Running Insight 6.15.17 by Running Insight

The Running Shop and Hops taproom.

Shifting T Gears Paul and Renee Rakitin take a bold entrepreneurial step with The Running Shop and Hops. By Daniel P. Smith

RUNNING INSIGHT® is a registered trademark of Formula4Media, LLC. © 2017 all rights reserved. Running Insight is published twice each month, is edited for owners and top executives at running specialty stores and available only via email.The opinions by authors and contributors to Running Insight are not necessarily those of the editors or publishers. Articles appearing in Running Insight may not be reproduced in whole or in part without the express permission of the publisher. Formula4Media, LLC, P.O. Box 23-1318, Great Neck, NY 11023. Tel: 516-305-4709.

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hat was one aggressive pivot. In July 2013, the husband and wife team of Paul and Renee Rakitin opened The Running Shop in Morgan Hill, CA, a 40,000-resident bedroom community on the southern tip of Silicon Valley. Three years later, the couple swapped their 750square foot storefront with manageable rent for a 3,000-square foot space in a historic Morgan Hill building. Along with the move into a space four times larger than their first unit, the Rakitins added something unique to their business: a 54-tap bar. The Running Shop and Hops opened for business last August. “Running specialty is a different environment today and you have to evolve,” Paul says. “More and more, you see businesses progressing into adding things that flow together and we thought it would be a natural fit to combine two things many people are passionate about – running and craft beer – to make our store a social hub.” While the running store-taproom concept isn’t an entirely new idea, the way the Rakitins went about it spotlights the daring thinking many contend is increasingly necessary in the stagnant run specialty channel. In 2014, Shoes & Brews opened in Longmont, CO, capturing headlines for its novel blend of running retail and craft beer.

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Shifting Gears (continued)

The space is split 50/50 between running retail and taproom.

“I actually had more questions about opening the retail shop back in 2013 than I did when we began putting the pieces in place for The Running Shop and Hops.” “People didn’t see what I saw, but once we started moving forward, the only thing to do was to succeed.” PAUL RAKITIN, OWNER THE RUNNING SHOP AND HOPS

While the Rakitins follow that formula, they, unlike Shoes & Brews, were not a startup operation, but rather an existing store that shifted gears into the novel combination. The Rakitins, of course, could have easily stayed the course with traditional running retail, a path on which they had scored favorable results as the only running store within a 25-mile radius. Instead, however, they tied their capital and their future to the prospects of what a more diversified and distinctive operation could bring. “I’ve had people tell me this is exactly what Morgan Hill needed and that’s reassured my thoughts from the beginning and helped confirmed that we did the right thing,” Paul says. An idea with history

Paul says he first had the idea for a running store-taproom concept back in 2010. Absent at the time, though, were the financial resources to launch the project. “And I had no intention to take on a partner,” he says. “I wanted full control and to do what I wanted to do.” Paul, who had worked in running stores throughout his 20s, and Renee decided to chart their own course by opening The Running Shop. The plan, Paul explains, was to build a client 4

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and product base and to become a community presence. Thereafter, the couple could investigate opportunities for a running store-taproom concept as they emerged. “We wanted to make sure we were a bona fide running store first because the worst thing you can do is get in over your head,” Paul says. The Rakitins found immediate success with The Running Shop, earning the trust of patrons and a growing customer base in the blossoming Morgan Hill community. As they completed their second year of business in mid-2015, Paul learned that a vacant storage building in Morgan Hill’s downtown corridor, located about one mile from their existing shop, could be had. “I just so happened to run with the landlord,” Paul says. Soon after, the Rakitins began negotiations to enter the space and turn their dual concept from idea into reality. Though some looked at Paul cross-eyed as he explained his plans for the new building, he never swayed from his vision. “I actually had more questions about opening the retail shop back in 2013 than I did when we began putting the pieces in place for The Running Shop and Hops,” Paul says. “People didn’t see what I saw, but once we started moving forward, the only thing to do was to succeed.” Bringing the idea to life

