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June 27, 2011

The Weekly Digital Magazine Service for the Sporting Goods Industry

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June 27, 2011

The Weekly Digital Magazine Service for the Sporting Goods Industry

Senior Business Editor Thomas J. Ryan (917.375.4699) Editor/Analyst Kyle J. Conrad (704.987.3450 x111) Creative Director Teresa Hartford Graphic Designer Camila Amortegui Advertising Sales Casey Vandenoever (303.997.7302) Katie O’Donohue (704.987.3450 x110) Circulation & Subscriptions Technology Chief Information Officer, Mark Fine VP Research & Development, Gerry Axelrod Manager Database Operations, Cathy Badalamenti


Photo courtesy of Columbia


SportsOneSource Publications SGB TEAM Business Sportsman’s Business The B.O.S.S. Report Sports Executive Weekly SGB Update Footwear Business Update PSR Update Sportsman’s Business Update Team Business Update SGB Weekly Team Business Weekly Sportsman’s Business Weekly Footwear Business Weekly Outdoor Business Weekly

4 5 6 8

PUMA Signs Julie Foudy as Brand Ambassador GENESCO Buys U.K.'s Schuh Group for $112.6M RUNNING STRENGTH Drives Finish Line's Q1 Profits FLEET FEET Honors Franchises NIKE Q4 Profit Rises 14 Percent, Beats The Street DECKERS To Stop Distributing Simple Shoes ACQUISITION BLOTTER

FEATURES 10 STRENGTH IN NUMBERS With A Number Of Factors Effecting The 16

Team Buying Marketplace, Many Dealers Have Turned To The Buying Groups To Help Weather Uncertainty. COLUMBIA TACKLES WET Columbia's Commitment To Innovation Continues For Spring 2012 With Technologies Designed Around Keeping Consumers Dry And Cool.


SportsOneSource, LLC 2151 Hawkins Street • Suite 200 • Charlotte • NC • 28203 t. 704-987-3450 • f. 704-987-3455


COVER PHOTO COURTESY OF COLUMBIA Copyright 2011 SportsOneSource, LLC. All rights reserved. The opinions expressed by writers & contributors to SGB WEEKLY are not necessarily those of the editors or publishers. SGB WEEKLY is not responsible for unsolicited manuscripts, photographs or artwork. Articles appearing in SGB WEEKLY may not be reproduced in whole or in part without the express permission of the publisher. SGB WEEKLY is published weekly by SportsOneSource, LLC, 2151 Hawkins Street, Suite 200, Charlotte, NC 28203; 704.987.3450. Send address changes to SGB WEEKLY, 2151 HAWKINS STREET, SUITE 200, CHARLOTTE, NC 28203; 704.987.3450.

WEEK 1126 |



GENESCO BUYS U.K.'S SCHUH GROUP FOR $112.6M Photo courtesy of Sports Illustrated Women


Puma has signed gold medalist, two-time world champion, and all-around soccer legend Julie Foudy as a brand ambassador. She joins other women soccer stars Karina LeBlanc, Alex Scott and Leslie Osborne, Marta, Amy Rodriguez, and Tasha Kai. As a Puma Women's Soccer Ambassador, Foudy will share her leadership expertise, soccer tips, news, and other commentary with fans over the blog at puma. com/womenssoccer and via her new Twitter handle, @ JulieFoudy. Fans will have the chance to meet her inperson as well, as Puma will be hosting Foudy at brand events throughout the year. "We're thrilled to team up with Julie," said Tara McRae, vice president of marketing for Puma. "Our values align perfectly - hers as a role model and women's soccer advocate, and ours as a women's soccer brand. We both truly believe in the development of this game and are committed to investing in its future." As a component of the sponsorship, Puma will lend its support to the Julie Foudy Sports Leadership Academy, which teaches self-confidence, communication skills, and leadership to teen girls using sports as a medium, as well as the soccer immersion and development programs of Julie Foudy Soccer Camps. Foudy, who spent 17 years with the US Women's National Team - 13 of those as a captain - was amongst the iconic athletes who brought women's soccer to the domestic and global stage in the mid-nineties and into the early-2000s. 4

SGB WEEKLY l JUNE 27, 2011

Genesco, Inc., the parent of Journeys and Lids, acquired British footwear chain Schuh Group, Ltd. for about $112.6 million, marking its entry into U.K. retailing. Schuh runs 59 stores in the U.K. and Republic of Ireland that sell casual and athletic footwear as well as 16 shop-in-shops in Republic, the trendy teen apparel chain in the U.K. Genesco's president and CEO Robert Dennis, on a conference call said Schuh is similar to its Journeys Group in customer demographics and the products they offer. He particularly raved about the opportunity to build on the successful 30-year old concept. For the fiscal year ended March 27, 2011, Schuh's sales increased 12 percent to £164 million ($267.5mm), driven by a 10.9 percent comp inclusive of e-commerce. Total EBITDA reached approximately £19 million ($31.0mm) last year, which equates to an EBITDA margin of 11.5 percent of sales. Sales-per-square-foot were roughly £477 ($787) with inventory turning four times a year. Dennis said what differentiates Schuh in the market is its breadth of branded assortment with almost twice the offerings of its next closest competitor. Schuh's e-commerce revenues have also been expanding at an annual rate of over 25 percent for the last four years and now represent 14 percent of its business. "Given other U.K. footwear competitors, we believe Schuh, with 59 freestanding stores, has the potential to roughly double its store base to 100 to 120 freestanding stores in its current geographic market," said Dennis. "Our plan for the business is to open about 30 stores over the next 4 to 4.5 years." Other benefits include gaining more scale with vendors in buying, including access to exclusive product, as well as gaining a quicker read on global fashion trends. Schuh's management team, led by Managing Director Colin Temple, a 29-year company veteran will join Genesco, reporting to Jim Estepa, the CEO of Journeys. Genesco also provided a bullish update on second quarter sales trends. Same-store sales for its retail stores other than Schuh had increased 14 percent in the second quarter to date through June 18, with the Journeys Group up 15 percent and the Lids Sports Group up 10 percent.

