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Mon, Aug 28, 2017
Vol 1, Issue No. 33
Monday, October 2, 2017
Volume 1, Issue No. 38

Moving Forward

Sports will endure, but how will the events of the past week shape how Americans and the world perceive them? How much, and for how long, will the professional leagues, the NCAA and the major sportswear brands be forced into damage control mode? How long before new guidelines and regulations are established?

Knee-jerk fan reactions to the uproar over NFL players not standing for the national anthem, ignited by President Trump, included cancellations of season tickets and public jersey bonfires. All of it has widened the political chasm that exists in America today and eliminated any still-held belief that play and sport are immune from such controversy.

Meanwhile, the FBI’s arrest of 10, including four Division I coaches and a senior executive for Adidas, for alleged fraud and corruption have shaken the business of college basketball to its core and again prompted calls for change.

While there are many sides to both the NFL controversy and college basketball scandal still to be played out, including in the court of law, it is the court of public opinion that should have anyone employed in the world of sports business shaking in his or her kicks.

Consumers speak with their wallets. And disdain for these recent developments have the potential to not only impact sales of favorite player and team jerseys and related merchandise, but also future sports participation and the school decisions of young athletes.

I get it. Business is business. Nike, Adidas and others will do whatever it takes to get the upper hand, strengthen their respective market shares and improve their standings with investors. Nike doesn’t want a competitor encroaching on its long-dominant position in basketball. Adidas needs to continue growing its market share in North America.

The “black eye” sports received last week needs time to heal, and the major companies in this business need to foster the process, not impede it. For their own sake. For the future of sport and athleticism.

Nike: Long View, Less is More, D2C Are Keys

No one appears to be pushing the “panic button” inside the House that Phil built despite persistent concerns over ongoing “marketplace disruption” and “short-term headwinds” in North America.

Instead, senior executives at Nike, which last week reported flat first quarter revenues and a 24 percent drop in period profit, said the company’s FY18 “measure of success” in its home North American market will principally focus on accelerating its direct-to-consumer business and working with key strategic partners (Dick’s and Foot Locker in particular) on reshaping the broader marketplace. Nike stopped short of estimating where its North American business, whose revenues declined 3 percent in the first quarter, will end up for the year. North America revenues are forecast to have a “slight contraction” in H1.

“I think the most important thing to keep in mind is, as we look out over the next several years, we see a bigger and more stable premium marketplace in North America,” Andy Campion, Nike EVP and CFO told analysts.

In the short-term, as Nike pivots toward a stronger direct-to-consumer business and building more experiences for its faithful consumers, the company intends to keep a tighter rein on inventories, which were down 2 percent in the U.S. in the first quarter, and its MAP (Minimum Advertised Price) policy with retailers. Part of the former objective will be accomplished through deeper assortments of key product styles; the latter via a more restrictive program that is forecast to positively impact brand results for the remainder of the FY and beyond.

In the digital area, Nike says it’s ramping up investments in a number of areas, ranging from data science/analytics and machine learning to augmented reality, image recognition and personalization.

Nike Chairman, president and CEO Mark Parker stressed that the company’s go-forward approach is about serving all of its customers worldwide, where international business now accounts for 55 percent of company revenues, and not merely transforming the developed North American market. Parker also emphasized Nike’s decision to work more closely with strategic partners who can help it define new consumer experiences through digitally integrated consumer concepts.

“Retailers who don’t embrace distinction will be left behind,” Parker told analysts.

Retail round-up:
Bass Pro, Cabela’s “Moving Forward Together”

The nearly $5 billion marriage of the outdoor specialty behemoths was consummated last week, after clearing numerous regulatory and financial hurdles and nearly 12 months after being announced. In the coming months, but most certainly after the holiday-selling season, the strategy and shape of a combined Bass Pro-Cabela’s operation will become clearer. Big decisions that weigh in the balance include the fate of Cabela’s Sidney, Nebraska operations; a rationalization of the 177-door store base; the future of each brand’s private label brands and merchandise assortments; and where cost savings can be achieved in both operations and personnel.

Out of the gate, Bass Pro declared the company was committed to retaining “everything customers love” about both banners by “creating a ‘best-of-the-best’ experience and retaining both nameplates. Immediately, customers have the ability to return Cabela’s purchases at Bass Pro locations and vice versa. 

Kevin Mansell, Chairman, CEO, and president of Kohl's (Left) and Marc Lore, president and CEO of Walmart eCommerce U.S. and Jet CEO (Right).

