SGI weekly intelligence july 19thDocument Transcript
VOLUME 2, NUMBER 28
JULY 19, 2010
Wolverine Worldwide results, backlog
strengthens but cost pressures mount.
June sales were generally strong but
SG sales lagged as BTS looms.
Asics acquires Haglöfs for a significant
premium to enter outdoor market.
Billabong buying spree continues
with purchase of RVCA.
Under Armour president David
NexCen will liquidate as the SEC
investigation ends without action.
NRF is pleased with new bank bill
provisions on swipe fees.
John Horan’s Deep Intelligence
looks at Nike and Adidas in the
Judy Spies: Rider, Moving Comfort
All Sports Center General Growth
Properties Freshwater fishing
Golfsmith Schuykill Valley Sports
The Fan’s Wear Champion
Chinese golf counterfeiters Li &
Fung New Balance Reebok
Sport Hansa CPSC recalls
Since introducing the first women’s-
specific running short in 1977, Moving
Comfort has been dedicated to
designing and engineering apparel
for active females. Shown here is
the Alexis Sports Bra and Momentum
Short, part of the Spring 2011
collection. Visit the new product
department to learn about the
company’s latest innovation.
Photo: Ty Milford for Moving Comfort.
INDUSTRY NEWS AND ANALYSIS FOR RETAILERS
From the Editorial Team of Sporting Goods Intelligence
WOLVERINE POSTS STRONG Q2, SEES
COST PRESSURES AHEAD
With improving orders and an increase in net income of
117% to $17,222,000 from $7,906,000, Wolverine World-
wide upped its guidance for the year but cautioned that
some of the gross margin improvement it saw in H1 would
evaporate as mid-single-digit cost increases work their way
into the supply chain in H2 followed by an expected high-sin-
gle-digit increase in H1 of next year. Sales in 12 weeks end-
ed June 19 rose 5% to $258,199,000 from $246,438,000.
The Outdoor Group, including Merrell, Patagonia and
Chaco, had a 5% sales gain to $97.9 million while Wolverine
had a 10% increase to $54.9 million. Heritage brands such
as Sebago fell 2% to $44.3 million and Hush Puppies fell 6%
to $25.6 million. WWW noted that its order book was up a
hefty 38%, but added that the comparison was to a period
when retailers were ordering very close to need whereas
now they are ordering in a more normal time cycle as well as
making commitments early enough to mitigate some of the
impending price increases. Some $4.5 million of the backlog
was also a delayed delivery on Merrell and Caterpillar that
was shifted into Q3.
WWW said it had not experienced strong resis-
tance to the price increases it has instituted for H2,
and believes that its competitors are also raising pric-
es. Detailing the cost pressures facing it, WWW said about
55-60% of the increase was coming from higher materials
costs. Another 10% was the result of higher wages in Asia
because of the well-documented labor shortage. Roughly
JUly 19, 2010 PAGE 3
10% was attributed to increased factory overhead and 7%
was the result of high duty rates as a result of the delay in
passing the Miscellaneous Tariff Bill. Merrell has been par-
ticularly hard hit by the delay. Another 3-4% of the cost in-
creases are the result of higher transportation costs, which
continue to rise.
Despite some of the caveats, WWW made it clear
that its business was strong and that it believed it was
gaining market share. Sales guidance for the year was
upped to $1.19 billion to $1.22 billion, an increase of 8-11%
vs. the prior year and up from the earlier forecast of $1.14-
1.17 billion. EPS guidance was increased to $1.98-2.04 per
share ($100 mm) from $1.88-1.96. It also noted that it was
investing in an incremental marketing spend for its high
growth brands, with two thirds of that amount targeted at
Merrell and the remainder spread among Sebago, Chaco and
Cushy. It added that it had seen significant progress in Mer-
WWW said it continued to expect a slow recovery
with some choppiness along the way but didn’t think a
double-dip recession was likely. It has seen the emerg-
ing market rebound strongly and the U.S. leading Europe,
feeling that Europe was one to three quarters behind the
U.S. in entering the recession and would follow it out by a
similar margin. Footwear has usually been one of the first
categories to recover in a recession, it opined.