RUNNING STRENGTH DRIVES FINISH LINE'S Q1 PROFITS The Finish Line, Inc.'s sales increased 6.0 percent in its fiscal first quarter ended May 28, to $299.5 million while earnings from continuing operations climbed 19.7 percent to $16.4 million, or 30 cents per share. Led by double-digit gains in running and basketball footwear as well as ongoing strength in e-commerce, comps increased 6.5 percent in the period on top of an increase of 10.9 percent for the same period a year ago. Store conversion was up 0.2 percent, average dollars per transaction increased 2.1 percent, and store traffic increased 1.5 percent for the quarter. The Finish Line also said comps during the current month through June 19 were running ahead 14.5 percent on top of a 6.8 percent increase for the same period a year ago. On a conference call with analysts, Steve Schneider, president and COO, said footwear comps were up 7 percent, driven by strong performance in both basketball and running. ASPs were flat, due primarily to the negative impact of toning in the women's business. Running comps increased in the mid-teens with strength across men's and women's. For men, Nike running performed well with strong demand in Max and Free. Reebok’s Zig also continued to sell well and Flex, introduced in late April, "is clearly a home run," said Schneider. Other lightweight running styles seeing strong sell-through included Asics, Adidas, Under Armour, and Fila's Skele-Toes line. In technical running, Mizuno, Asics, Brooks, and others are being expanded. In women's running, comps increased based on strength in Flex, as well as Nike Air Max 2011 and Free. Technical running also performed well in women's. Basketball, building on renewed momentum seen in the fourth quarter, delivered strong double-digit comps in the quarter, led by all segments of Brand Jordan. Finish Line also saw strong results from Adidas Crazy 8s. Athletic casual was down, but on plan. In women's, key programs from Nike, New Balance, and Adidas Originals performed well. In men, the white-white Air Force 1 and classics like Adidas Superstars saw strong sales. Athletic casual is expected to pick up in the current quarter as warm weather drives sandal sales. Kid’s footwear was up strong double-digits for the quarter, driven by running. Leading the gains were Reebok Zig as well as Nike Free, Lunar and Max 11. In softgoods, comps were up low-single-digits. Apparel sales were down for the quarter, as planned, due to a continued shift away from commodity product. First Quarter bright spots included Nike and Brand Jordan apparel. Accessory comps were up over 13 percent, driven by an "exceptional performance" in branded accessories including Power Balance bands as well as sunglasses, watches, and socks - especially the Nike Elite basketball sock.

FLEET FEET HONORS FRANCHISEES Fleet Feet, Inc., the franchisor of running specialty stores, honored many of its franchisees last week at its annual National Franchise Conference held in Chicago. One of the big winners was Lisa and David Zimmer, owners of Fleet Feet Sports, Chicago, IL, who earned Fleet Feet Sports Brand Builder Award. The award honors franchisees for establishing and promoting the Fleet Feet Sports brand in their community and for contributions to the national Fleet Feet Sports network. The Zimmers opened their first Fleet Feet store in Chicago in 1996 and now have two in the area. Stephanie and Carrie Blozy, owners of Fleet Feet Sports, Hartford, CT, earned the New Store Development Award, recognizing successful franchisees that have been in business more than one year and fewer than three years. Christi Beth and Matt Adams, of Fleet Feet Sports, Brentwood, TN, won the Pinnacle Award for demonstrating excellence in customer acquisition, staffing and customer experience, financial and inventory management, and vendor relations. Among suppliers, Brooks Sports earned the Supplier of the Year "for providing excellent product, support and services." Fleet Feet noted that Brooks last year became the first brand to do more than $20 million in sales across its 90-store franchise network. Saucony earned the Vendor Service Award in recognition of support and service levels.