Over the next year, the Rakitins brought The Running Shop and Hops to life. They landed their beer license as well as a conditional use permit from the city, earning the approval of the local planning commission after presenting their detailed plans and having about two-dozen people speak to the commission on their behalf. “That was probably the biggest hurdle,” Paul says. They split the 3,000-square foot space about 50/50 between taproom and running retail, brought the metal-shelled storage building up to code and tackled much of the buildout with friends and family, including construction of key elements such as the bar and benches. Visually, Paul says, the two spaces are connected, only loosely separated by a perforated swinging door. The layout, design and finishes in one space largely mirror those in the other, including the same wall trim, wood and metal.

Peak Running Company Readies to Open Second Location – With a Twist

Shifting Gears (continued)

“We didn’t want to disconnect the two spaces and our full intention was to combine them in a fluid way so people would be invited to explore the other side,” Paul says. As hoped for, the two sides complement each other, “living together symbiotically and seamlessly,” Paul says. The taproom gives its retail sister a spot to host events, such as clinics or post-run gatherings, while also helping The Running Shop to expand its customer base.

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“We’re combining two things that feed off each other,” says Paul, who mans the retail operation while Renee oversees the brew side and its rotating taps of, largely, West Coast microbrews. It was a bold decision and significant investment, Paul acknowledges, but one he’s glad he and his wife made. “We’re doing amazingly well and couldn’t be happier with our decision,” he says. n

In crafting plans for a second Peak Running Company location in Chicago’s western suburbs, owner Tiffany Cruickshank wanted something offbeat and innovative. Later this month, Cruickshank will unveil just that when Peak opens its unit in Burr Ridge, IL, about a 15-minute drive from its three-year-old flagship store in Downers Grove, IL. The 2,300-square foot Burr Ridge location will feature a bar in back serving up 6-8 Chicago area craft beers alongside wine options. “In today’s environment, we’re competing not just against other running shops, but the big boxes, the Internet and our vendors, which means we have to come up with some creative solutions and things not typically done in the retail environment,” Cruickshank says. While Cruickshank initially envisions the bar complementing in-store special events and fun run revelry, she says the store’s main focus will remain on running retail. Still, she’s excited to see how the customers embrace the adult beverage service and how it evolves. “Maybe we’ll attract a wider group of people than we’ve ever anticipated or maybe folks will start coming in here after their workout at the [Lifetime Fitness] next door. Who knows?” she says. “Any way it goes, I know it will be fun to see how this unravels.” n

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IRONMAN Expands Empire With Acquisition of Competitor Group

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Photo: Ryan Bethke

n a move that expands the company beyond its strength in the triathlon category, IRONMAN, a Wanda Sports Holdings Company, has acquired 100 percent of Competitor Group Holdings, Inc. (CGI). “This is an important step in the growth IRONMAN has seen over the last decade,” said Andrew Messick, Chief Executive Officer for IRONMAN. “As a globally recognized endurance brand, the acquisition of the world’s largest running platform puts us in an exciting position for the future growth of running worldwide. The ability to help globalize the successful Rock ‘n’ Roll Marathon Series brings about many opportunities to demonstrate our leadership in this industry.”