A big driver of Q2 improvement was gross margin ex-
pansion to 40.3% compared to last year’s 37.8%. Lower
closeout levels, lower sourcing costs and improvements from
PAGE 4 JULY 19, 2010
last year’s restructuring efforts were all factors. While lower
closeout levels and the efficiencies are expected to continue,
the higher input costs in H2 are expected to hold gross mar-
gin roughly level for the year, WWW said. However, investing
in higher margin brands is expected to help offset some of
the price increases, as will continued growth in direct con-
sumer sales. Now at 7% of sales, direct sales rose 17% in
Q2 and WWW is targeting them at 15% of sales in the me-
JUNE SG SALES LAG AS RETAILERS
PREPARE FOR BTS SEASON
Total unadjusted U.S. retail sales rose 4.9% year-over-
year in June, according to statistics released by the U.S.
Census Bureau, and were up 3.3% y-o-y on an unadjusted
basis according to National Retail Federation research for
the same period. Clothing and clothing accessory store sales
rose 6.1% on an unadjusted basis, y-o-y in June. As for the
sporting goods, hobby, book & music stores segment, y-o-y
June sales on an adjusted basis improved 1.5% to $7,083
million from $6,981 million. On a non-adjusted basis, seg-
ment sales were 2.0% higher in June at $6,679 million. In
H1, the sporting goods, hobby, book & music store segment
posted a 3.8% gain on non-adjusted sales to $38,906 mil-
Meanwhile, according to a retail panel survey con-
ducted by research firm Leisure Trends, the Fourth of
July Weekend proved to be a boon for many retailers
PAGE 6 JULY 19, 2010
with 79% of respondents posting a 20%+ increase in
year-over-year retail sales for the period (July 3-5).
Only 6% of respondents had a y-o-y sales decline of more
than 20% and 9% had flat sales for the weekend. Leisure
Trends said there was no consensus among its panel mem-
bers as to whether the holiday falling on a Sunday helped
or hurt sales growth. However, U.S. shoppers continued the
trend of delaying purchases to the last minute with 64% of
respondents reporting a sales uptick the week prior (June
26-July 2) and 19% suggesting the gains occurred over the
There was a seemingly unwarranted alarm sound-
ed in early July about the toning footwear category,
specifically on sales of first-generation Shape-Ups
models from Skechers. U.S. retailers, including the Bob’s
Stores in New England and Macy’s, have begun a three-
week promotion offering a 20% discount ($80-88 retail vs.
$100-110 prior) on first-generation Shape-Ups from Skech-
ers. Addressing the sale in a note, Susquehanna Financial
Group said the discount window for the popular Skechers’
footwear that ends Aug. 4 was planned to allow retailers to
clear inventory ahead of the brand’s next generation of ton-
ing footwear. The current promotion is the first time that
retailers have been allowed to discount G1 Shape-Ups that
have already sold several million pairs. Susquehanna, citing
its conversations with management and retail store manag-
ers, says the toning category “continues to be very strong”
and adds that the segment, as evidenced by Skechers’ next-
generation of toning products, will be evolving away from
rocker-style bottoms to lower, athletic-style outsoles. Also,
PAGE 8 JULY 19, 2010
the investment house adds that Skechers “needs to be ag-
gressive in product development and marketing and [we]
think the new lineup [out in Q4] is just that.”
Looking ahead, research from ShopperScape suggests
53% of U.S. consumers intend to spend about the same on
BTS shopping this year as in 2009. Another 21% of respon-
dents said they intend to spend “somewhat or much more”
and 19% intend to spend “somewhat or much less.” The re-
search is based on a June survey of slightly more than 4,000
U.S. consumers. On apparel specifically, it appears consum-
ers will shop a wider range of banners this year in search of
the right style, size and price for junior. Discount department
stores garnered 55% of the responses for BTS apparel des-
tinations with Walmart (37%) outpacing Target (33%) but
value department stores were the choice of 53% of respon-
dents, led by Kohl’s (32%) and JCPenney (27%). Meanwhile,
20% of survey respondents said they planned to shop for
clothing at off-price retailers such as Marshall’s and TJ Maxx
and 24% intend to head to apparel specialty banners such
as American Eagle, The Gap and Old Navy.
But a separate Back-To-School survey conducted for the
NRF by BIGresearch, contends spending on apparel, shoes,
supplies and electronics will be 10.5% higher this season
to $606.40 vs. $548.72 in 2009, but that 44.3% of families
will seek out store or generic brands versus 41.7% in 2009.
