Retail: 56
-43.76%
Retail: 109
+8.56%
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Mon, Aug 28, 2017
Vol 1, Issue No. 33
PRESENTING SPONSORS
Monday, December 11, 2017
Volume 1, Issue No. 48

Lululemon Keeps $4 Billion Revenue Target in Sight

In reporting a strong third quarter where comparable store sales grew 7 percent and adjusted gross margin expanded 110 basis points, LULU maintained its annual guidance and remained steadfast that it will reach $4 billion in annual revenues in 2020 with men’s, digital and international each contributing 25 percent of the total. Total third quarter revenue rose 14 percent to $619 million. The FY17 revenue target, assuming comp growth in the mid-single digits, is forecast at $2.59-2.605 billion.

During the recently completed period, lululemon realized 24 percent growth in women’s pants and a 21 percent gain in male guests that helped bolster sales of men’s bottoms 26 percent year-over-year.

Digital and China are two areas that the Vancouver company believes will be vital to accomplishing its revenues and profit targets. Third quarter constant dollar comps in ecommerce were 25 percent higher, and LULU estimates its ecommerce penetration in China may eventually reach 40-50 percent thanks to distribution deals with Tmall and Wechat. Overall digital sales are projected to hit $1 billion annually by 2020. In FY18, the company will introduce “Buy Online, Pick Up in Store” for its customers.

On the North American store front, lululemon senior executive report “very little cannibalization” from the opening of a store on Fifth Avenue in New York (The company’s top U.S. location), and plans to open 22 seasonal North American stores to meet increased holiday demand.

RETAIL ROUND-UP
NPD: Holiday Sales Up 2 Percent in November; Nike’s Big Apple Move

Retail sales declines over the last two weeks “have dulled” the season’s early lead over Holiday 2016, according to the research house, putting general merchandise sales up 2 percent for the four weeks ended November 25. During the final week of November, year-over-year dollar sales were down 2 percent.

NPD, in reporting a 30+% increase in online buyers on Thanksgiving, Black Friday and the day after, said practical giving and self-gifting were the dominant buying themes throughout the holiday weekend. The average ecommerce basket size increased more than 2 percent the Saturday after Black Friday.

Elsewhere, BSN Sports acquired a portion of the assets of Hibbett Team Sports, which has served Alabama, parts of Georgia and the Florida panhandle since 1975, for an undisclosed price.

Nike is exiting the Niketown New York space at 6 East 57th Street, which occupies 65,000-square-feet in a Trump-owned building, in the spring. The company intends to open a new 69,000-square-foot flagship, complete with a NikePlus members-only destination on the fifth floor at 650 Fifth Avenue at West 52nd Street in early 2019. The company has a 15-year lease at the new property that will feature the brand’s new small-format concept, Hyperlive, on the first floor.

Dick’s Sporting Goods will reportedly close its Muskogee, OK store on January 6 after only two years in the market. The store was part of a first-phase urban renewal project.

Canfield Sporting Goods, an outdoor specialty door in Omaha, NE for 71 years, commenced a two-month, Going-Out-of-Business Sale on Friday. The business closes its doors for good sometime in January.

Maurice Sporting Goods, the bankrupt outdoor products distributor that hopes to sell its assets to Middleton Partners for $39 million, could lay off up to 104 staffers in a restructuring. More than 25 percent of Middleton’s proposed payment will be for non-current inventory with $5 million earmarked for new inventory.

Outdoor Insight
Johnson Outdoors Repositioning Eureka!

Photo: Eureka! Tents

Faced with another challenging year in 2017, Johnson Outdoors is working on a repositioning strategy for its Eureka! Camping brand, whose revenues have fallen more than 20 percent over the last two fiscal years. In FY17, the unit that makes consumer, commercial and military tents, mostly at a Binghamton, NY plant, and sleeping bags, camping stoves and other recreational gear, annual sales dipped 5.2 percent year-over-year to $37.9 million.