The acquisition establishes IRONMAN as the largest running event producer in the world. With more than 30 world-class events including the flagship Rock ‘n’ Roll Marathon Series, CGI events host more than 600,000 athletes each year. IRONMAN already owns or operates more than 20 running races worldwide, including the Standard Chartered Singapore Marathon, ASB Auckland Marathon, Marathon Bordeaux and Across the Bay 10k. “We are committed to providing our athletes with consistent, high-quality experiences across each of our events,” added Messick. “Our distinct expertise in event operations will allow us to ensure that athletes across the entire endurance life cycle are able to achieve their goals at any stage in their endurance journey – from 5K to IRONMAN.” In recent years, IRONMAN has moved into road cycling events including the UCI Velothon Majors Series, mountain bike races such as the Absa Cape Epic, and premier marathons. “This is a game changing development for the future of CGI and a clear signal into the investment being made in the global running community,” said Josh Furlow, President of CGI. “IRONMAN is a tremendous organization with incredible brand strength and I look forward to working with Andrew to bring together two of the world’s greatest event producers collectively as one team.” Since the debut of the of the signature Rock ‘n’ Roll Marathon Series in 1998, CGI has continued to expand to key cities throughout the United States, covering 22 major markets in the United States and eight international races from the United Kingdom to China, creating the largest running series in the world. The Rock ‘n’ Roll Marathon Series innovated the running industry by infusing the course with live bands, cheer teams, and creating a block-party atmosphere for participants and spectators. This year marked the 20th anniversary of the series with the Synchrony Financial Rock ‘n’ Roll San Diego Marathon, which took place on June 3-4, 2017. Wanda Sports Holdings has become the major player in the endurance events worldwide. Wanda Sports Holding incorporates the international sports marketing company Infront Sports & Media, the endurance brand IRONMAN, and Wanda Sports China. The headquarters are in Guangzhou, China. n

RIA Summit Report: Alive & Well

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1. Women Rule at RIA: Rebecca Hohenstein, Tortoise & Hare; Kathy Dalby, Pacer’s Running; Michele Allen, iRun Texas; Susie Stein, Up and Running; Cathy Pugsley, Potomac River Running; Megan Searfoss and Elizabeth Side, Ridgefield Running Co. 2. John Rogers, Fleet Feet Maine Running and Duncan Finigan, OOFOS. 3. Rick Wilhelm of Brooks and Christibeth Adams, Fleet Feet Nashville. 4. Rafael Mael.

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he running specialty business is alive and well. That was the message delivered loud and clear at the RIA Summit in Fort Lauderdale earlier this week. The Summit, which took place the day before the Sportstyle show and conference, featured a day of presentations, business sessions and networking around the theme of “New Thinking: Strategies and Tactics for the Future of Running Specialty.” Most of the presentations were collaborations between brand executives and retailers with topics ranging from “How to Launch a new brand in your store,” presented by Ted Goodlake of On Running and Adam White of Running Central to “how to tell better stories in Apparel,” presented by Rick Wilhelm of Brooks and Christibeth Adams of Fleet Feet Nashville. In between, there were plenty of facts and figures shared with attendees, many of which focused on consumers’ use of the Internet in shopping and what that meant for brick-and-mortar stores. “More than ever, consumers are researching their purchases online,” said RIA executive director Terry Schalow. “The practice of ‘webrooming’ is much more evident than showrooming, when consumers shop your store first and then purchase online.” Schalow cited research that said: 26 percent of shoppers webroom “most of the time,” 50 percent webroom “sometimes” and 15 percent do it “all the time.” Girls on The Run presented its annual Remarkable Retailer of the Year award to Jeff Fedorko of Riverside Running in Virginia for his outstanding support of their program which encourages young girls to get out and run. n

Adidas Is Off and Running By Jennifer Ernst Beaudry

But Can Specialty Benefit?

o say Adidas is having a moment might be underselling it. But will that moment pay off for run specialty stores? And if it does, are RSA accounts ready to grab the opportunity? The brand has seen soaring sales in the broader athletic channel. For the first quarter of fiscal 2017, sales in North America were up 36 percent for the Adidas brand, driven by a 9 percent lift in performance and an eye-popping 73 percent lift in lifestyle. And while its share in the U.S. market broadly is still small — data from The NPD Group showed the Adidas brand with 7.4 percent market share in the U.S. overall — it’s tiny in RSA. Data reviewed by Running Insight suggests that Adidas accounted for fewer than 3 percent of the pairs sold channel-wide in 2016, 12

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ranking them eighth overall. (To put that in perspective, the brand sold just slightly more than a 10th of the pairs that market leader Brooks did.) And despite the gains in the athletic channel, Adidas actually sold fewer pairs in

“We’ve got much bigger aspirations. Running is our biggest opportunity.” MARK KING, ADIDAS specialty in December of 2016 than it did in January. But Adidas North America president Mark King says there’s still a lot of runway for the brand in the U.S. — and that running is critical.