Also, teens and pre-teens, despite their double-digit unem-
ployment rate this summer, will be asked to spend 2.8%
more of their own money at BTS for apparel, shoes and ac-
JUly 19, 2010 PAGE 9
ASICS ACQUIRING HAGLÖFS TO
ENTER OUTDOOR MARKET
Asics Corp. will venture into outdoor sporting goods and
apparel with its planned Aug. acquisition of Haglöfs Holding
from investment firm Ratos for SEK 1 billion ($133.3 mm),
which will result in an estimated net exit gain of approxi-
mately SEK 765 million ($102.0 mm) for the investment
house and an annual return of approximately 30%. The Sö-
derberg family and related foundations own approximately
35% of Ratos.
The purchase price is approximately 20x net in-
come, 15x EBITDA and 1.4x revenue, indicating that
Asics sees strong potential for the largely European
brand that has been making backpacks for 97 years
and currently distributes the majority of its softgoods
and hiking gear on its home continent. In FY09, Haglöfs’
consolidated sales rose 19% to SEK 590 million ($78.7 mm)
as net income grew 25% to SEK 48 million ($6.4 mm). Sales
outside of Sweden represented 77% of turnover in FY09 with
sales to 17 European countries and Japan.
The planned acquisition is part of Asics’ medium-term
global expansion plan, the Asics Challenge Plan 2010.
Among other things, the strategy calls for expanding the
brand’s relatively small apparel business by introducing func-
tional, high-quality products while continuing to grow a core
running business. The Japanese company says it expects
synergies with Haglöfs in management, technology, produc-
tion and sales channels.
PAGE 10 JULY 19, 2010
BILLABONG TO ACQUIRE CALI
APPAREL BRAND RVCA
Only a week after declaring its intention to acquire Ca-
nadian action sports retailer West 49, BBG reaches a condi-
tional agreement to acquire California art and design-driven
apparel brand, RVCA. Terms of the pending transaction
weren’t released by Billabong, but estimates out of Australia
suggest BBG paid approximately $30 million, or 1x sales, for
The acquisition is projected to contribute about 2% of
Billabong’s group revenue and be EPS neutral in FY10-11.
RVCA currently generates the majority of its top line in the
U.S. market, but has begun expansion into Australia and
Europe under the leadership of brand founder Pat Tenore,
who will remain with the company and its existing manage-
ment team after the transaction is closed. Billabong is slated
to report full-year results in mid-August when more details
about the future direction of the two acquisitions will likely
Meanwhile, the recent buyout offer from Billabong
to West 49 for C$1.30 per share, or a total cash con-
sideration of C$83.2 million ($80.5 mm), will appar-
ently move forward as Zumiez drops out. Zumiez had
expressed a willingness to bid higher for West 49 subject to
an expedited due diligence process that West 49 declined
because of concerns about revealing confidential informa-
tion. ZUMZ is planning to enter the Canadian market in Van-
couver next year.
PAGE 12 JULY 19, 2010
JUly 19, 2010 PAGE 13
UNDER ARMOUR PREZ DAVID
MCCREIGHT IS DEPARTING
The former Lands’ End, Disney Store and Smith &
Hawken executive was hired as Under Armour’s president on
July 1, 2008 and is leaving the company on Aug. 20. He will
be replaced as president by Kevin Plank, CEO.
In its statement announcing the transition, Under Ar-
mour did not hint to any reasons behind McCreight’s depar-
ture, including whether he was leaving the branded perfor-
mance apparel firm for another retail job. When UA hired
McCreight, his responsibilities included developing the long-
term growth strategy for the brand. Last year, McCreight was
paid $974,225 by the company, a drastic reduction from the
$4.87 million salary that he received in 2008 when his total
compensation package included $4 million in UA shares.
PAGE 14 JULY 19, 2010
NEXCEN PLANS ASSET SALE; NO SEC
Independent proxy advisory firms Glass Lewis and ISS
Proxy Advisory Services are each recommending NexCen
Brands shareholders approve a sale of the company’s fran-
chise business assets and franchise management operations
to an affiliate of investment house Levine Leichtman Capital
Partners for $112.5 million. NexCen shareholders are sched-
uled to vote on the proposal on July 29. Meanwhile, the SEC’s
division of enforcement completes its two-year investigation
of the company without recommending any action.
NexCen says the liquidation of the New York company
to Global Franchise Group is imperative. Without it, NexCen
shareholders may receive little or no value from remaining
alternatives, including a filing for bankruptcy protection. After
paying off its lender, BTMU Capital, NexCen expects to have
$14-15 million in cash after the asset sell-off and $0.12-.16 a
share ($8.0 mm) of that to distribute to shareholders.