NIKE Q4 PROFIT RISES 14 PERCENT, BEATS THE STREET Powered by strength in North America, China and Emerging Markets, Nike Inc.'s fourth-quarter revenues jumped 13.6 percent to $5.8 billion and would have been up 11 percent excluding currency changes. Earnings rose 13.9 percent to $594 million, or $1.24 a share. Most encouragingly, Nike Brand futures orders were up 15 percent or 12 percent excluding currency changes. Results easily exceeded expectations. Analysts had expected the company to report earnings of $1.16 a share on revenue of $5.53 billion. Excluding the impact of changes in foreign currency, Nike Brand revenues rose 12 percent, driven by growth in all geographies except Japan and Central and Eastern Europe. By category, revenues were up on a currency neutral basis in all key categories except Football (Soccer), which faced challenging comparisons to last year's World Cup. Reported Nike brand revenues advanced 14.8 percent to $5 billion. EBIT for the Nike Brand grew 13.0 percent to $898 million. Total Nike brand footwear revenues grew 18.6 percent to $3.23 billion; apparel advanced 8.4 percent to $1.44 billion; equipment rose 4.6 percent to $271 million. On a currency-neutral, sales grew 16 percent in footwear, 5 percent in apparel, and 2 percent in equipment. Revenues for Other Businesses increased 6.3 percent to $760 million with a 1 percentage point benefit from changes in currency exchange rates. For the quarter, growth in Converse, Cole Haan and Hurley more than offset lower revenues at Umbro and Nike Golf. Gross margin declined 310 basis points to 44.3 percent, primarily driven by higher product costs. Other factors contributing to this decline include elevated freight costs (including airfreight to meet strong demand for select Nike Brand products), higher inventory obsolescence reserves and higher royalty expenses related to sales of endorsed team products. These factors more than offset the positive impact of growing sales in its Direct to Consumer operations and ongoing product cost reduction initiatives. Selling and administrative expenses grew at a slower rate than revenue, up 2.0 percent to $1.8 billion. Demand creation expenses were $617 million, down 7 percent from higher prior year spending in support of the World Cup. Operating overhead expenses increased 8 percent to $1.2 billion due to additional investments in its Direct to Consumer business and low single digit growth in its core operating overhead. In North America, Nike brand revenues increased 21.5 percent to $2.1 billion with a 1 percentage point benefit from changes in currency exchange rates. Revenues were higher on a currency neutral basis in all key categories except Football (Soccer), The strongest growth came from Running, Men's Training, Sportswear, Basketball and Women's Training, which were all up at a double-digit rate for the quarter. Footwear and apparel revenues, up 19.6 and 27.7 percent, respectively, were driven by strong category presentations, improved product lines and earlier shipments of summer season product. Futures in the North America region were up 14 percent. The North America Direct-to-Consumer business' sales were up 23 percent, driven by an 18 percent improvement in same-store sales and 31 percent growth in online sales. Earnings before interest and taxes (EBIT) in the North America region for the Nike Brand grew 20.3 percent to $522 million as revenue growth and leverage of selling and administrative expenses more than offset a lower gross margin rate for the quarter. 6

SGB WEEKLY l JUNE 27, 2011

DECKERS TO CEASE DISTRIBUTING SIMPLE SHOES Following its acquisition of the Sanuk surf-inspired sandal, Deckers Outdoor Corp. said it made the strategic decision to cease distribution of its Simple Shoes sneaker brand by the close of the year. Angel Martinez, president, chief executive officer and chairman, said in a statement, "Simple Shoes was the first brand to prove it's possible to make eco-conscious footwear, and we're proud to have accomplished all that we have. Given that there is some degree of overlap between Simple and Sanuk consumers, and Sanuk's positive outlook and global appeal, we make this difficult decision knowing it is in the best interest of the brands, the company and its shareholders." Deckers, which acquired Simple Shoes in 1993, did not indicate what it planned to do with the Simple brand. As reported, Deckers on May 19 signed a definitive asset purchase agreement to acquire the Sanuk brand for $120 million plus earn outs, or nearly 3X Sanuk's 2010 sales of $43 million. Decker's Other Brands segment – including Simple as well as Ahnu and TSUBO – generated sales of $26.5 million in 2010.

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ACQUISITION BLOTTER Sherbrook SBK Sport Corp. signed a letter of intent to acquire Global Sports Technologies Corporation and its patented sports technologies, including the Trilage hockey stick, for $8.9 million. The transaction will be completed through issuing nearly 8.1 million Sherbrook shares that will be transferred once certain conditions are met. Mario Boscarino, president of Global Sports, will be joining Sherbrook. PPR S.A., the parent of Puma, announced the successful completion of its tender offer for all outstanding shares of common stock of Volcom for $24.50 per share in cash. Valencell, Inc., a Raleigh,NC- based mobile fitness technology company, has received $5.5 million in Series B venture investment. The round was led by Best Buy Capital, the investment group of Best Buy Co., Inc., with participation from Series A investors TDF and True Ventures. Valencell is the creator of Healthset powered earbuds, which gives audio headsets the ability to monitor the

health and fitness of the user. It also tracks real-time physiological metrics including heart rate, calories burned, steps taken, distance traveled, speed and more with data streamed to smart phones and/ or MP3-players through wired or wireless links. Garmin, Ltd. agreed to acquire Navigon AG, a German company that has a seven percent share in portable navigation devices (PND) and top selling navigation apps for the iPhone and Android platforms in Europe. Terms were not disclosed. The acquisition would enable Garmin to rapidly expand its OEM business with European automakers, where Navigon has invested significantly, said Cliff Pemble, Garmin’s president and COO. JD Sports, the U.K. athletic footwear and apparel chain, has acquired a majority stake in Sprinter Group, which operates 47 stores in southeast Spain, marking JD Sports' entry into the country. JD invested €20 million ($28mm) for a 50.1 percent stake in a new joint venture company with Sprinter Group's existing family owners.