Solid growth from Jetboil was not enough to offset softness at Eureka!, which was caused by retailer bankruptcies and market restructurings,” Johnson Outdoors executives told analysts last week.

Obituary
Bruce Fendell

The sporting goods business was a family affair for Bruce Fendell and his Dad, Yale. Both had long careers in the business. Last week, Bruce, 60, who worked with his late father at the Ralph Libonati Co. (Libco) in the 1980s, passed away due to complications from lung cancer. At the time of his death, he was SVP of strategic planning for WSS/Eurostar, Inc. in Los Angeles. Earlier in his 30+ year career, he worked for Eddie Bauer Footwear; Fila, Pony, Reebok, where he was SVP of the brand’s former On-Field unit and Adidas for six years. Yale, who helped found the Libonati Company in the late 1950s, was an EVP at the New Jersey company at the time of his death in early 1991. He was 67.

Textile Insight
Denim Developments:  Eco, and Tech and Mill Closings – Oh My!

It’s not all about the weave in the denim market these days. Tech innovations, eco-responsibility, global trend influences and performance fabrics provide plenty of interest in the contemporary jeans business. Add to that the closing of three denim mills in recent months, and you’ve got an apparel category moving in new and diverse directions.

That dynamic was evident at last month’s Kingpins show. For example, exhibitor Denim Repair, with a classic sewing machine at the ready to restore blue jeans, was positioned directly across from a high-tech display by MYR, a new software business, while sponsor Invista showcased a partnership with online brand Who What Wear promoting Lycra stretch technology to the fashionable millennial shopper.

Eco stories emphasize the use of natural dyes, reactive dyes, recycled fibers and eco cottons. Bluesign CEO Jill Dumain sees growth opportunities in the denim market, and is energizing company efforts to get the fashion industry involved in Bluesign certification. New Bluesign partner Anubha Industries’ managing director Aditya Goyal, explained, “Denim sourcing teams understand that they can’t ignore environmentally responsible practices. More companies are starting to believe that product has to be sustainable. Denim is inline with that.”

New digital tech that combines customization with cost effectiveness continues to emerge on the product development side. MYR software serves as a digital portal connecting all the players in the denim supply chain providing information to create tailor-made looks on denim garments with speed to market advantages.

Despite these advances, the shift in consumer buying is impacting mill production. Blue Farm Textiles plans to stop production and dissolve the business in July 2018 saying that it feels “suffocated” by demand for fast fashion and low prices. The Hong-Kong denim maker is joined by Cone Denim’s announced closure before the New Year, and DNA Textile Group reported in November that it, too, will shutter.

Textile Insight
Ibex Goes Baa Baa

Ibex, challenged by market forces and investor pressure, announced that the company will cease operations in February 2018. The Vermont-based wool specialist, with annual revenues of $20M, had a devoted following in the outdoor community yet the acceleration of online, the shift away from pre-season to “ASAP” ordering, and the erosion of specialty retail, made for a difficult path to profitability. “Whether it was building bridges or throwing Hail Marys we just kept trying but couldn’t recover,” said Ibex CEO Ted Manning.

During the summer Ibex announced a strategic shift to focus on direct sales to complement its three stand-alone Ibex stores, located in Denver, Seattle and Boston. Layoffs began in October, scaling the staff of 32 to 20 employees, signaling more change on the horizon.

Manning describes today’s business climate as a time of “upheaval, challenge and massive opportunity.”  He adds, “There is a chance to take a brand that is beloved, and (has) great product and do it with freshness. I see Ibex re-emerging on the trail.”

The Buzz

Fitbit reaches a confidential, global settlement with the assignee for the former Jawbone over all outstanding litigation between the two parties.

Malden Mills’ former plant, a 600,000-square-foot facility that straddled Lawrence and Methuen, MA, has been sold to a California real estate broker for $5.82 million. The purchase of the 15-acre campus, first disclosed after a May auction, will reportedly see it subdivided for a variety of industries including textile manufacturing. It has been renamed IndusPAD.