The proposed asset purchase by LLCP would be its largest
single investment ever, surpassing the $96.8 million it sunk
into Consumer Finance Services, which provides financial ser-
vices in the auto sector. NexCen’s franchise holdings in the
quick service restaurant segment—Great American Cookies,
MaggieMoos, Marble Slab Creamery, Pretzelmaker and Pret-
zel Time—appear to be a good fit with LLCP’s current portfolio
that includes stakes in Cici’s Pizza, Beef O’Brady’s, Quiznos,
and Wetzel’s Pretzels together valued at $84.1 million. But
how LLCP might manage NexCen’s other franchise holdings,
The Athlete’s Foot and Shoebox New York, is less certain.
PAGE 16 JULY 19, 2010
NRF APPLAUDS ‘SWIPE FEE FIX’
PASSED BY SENATE
The trade group is more than pleased about the provi-
sions in the financial services reform bill passed by the U.S.
Senate that regulates debit card swipe fees and makes it
easier for retailers to give discounts to customers who don’t
use credit cards. By requiring debit fees that are proportion-
al to actual costs, retailers will see their costs lowered and
will be able to pass on the savings through lower prices and
greater value for the customers, the National Retail Federa-
tion said. Eliminating obstacles to giving a discount or other
benefit for cash, check or debit cards will make it easier for
merchants to reward customers who are clued into the fees
and choose not to use credit cards. Swipe fees related to
debit card use hit $20 billion in 2008.
The U.S. Senate voted 60-39 to approve the conference
report on H.R. 4173, the final version of a pair of wide-rang-
ing financial service reform bills first passed by the House
last Nov. and in the Senate in May. The report was approved
by the House on June 30 and now heads to the desk of Pres.
PAGE 18 JULY 19, 2010
WORLD CUP MARKETING WAR BETWEEN
NIKE AND ADIDAS STAYS HEATED
The debate over who rules global football was far from
settled during the recent World Cup. On the simplest level, a
somewhat improbable Nike team, the Netherlands, faced a
Spanish Adidas team in the final round, and Spain won. From
a sales perspective, both claim the honor, though the debate
is somewhat semantic. Adidas correctly claims it is the world’s
largest football brand with sales of $1.85 billion. Nike correctly
claims to be the world’s largest football company based on its
$1.7 billion in Nike brand football sales and the addition of Um-
bro, whose $200 million in sales have a wholesale equivalent of
But the argument goes much deeper than results on the
pitch or discussions of sales. The marketing efforts that the two
brands use to define themselves to the global audience had some
interesting story lines as well. Nike got most of the attention at
the outset with its “Write the Future” three-minute video that
drew widespread critical acclaim for its witty, fast-paced content
featuring many of the game’s top stars. The video has a record-
setting 19.4 million views on YouTube.
Then the tournament started and almost every person fea-
tured in the Nike video was tied to a disappointment. One player
broke his arm and his team failed to make it into elimination.
The French captain led the infamous protest against training as
the team performed poorly, leading to governmental attention.
Wayne Rooney, a central character in the video, led the English
team to a disappointing performance and Italy’s Fabio Cannavaro
allowed five goals in round robin play before packing it in. Ron-
aldinho’s chances of writing the future were somewhat tempered
by his failure to play for the Brazilian team.
This immediately led to much press coverage of a “Nike jinx,”
even pointing out that Roger Federer made a brief appearance
in the video and lost in the quarterfinals at Wimbledon. Nobody
really cared that Kobe Bryant also was in the video and won the
PAGE 20 JULY 19, 2010
NBA title. Obviously, Nike was trying to cover its bets by using
such a large number of players but the results didn’t work out
that way. To some extent, it also represents a misreading of the
football gestalt that really is much more about team performance
than individual performance. It is not like the NBA.
Adidas, meanwhile, had a clever takeoff on Star Wars that
also gathered much critical praise and didn’t fall into the trap of
using current players. Only soccer legends Franz Beckenbauer
and an aging David Beckham appear in the video and the most
recognizable character to Americans is a funny bit by Snoop Dog.
The video isn’t really even about football as the Originals logo is
used very prominently. One of the football-oriented ads that uses
the performance logo didn’t use any top players at all, but rather
a pick-up game using barefoot African children whose feet get
the three stripes superimposed at the end. Only one commercial
actually featured football stars, called Quest.