• 2151

HAWKINS STREET • SUITE 200 • CHARLOTTE • NC • 28203 • 704.987.3450




HAWKINS STREET • SUITE 200 • CHARLOTTE • NC • 28203 • 704.987.3450

Photo courtesy of TAG

STRENGTH IN NUMBERS With a number of factors effecting the team buying marketplace, many dealers have turned to the buying groups to help weather uncertainty. By Kyle J. Conrad

As the summer market shows approach for the team buying market, vendors, accounts and buyers find themselves in an uncertain marketplace. The recession has reportedly been “lifted,” but institutional athletic budgets remain far below historic levels and parents, players and boosters are being asked to front more equipment and apparel costs. Meanwhile, soaring manufacturing costs relating to labor conditions in China, rising fuel costs and inflated raw material costs have plagued vendors and have subsequently been passed on to accounts forcing some to adopt a buy-now mind-set to avoid harsher inflationary repercussions in the future. This poses a challenge to accounts 10

SGB WEEKLY l JUNE 27, 2011

who have in the past emphasized fill-in orders to minimize inventory concerns. Meanwhile, a well-publicized bat ruling that left dealers and manufacturers in a pinch a year ago represents a valuable opportunity for these same parties to move an unprecedented amount of high-margin bats for the 2012 season. During uncertain times, it is essential dealers have a “security blanket” in organizations that offer incentives and benefits to minimize or offset the impact of an unstable buying and selling environment. The major buying groups - ADA, NBS, Sports, Inc. and TAG act as that lifeline for their members offering rebates, discounts and vendor deals that can be lifesaving for struggling accounts.



eam Athletic Group, based in Chesterfield, MO, was founded in 1970 as a buying group devoted solely to the team dealer market. Originally headquartered in Illinois, TAG relocated to Eugene, OR in the 1980’s and then to St. Louis, MO in the 1990’s. Over the years, TAG has evolved from a simple buying group into a highly-developed network of team dealers purchasing products from more than 450 major suppliers throughout the world. The group also offers an exclusive brand of equipment, clothing and custom uniforms under the TAG label. Currently, TAG has 53 team distributors across the United States, Canada, and Japan and management confirmed the group is researching opportunities to expand into the European market. The group says it is constantly interested in adding more team dealers into the fold. “(We want to add dealers that provide) the avenues to increase profits and prosper in a very challenging market,” says CEO Philip Rosati. TAG touts a number of member benefits, including a “very aggressive” rebate program, complete access to the best vendor pricing and an exclusive TAG private label product line that includes a yearround TAG warehouse inventory with online ordering capability. Recent TAG initiatives include instituting special dating programs for dealers

on the group’s exclusive product, developing a single billing program that includes added vendor-to-dealer discounts, and instituted special buying show discounts from vendors. Rosati points out that TAG has also developed its own exclusive custom clothing line made in the USA, which he says will buck the trend of lower-quality import product and gives the dealers the ability to deliver custom uniforms to customers in a shorter period of time. As TAG heads into its June 27 buying show, Rosati notes that he expects the 2012 buying approach to reflect price increases from high raw material costs and the global economy. He also anticipates that “drastically cut” cuts stemming from a decline in education funds will only compound the problem. “…we have found that parents and booster clubs have stepped in to fill a significant part of that void,” said Rosati. “In particular, parents have begun taking the responsibility to purchase equipment for their children - this is evidenced by the increasing amount of team products that are found in retail stores across the country.” Rosati noted that in many cases, this leads to more movement of higher-margin products, which can help offset a decrease in high volume orders.

KEY FACTS 2011 TEAM BUYING SHOW CALENDAR • TAG has 53 team distributors across the United States, Canada, and Japan • Since its inception in 1970, TAG has evolved from a simple buying group into a highly- developed network of team dealer purchasing products from more than 450 major suppliers throughout the world. • TAG recently developed an exclusive custom clothing line made in the USA. The group said it allows it deliver orders to customers much faster while allowing more customizing options.



Team Athletic Group, Inc. 629 Cepi Drive Chesterfield, MO 63005 636.530.3710

• Philip Rosati, CEO • Darcy Kinder, Director of Operation • Robin Krause, Customer Service • Carrie Bretz, Executive Assistant / Marketing • Tim Loudermilk, Product Manager

June 28-30 TAG Spring/Summer Show St. Louis, MO November 2-4 TAG Fall/Winter Show St. Pete Beach, FL


WEEK 1126 |


KEY FACTS • With a combined retail volume in excess of $2.5 billion, NBS is the largest by- volume sporting goods buying group in North America. • The group’s membership includes more than 285 members which operate more than 800 retail sporting goods stores in North America. Of those members, 85 are in the group’s athletic business segment. KEY PERSONNEL

