become VFC’s first $1 billion regional DTC platform. The brand’s North American revenues increased 19 percent last year.

Elsewhere,
Under Armour is working diligently to reshape its business model, including further expansion of a growing international business and an overall leaner, more efficient operation that will result in about $75 million in annualized savings in FY19. But CFO David Bergman is realistic about the brand’s outlook on its home turf, forecasting a little more contraction in the U.S. market for the brand and proclaiming to analysts last week, “So we’re not expecting a miraculous turnaround in North America.” Currently, UA is predicting a mid-single-digit revenue decline in North America in FY18 as it prepares to shrink its overall SKU base by 30-40 percent for Fall 2019. During H1/18, the company will work through higher inventories (up mid-teens at year-end) through its own outlets and third-party, off-price partners. Better planning will result in an accelerated business commencing in H2/18, senior management told analysts, after the majority of ongoing restructuring is completed by June 30. The company is promising better product segmentation by channel going forward.

• Japanese brands Asics and Mizuno recently reported softer revenues. Americas’ annual revenues fell 6 percent to the equivalent of $944.0 million at Asics for the 12 months ended Dec. 31, 2017. But the region’s profitability soared more than 173 percent year-over-year to $22.2 million on an improved cost of sales ratio and lower allowances for doubtful receivables. Asics’ running shoe sales in the Americas dipped 2 percent in FY17 to the equivalent of $884.4 million. The company is forecasting a 1 percent currency-neutral decline in Americas’ revenues in FY18 with the U.S. off 5 percent but the Brazilian market up 7 percent. At Mizuno, implied third quarter Americas’ revenues slipped 9.3 percent to $46.1 million as footwear sales fell 7.4 percent.

Retail Round-Up
2018 Retail Sales, Fueled by Ecommerce, Should Grow 3.8 to 4.4 Percent

KHOMBU has worked with its new brand ambassador, U.S. Ski Team member Breezy Johnson, on new apré ski boots, the Victor and Victory ($120 retail) for Fall/Winter '19.

The forecast from the National Retail Federation includes an expectation of a 10-12 percent sales increase from online and other non-store sales. Ecommerce sales grew 16 percent in 2017 to account for 13 percent of all 2017 retail sales versus 11.6 percent in 2016. In the fourth quarter specifically, online retail sales grew at their fastest rate since 2011. Amazon, according to Internet Retailer, accounted for more than 70 percent of the $62.5 billion in U.S. online retail growth last year.

Except for the bottom end of the range, the NRF outlook, if realized, will match or exceed 2017 retail sales growth of 3.9 percent to $3.53 billion, according to U.S. Census Bureau data. The gain, still subject to revision, exceeded the trade group’s annual 2017 forecast of 3.2-3.8 percent sales growth. The NRF’s bullish outlook is based on high consumer confidence, low unemployment that is forecast to decline to 3.9 percent by year-end and growing wages. U.S. gross domestic product (GDP) growth, bolstered by the new federal tax plan, is forecast to increase 2.5-3.0 percent this year.

Elsewhere,
Bass Pro Shops is offering Cabela’s headquarters employees in Sidney, NE severance packages from an established $20 million fund. Those over 50 years old and with a minimum of 10 years of service will receive two weeks of severance pay for each year worked plus a $40,000 bonus; those with under 10 years of service get the severance offer, a $20,000 bonus and store discounts for the next decade. The voluntary offers expire on March 1.

Sporting goods stores were the only segment to post a year-over-year sales decline in January, falling 5.9 percent and 0.8 percent from December seasonally adjusted, according the U.S. Census Bureau.

JackRabbit continues expanding its footprint across Texas, opening an 8,800-sq.-ft. store in Fort Worth last week. With the new door, JR now counts more than 16 percent of its 62-door base in the Lone Star State.

Zumiez, slated to report year-end results on March 15, is forecasting fourth quarter income at the high-end of guidance. Comparable store sales for the 698-door chain rose 6.3 percent for the five weeks ended Feb. 3, driven by men’s, footwear and women’s. Fourth quarter comps were up 7.5 percent; FY, up 5.9 percent.

Canadian Tire’s FGL segment that includes Sport Chek and other sports banners generated 2.0 percent comparable store sales growth in FY17 as total revenues grew 2.6 percent to C$2,059.2 million.

Off Broadway Shoe Warehouse opens its first Puma shop at its West Sunset Boulevard Store in Los Angeles with plans to add the brand concept area to all of its 80 stores in the future.

Bits ‘n Pieces:
Sportsman’s Rendezvous, based in Flemington, NJ, is closing its door and website on Feb. 28. Modell’s is opening a store in Brooklyn, NY’s Sheepshead Bay neighborhood. REI is named to Fortune’s “100 Best Companies to Work For” for a 21st consecutive year, ranked 43rd. Amazon, which employs 40,000, is laying off hundreds of employees with the cutbacks largely focused within its consumer retail businesses that include approximately 30 at Zappos.