Of course, Adidas’ World Cup balloon was punctured by wide-
spread criticism of the Jabulani ball, despite the fact that it sold
13 million of them. Players complained openly about unpredict-
able flight paths and mysterious lapses by goalies. Scientists
weighed in with tests saying that the ball’s much ballyhooed per-
fect spherical shape was the reason. FIFA itself promised to ad-
dress the issue of the ball after the tournament.
A study by Nielsen measuring blogs, social networking sites
and message boards cited in the Portland Business Journal found
that Nike took a strong early lead on the Internet buzz meter with
a 30.2% share, more than double that of Adidas. However, by
the end of the tournament, Adidas had climbed into the lead with
a 25.1% share with Nike down to 19.4%. The article noted that
about 8% of the Adidas buzz related to the controversial ball. Alto-
gether, the answer to who won the World Cup Buzz contest was a
bit like a World Cup Game: Lots of action but not much scoring.
John Horan founded Sporting Goods Intelligence in 1984. He has
over 30 years experience reporting on the sporting goods industry.
If you’d like to comment on this story, join us on
JUly 19, 2010 PAGE 21
RIDER SANDALS NOW
The brand is embracing a manufacturing initiative that
focuses on recyclability. Having already started with its
Spring 2011 line, all Rider after sport footwear is being
made in a factory that recycles 100 percent of the excess
material created in the production process. The factory also
recycles 100 percent of its production water, 100 percent of
its excess PVC and 99 percent of its industrial residues.
Grendene (Rider’s parent)
noted that 960.5 tons of ma-
terials are being recycled
each month, reducing
the total annual impact
on the earth’s environ-
ment by 11.5 million
kilograms (25.35 mil-
lion pounds). Moreover,
Rider sandals are be-
ing made with up to 30
percent recycled mate-
rials in each style. The
The women’s Premiun (turquoise and
white), Energy (pink and white) and
Dunas WM II (brown and lilac) are
made with up to 30 percent recycled
materials, and the factory recycles 100
percent of the excess material created
in the production process.
PAGE 22 JULY 19, 2010
majority of shoes in Rider’s 2011 line are phthalate-free, as
are all models in the children’s collection.
To bring the effort full circle, the finished Rider shoes
can also be recycled and several models bear the #3 recy-
cling symbol on the outsole. This reduces the waste going
into landfills and returns the used materials to the recycled
For Spring 2011, key Rider styles for women include the
Premiun, Energy and Dunas WM II, all of which are retail
priced at $28. The Premiun has an EVA-lined thong strap
and ultra-cushioned EVA insole. The Energy slide features
unique ventilation panes to keep the feet cool, and an EVA-
topped Flexspand footbed for comfort. The Dunas WM II is
a Brazilian-inspired thong that offers a cushioned textured
footbed and a semi-transparent upper. All three models are
100 percent free of phthalates, cadmium and lead.
For men, the Mali II Thong
features a multi-textured thong
upper with a stitch-accented
microfibre strap. The fab-
ric toe tether secures the
thin-profile sole, which
The men’s Mali II Thong (gray and
red) and Deck II (gray and orange)
are completely free of phthalates,
cadmium and lead.
JUly 19, 2010 PAGE 23
is topped with a cushioned EVA insole. The Deck Brazilian-
inspired thong has an ultrasoft EVA footbed (the same
kind found on wakeboards) and the woven upper is affixed
with a soft fabric toe tether. Both styles are retail priced at
$28 and, like the women’s models, are 100 percent free of
phthalates, cadmium and lead.
On the corporate side of the business, Rider’s parent,
Grendha Shoes Corp. of Orlando, FL (a wholly owned subsid-
iary of Brazil-based Grendene), changed its name in June to
Grendene USA Inc. Grendene is a publicly traded company
listed on the São Paulo stock exchange’s Bovespa Index.
With a workforce of over 25,000 employees worldwide, the
company is one of the largest makers of synthetic footwear
in the world, producing 176 million pairs of shoes at its six
industrial units. In addition to Rider, Grendene’s brands in-
clude Melissa, Grendha, Ipanema, and Cartago.
PAGE 24 JULY 19, 2010
MOVING COMFORT INTRODUCES
LUNA HYBRID SPORTS BRA
Continuing its tradition of innovation in women’s-specific
performance apparel, Moving Comfort (a division of Brooks
Sports, Inc.) will offer Luna, an advanced sports bra, for
Spring/Summer 2011. The garment features a hybrid design
that combines performance characteristics with everyday
comfort and aesthetics.