Photo courtesy of NBS


With more than 285 members operating in more than 800 retail sporting goods stores and accounting for a combined retail volume in excess of $1.5 billion, NBS is the largest by-volume sporting goods buying group in North America. The Fort Worth, TX-based buying group has been involved in the athletic business almost since its inception and currently has over 80 members involved in the athletic business. In an interview with SGB, Travis VanCampen, who serves as a divisional merchandise manager, confirmed NBS will have three new dealers participating for the first time at the upcoming Summer Athletic Market. NBS touts numerous benefits for members, including increased buying power, exclusive brands and special make ups offering members greater margins, a full complement of marketing solutions including customized player pay and e-commerce sites, full color team sports catalogs and retail print advertising as well as freight and service oriented discounts and programs. Heading into the 2011 show season, VanCampen noted that the mood of the buyer is very positive compared to previous years due in large part to the sweeping NFHS ruling mandating BBCOR bats for little league and high school play that goes into effect January 2012. As a result, parents and players will be forced to purchase new bats for 12

SGB WEEKLY l JUNE 27, 2011

competition next year, representing a high-margin opportunity heading into the 2012 season. VanCampen also noted a “buy-it-now” attitude among NBS members amidst concerns that soaring raw material costs will inflate product pricing in the coming months. “We’re telling our members to buy now even if they have to sit on (inventory) for a few months.” VanCampen said. One reason buyers will be able to do this, he noted, is that buyers ended the 2010-2011 selling season with their cleanest inventory levels in years. VanCampen added that the group has seen prices on the manufacturer’s side up between 8 percent to 18 percent, and there does not appear to be relief in sight. Other key trends he expects will affect the upcoming buying shows include a general trade down for retail pricing. “Instead of the $299 glove or bat, customers are trading to the $199, which is opposite of what we observed in year’s past,” he noted.

• Jim Chandley, President • Bryan Davis, Executive VP and Whitney, Vice President Outdoor Division • Stuart Snow, Director of Member Recruiting • Travis VanCampen, Steven Baker, Marty Plazo, Divisonal Merchandise Managers 2011 TEAM BUYING SHOW CALENDAR (BOOTH BUYING PERIODS)

July 7-8 NBS Summer Market Mobile, AL September 9-11 NBS Fall Semi-Annual Market Fort Worth, TX November 3-4 NBS Fall Market Mobile, AL CONTACT INFORMATION Nations Best Sports 4216 Hahn Blvd Fort Worth, TX 76117 800.379.0155


elbourne, FL-based Athletic Dealers of America got a major boost from the benefit that came with its reorganization in January 2007, when the group’s membership purchased the buying group from founder Don Sonandres. ADA, which calls itself “a synergistic alignment of non-competing athletic team equipment dealers,” is formed by associating the following buying groups - Buckeye, Flag/Triad, Midwest, Northeast Buying Group, Sports Buyers and Western States Buying Group. Among numerous member benefits and incentive programs, ADA touts the unique advantage of being member-owned as it’s most essential selling point. “The main difference with ADA is that it doesn’t have a middle-man,” said President Pete Schneider. “ADA functions for the full benefit of our membership. We don’t have a proprietor that’s going to take 10 percent to 15 percent off every deal we make.” Schneider added that being member-owned allows more funds and resources to be “recycled” back into the membership in the form of benefits, programs and rebates that other buying groups cannot offer. Schneider pointed out that since the takeover in early-2007, rebates to members increased 417 percent through the end of fiscal 2010. Likewise, Schneider said membership dues for the group’s 94 dealer members were the lowest in the industry “by a long shot.” That flexibility has allowed ADA to launch several unique initiatives, including a new website application that helps dealers identify fundraising opportunities for schools with tight athletic budgets. The application allows dealers and schools to work together to formulate a marketing plan to aid schools in raising money for athletic equipment and apparel, typically through the sale of licensed “fan” apparel to parents, students and faculty. The program was designed to help offset increasingly pared down school athletic budgets, which Schneider said have been more drastic than in years past. “That’s the key issue this year,” he said, “and it’s getting worse.” “There were a lot of budgets down three to five percent a couple of years ago, but this year, they are down 5 percent to 15 percent ... and we’re hoping it’s five percent.” Schneider added that one of the challenges coinciding with tight budgets is the uncertainty of order volumes because of short timelines. “The schools have not released budgets so they can’t put their orders in because they don’t know how much money they are going to have,” he added. “That’s posed a problem for a lot of our dealers.” Moreover, he said that sometimes dealers have to make an educated guess as to order volumes because they do not want to be stuck without inventory when a school finally places an order and expects it to be delivered by the first game of the season. As for ADA’s upcoming Spring Buying Show in Denver, CO, Schneider said he sees no indication buyers will be anything but cautious. “Supposedly we came out of the recession 18 to 24 months ago, but we’re seeing budget cuts this year worse than ever. Budgets tend to lag behind (the economy) and this is the toughest year we’ve seen. Over the last five years, dealers are booking 35 percent to 40 percent of what (they’re) going to sell and filling in the rest, so that’s already in place,” he said. “Will it get a little more strained? Maybe, but it can’t go much lower than where it is - you have to have inventory in order to sell product…” 14

