Retail: 57
Retail: 183
Monday, October 8, 2018
Volume 2, Issue No. 39

U.S. Trade Group Targets Amazon for Counterfeits

The American Apparel & Footwear Association, citing its desire to protect its members’ intellectual property, as well as U.S. jobs and American consumers, wants leading ecommerce giants to prevent the selling of counterfeit merchandise on their websites. Additionally, the AAFA believes new tariffs on imported merchandise into the U.S. will “incentivize the sale of counterfeit products, as they will not be charged the added tax.”

In a 10-page letter to the Office of the U.S. Trade Representative last week, the trade group submitted comments for the annual Out-of-Cycle Review of Notorious Markets by singling out Amazon’s operations in the United Kingdom, Canada and Germany “as the most unresponsive and non-compliant” marketplace extensions worldwide, and physical markets in 18 countries where vendors are known for selling counterfeit merchandise. The list includes 16 locations in China, 28 in India, 19 in Bolivia, 8 in Russia and 21 in Thailand.

In recommending Amazon for the annual U.S. list that identifies foreign physical and online marketplaces that engage in and facilitate substantial copyright piracy and trademark counterfeiting, the AAFA wrote of the three Amazon platforms, “…Not all third-party sellers facilitate the sale of counterfeit goods on Amazon. However, there is a growing concern—which many members have validated through experience—that Amazon’s selling structure limits the ability of both brands and consumers to verify the authenticity of goods.”

The trade group, while expressing hope that there will be improvement in Amazon’s record in protecting intellectual property (IP), something that hasn’t occurred over the last 12 months, confirmed that it has had “regular and consistent dialogue” with the online behemoth over the last year to voice its members’ concerns.

Among the seven most flagged Amazon concerns of AAFA members are: fake brands that infringe on registered trademarks that sometimes resurface on the platform months after being banned; the use of a brand’s trademarks in product listings (particularly frustrating to footwear and apparel brands that do not sell directly on Amazon);  the unauthorized use of a licensed image in a listing that misleads consumers who do not know the product is not coming from an authorized seller; and Amazon’s practice of “commingling” first-party merchandise with third-party seller merchandise and failing to identify the third-party seller and/or the source of their inventory.

“Our (AAFA) members believe that Amazon has a responsibility to be more transparent to both brands and consumers,” the trade group writes. “Brands would like Amazon to be more forthcoming in terms of enforcement figures, especially when it comes to which listings they proactively remove. Furthermore, brands would like to see Amazon’s search functionality provide more transparent information to consumers—such as the ‘by [brand]’ feature.”

Footwear Insight / Textile Insight
Emerging Developments in Shoe Design & Direction

The latest looks in knitted footwear offer lightweight comfort and performance attributes.

These days, as textiles go, so goes footwear. The staying power of knit uppers is fueling footwear technologies and fiber developments that are fabric-centric with a strong focus on sustainability. Presentations at the recent Footwear Distributors and Retailers of America

(FDRA) conference held at NC State’s College of Textiles campus in Raleigh, NC, reflected this eco-textile theme during a gathering that brought together footwear execs and textile experts. Throughout the two-day event, attendees discussed how best to implement the latest tech and industry trends in a marketplace that increasingly seeks heightened environmental and social responsibility while demanding shorter lead times.

The trend line of importation of knit uppers in recent years is straight up, according to Matt Priest, executive director, FDRA. “Whether we’re at work, church, brunch, whatever, we’re all wearing knit footwear,” said Priest, who presided over FDRA’s Footwear Materials & Innovation Summit that attracted 100+ professionals from leading brands such as Nike, Toms, Target, Walmart, Columbia and Red Wing.

Indeed, it appears knits are here to stay. Tom White, senior director material innovation, Under Armour, mentioned how knit construction solves many problems related to breathability and levels of flexibility, for example while Jon Ervin, footwear product specialist for Avery Denison commented, “Even if consumers don’t know what the material benefits are, they understand what good fit feels like.” Joanne Stetson, director of materials at Ariat, explained that while leather remains a material mainstay for Ariat, the brand has recently introduced mesh athletic-style sneakers. “We’re developing knit styles, but for us, offering something with eye appeal is more important than what the technology is about.”