Key attributes of Luna (SRP $52) include a bonded neck-
line, straps, armholes and back opening to minimize bulk
and chafing; hidden support
features that accommo-
Luna’s hybrid design
date a range of sizes; offers women high-
and interior cups lined performance
features and all-
with S.Cafe (made day comfort.
from recycled coffee
grounds) that boost
and odor control.
In addition, a front
mesh panel offers
tion, and adjust-
able back straps
and back closure pro-
vide a customized fit.
Luna will make its de-
but at the Outdoor Retailer Summer Market
show in August, and will launch at retail in February 2011.
JUly 19, 2010 PAGE 25
ASICS CONTINUES TO BROADEN
Earlier this year, the company launched a global ad-
vertising campaign with the aim of drawing more runners
into the brand while also underscoring its strong acceptance
among the sport’s serious participants. “The Cleansing Power
of Sport” captures the essence of Asics’ 60-year philosophy:
by staying active, one can shed negativity and achieve a
sound mind in a sound body.
All elements of the campaign focus on the transforma-
tive power of running. Burdened by countless negative in-
fluences that weigh people down every day, each runner in
the campaign demonstrates how negativity can literally be
washed away through running. The powerful imagery and
icons deliver the message in a simple and impactful way. The
company doesn’t want people to merely run, but to embrace
running and the sense of well being that the sport offers.
Click here to see “The Cleansing Power of Sport.”
PAGE 26 JULY 19, 2010
ALL SPORTS CENTER, based in Carrollton, GA, some 47
miles southwest of Atlanta, filed for Chap. 7 bankruptcy pro-
tection on July 6. The business, whose 2009 turnover slid 14%
to $590,049 for the 12 months ended Oct. 31, is 75%-owned
by Dale Fleming, president. The remaining stake in owned
by Don W. Dedman, Jr., an All Sports Center VP. The petition
lists $344,601 in liabilities, including $223,689 owed to un-
secured creditors, and $32,250 in assets. Russell ($32,252)
leads all trade creditors of the business, followed by Rock
Creek ($14,836), Wilson ($11,884), Mizuno ($10,635), Easton
($10,316), Schutt ($8,456), The Game ($4,764), Nike (4,335),
Diamond Sports ($3,184) and McDavid ($2,564).
GENERAL GROWTH PROPERTIES, whose real estate
holdings include Glendale Galleria in CA, the South Street Sea-
port in New York and Faneuil Hall Marketplace in Boston, is
projecting an emergence from bankruptcy protection in Oct.
with an improved balance sheet and about 180 shopping prop-
erties as it splits into two separate companies. GGP, which has
restructured approximately $15 billion in debt to-date, intends
to satisfy all of its debt obligations in part through a $500 mil-
lion infusion from The Teacher Retirement System of Texas in
a cash for shares swap. Meanwhile, GGP shareholders will own
stakes in GGP and spin-off, Spinco, when the company com-
pletes its re-organization. Spinco will manage a diverse group
of little-debt properties that have development potential, in-
cluding mixed-use projects and master-planned communities.
Additionally, 18 GGP malls in 11 states will now be managed by
Jones Lang LaSalle.
JUly 19, 2010 PAGE 27
FRESHWATER FISHING gained 2% more participants
in 2009 to approximately 41 million Americans, according to a
new research report published jointly by The Outdoor Founda-
tion and its partner, Recreational Boating & Fishing Foundation
(RBFF). Additionally, there are a total of 48 million anglers in
the U.S. and all fishing participants made 996 million outings
last year, off slightly from one billion in 2008. The full report
and its methodology are available online.
GOLFSMITH amends its credit facility with GE Antares
Capital as it prepares to open additional doors in both 2011
and 2012. Terms of the revised credit facility include a term
extension of 48 months from closing date that will result in no
write-off of previously capitalized and unamortized debt issu-
ance costs and a $90.0 million asset-based revolver.
CORRECTION: GRAPEVINE MILLS CROSSING did file
for bankruptcy protection as reported last week by SGI. How-
ever, the story listed the tenants of nearby Grapevine Mills, a
major outlet mall near Dallas containing a Bass Pro and nu-
merous other sporting goods outlets. Grapevine Mills has not
filed for bankruptcy.
SCHUYLKILL VALLEY SPORTS founder, CEO and COB
Randy Ruch retired July 1 after 39 years in the business. The
18-door chain will continue to be run by Jerry Williams, presi-
dent. Recently, Schuylkill named John DeMaria to director of
apparel and licensed products.