SGB WEEKLY l JUNE 27, 2011

KEY FACTS • ADA’s membership purchased the buying group from founder Don Sonandres in January of 2007. • ADA’s membership consists of 94 team dealers that operate 122 retail stores. • ADA’s constitution guarantees at 100 percent, $1500 of every order written at its buying sessions, per dealer, per vendor. There is also an inter-dealer catalog and internet invoice guarantee. KEY PERSONNEL • Peter Schneider, President • Ron Blackard, Chairman • Steve Hauff, Vice Chairman 2011 TEAM BUYING SHOW CALENDAR (BOOTH BUYING PERIODS)

July 8-10 Spring Buying Show Denver, CO November 12-14 Fall Buying Show Kansas City, MO

CONTACT INFORMATION Athletic Dealers of America 1395 Highland Avenue Melbourne, FL 32935 321.254.0091


Photo courtesy of Sports, Inc.


ewistown, MT-based Sports, Inc. is a sporting goods buying group and marketing organization with more than 400 members (200 outdoor, 200 athletic) and 550 sales locations in 49 states and Canada. Sports, Inc. is member-owned, and has been owned by its membership since its inception in 1965. The group prides itself in helping independent sporting goods retailers remain competitive by fostering the development of mutually beneficial relationships with more than 900 vendors. Along with buying programs and reduced inventories, the group offers unique benefits for its membership, including allowing members to be stock holders upon entry into the group, consolidated payments to multiple vendors, rebate programs, which paid an average of more than $25,000 per member during the last reported year, profit-building catalogs and freight/credit card programs through UPS, Yellow Transportation, DefEx, FMI and Roadway. For its June 23-25 buying show in Denver, CO, Sports, Inc. expects more than 475 storeowners, buyers and salespeople from over 195 member locations to attend. Management for the group noted that only 108 vendors were invited to the June show - something planners say optimizes the “buyer-tovendor ratio.” CEO Todd Adams said despite concerns about school athletic budgets, he expected the “aisles to be packed with activity.” “…our marketing (team has), once again, done an excellent job putting together a show that is a can’t miss event for our members and invited vendors,” said Adams. “Our members will enjoy more than two dozen program improvements this season and numerous Sports, Inc. exclusive show deals.” Adams added that while show management and membership

does not know exactly what to expect at the show and through the remainder of the year, accounts have given positive feedback thus far. “This show and our overall athletic’s volume have been flat for a couple of years,” he said. “However, year-to-date we have experienced an impressive athletic’s increase so it looks like our members are having solid Springs - they are also paying (Sports, Inc.) extremely well.” Adams noted that accounts have shown concern about shrinking school budgets and accounts receivable “woes,” but noted that those were also concerns when the economy is healthy. The group will welcome 14 new members to the June show. Aside from cost cutting pressures, Adams predicted bat suppliers would have “tremendous shows” this summer. “They say that this is the season to jump on BBCOR,” he said. “My guess is that they’re probably right - we’ll find out in a couple of months.”

• Established in 1965, Sports, Inc. has been member-owned since its inception. • Headquartered in Lewistown, MT, Sports, Inc. has more than 400 members (200 outdoor, 200 athletic) and 550 sales locations in 49 states and Canada. • Unlike some groups, Sports, Inc. takes cred it responsibility for the billing of all approved orders. The group pays vendors directly while members pay the group. Members are not responsible for the debt of other members. • In its last reported year, total rebates paid to Sports, Inc. members were $12 million, an average of $32,226 per store. KEY PERSONNEL • Todd Adams, CEO 2011 TEAM BUYING SHOW CALENDAR (BOOTH BUYING PERIODS)

June 23-25 Sports, Inc. Athletic Show Denver, CO August 11-13 Sports, Inc. Outdoor Show Kansas City, MO November 20-22 Sports, Inc. Athletic Show Las Vegas, NV

CONTACT INFORMATION Sports, Inc. 333 2nd Avenue North Lewistown, MT 59457 406.538.3496 WEEK 1126 |


Photo courtesy of Columbia

COLUMBIA TACKLES WET Columbia's commitment to innovation continues for Spring 2012 with technologies designed around keeping consumers dry and cool. By Thomas J. Ryan

Celebrating the "End of Wet," Columbia Sportswear recently showcased its Spring 2012 collection to the North America trade press. The products are anchored around bringing its Omni-Dry and Omni-Wick EVAP technologies to outerwear and OutDry to footwear. Typical of Columbia's newfound bravado in recent years, management served up the new collections as an answer to the complacency and lack of innovation in the marketplace. "Truly, we as an industry aren't innovating the way we should be and we as a company haven't been doing it until recently," said Mick McCormick, EVP global sales and marketing, at the event. Held midJune at The California Academy of Sciences in San Francisco, the setting allowed the company to show off some of those technologies in rainforest conditions. Prior to Columbia's own renewed commitment to innovation that began with Spring 2008, the brand had only one patent family. It now has 150 across its portfolio with an innovation roadmap extending to 2014, according to McCormick. But much of McCormick's presentation focused on three years of consumer research that has dispelled many of the company's notions on how consumers are viewed. In particular, research shows consumers "don’t care about technologies, they care about benefits," said McCormick. That was again reinforced last year when the company went into the homes of 24 active-outdoor couples with video cameras in four markets: Seattle, Boulder, Asheville, and the Boston area. One key finding was that the consumer's choice of activity and wardrobe was even more highly dependent on the weather than previously thought. Said McCormick, "They look outside their window or outside their door and the first thing they say is, 'What is the weather like? Is it warm? Is it cold? Is it wet or is it dry?' And then they determine what