Nautica extends its partnership with PGA Tour player Cameron Tringale for another year and adds Michael Kim as a brand endorser. Both golfers will don the brand’s NavTech performance golf shirts and pants. 

RIP-IT, the Orlando, FL softball equipment company, has expanded into softball market with pants and shirts. All of the apparel items feature four-way stretch and moisture-wicking material. Currently available in 182 Dick’s locations, line will be expanded to more than 400 stores in early 2018.

On the Move: Macy’s Executive Chairman Terry Lundgren is retiring from the retailer’s board on January 31. On the same day, Jeff Gennette, Macy’s CEO since March, takes over as Chairman. Meanwhile, Smith promotes Andy McCabe to creative director where he will lead all marketing, sales and product work for the brand at the Safilo Pacific Design Center in Portland, OR. Additionally, Cara Shumate is elevated to art manager and Cody Browning to senior graphic designer. At Atlanta-based Tegra LLC, an apparel manufacturer in sports, team, licensed and activewear, Pamela DeNichilo, most recently with Victoria’s Secret, is hired as chief product development officer, and Ed Groce is promoted to chief customer officer. At Under Armour, acting CFO David Bergman is promoted to the position permanently and Michael LaGuardia, the former head of product for Yahoo! Finance and Sports, joins the company January 8 in San Francisco as SVP of Digital Product. Also, MyFitnessPal Co-Founders Mike and Albert Lee are leaving UA next month to pursue other entrepreneurial ventures.

Tubes of the Week

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.

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Numbers In Play
Week of 11/30-12/07
The Sports Insight Index is our opinion of what we think are the 30 most important public companies in the industry, 15 vendors and 15 retailers. Space considerations prevent us from tracking more, but we will make changes over time.
Index base of 100 is key to the closing prices of 12/31/14
Retail
A split week for the segment with eight up and seven down, but Index is slightly positive for the week. Genesco, following a tough third quarter, had at least one observer thinking the Nashville company should sell-off its segments, including Journeys and Lids, to strategic buyers. Big 5 has some wondering if the 432-door retailer is a takeover target. Would Hibbett Sports, which sold its team sports unit to BSN this week, be interested? Or, how about Bob’s Stores and Eastern Mountain Sports’ parent UK-based Sports Direct? BGFV’s market capitalization of $138 million makes it attractive. Meanwhile, new Street bullish-ness on Macy’s is at least partly attributable to company’s decision to start repurchasing some of its debt. At Tilly’s, insider Debbie Anker-Morris sold more than 10,700 shares.
Brands
Mixed week for the segment with eight up and seven down, but still up more than 1.2 percent for the period to a new Index high of 109. Lululemon sees its men’s business gaining traction with 26 percent sales increase in third quarter. Unit is faring well despite worries about a denim headwind. Columbia Sportswear faced protesters outside its downtown Portland, OR store after CEO Tim Boyle complained about the homeless threatening employees and the mayor designated a high-pedestrian, no-sit zone around store. VF Corp. recently shook-up management team within its EMEA jeanswear division, and has strengthened its commitment to fur-free products. Adidas will take over from Under Armour as brand sponsor for the University of South Florida with a new eight-year deal that commences July 1, 2018 and is more product-laden than cash-rich.

