SGI weekly intelligence july 19th


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SGI weekly intelligence july 19th

  1. 1. VOLUME 2, NUMBER 28 JULY 19, 2010 INSIDE: 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 McCreight exits. 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 World Cup. 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
  2. 2. John Horan A CLEAN SLATE Publisher One of the great things 610-459-4040 about the sporting goods Judy Leand industry is that it encour- Editor ages fresh starts every season, particularly in the 718-858-2354 product and marketing arenas. In fact, innovation Bob McGee isn’t just a happy accident—it’s expected, planned, Managing Editor and when executed well, is richly rewarded. 508-279-3060 Looking ahead to Spring/Summer 2011, Moving Comfort is continuing its 33-year mis- Robert Z. Feiner Advertising Director sion of designing women’s-specific performance apparel and is now ready to introduce the Luna 212-879-9200 sports bra. The garment’s hybrid design combines high-end functionality with everyday comfort and Jon Bogert aesthetics. At Rider Sandals, which specializes in Associate Publisher after-sport and casual footwear, a primary focus 610-459-4040 has been to develop eco-friendly products and manufacturing processes. In addition to reusing Rob Maturo Circulation resources and materials during production, Rid- er’s finished sandals can also be recycled at the 610-459-4040 end of their useful life. For complete details, visit the new product department. SGI Weekly Intelligence is published by Sporting On the marketing side, Asics continues to Goods Intelligence, Inc. broaden its brand appeal with a global ad cam- 442 Featherbed Lane, Glen Mills, PA 19342. paign called “The Cleansing Power of Sport.” The goal is to get consumers to embrace running and ©2010 Sporting Goods Intelligence, Inc. all rights the sense of well being that the sport offers. To reserved. see the spot, head over to the e-vent depart- ment. Click Here to Request a Subscription Of course, this week’s issue also provides a fresh start by bringing you the latest news and events from around the industry, so go ahead and start clicking! Judy Leand Editor PAGE 2 JULY 19, 2010
  3. 3. 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
  4. 4. 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- rell apparel. 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
  5. 5. 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- dium term. 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- lion. 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
  6. 6. 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 holiday weekend. 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
  7. 7. 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- cessories. JUly 19, 2010 PAGE 9
  8. 8. 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
  9. 9. 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 RVCA. 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 be disclosed. 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
  10. 10. JUly 19, 2010 PAGE 13
  11. 11. 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
  12. 12. NEXCEN PLANS ASSET SALE; NO SEC ACTION COMING 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
  13. 13. 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. Obama. PAGE 18 JULY 19, 2010
  14. 14. 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 $600 million. 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
  15. 15. 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
  16. 16. RIDER SANDALS NOW JUDY SPIES... ECO-FRIENDLY 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
  17. 17. 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 material pool. 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
  18. 18. is topped with a cushioned EVA insole. The Deck Brazilian- JUDY SPIES... 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
  19. 19. 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 moisture transfer and odor control. In addition, a front mesh panel offers improved ventila- 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
  20. 20. E-VENTS ASICS CONTINUES TO BROADEN BRAND APPEAL 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
  21. 21. RETAIL BRIEFS 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
  22. 22. 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
  23. 23. 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
  24. 24. COMPANIES 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 ( 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
  25. 25. 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 segments. 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- tion reports. 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 linoleum flooring. 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
  26. 26. 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
  27. 27. CPSC RECALLS 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, amazon. com,, and 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 frameset. PAGE 34 JULY 19, 2010
  28. 28. SHORT STOPS • 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
  29. 29. CATALOG OF CATALOGS Click on the logo to view the catalog. PAGE 36 JULY 19, 2010