their activity is going to be. In fact, depending on the weather, it can change their activity. And once they determine their activity, then they pack what they need for their bag." The second primary finding was that even avid gear junkies – identified as 'accumulators' - have little interest in exploring the intricacies of technologies. "We went out with a preconceived notion that what they were going to talk about was technology and the science behind the technology," said McCormick. "But after hundreds of hours of video, none of them talked about the science behind it. What they all talked about was, 'We want a brand to keep us warm, dry, cool and protected' … Their lives are so complicated around work and the technology they already use – whether it's their own or technology at work - what they want is a simple solution that they don’t have to do a lot of research on. And I'm talking about the gearheads in our industry." That supported Columbia's mantra that any innovation the company delivers must "talk about benefits that are easy to understand," he said. To make sure it's delivering those benefits, Columbia tests products with 325 outdoor enthusiasts in 25 countries around the world as part of a "Beta Project" program. Although Columbia also sponsors athletes, their feedback, according to McCormick, is somewhat "polluted" since they're getting paid. He believes Beta Project members deliver more "unfiltered"' insights. Said McCormick, "We don’t' pay them. We send them product and we don’t even tell them what it's supposed to do. We say, 'Go enjoy your activity and send us feedback.'" For Spring 2012, one core technology on the apparel side is OmniWick EVAP, which disperses sweat across a broad surface to allow WEEK 1126 |


Photo courtesy of Columbia

moisture to spread and evaporate quickly. Joked Sue Parham, VP, global apparel merchandising, "Sometimes the storm within the jacket is as wet as the storm outside." Overall, Spring 2012's apparel focus will be on the "End of wet and the end of sweat" in contrast to Fall 2011's focus on heat. She also said a particular focus was on making product adaptable to wide changes in weather, noting that temperatures can shift as much as 50 degrees between January and August across regions. One key piece being introduced is the Compounder Shell, combining Omni-Dry waterproof technology with Omni-Wick. In certain pieces, Omni-Wick will be combined with Omni-Tech for a more budget-conscious option. Addressing the cold spells that linger in early spring, Omni-Heat, which regulates body temperature, will be brought into the Spring 2012 season on products such as the Dolomite Hybrid Jacket and the Trail Fire Windbreaker Jacket. Both items also feature Columbia's Omni-Shield water resistance and stain protection technology. Base layers were introduced last season with Omni-Heat, but will continue in Spring 2012 with Omni-Freeze ICE, a technology that creates a cooling sensation after sweat hits the fabric's surface. 18

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Omni-Freeze will also be extended into its Insect Blocker lines. Many tops and bottoms for runners will feature both Omni-Wick and OmniFreeze. The Solar Polar Half-Zip Jacket features Omni-Wick, OmniFreeze and Omni-Shade for UPF 50 sun protection. In footwear, 25 new models are being introduced with a particular focus on creating lighter, more flexible, 'faster and more fun" footwear throughout the line. "This whole barefoot movement that is birthed in running is increasingly part of the conversation in outdoor," said Mark Nenow, VP, global footwear merchandising." The paradigm is shifting. It's very clearly shifting away from heavy overbuilt, clunky inflexible waterproof, breathable and I will say it Gore-Tex footwear." The line also focuses more on benefits than specific styles, after research found that consumers don't look at shoes "silos" like the industry does but rather at their benefit. Said Nenow, "A woman is not going into outdoor specialty or sporting goods and saying, 'Show me your multi-sport shoe.' What shoes are used for are increasingly a very individual preference and a very individual experience. One woman's perfect trail running shoe may be another woman's perfect hiking shoe."

Compounder Shell features Omni-Dry and Omni-Wick EVAP advanced evaporation properties with attached, adjustable helmet. Available January 2012. MSRP $300

Trail Fire Windbreaker Jacket with Omni-Heat thermal reflective and Omni-Shield advanced repellency. Available January 2012. MSRP $90

The two new technologies in footwear include the Techlite FluidPost midsole that delivers adaptive pronation control as well as the Techlite FluidFrame that promises adaptive trail stability. Both blend multiple densities of Columbia's Techlite foam to drive a smooth transition and reduce abrupt changes in foot motion. Columbia's OutDry waterproofing system is also being extended to footwear. OutDry construction, according to Nenow, eliminates air pockets created by the industry standard bootie/bladder construction where water and debris can significantly drive up the shoe's weight. In backpacks, while Columbia has made smaller day-trip type backs for years, Spring 2012 will be the brands' first season of multi-day trail packs. A particular focus will be on delivering what the company believes is the most breathable strap on the market, with the help of Techlite technology used in its footwear. Said Joe Boyle, general merchandise manager, specialty, "It's stronger, lighter and more durable with a visible consumer benefit." Other focuses in backpacks include delivering the industry's lightest straps for done-in-a-day and fast hikes as well as on creating