“We’ve got much bigger aspirations,” King told Running Insight. “It’s been another year of double-digit growth in running. Running is our biggest opportunity.” Running retailers say there’s opportunity for the brand to gain shelf space — but that as yet, the heat around the brand in the general market hasn’t fully penetrated the specialty space. Fleet Feet has seen Adidas sales pick up, according to VP of Retail Operations Ben Cooke — not just from runners. “We have seen tremendous sales online around UltraBoost that is unparalleled,” he said, noting that Fleet Feet’s online business sees a spike every time sneaker blogs post about new UltraBoost releases. Mike Cosentino, owner of the eight Big Peach Running Co. stores based in © 2017 Formula4media LLC.

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“It’s a tough conversation with the retailer when you have hot product and they don’t have it.” MARK KING, ADIDAS

“Adidas is making really good product right now and customers know that Boost name.” ROSS MARTINSON, PHILADELPHIA RUNNER

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Atlanta, said Adidas has made strides at his doors. Strength in UltraBoost and EnergyBoost shoes, he said, have helped the brand come close to tripling share — but that they’re still Big Peach’s number five or six brand. Cosentino said a new focus from his sales rep, who hits each one of the retailer’s fullprice stores each week and who helps manage inventory, has been part of the growth. (That increased service may not be a benefit to every door: Multiple retailers told us that their reps have told them they are being told to focus their efforts on larger accounts and to give smaller doors a customer service number to call.) “For the people who were exposed to the Boost product early on — there’s repeat purchase, intent to purchase again, and satisfaction both with appeal at onset and the performance,” he said. But where the brand needs to improve, he said, was in bringing some of that heat into other models. “The challenge I offer to them is to get their other products like the Adidas Supernova Sequence Boost and Supernova Glide — to pull their weight,” he said. “Those models don’t seem to be making the strides against competitors that UltraBoost or EnergyBoost before that did.” To take share and improve sales, he said, “they need stronger number two and some number three and four shoes.” And going forward, the assorted offering may be even more critical as supply of the already-limited UltraBoost could dry up. Adidas hasn’t officially confirmed any changes, but some store owners have been told they won’t be getting any further supply. Ross Martinson, co-owner of the four Philadelphia Runner locations based in Philadelphia, said he was told that going forward his store won’t have access to UltraBoost. And while Martinson said that while the supply had been limited, it had been a top performer. “We’ve always carried Adidas and this is clearly their best-selling item for 15 years,” he said. And while he said he understood the strategy, he added ruefully, “I want brands to segment and it totally makes sense — on the other hand, I want them to be able to segment

and I want to get it.” King acknowledge that managing multiple channels of distribution has meant disappointing retail customers. “It’s a tough conversation with the retailer when you have hot product and they don’t have it,” he said. And while UltraBoost was initially conceived as a performance runner, its runaway success as a style item has meant Adidas has shifted the way it has positioned the style, King said. Martinson said that while UltraBoost has resonated with his core running consumer, its ability to bring new customers is something not every style — or every brand — has. “Adidas is making really good product right now and customers know that Boost name,” he said. “But I don’t know what’s going to take the place of the UltraBoost.” And that will be a detriment in more ways than just pure pairs sold, he said. “There aren’t a lot of other brands that have the ability to sell above our channel, and it’s a huge benefit. Adding them and those pieces brings in additional business and also draws more interest to our channel.” That has held true at Fleet Feet, Cooke said. “The strength of UltraBoost especially has had a halo effect on the rest of the business,” he said. “They’re keeping the fires hot with their approach to the market. Even for [recycled ocean plastic collaboration product] Parlay — people are calling the stores and asking if we have the apparel.” But Cooke said he isn’t sure that the channel as a whole is equipped to leverage that outside interest. “It’s an interesting challenge for SRA: can we participate?” he said. “We didn’t participate in Nike Free as a channel all that well, frankly, and we’ve got to get better at seizing these moments that happen outside of [our space].” Sales associates still aren’t necessarily used to including Boost when they’re pulling shoes, he said, but that the product resonates when they do. “With the tech story, they have some forward momentum,” he said. “The question is, can we capitalize on it?” n © 2017 Formula4media LLC.

