Those eying a speedy resolution to U.S. trade disputes with Canada and China may be disappointed. Comments by Pres. Trump Friday threatened to escalate the U.S.-China trade dispute further with a threat to place tariffs on essentially all imported China-made merchandise without an agreement to more freely open China to more U.S. companies. Such action by the administration would undoubtedly impact the footwear, apparel and sporting goods industries, particularly smaller firms unable to pivot their supply chains with immediacy. Economists are already suggesting that the longer new tariffs stay in place, the potential bigger dragon U.S. economic growth.
“If the U.S. side obstinately clings to its course and takes any new tariff measures against China, then the Chinese side will inevitably take counter measures to resolutely protect our legitimate rights,” China Foreign Ministry spokesman Geng Shuang said in response to Trump’s new tariff warning.
Earlier this year, the U.S. tagged $50 billion worth of Chinese goods with additional tariffs. And within a matter of weeks, another $200 billion worth of tariffs of up to 25 percent will be slapped on certain China imports, most likely including sport coolers, gloves, chairs, helmet accessories and hats/caps.
Meanwhile, with China’s trade surplus with the U.S. widening more than 10.5 percent in August to more than $31 billion and the National RetailFederation warning that additional tariffs “are the wild card” that threaten the stronger retail sales gains that have been made this year, a lead investment house CEO said worries over a U.S.-China trade war are premature since the impact on the Asian country will not be as immediate and challenging as many investors expect.
From a purely political perspective, Pres. Trump and China Pres. Xi Jinping are unlikely to back off from the escalating trade tussle, opined the Financial Times. But it’s more likely the U.S. administration would settle with a symbolic victory.
“Further tariffs are likely to lead to a weaker Chinese yuan and stronger U.S. dollar, and I think emerging market currencies will fall in response,” MUFG Bank chief currency strategist Minori Uchida told Reuters. The yuan slid almost 9 percent against the U.S. dollar between April and July but was little changed last month. A weaker yuan makes China-manufactured products cheaper for U.S. consumers.
For his part, Pres. Trump says he’s being strong on China because “I have to be.”
Whether that hardline stance carries over to Canada is uncertain. The U.S. and Canada have until Sept. 30 to settle their trade differences before the text of the new U.S. trade treaty with Mexico is made public. The U.S.wants a new trade agreement in place with its neighbor to the south before Mexico’s new president takes office on Dec. 1.
Each of the major U.S. footwear chains reported stronger results in their most recent quarters. A breakdown of the highlights:
• Famous Footwear, which welcomed new president Molly Adams at the end of May, delivered a 150-basis point improvement in operating margin to 7.7 percent. Same store sales were up 2.6 percent on improvements in traffic, conversion and pairs per transaction. Total sales rose 6.1 percent, driven by lifestyle athletic and sandals and benefitting from a quarterly sales shift of $20 million from Q3 last year. The Caleres-owned chain said it could not keep pace with consumer demand for retro styles but saw performance athletic sales fall mid-single digits and kids’ dip low-single digits despite growth in athletic. The 1,008-door chain shipped nearly 500,000 pairs from its stores in Q2. Ecommerce sales represented approximately 10percent of quarterly revenues, or approximately $43 million, up about 15 percent.
• DSW sales and comparable store sales each rose 10 percent in Q2 ended Aug. 4. All categories posted positive comps for the first time since Q1/15 with a stronger in-stock positions driving higher margins and more regular-priced sales. While sandals produced a double-digit comp increase, athletic lifestyle sales were said to remain healthy as demand for non-athletic dress, casual and seasonal offerings increased. Senior management says the chain will continue to invest in athleisure styles due to its under penetration in the segment. Given the rise in vendor DTC, retailer is eying more offering more styles from own brands.
• Journeys’ comps rose double-digits in Q2 for parent Genesco as demand exceeded internal expectations. This fall, the banner’s website is being re-launched with better search and navigation features, new payment options, new help availability and better local store integration. GCO has also completed the expansion and upgrade of the chain’s DC, including a customized module for ecommerce picking.
Facebook-owned Instagram, as first reported by The Verge, may be on the verge of launching a dedicated shopping app that would enable users to browse collections of merchandise from people and merchants they follow. Purchases would be made directly within the app, which has not yet been formally confirmed by Instagram.
Elsewhere:
• The new owner of bankrupt century-old Bon-TonStores, a subsidiary of tech firm CSC Generation Holdings, is reportedly eyeing a retail return for the retailer and six subsidiary banners (Carson’s and Elder Beerman among them) that would largely be focused online but also re-opened brick-and-mortar locations in five states (CO, IL, IN, PA and WI).
• JackRabbit has completed its acquisition of Rhythm Running in Nashville to bring its door count to 62 across18 states. The CriticalPoint Capital-owned running retail chain also intends to open stores in Houston and Tampa, FL this month.
• Retail jobs in sporting goods were up 9,200 in August, according to U.S. Labor Dept. data released Friday. Overall retail industry employment jumped by 89,100 jobs year-over-year, but the sector was down 9,700 positions from July.
• Prime Time Sports, the Colorado Springs, CO-based retailer, will no longer sell Nike products due to the company’s decision to make Colin Kaepernick the face of its 30th anniversary “Just Do It” campaign. Meanwhile, reports late last week suggested Nike’s online sales jumped 31 percent after it revealed the ad effort.