properly-fitted women's backpacks, an area the company feels is underserved. In sleeping bags, Omni-Heat reflective linings, which regulate body temperature and reduce excess heat and moisture, will be introduced to both a synthetic and down version. Spring 2012 will also be the first season Columbia has produced sleeping bags in-house after having previously licensed them. McCormick closed his presentation with a call to the industry to embrace innovation, including at the store level. Many store layouts reflect "decades-old retailing" that aren't telling innovation stories. Said McCormick, "[They don’t] say anything about 'Product is king.' It's about how much stuff we can cram in and how much we can put a discount on it so we can sell it." By comparison, he pointed to a number of fashion chains – J. Crew, Lululemon, H&M, Gap and Lucy – that are not only delivering more compelling environments but Columbia's research shows that outdoor-active consumers are shopping these retailers for their active apparel needs. "These brands are being purchased by those 19 million hardcore WEEK 1126 |


Photo courtesy of Columbia

Dolomite Hybrid Jacket with Omni-Heat thermal reflective and Omni-Shield advanced repellency. Available December 2011. MSRP $120

outdoor active consumers not for their lifestyle products but to actually go out and perform their activities in the outdoors," said McCormick. "Shame on us as an industry when we let these competitors into our space because truly, we own the authenticity and the insight. But more importantly, they are bringing these presentations together in compelling environments. We have to fix this together with our retail partners so that the stories come to life." At the same time, McCormick lamented that he regularly goes to outdoor/sports stores to ask store associates "What's new and exciting?," and finds many responses end up being decades-old technologies. Said McCormick, "That’s not inspirational. Our retailers - outdoor specialty retail in Canada and the U.S. – are not very healthy these days. I get to see their credit. We need to deliver innovation so that they can become healthier." On a brighter note, he noted that Columbia has been able to grow by hundreds of millions over the last couple years with its renewed focus on innovation that has also "reenergized" its entire organization. And he called on the writers in the audience at the event to "challenge" other brands to take a similar step. "What if every single brand in our industry had their own innovation that made a telling difference with easy-to-understand benefits, and helped our retailers market around the world?,� he asked rhetorically. "How strong could our industry be?" 20

SGB WEEKLY l JUNE 27, 2011

Solar Polar Half-Zip Jacket with Omni-Freeze Ice advanced cooling, Omni-Shade UPF 50 sun protection and Omni-Wick advanced evaporation. Available January 2012. MSRP $70



JUNE 28-30

For full year calendar go to

TAG Spring/Summer Show St. Louis, MO



Surf Expo SUP Demo Orlando, FL


Surf Expo Orlando, FL


NBS Summer Market Mobile, AL


NBS Fall Semi-Annual Market Ft. Worth, TX


ADA Spring Buying Show Denver, CO


Interbike Outdoor Demo West Boulder City, NV


ASA-ICAST Int’l. Sport Fishing Expo Las Vegas, NV


EORA Lake Placid Expo Show Lake Placid, NY


BCA Int’l. Billiard and Home Recreation Expo Las Vegas, NV


WDI Worldwide Fall Show Portland, OR


European Outdoor Trade Fair Friedrichshafen, Germany


MRA Paddle & SUP Demo Gull Lake, MI


Bike Expo 2011 Munich, Germany


Interbike Int’l. Trade Expo Las Vegas, NV


WSA Show Las Vegas, NV


Health & Fitness Business Show Las Vegas, NV



Outdoor Retailer Open Air Demo Heber City, UT


NASGW Annual Meeting & Expo Reno, NV


Outdoor Retailer Summer Mkt. Salt Lake City, UT


TAG Fall/Winter Show St. Pete Beach, FL


Sports, Inc. Outdoor Show Kansas City, MO


NBS Fall Market Mobile, AL


EORA Greenville Primary Expo Greenville, SC


ADA Fall Buying Show Kansas City, MO


EORA Killington Primary Expo Killington, VT


Sports, Inc. Athletic Show Las Vegas, NV

Athletic Dealers of America 1395 Highland Avenue Melbourne, FL 32935 t 321.254.0091 f 321.242.7419



National Sporting Goods Association 1601 Feehanville Dr. / Suite 300 Mount Prospect, IL 60056 t 847.296.6742 f 847.391.9827 Nation’s Best Sports 4216 Hahn Blvd. Ft. Worth, TX 76117 t 817.788.0034 f 817.788.8542 Outdoor Industry Association 4909 Pearl East Circle / Suite 200 Boulder, CO 80301 t 303.444.3353 f 303.444.3284 SGMA 8505 Fenton Street Silver Spring, MD 20910 t 301.495.6321 f 301.495.6322 SnowSports Industries America 8377-B Greensboro Drive McLean, VA 22102 t 703.556.9020 f 703.821.8276 Sports, Inc. 333 2nd Avenue North Lewistown, MT 59457 t 406.538.3496 f 406.538.2801 Sports Specialists Ltd. 590 Fishers Station Dr. / Suite 110 Victor, NY 14564 t 585.742.1010 f 585.742.2645 Team Athletic Goods 629 Cepi Drive Chesterfield, MO 63005 t 636.530.3710 f 636.530.3711 World Wide Distributors 8211 South 194th Kent, WA 98032 t 253.872.8746 f 253.872.7603