RETAIL: 56

43.76%

BRANDS: 109

8.56%

Retail Name (Ticker Symbol)
Close on 11/30/17
Close on 12/07/17
% change over time
Big 5 Sporting Goods (BGFV)
BGFV
$7.55
$7.30
-3.31%
Sports Direct (LON: SPD)
SPD
$507.10
$514.89
+1.54%
Camping World (CWH)
CWH
$46.36
$47.21
+1.83%
Dick's Sporting Goods (DKS)
DKA
$29.46
$29.92
+1.56%
Finish Line (FINL)
FINL
$10.79
$10.86
+0.65%
Foot Locker (FL)
FL
$42.84
$43.20
+0.84%
Genesco (GCO)
GCO
$31.10
$28.75
-7.56%
Hibbett Sports (HIBB)
HIBB
$19.95
$19.35
-3.01%
Kohl’s (KSS)
KSS
$47.97
$48.88
+1.90%
Macy’s (M)
M
$23.80
$25.31
+6.34%
Sportsman’s Warehouse (SPWH)
SPWH
$5.04
$5.27
+4.56%
Shoe Carnival (SCVL)
SCVL
$26.78
$25.13
-6.16%
Tilly’s (TLYS)
TLYS
$16.50
$15.88
-3.76%
Walmart (WMT)
WMT
$97.23
$96.80
-0.44%
Zumiez (ZUMZ)
ZUMZ
$21.86
$21.15
-3.25%
Brand Name (Ticker Symbol)
Close on 11/30/17
Close on 12/07/17
% change over time
Acushnet Holdings (GOLF)
GOLF
$19.87
$20.21
+1.71%
adidas (ADDYY)
ADDYY
$104.44
$106.40
+1.88%
Amer Sports (AGPDY)
AGPDY
$26.25
$25.85
-1.52%
Callaway (ELY)
ELY
$14.51
$14.49
-0.14%
Columbia Sportwear (COLM)
COLM
$70.31
$69.58
-1.04%
Deckers Brands (DECK)
DECK
$74.73
$76.28
+2.07%
Fitbit (FIT)
FIT
$6.86
$6.78
-1.17%
GoPro (GPRO)
GPRO
$8.54
$7.99
-6.44%
lululemon (LULU)
LULU
$66.96
$72.01
+7.54%
Nautilus (NLS)
NLS
$13.10
$13.50
+3.05%
Nike (NKE)
NKE
$60.42
$60.60
+0.30%
Skechers (SKX)
SKX
$35.10
$35.37
+0.77%
Under Armour (UA)
UA
$11.93
$11.93
0.00%
VF Corp. (VFC)
VFC
$72.96
$71.92
-1.43%
Wolverine Worldwide (WWW)
WWW
$28.97
$29.49
+1.79%

Sports Insight Extra Podcast Series

Rob & Mike Barnes

The co-founders of Selkirk Sports, a Hayden, ID maker of Pickleball paddles and accessories, dish on the rise of the sport that counted 2.5 million participants in 2015.

Brendan Candon

CEO of SidelineSwap, an online marketplace for used sports gear and equipment, dishes on the market and whether it steps on the toes of traditional, full-line retailers.

Dave McGillivray

The long-time race director and long-distance runner weighs in on marathon participation, the future of event marketing and his latest venture that may bring a marathon to a MLB ballpark near you.

Paul Froio

Reebok’s VP of U.S. Retail and Direct-to-Consumer channels talks about the company’s new South Boston headquarters and adjacent global flagship store.

Aquiles M. Bermùdez P.

The former president of the Dominican Association of Free Zone Companies and current member of the National Commission of Footwear addresses the industry, Dominican Republic’s infrastructure and Footwear Technology Institute.

W. Andrew Martin

The managing director for Baird in Charlotte, NC discusses the M&A climate, consumer loyalty to brands today and the impact of private label.

Mark Sullivan

The president of Formula4Media, LLC previews The Running Event conference and trade show set for November 28-December 1 in Austin, Texas.

Bryan Smeltzer

The general manager of Zamst Americas talks sports protectives, dispelling some of the consumer and athlete misconceptions about the category.

Emily Walzer

Formula4Media colleagues Emily Walzer, Textile Insight editor, Jennifer Beaudry-Ernst, footwear specialist, and contributor Kurt Gray, owner of SimplyGrayDesign, dish on key trends from the final Outdoor Retailer trade show in Salt Lake City.