Panelists Jon Ervin, Avery Dennison; Joanne Stetson, Ariat; and Tom White, Under Armour

All three remarked on the importance of sustainability today. Said Ervin, “A few years ago there was no traction around recycled poly, for example. Now it is full on. I believe there is also a push toward natural fibers – like wool, and sustainable solutions.”  

Jeff Dougherty, director of materials, Wolverine Worldwide noted a move toward greater traceability in the leather industry, such as the use of new DNA technology to allow for “from slaughter to product” tracking.

Brands and retailers realize they need to be onboard with sustainable practices and products as consumer interest in eco expands and regulations around the world tighten. And with the current knit revolution, it’s also clear that sustainability measures go hand in hand with modern textile development.

Former Nike Execs Create Design Strategy Firm

Keith Crawford and David Odusanya, former Nike executives for a combined 37 years, have launched the creative agency CO-Lab. The Portland, OR firm will specialize in design strategy from brand and product development to consumer experience.

“Keith and I are thrilled to launch CO-Lab. together,” said Odusanya. “We’ve known and worked with each other for close to 20 years, and we both thrive on creative thinking, ideas, strategy and disruption…We’re excited to bring our synergy, along with our deep design backgrounds, to other companies, and to work together with them to create powerful brands.”

Crawford spent 17 years at Nike, holding executive creative director and senior design positions in Jordan, basketball, women’s and team sports. Prior, he represented the likes of Converse, Sony, Diesel and Skype as design director for Anomaly London. Odusanya, meanwhile, spent two decades at Nike in numerous positions, including VP Design Global Football.  

Entrepreneur and Long Island native Dave Goldberg dishes on his business relationship with two streetwear brands that began in the 1980s, Ewing and Troop.

Footwear Insight
VF Corp. Selling Reef Brand to The Rockport Group

Reef, the beach lifestyle brand founded by two Argentinean brothers in 1984 and acquired by VF Corp. in March 2005, is being sold to The Rockport Group in a transaction slated to close this month. Reef is part of VF’s Active division along with Vans, Eagle Creek and five other brands. When VF announced its Reef acquisition, it reported the brand’s FY04 revenues as $75 million plus additional royalties.

Under the ownership of The Rockport Group, itself acquired by Charlesbank Capital Partners in August, Reef will operate as an independent global brand and maintain its Carlsbad, CA headquarters. Rockport, headed by industry veteran Gregg Ribatt, already markets the Rockport, Aravon and Dunham footwear brands.

For its part, VFC, in a statement, said the Reef divestiture is part of its ongoing, multi-year business strategy to reshape its brand portfolio.

A Jeans Jamboree with a Strong Sustainability Beat  

At Denim Days NY exhibitors displayed jeans from floor to ceiling

Talk of sustainability was loud and clear at the Metropolitan Pavilion where the denim community gathered recently to celebrate all things indigo. The second-annual NY Denim Days, a two-day event open to consumers, showcased product from new and established brands and offered interactive displays, workshops and a festive street fair. Throughout, an eco-narrative prevailed. Exhibitors featured clean dyeing and finishing technologies, ethical sourcing initiatives and fabrications of earth-friendly fiber blends in a collective effort to produce more environmentally responsible garments. An upcycling trend was also well represented as energy around an ethos of “renew and repair” is fueling an entire category of denim design.  

Building on this eco foundation, firms are now increasingly backing up sustainable tech and design advances with effective messaging to get the word out not only to the trade, but also to consumers. A good example is Tencel’s new consumer branding campaign. The tag line, “Feels so Right,” captures today’s consumer trend of wanting garments that feel good in terms of comfort but also feel good in terms of wearing something eco-correct. A “Tencel forest” display greeted attendees in the entryway to the exhibit hall complete with a “Tencel tree” made of patchwork Tencel denim to signify the sustainably-derived origins of the Lenzing branded fiber.  

JCPenney Hires CEO

Jill Soltau, a 30-year retail veteran who most recently served as president and COO of the JOANN Stores chain and has prior experience at both Sears and Kohl’s, takes over as CEO of JC Penney on Oct. 15. She will be the first woman to lead the 116-year-old department store, which has been without a CEO since May.