• NRF 2019: Retail’s Big Show will take place at the National Retail Federation’s 108th annual convention in New York City from Jan. 13-15, 2019. Dick’s Chairman and CEO Ed Stack and Allbirds Co-CEO and Co-founder Tim Brown are scheduled as keynote speakers. Emily Culp, chief marketing officer for Keds, will also speak at the event.
• Allbirds is opening a new 4,800-sq. foot flagship store in New York City’s SoHo neighborhood this week. The company, which has raised $27.5 million to date, is said to be eying eight additional U.S. stores, including Los Angeles and Boston, over the next 12 months.
The public parent of Wilson and Salomon is weighing a number of changes to its portfolio of sports brands to generate faster growth, higher profitability and better asset efficiency.
On deck, besides the integration of the acquired Peak Performance apparel business, are: putting its Mavic/ENVE cycling group business, with approximately $109 million in annual revenues, up for strategic review and exploring long-term strategic options for its Precor fitness and Suunto sports instruments businesses that may include a spin-off of either or both of the units.
Amer, in maintaining its FY18 financial objectives, says it will continue to prioritize profitable, sustainable growth focused on apparel and footwear, DTC, China, U.S. and Connected Devices and Services.
The co-founder and president of Skechers, Michael Greenberg, is set to receive the T. Kenyon Holly Award, the Two Ten Foundation’s highest honor for outstanding humanitarian achievement during the foundation’s 79th annual gala on December 5 in New York City. Greenberg, who served as a mentor for a peer with special needs as an elementary school student, in 2005 co-founded The Friendship Circle of South Bay, which creates social and recreational opportunities for special needs children at risk of isolation. The Skechers Foundation hosts an annual walk every October to raise funds for children with special needs and public education. The event has raised $10 million over the last decade.
Zappos, meanwhile, will receive the Two Ten Social Impact Award, an honor for an individual or company who affects positive change through giving back to the community. The company has a Zappos for Good program with a mission to “spread happiness” through numerous initiatives.
Vidya Jwala, a former Walmart merchandising and operations executive who most recently has been SVP of merchandising, supply chain, technology and customer service for Overstock.com, is joining DKS as Chief eCommerce and Supply Chain Officer. DKS, which operates 729 full-line brick-and-mortar locations and recently reported a 12 percent increase in Q2 ecommerce sales, is currently building its first regional ecommerce fulfillment center in Binghamton, NY that is scheduled to open in Q3/2019.
Elsewhere:
• Mountain Khakis, the mountain town-inspired lifestyle apparel brand, has hired former Billabong executive Jeremy Hall as president. He is replacing Ross Saldarini, company founder and president who is leaving to pursue other opportunities.
• DSW taps company veteran Bill Jordan to head its Canadian operation.
• Vista Outdoor hires Kelly Reisdorf as VP of investor relations.
• Lew’s Holdings Corp. promotes Ken Eubanks to CEO as Gary Remensnyder moves to the board of the company, which supplies branded fishing and hunting gear.
Riddell, in honor of brand ambassador Peyton Manning’s iconic jersey number, increased the number of SmarterFootball equipment grants to 18 in 2018 from 10 last year. Winners, who applied via an online application, successfully demonstrated commitment to teach smarter tactics on and off the gridiron. There were 1,400 applicants for the grants that were given to one college program, 12 high schools, two middle school teams and three youth football organizations. (Photo courtesy of Riddell)
Golf Datatech has completed an exclusive study detailing the surge in the Ultra-Premium golf club market. The report provides details on who buys these clubs, why, price-point comparisons and best-selling brands. The200+ page offering is based on a survey with nearly 2,300 serious golfers.Parties interested in the report are advised to contact Tom Stine at [email protected].
Iconix Brand Group has launched a Direct-To-Consumer website for the Ocean Pacific brand, offering shoppers a vintage-inspired collection for men and women with pieces ranging from $32-$64 retail.
TheSecond World Cycling Forum has been scheduled by the World Federation of the Sporting Goods Industry (WFSGI) for June 4-5, 2019 in Rotterdam, theNetherlands. The main theme of the two-day event will be: “Putting the BicycleIndustry at the Core of Sustainable Development.” Discussion will focus on the consequences of climate change and the role that the bicycle industry can play in combatting those changes. For more information on the event and theme, interested parties are advised to contact Emma Mason, head of strategy and external affairs for the WFSGI, at: [email protected]
Steelo Sports, aLos Angeles baseball start-up, is the first African-American owned baseball glove company to land its product in Major League Baseball. Jonathan Davis, aSeptember call-up by the Toronto Blue Jays, wore Steelo’s custom pro model during a Sept. 5 game.
Velocity Outdoor, a subsidiary of Compass Diversified Holdings, has acquired Ravin Crossbows for $94 million, excluding a potential earn out of up to $25 million based on future financial performance. Ravin, based in Superior, WI and focusing on the premium crossbow market, had net sales of $46 million for the 12 months ended June 30.
Sports Insight® is a trademark of Formula4 Media, LLC. ©2018 All rights reserved. The opinions expressed by authors and contributors to Sports Insight are not necessarily those of the editors or publishers. Sports Insight is not responsible for unsolicited manuscripts, photographs or artwork. Articles appearing in publication may not be reproduced in whole or in part without the express permission of the publisher.