THE FAN’S WEAR, which had been in operation in At-
lanta’s Cumberland Mall since Aug. 2000, filed for Chap. 7
bankruptcy protection on July 5. The business, headed by
CEO Tim Nguyen, saw its annual revenues plunge 29% in
PAGE 28 JULY 19, 2010
2009 to $341,537 and had year-to-date sales of $110,451
when it closed its doors. Total liabilities are $142,596, includ-
ing $128,596 owed to unsecured creditors. Top trade creditors
are: New Era ($26,000), Nike ($23,524), Collosseum Athletics
($3,370), G-III ($2,751) and American Needle ($2,444). The
first meeting of creditors is scheduled for Aug. 6 in Atlanta.
ON THE MOVE:
• Scheels hires Catchfire Media, of Des Moines, IA, as its
social media agency of record, as the 23-door regional
retailer moves to broaden its reach.
• Sport Chalet has hidden three gold-colored bars off
the California coast, which can be redeemed for $5,000,
$3,000 and $1,000 gift cards at the store. Clues to the
location of the bars are being posted daily in the chain’s
scuba locations as well as online and at the store’s Face-
book and Twitter pages.
• The Sports Authority taps Allurent to add interactive
shopping experiences to its core e-commerce website
and other related brand sites.
• Play It Again Sports parent Winmark Corp. secures a
new $30 million credit line with PrivateBank and Trust Co.
• Li Ning is getting a 70-door test with its basketball
shoes in Champs Sports stores.
PAGE 30 JULY 19, 2010
CHAMPION ATHLETICWEAR is teaming with the Na-
tional Alliance for Youth Sports and a council of key sports in-
dustry leaders in an effort to create a belief system designed
to inspire players of all levels to reclaim the pure enjoyment
of the game, the camaraderie of a team and the spirit of
clean competition. The company is inviting athletes to vote
on The Champion Athletes’ Creed submitted by its advisory
council or submit their own athletic principles on the brand’s
Facebook page (www.Facebook.com/Champion) through Aug.
6 for a chance to win Champion branded apparel. Champion
said the need for the Creed became apparent after a national
opinion survey of young athletes it commissioned with the
NAYS showed that more than two-thirds of athletes believe
sportsmanship is on the decline and that 81% believe athletes
today would rather win than play fairly. Of those surveyed,
93% believe that playing sports is most fun when everyone
shows good sportsmanship.
CHINESE GOLF COUNTERFEITS of more than 2,300
golf clubs and an unspecified, large number of fake golf caps,
bags and accessories last year, have resulted in the sentenc-
ing of five individuals to jail terms of more than one year and
ordered fines of approximately US$54,000. The defendants
were operating warehouses in China and selling the counter-
feit goods to a number of retailers, including the Beijing World
Famous Golf Store and the Beijing Te Qi Qiao International
Commerce Center. The legal action taken against them was
prompted by the U.S. Golf Manufacturers Anti-Counterfeiting
Working Group that was created in 2004 and counts Titleist/
FootJoy, Nike Golf, Ben Hogan, Taylormade-adidas Golf, PING,
JUly 19, 2010 PAGE 31
Callaway Golf/Odyssey Golf, Cleveland Golf/Srixon, Top-Flite
and Never Compromise among its members.
ECCO USA promotes Dave Quel to president. He as-
sumed the role of acting president in March after Ecco USA’s
President and CEO Tom Nelson announced plans to retire, ef-
fective June 1. Nelson will continue to serve on the USA and
Canada Ecco board of directors and act as an adviser to both
LI & FUNG is reportedly closing in on acquiring Jimlar
Corp., parent of the Frye footwear brand and holder of various
licenses. The potential deal was first reported by Women’s
Wear Daily. To date, Jimlar hasn’t commented on the acquisi-
NEW BALANCE opens a 3,600-sq.-ft. store, located in
the Pentagon, that will specialize in athletic and lifestyle foot-
wear, apparel and accessories. It will also carry NB’s line of
military 993 running shoes that are manufactured in the U.S.,
rugged casual footwear from Dunham, and Aravon branded
comfort shoes. The door features environmentally responsible
design elements such as a Dakota Burl slat wall—a composite
material made out of recycled sunflower seed husks—a cash
wrap counter made of 75% recycled materials and renewable
REEBOK introduced its new U-Form Cleat (SRP $100)
on David Ortiz during the MLB’s annual “Home Run Derby,”
incidentally won by the aging Red Sox slugger with 32 home
runs over three rounds. The concept behind the customizable
cleat is similar to what has been used in hockey skates for
years. One has to wonder if American baseball might be only
PAGE 32 JULY 19, 2010
the first field sport for the technology if it takes off with play-
ers. According to Reebok, the U-Form technology is heat acti-
vated and built into the lining of the shoes for added comfort.