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Boa Introduces New Tech and Names New CEO

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is “built specifically for runners.” The Boa team surveyed and researched run brands and consumer needs, and conducted four rounds of field testing that spanned 100+ testers, 1,800 hours, and 20,000 miles. The result is a textile-based Boa System that allows the user to dial in the perfect fit for a more efficient stride and increased comfort. Earlier this month, Boa announced that Shawn Neville has been named CEO. Neville joins Boa following his most recent tenure as CEO and Chairman of Aerosoles Group. Neville joined Reebok International in the early ’90s, where he served as Vice President of USA Marketing,

General Manager of Reebok France & European Operations, and Senior Vice President & General Manager of Reebok North America during his tenure. Shawn joined Footaction USA as CEO and President in 1998 and led Keds Corp as President from 2004-2008, which was recognized as Global Footwear Marketer of the Year in 2006 and where he also led the successful acquisition of Saucony. ASICS GEL-FujiRado Targets the Trail with ‘Supreme Fit’

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Running Shorts (continued) shoe from ASICS features the micro-adjustable Boa System for the first time in ASICS performance running footwear. The Boa System is designed for the trail environment and built to perform in muddy and wet conditions. It allows for micro-adjustments, creating a precision fit. Each turn of the Boa dial equates to one millimeter of tension, allowing for on-the-fly adjustments. The ASICS GELFujiRado model also features symmetrical medial and lateral panels and heel hold for ascent and descent on the trail. The MONO-SOCK upper, secure lace containment, aggressive outsole lugs and a strengthened

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toe bumper allow runners to take on challenging terrain. The trail shoe also includes ASICS’ SpEVA midsole to provide improved rebound. Bauerfeind Partners with Atlanta Track Club

Bauerfeind announced a new partnership with Atlanta Track Club. As part of the multi-year agreement, Bauerfeind will be the official supplier of braces, supports and medical-grade compression products for all of Atlanta Track Club’s events, including the largest 10K running event in the world – the AJC Peachtree Road Race.

In 2016, Bauerfeind launched a new line of lightweight, breathable sports products specifically designed for athletes. Olympic marathon runners Lisa & Anna Hahner are the global

running ambassadors for Bauerfeind Sports. Beginning July 1, 2017, Bauerfeind will launch #myperfecttrail, a world-wide digital campaign for runners. Winners from around the world will converge in Atlanta for a full week of running activities culminating in the 2018 AJC Peachtree Road Race. Atlanta Track Club will choose a winner from its list of members who enter to take part in this grand prize. Buff’s New Ambassadors

Buff Inc. has revealed its group of running ambassadors for 2017. The brand has added trail runners Suzanna Bon

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Running Shorts (continued) and Zach Miller to a team that already includes Anton Krupicka, Ian Sharman, Adam Kimble, Michael Wardian and Gina Lucrezi. The new team comes at a time when Buff is continuing to expand its line of run products. “We are proud of this team who’s constantly pushing the limits.” said Shirley Choi Brunetti, VP and general manager, Buff Inc. “It’s great to be able to attract so many prestigious names in the sport. We are extremely happy with our latest innovative running products and can’t wait to see how these amazing athletes utilize them on the roads and trails this season.”