Tubes of the Week

The game has changed. #HouseofHoops

A post shared by House of Hoops by Foot Locker (@houseofhoops) on

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.

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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
Dow rose nearly 307 points on final day and more than 1,748 points for the period. Thirteen out of 15 stocks increased for the week. To no one’s surprise, Genesco formally announced plans to divest its Lids group to focus on its footwear businesses. Dick’s Sporting Goods, upgraded to “hold” from “sell” by CFRA, hikes its quarterly dividend by 32 percent and precedes with plans to open four new stores in February. Foot Locker was waiting on U.S. Supreme Court to review federal appeals court $180 million verdict against it for 16,000 class members in a case that charged FL with misleading employees about changes to its pension plan. Also, retailer launched an Instagram account with Nike. Macy’s, according to sources, will benefit from the new federal tax law and likely use its savings this year to pay down debt. Sports Direct intends to introduce e-sports games and competition areas into some of its U.K. doors after paying $4.5 million for a 50-percent stake in part of video game retailer Game.   Brands
Brands
Fourteen of 15 stocks rose for the week with only decliner, Nautilus, down less than 1 percent for the period. Fitbit annual revenues should grow approximately 5 percent this year, but it apparently won’t be enough for company to turn a profit, analysts opine. GoPro, while focused on growing its paid subscription service, may be working on a deal with a larger partner. Amer Sports promotes Dave Marrinan to national sales direct for team sports and Jon Hanson to national sales director for outdoor with responsibility for Atomic, Arc’teryx, Salomon and Suunto. VF Corp. is forecasting 6-8 percent growth for The North Face this year. Brand had 14 percent growth in digital in most recent FY. Also, VFC is selling Nautica brand and moving Kipling to its Outdoor & Sports Coalition. Under Armour North American revenues dipped 5 percent in FY17, but international was up 46 percent. Annual apparel sales rose 2 percent. Company execs are promising “to prioritize being premium at every price point.” Lululemon sees founder Chip Wilson sell $211 million of his stock, first time he’s sold LULU shares in more than three years. However, he says he “remains a significant shareholder” in the Vancouver company.

RETAIL: 57

43.75%

BRANDS: 121

21.31%

Retail Name (Ticker Symbol)
Close on 02/08/17
Close on 02/15/18
% change over week
Big 5 Sporting Goods (BGFV)
BGFV
$5.65
$5.95
+5.31%
Sports Direct (LON: SPD)
SPD
$501.77
$494.09
-1.53%
Camping World (CWH)
CWH
$40.77
$41.77
+2.45%
Dick's Sporting Goods (DKS)
DKS
$31.50
$33.58
+6.60%
Finish Line (FINL)
FINL
$10.39
$10.29
-0.96%
Foot Locker (FL)
FL
$45.88
$49.25
+7.35%
Genesco (GCO)
GCO
$34.15
$38.17
+11.77%
Hibbett Sports (HIBB)
HIBB
$24.40
$25.45
+4.30%
Kohl’s (KSS)
KSS
$60.34
$65.14
+7.95%
Macy’s (M)
M
$24.00
$26.48
+10.33%
Sportsman’s Warehouse (SPWH)
SPWH
$5.00
$5.01
+0.20%
Shoe Carnival (SCVL)
SCVL
$22.80
$24.11
+5.75%
Tilly’s (TLYS)
TLYS
$13.39
$13.81
+3.14%
Walmart (WMT)
WMT
$100.02
$103.26
+3.24%
Zumiez (ZUMZ)
ZUMZ
$20.05
$20.10
+0.25%
TOTAL
ZUMZ
$940.11
$956.46
+1.74%
Brand Name (Ticker Symbol)
Close on 02/08/17
Close on 02/15/18
% change over week
Acushnet Holdings (GOLF)
GOLF
$20.36
$21.54
+5.80%
adidas (ADDYY)
ADDYY
$109.24
$111.32
+1.90%
Amer Sports (AGPDY)
AGPDY
$27.66
$31.46
+13.74%
Callaway (ELY)
ELY
$15.12
$15.92
+5.29%
Columbia Sportwear (COLM)
COLM
$73.30
$76.19
+3.94%
Deckers Brands (DECK)
DECK
$90.68
$95.98
+5.84%
Fitbit (FIT)
FIT
$5.10
$5.40
+5.88%
GoPro (GPRO)
GPRO
$5.58
$5.62
+0.72%
lululemon (LULU)
LULU
$76.67
$80.92
+5.54%
Nautilus (NLS)
NLS
$12.00
$11.90
-0.83%
Nike (NKE)
NKE
$62.49
$68.30
+9.30%
Skechers (SKX)
SKX
$38.18
$39.47
+3.38%
Under Armour (UA)
UA
$11.95
$16.55
+38.49%
VF Corp. (VFC)
VFC
$78.75
$83.89
+6.53%
Wolverine Worldwide (WWW)
WWW
$30.64
$31.08
+1.44%
TOTAL
ZUMZ
$657.72
$695.54
+5.75%

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.