Judith A. Russell

Shifting consumer purchasing patterns are vital to understanding today’s marketplace. Russell, a marketing and strategic planning professional, offered up her thoughts at TexWorld in New York on a panel with Sports Insight Extra’s Bob McGee.

Will Decker

Family-owned Silicon Valley firm Plug and Play, which dubs itself the “Ultimate Startup Ecosystem,” has raised over $6 billion in venture funding during its 11 years while bringing corporations, venture capitalists and start-ups together.

Matthew Lyon

In the fragmented hydration market, where price points for performance products are on the rise, HydraPak is an OE supplier to numerous brands and has its own lightweight, flexible products.

Eric Hayes

Superfeet Celebrates 40th Anniversary. The employee-owned company introduces footwear and rolls out a 3D printed insole program.

Shawn Neville

BOA introduces New Tech and Names New CEO. Nothing will constrict Boa Technology CEO Shawn Neville from helping the Denver company improve its customized fit solution.

Waingarten and Frydlewski

No strings attached. The married Argentinean couple has raised nearly $20 million for Hickies, a Brooklyn company addressing how athletic shoes are closed around the foot two eyelets at a time.

Michelle Carmichael

The Co-founder and Managing Partner of Partners Growth, which brings premium brands into the U.S. market, talks Finnish children’s wear brand Reima. 

Brian Beckstead

Six-year old Altra is teaming with Utah State University to develop outdoor design talent.

Declan Condron

Let's Go Hyperwear: Former Equinox personal trainer merges the innovative, functional fitness gear from Austin, TX company with programming for schools, camps and institutions.

Hugues Gontier

Sly and Simple. BlueFox.io and its technology enable a retailer to interact with customers in store and track traffic. No beacon required. The CMO explains the benefits of the platform.

Reza Raji

The CEO of Xenio Systems talks about the company’s new platform that tracks where shoppers spend time in physical stores and its patented hyper-positioning technology.

Jacob Torres Espino

The director of export promotion for Mexico’s Guanajuato State government agency addresses the proposed impact of the Border Adjustment Tax by the U.S. and the possibility of a renegotiated NAFTA free trade agreement.

Isabelle Ohnemus

The founder and CEO of EyeFitU, a former investment banker, talks ‘glocal’ assortments, shoppers’ personal sizing and global web payment options.

Tom Cove #2

The president and CEO of the SFIA addresses the most serious threat the industry has faced in the past half-century and the expected re-introduction of the PHIT Act by Congress.

Matteo Scarparo

The Italian global trade expert in footwear talks about the present and future of TheMicam trade show and the potential impact of a Border Adjustment Tax in the U.S. on imported shoes.

Dr. James Eakin

Dr. James Eakin, chief marketing officer and director of U.S. operations for Xenoma, discusses the Japan company’s e-skin shirt and entire wearable category.

Rusty Saunders

Industry senior statesman Rusty Saunders dishes on industry leadership, pressing issues and the inactivity pandemic.

Barbara Barclay

Expert Barbara Barclay, president of RightEye, talks eye-tracking technology and her company’s recent alliance with Major League Baseball and USA Baseball.

Julie Sylvester

Julie Sylvester, Executive Producer at Living in Digital Times, talks trends likely to emerge at Sports and FitnessTech Summit at CES in Las Vegas.

Chris Palmer

Chris Palmer, Founder and CEO of BoxFox, talks excess inventory and solutions for vendors, retailers and distributors.

Susie McCabe

Susie McCabe, SVP of global retail for Under Armour who previously spent 16 years at The Ralph Lauren Corp., dishes on UA’s retail strategy and new Brand House in Boston.

Tom Cove

On the eve of Election Day, we talk to three leading industry lobbyists on how the results may impact trade in the sporting goods, outdoor and apparel and footwear industries.

Rich Harper

On the eve of Election Day, we talk to three leading industry lobbyists on how the results may impact trade in the sporting goods, outdoor and apparel and footwear industries.