Saucony Launches Run Your World Campaign

A new brand platform from Saucony — Run Your World — aims to reflect unique yet unifying voice of Saucony consumers across brand’s three product categories: Run, Life

on the Run, and Originals. View Saucony’s campaign video here: https://youtu. be/55TwCh6P02E The new global brand platform is an evolution of the brand’s Find Your Strong initiative, and it extends to a

broader consumer set, with a global mindset. The Run Your World brand platform will be supported by social, print and digital media, influencer engagement, and retail and experiential components. The campaign kicked off earlier

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Running Shorts (continued) this month with the launch of the Run Your World video on social media and at saucony. com/RunYourWorld. The Run Your World platform’s digital approach aims to engage and activate. The “World Runners” team will create and share unique journeys across the brand’s social media platforms through video storytelling. The Run Your World multimedia launch was shot by a global group of photographers and influencers. Featured taglines in the campaign include: “Run Outside the Lines,” “To Each Her Own,” and “Originators Only.” Saucony is inviting the community to share how they

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personally run their world through branded experiences, including a #RunYourWorld consumer contest and Run Your World events in multiple cities with localized partnerships. The Run Your World platform is planned to run throughout 2017, with several new executions for the fall and throughout the year. United Sports Brands Rolls Out Enhanced B2B E-commerce Platform

United Sports Brands, manufacturer of sports performance and protective products, announced that its new e-commerce platform, for use by its sales representatives and

retail partners, is now live. Developed by PlumRiver LLC, a provider of B2B e-commerce software solutions, the new United Sports Brands site will provide enhanced one-stop ordering capabilities for Shock Doctor, McDavid, Cutters, Nathan and XO Athletic brands. “We’re taking the innovation we build into each of our products and channeling it into our new B2B e-commerce site,” said Tony Armand, CEO of United Sports Brands. “This site will offer our customers and reps an easier, more efficient method for entering orders for any of our brands, anytime and anywhere. The plat-

form will also feature order status monitoring, history and tracking to help simplify and improve processes for our busy retail partners and sales reps, ultimately allowing us to better satisfy the needs of our customers.” PlumRiver’s Retailer Web Application provides key features that enhance order creation and management for retailers, including expanded product search capability, dynamic product imaging, real-time inventory visibility, CRM, custom ordering, product promotions, sales incentives, cross-selling and self-service management of order and invoice status and history, which includes live tracking.

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Running Shorts (continued) Betty Wong Ortiz Appointed First Female Editor in Chief of Runner’s World

Betty Wong Ortiz, Editor in Chief, Runner’s World

NYU Stern. She lives in Forest Hills, NY with her husband, daughter, and son. Pointer Named CEO of Fleet Feet, Inc.

Joey Pointer has been named the Chief Executive Officer of Fleet Feet Sports. Pointer had been acting CEO since the departure of Jeff Phillips earlier this year in addition to his duties as CFO. Pointer joined Fleet Feet, Incorporated in 2004 as the first classically trained financial employee. Prior to joining Fleet Feet, he spent time as a senior tax consultant for Ernst and Young LLP. n

Roll to Recovery 24

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Photo: Runner’s World, Betty Wong Ortiz

Joey Pointer, Fleet Feet Sports CEO

Betty Wong Ortiz will join Runner’s World as the magazine’s first female editor in chief. Wong Ortiz will provide direction for all brand editorial platforms, including print, web, and social channels. Wong Ortiz was most recently the director of editorial strategy and operations at Condé Nast’s Bon Appétit, where she managed content workflows and budgets across print, digital, and video, directed special projects, and optimized strategic partnerships. She previously spent six

years as the editor in chief of Fitness. “Today the majority—57 percent—of road-race finishers are women, and running is as much a social experience as it is a sport,” said Rodale group editorial director Bill Strickland. “Betty’s experience will be invaluable as the Runner’s World team continues to create content that caters to evolving audiences and the growing diversity of runners who line up at races or who simply lace up and hit the road outside their doorstep.” Wong Ortiz is a graduate of Cornell University and recently earned an MBA from

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