While Soltau’s strategy for lifting Penney’s fortunes isn’t entirely known, her retail career has been focused on the needs of a value-based consumer.

JCP recently introduced its private label Peyton & Parker apparel and accessory brand for the entire family in 400 of its 860 locations. In June, the Plano,TX-based retailer introduced 650-sq. ft. Fanatics shops in 325 locations and 1,300 sq. ft. Fanatics shops in 50 of its flagship doors, promising an elevated shopping experience for local, collegiate and pro sports team merchandise.

While footwear/handbags have accounted for 8 percent of merchandise sales for three consecutive fiscal years, both women’s (22% in FY17 vs. 23% in FY16) and men’s apparel and accessories (21% vs. 22% in FY16) sales declined last year.

Sandy Bodecker

Sandy Bodecker, illustrated by Wu Yue. Image courtesy of Nike.

The 36-year Nike employee, whose fingerprint on the company stretches from running and soccer to the Swoosh’s entry into action sports, has passed away. He was 66. The former ski racer, who began his Nike career as a product tester, battled throat cancer for more than 16 years. He was married to former Australian sprinter Cathy Freeman for four years. She pared back her training regimen in 2002 to assist Bodecker in his initial cancer recovery.

Bodecker, who led Nike’s global football division at one point, was oft credited with making the brand a major player in global soccer through heavy investments in national team sponsorships. Later, for more than a decade starting in in 2002, he navigated Nike’s entry into the action sports arena of skateboarding, surfing, snowboarding, BMX and motocross. Six years ago, he was named VP of Special Projects at Nike, and more recently, he oversaw the company’s ‘Breaking2’ project that focused on breaking the sub-two-hour marathon and helped develop the brand’s Vaporfly and Zoom Fly running shoe concepts.  

Puma Launches #REFORM

Inspired by Olympian Tommie Smith and his “Silent Gesture” during the 1968 Mexico City Olympic Games that sparked global debate about civil rights and universal equality, Puma launched its #Reform platform on Oct. 6. The company has also created Team#REFORM, a collection of individuals who “believe progress toward universal equality needs to be achieved faster.” Captains of the group include rapper Meek Mill (who will focus on criminal justice reform), WNBA’s Skylar Diggins-Smith (gender equality) and Captain Emeritus Tommie Smith (universal equality).

Additional #REFORM Captains will be named in the months ahead. #REFORM Captains will work with Puma to identify beneficiaries of #REFORM tactics, including product creation, recognition grants and #REFORM Summits, where like-minded individuals will work together to promote an agenda for change. On Oct. 16th, the brand will celebrate the 50th anniversary of the “Silent Gesture” with a social media movement called #THIRDSALUTE and launch a “Power Through Peace” collection where all profits from the line will be donated to charities pursuing universal equality.

What’s Hot? What’s New?

Sperry is teaming with lifestyle brand vineyard vines on a new multi-season collection for men, women, children and baby. Line includes a Seaside slip-on with vineyards’ signature whale design. Collection ranges from $40-$125 retail.

and Supreme are connecting again for a Fall/Winter collection in a capsule called Sid Pro, a 1995 casual shoe, with four new styles. Patagonia’s Capilene Air base layers are made of 51% merino wool and 49% recycled polyester with a 3D knit structure. $149 for hoodie, $129 retail for crew neck.

Patagonia’s Capilene Air base layers are made of 51% merino wool and 49% recycled polyester with a 3D knit structure. $149 for hoodie, $129 retail for crew neck.

The Buzz

BSN Sports completes its acquisition of Port Jeff Sporting Goods, Port Jefferson, NY, which has been a team supplier on Long Island, NY since 1971. Richie LoNigro, founder, and the rest of the Port Jeff staff will join BSN, which has added 200+ sales professional to its team over the last 12 months.

Implus, the Durham, NC accessory company, has added RockTape to its portfolio of athletic fitness and outdoor brands. In conjunction with the acquisition, RockTape’s existing office in Campbell, CA will be maintained to support the expansion of a newly created Clinical vertical within the company for RockTape and other Implus products. The deal represents the ninth acquisition for Berkshire Partners-controlled Implus since April 2015.