The material can be reheated and reformed as many times
as needed without losing its effectiveness unless exposed
to a temperature over 200 degrees. Directions slated to be
packaged with the cleats will advise their wearer to place the
U-Forms in a preheated, 200-degree oven for three minutes
before lacing them up and wearing them for eight consecutive
minutes to ensure a customized fit.
SPORT HANSA will sell and distribute five European
outdoor brands in the U.S. and Canada. They include Gro-
nell, an Italian brand that since 1937 has made alpine, hiking
and trekking boots; Norway-based Helle, a maker of outdoor
knives and cutlery; Montane of Ashington, England, which
produces lightweight mountaineering, running and cycling
apparel; Terra Nova, another U.K. company that makes light-
weight tents and packs; and Termoswed, a Swedish brand
that has made base layers for the Scandinavian outdoors
since 1980. Boulder, CO-based Sport Hansa was founded by
Matt Huff, a former group GM for Europe at K2 Sports from
2006 to 2010. The company is also being led by R. Stephen
Schreck, a former product marketing manager at Eagle Claw
Fishing Tackle in Denver.
JUly 19, 2010 PAGE 33
Baja Motorsports, of Phoenix, AZ, is recalling approxi-
mately 308,000 mini-bikes and go-carts due to a faulty gas
cap and throttle. The company has received at least nine
reports of gas caps leaking and detaching, including one re-
port of a serious burn injury to a child. Also, there have been
25 reports of stuck throttles on the recalled products-HT65,
MB165, MB196, DB30, WR90 and DR90 (mini-bikes) and
BB65, SD65, DN65 and TN65 (go-carts) model numbers.
These were sold in the U.S. between Nov. 2004 and June
2010 at a variety of websites, including costco.com, amazon.
com, toysrus.com, sears.com and kmart.com.
Muddy Outdoors, of Camdenton, MO, is recalling ap-
proximately 2,550 tree climbing sticks due to faulty bolts that
can detach and cause the climbing stick to release from the
tree. The recalled products were sold directly by the company
and through outdoor sports retailers between July 2009 and
April 2010. Consumers are advised to immediately stop using
the sticks and return them to the company for a refund, ex-
change or manufacturer’s credit.
Seattle Bike Supply is recalling approximately 330
Taiwan-made Redline Conquest Cyclocross bicycles and
framesets. The products are being recalled due to faulty fork
legs that can separate from the fork crown. The recalled items
were sold in U.S. bike specialty stores between July 2009 and
May 2010 priced at $1,400 for the bicycle and $400 for the
PAGE 34 JULY 19, 2010
• Spyder Active Sports is raising $1,000 for the Wounded
Warrior Project by reaching 10,000 Facebook members.
• Horny Toad hires former Cutter & Buck executive Brian
Thompson as global director of sales.
• Victorinox Swiss Army announces the retirement of its
president, Rick Taggart, in Aug.
• Russell Athletic signed quarterback Colt McCoy, drafted
by the Cleveland Browns, to a multi-year endorsement
deal. He will represent Russell Athletic and all its brands,
including Spalding, BIKE and Russell Outdoors.
• DC Shoes names Jason Smith snow marketing director.
• Yakima taps The Hitch Co. and Norco to act as its Cana-
dian distributors starting Sep. 1. Norco will handle distribu-
tion for IBDs, rack specialty and outdoor specialty stores.
• Delong’s varsity award jacket business assets are ac-
quired by Rock Creek Athletics, also of Grinell, IA.
• Technogym becomes the Official Equipment Supplier to
the London Olympic and Paralympic Games in 2012.
• Performance Bicycle is introducing its line of bicycles for
kids from tricycles to mountain bikes.
• Wilson is aiming to enhance soccer and football ball aero-
dynamics with CD-adapco’s STAR-CCM+ software.
• Timberland Canada installs David Beecroft as the head
of its Pro business in the market, replacing John Spotts,
who has returned to the U.S.
JUly 19, 2010 PAGE 35
CATALOG OF CATALOGS
Click on the logo to view the catalog.
PAGE 36 JULY 19, 2010