Elsewhere, Kohl’s intends to hand the reigns of its business to two women senior executives following the May 2018 retirement of 35-year company veteran Kevin Mansell, Chairman, CEO and president. Michelle Gass, who has been instrumental in the retailer’s focus of becoming an active and wellness destination for families, will become CEO. Meanwhile, Sona Chawla, Kohl’s COO who will maintain her responsibilities for the chain’s omnichannel operations, will become president next May.

Through the third week of September, not including any future impact from the bankruptcy filing of Toys “R” Us, U.S. store closures stood at 6,098 versus 2,139 for all of 2016. Announced brick-and-mortar openings stood at 3,381.

DSW, meanwhile, is increasing the number of footwear units in its doors by 70 percent, launching a new loyalty program in 2018 and redesigning some of its warehouses under a new brand mission called Music For Your Feet (see video in Tubes of the Week).

Marc Lore, president and CEO of Walmart eCommerce U.S. and Jet CEO, confirmed the retail giant is testing virtual reality, personalized shopping and delivery from autonomous vehicles and drones at its Silicon Valley-based startup incubator. Lore also told attendees at a Los Angeles conference that the retailer is working on voice search technology.   Target, meanwhile, is raising its starting wage to $11 an hour this month and promising to hike it to $15 by the end of 2020.

Dick’s Sporting Goods has become the official sporting goods, football uniform, league registration, national data center and technology provider of Pop Warner. The retailer also becomes a participating sponsor of the Pop Warner regional championships and Super Bowl and national cheer and dance championships in a new partnership with the Langhorne, PA organization.

The National Retail Federation is working with Toluna Analytics to produce a new quarterly report focused on gauging consumer behavior and shopping trends related to stores, online channels, customer loyalty, technology and other issues. The first report finds that despite the growth of ecommerce, only 21 percent of U.S. consumers are primarily online shoppers with 79 percent of those surveyed reporting they purchase half or less of their items online. As for apparel, 49 percent shop in store, 13 percent online and 38 percent equally between stores and online.

Russell Athletic’s Team Exit Should Create Opportunity

More than two decades removed from its category heyday that stretched from the 1970s until about 1994, Fruit of the Loom-owned Russell Athletic is walking away from the decorated uniform and apparel segment December 15 when it stops accepting orders. The Bowling Green, Kentucky company will continue to sell blank T-shirts, sweatpants and collegiate licensed products into the team market afterward as it offers any remaining uniforms on hand for sale throughout 2018.

Russell is leaving behind the corporate overhead of its lower-margin team business, which at one time generated annual sales in excess of $100 million, to focus on a repositioning of its athletic lifestyle and performance apparel. This decision should provide ample opportunities for other players in the team uniform segment. And not just for Nike, Adidas and Under Armour. Those brands are likely to only seek high-profile Russell teams for their respective portfolios given the heavy service needs of the team business and their respective pre-occupations right now with product innovation, direct-to-consumer and international business development.

Bernie Wachtel, president of Russell Athletic for a decade ending in 2001, told a local Alabama paper that the exit decision will be a big blow to small colleges and high schools who relied on the brand for quality, affordable uniforms.

Russell Corp., purchased by Warren Buffett’s Berkshire Hathaway for $600 million in 2006 and made a FTL division, has a 115-year year history. In 1992, the brand signed a five-year contract to be the official uniform provider to Major League Baseball. Three years later, Russell’s annual revenues reached a record $1.25 billion.

JackRabbit Goes Rogue with Acquisition

CriticalPoint Capital-controlled JackRabbit is expanding its footprint in Texas through its acquisition of Rogue Running, which began as a training business for runners in 2004. The retail operations of the Austin business will now operate as Rogue Running by JackRabbit with its training centers and travel business under the Rogue Running and Rogue Expeditions.

The deal expands JackRabbit’s presence in the Lone Star State to nine stores, including two in Austin, and 63 nationwide across 17 states. The company also operates

“Like JackRabbit, Rogue Running has a strong running and fitness expertise and shares the same values of providing personalized services to its customers who are passionate about running and fitness,” said Bill Kirkendall, CEO of JackRabbit.

Imperial Headwear Restructures Management

The top headwear brand in private and resort golf facilities, owned by Paramount Apparel International, re-organizes its senior management structure. The Bourbon, Missouri company names golf apparel industry veteran Mike Wrightson as president; David Shaffer as VP of sales and marketing; and Dan Parenti, a former 15-year veteran at American Needle who most recently was Imperial’s creative director, as VP of Design & Brand Development.

The Buzz

Darn Tough Vermont hires Chad DeJong, formerly of Keurig Green Mountain and Intel, as director of quality and continuous improvement.