Fashion Footwear Association of New York (FFANY) and Informa PLC, organizer of FN Platform, MAGIC, Coterie and PROJECT, forge a collaboration to promote the development and growth of the U.S. footwear industry. The partnership will focus on the development of research and recommendations for footwear brands and retailers on omnichannel strategy and the establishment of coordinated trade shoe calendars for platforms in New York and Las Vegas.

Tubes of the Week

Mon, Aug 28, 2017
Vol 1, Issue No. 33
Numbers In Play
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
Against the backdrop of the lowest unemployment rate since 1969 at 3.7 percent; a Wall Street worried that strong economic data could push the Federal Reserve to raise interest rates at a faster pace; and a Congress preparing to confirm Judge Brett Kavanaugh as the next U.S. Supreme Court justice, the Retail segment extended its weekly losing streak to five as all 15 stocks fell during the period. Meanwhile, an estimated 60 retailers will keep their brick-and-mortar doors closed on Thanksgiving, including —Academy Sports & Outdoors, Big 5, Nordstrom, Sierra Trading Post, REI and Sportsman’s Warehouse. Heading into the holiday selling season, where the National Retail Federation estimates Nov.-Dec. aggregate retail sales will rise 4.3-4.8 percent versus 5.3 percent in 2017, Hibbett is launching a ‘Buy Online, Pick-Up in Store’ function on its app and allowing customers to reserve items for in-store try-on. Credit Suisse analyst Michael Binetti suggests Nike’s decision to team with Walmart-owned could be a big blow to Dick’s SG business with the Swoosh. Opinion here is the Nike assortments in each channel will be markedly different. Amazon’s new $15 an hour minimum wage could force other retailers to follow suit.
Sea of red as all stocks are negative for the period and the segment dips below the 180 mark for the first time in weeks. It may be eight days until the start of the NBA season and four weeks until the college season tips off, but basketball and the companies competing in the category are already at center court. A federal trial involving former Adidas executives James Gatto and Merl Code got underway with Gatto’s lawyer reportedly telling jurors, “They (families of young basketball players) negotiate with various colleges that are trying to recruit their sons…You will see evidence that those colleges then turn to their corporate sponsors—Adidas, Nike or Under Armour—to give these parents what they were looking for.” The trial is supposed to last a month. Meanwhile, Adidas endorser Kanye West, who appeared on the season opener of “Saturday Night Live” on Sept. 30, wants the NBA to approve his Yeezy basketball shoe with “glow in the dark” heels and a reflective design for wear by league players. But NBA officials are more likely to ban the style, sources told ESPN, due to the reflective elements being distracting to in-arena spectators and TV viewers. Puma continues to claw its way back into the category and annoy larger rivals ahead of The Clyde Disrupt launch. The Cat has offered Golden State Warrior center DeMarcus Cousins a multi-million dollar endorsement deal, forcing Cousins’ prior endorsement partner, Nike, to raise its financial offer if it wants to retain him. Even if Puma doesn’t end up with Cousins in the fold, the brand already has Rudy Gay and Boston’s Terry Rozier in the brand, not to mention Jay-Z as its Basketball Creative Director.  





Weekly Review

Retail Name (Ticker Symbol)
Close on 09/27/18
Close on 10/04/18
% change over week
Big 5 Sporting Goods (BGFV)
Sports Direct (LON: SPD)
Camping World (CWH)
Dick's Sporting Goods (DKS)
JD Fashion (JD)
Foot Locker (FL)
Genesco (GCO)
Hibbett Sports (HIBB)
Kohl’s (KSS)
Macy’s (M)
Sportsman’s Warehouse (SPWH)
Shoe Carnival (SCVL)
Tilly’s (TLYS)
Walmart (WMT)
Zumiez (ZUMZ)
Brand Name (Ticker Symbol)
Close on 09/27/18
Close on 10/04/18
% change over week
Acushnet Holdings (GOLF)
adidas (ADDYY)
Amer Sports (AGPDY)
Callaway (ELY)
Columbia Sportwear (COLM)
Deckers Brands (DECK)
GoPro (GPRO)
lululemon (LULU)
Nautilus (NLS)
Nike (NKE)
Puma (PUMA)
Skechers (SKX)
Under Armour (UA)
VF Corp. (VFC)
Wolverine Worldwide (WWW)

Sports Insight Extra Podcast Series