Stephen Lamar

On the eve of Election Day, we talk to three leading industry lobbyists on how the results may impact trade in the sporting goods, outdoor and apparel and footwear industries.

Bill McInnis

The president of Reebok Future discusses the intent of the unit and the brand’s plans to develop footwear in a new way.

Tom Fowler

Polar USA CEO Tom Fowler talks technology and the future of smart wearables.

Paul Schille

TREW CEO Paul Schille dishes on the eight-year old company in the process of completing its Series A round of funding and his dual career.

Jason Kaplan

Milestone Sports CEO Jason Kaplan dishes on the company’s low-cost, wearable pod and how it will help specialty retailers connect.

Duncan Finigan

OOFOS marketing executive talks about the recovery footwear brand and candidly about her courageous personal health journey.

Matt Priest

Footwear Distributors and Retailers of America President Matt Priest the likelihood of the Trans-Pacific Partnership being passed soon.

David and Josh Higgins

ING Source executives dish about compression technology and the Hickory, NC company’s breakthrough OS1st Brace Layer System.

Charles Liberge

Jones & Vining’s Charles Liberge addresses strategies and directions for the iconic brand.

Jim Baugh

PHIT America’s Jim Baugh dishes on the inactivity pandemic.

Sue Dooley and John Daher

Rockport Group senior executives talk about the brand’s fresh start under new ownership that has a major emphasis on versatility.

Josh Shaw

Mission Athletecare CEO Josh Shaw says thermoregulation is the New York company’s singular focus.

Tim Porth

Tim Porth of Octane Fitness talks trends, Zero Runner and the company’s January acquisition by Nautilus Inc.

David Costello

The principal and founder of Rising Tide Associates talks about industry advocate lobbying for the domestic textile and footwear industries.

Steven D’Angelo

The ‘47 brand executive dishes on the Boston company and long-time MLB licensee founded by his father Arthur and his late Uncle Henry.

Pam Gelsomini and CB Tuite

Pam Gelsomini, president, and CB Tuite, VP–sales, discuss the company’s products, partnerships and what’s new for the season ahead.

Kenneth G. Andres

The tradeshowdirector for the American Sportfishing Association casts comments on the activity’s popularity, and trends in fishing.

Dick Sullivan

The principal and founder of Rising Tide Associates talks about industry advocate lobbying for the domestic textile.

Dave Coradini

The VP of sales and sponsorships for Spalding, Dave Coradini talks Shot Tracker and basketball.

Scott McGuire

The executive brand and product innovation leader dishes to F4M’s Emily Walzer on an array of topics.

Kelly Davis

Snow Sports Industries of America’s Kelly Davis talks weather, participation trends and how to handle the psyche.

Kevin Davis

The CEO of Performance Sports Group dishes on new bat standards and Own the Moment.

Gene McCarthy, Pt 2

Gene McCarthy, president of Asics America, speaks to Jen Ernst Beaudry on specialty run and more in the second part of the podcast.

Gene McCarthy, Pt 1

Gene McCarthy, new president of Asics Americas, dishes to F4M’s Jen Ernst Beaudry in the first of a two-part podcast.

Richie Woodworth

Saucony’s Richie Woodworth offers his views on brand’s running business and what it takes to manage through change.

Bruce Cazenave

Bruce Cazenave, CEO of Nautilus Inc., recently ranked 23rd on Fortune’s “Fastest Growing Companies” list.

Tony Armand

Armand is leading USB, created after the April merger of Shock Doctor and McDavid.

Gary Smith

Gary Smith has been at the helm of the Lawrence, MA firm for three years, and his 2016 strategies will broaden Polartec’s scope.

Marty Hanaka

City Sports CEO Marty Hanaka has 42 years in retail, starting at Sears in 1973.

Mike Dowse

Wilson Sporting Goods, one year removed from its 100th anniversary and a major restructuring, has a renewed focus and strategy.