Federal Firearms Licensee Protection Act of 2017, introduced by Sen. Lindsey Graham recently will strengthen criminal penalties for thefts of firearms from retailers and impose mandatory minimum sentences of not less than three years for burglary and five years for robbery. The number of robberies has risen 175 percent since 2012, according to The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).

Holloway Sportswear, part of Augusta Sportswear Group, introduces Storm Dfend, a collection of weatherproof wear that incorporates a comfortable, high-stretch fabric that feels like a lightweight pullover and delivers the warmth of a heavyweight jacket. Collection, in a range of colors and styles, includes jackets, pullovers and vest. 

Khombu signs U.S. Ski Team member Breezy Johnson as its brand ambassador for the Fall/Winter 2017-18 season.

Mission partners with the University of Connecticut’s Korey Stringer Institute to open heat research labs at the institution’s Storrs, CT campus. The facilities will enable researchers to explore new ways to improve human performance, endurance, and safety in the heat. The Mission Heat Lab includes a cooling area for monitoring how the human body responds to different cooling treatments after experiencing heat-related stress and conditions.

Wolverine Worldwide sells the assets related to its U.S. Dept. of Defense contract business and transfers outstanding DoD contract to Original Footwear, a Tennessee company which produces the Altama brand and several other labels. The transaction includes the sale of WWW’s Big Rapids, MI factory that produces footwear for the U.S. military. Original will become a footwear supplier to Wolverine for certain products made there. Also, the acquisition will enable Original to compete for DoD contracts set aside for small businesses. Wolverine retains its Bates brand and will continue to operate its Bates civilian and military exchange business.

Tubes of the Week


Numbers In Play
Week of 9/21-9/28
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
As the fourth quarter of 2017 commences, we have made another notable change to the segment. Shares in Cabela’s, whose acquisition by Bass Pro Shops was completed September 25, are no longer publicly trading. U.K.-based Sports Direct, parent of Bob’s Stores and Eastern Mountain Sports and reportedly in pursuit of Finish Line, has been added here and Index baseline has been adjusted accordingly. The Index total is the price of all stocks in each segment on December 31, 2014, adjusted to include the closing IPO day prices of three entrants (Camping World, Acushnet and Fitbit). All Sports Direct closing prices have been converted to U.S. dollars from the British pound at average rate on the given date. As for the final week of September and the third quarter, 13 stocks rose and only two declined. As reports of its negotiations with Sports Direct continued surfacing, Finish Line shares recorded a hefty spike. Meanwhile, Camping World CEO Marcus Lemonis announced his plans to charter a cargo plan filled with supplies to Puerto Rico. Genesco shares rose more than 6 percent for the week amid all the chaos around the NFL and college basketball scandal. Shoe Carnival shares enjoyed a bigger increase, more than 10 percent, as executives revealed the chain’s test with in-store Puma shops.
The segment surpasses the Index score of 100 at last with a more than 1.3 percent gain for the week, bolstered by gains from 10 stocks and declines from only 5. Acushnet got more than a 5 percent lift in the same week it announced long-time CEO Wally Uihlein would be retiring on January 1. Adidas shares fell more than 3.7 percent, perhaps a fallout from one of its senior executives being arrested in the college basketball scandal for allegedly paying the families of high school players to sign on with universities where the Three Stripes has apparel deals in place. Deckers, which has yet to get an EBITDA contribution from its momentum-gaining Hoka One One brand, is working on additional distribution for its brands in Japan and China. The company newfound traction with products and sales will likely help the public company attract a potential buyer. Wolverine, meanwhile, which gained for the week, took heat from locals in its corporate city of Rockford, MI last company over potential contamination from discarded leather scraps by the company after it closed down a tannery. According to published reports out of Michigan, WWW SVP of corporate strategy told a local group, “We shouldn’t have done it. And we are committed to cleaning it up.”





Retail Name (Ticker Symbol)
Close on 09/21/17
Close on 09/28/17
% change over time
Big 5 Sporting Goods (BGFV)
Sports Direct (LON: SPD)
Camping World (CWH)
Dick's Sporting Goods (DKS)
Finish Line (FINL)
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 09/21/17
Close on 09/28/17
% change over time
Acushnet Holdings (GOLF)
adidas (ADDYY)
Amer Sports (AGPDY)
Callaway (ELY)
Columbia Sportwear (COLM)
Deckers Brands (DECK)
Fitbit (FIT)
GoPro (GPRO)
lululemon (LULU)
Nautilus (NLS)
Nike (NKE)
Skechers (SKX)
Under Armour (UA)
VF Corp. (VFC)
Wolverine Worldwide (WWW)

Sports Insight Extra Podcast Series

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.