Today's News...6/17/05 JUNE 17, 2005 -- Nautilus To Acquire Pearl Izumi USA Nautilus Inc. has agreed to acquire fitness apparel and footwear brand Pearl Izumi USA for $68 million plus about $6 million in assumed debt. Pearl Izumi, which had recently retained Wachovia Securities to explore strategic alternatives, generated annual sales of approximately $49 million last year, and has increased sales 15-percent annually since 2001 due to growing demand for high-performance fitness apparel. Headquartered in Broomfield, Colo., and with European operations in Kirschzarten, Germany, Pearl Izumi holds a 16-percent share in the high-performance cycling apparel market in the U.S. and has recently established a solid presence in the running apparel segment. “This acquisition is a natural extension of our strategy and will provide a highly complementary entry into the $2 billion high-performance fitness apparel market, which is the fastest-growing portion of the active lifestyle category," comments Gregg Hammann, Nautilus chairman and CEO. “The Nautilus management team, which has experience in the apparel and footwear industry, intends to apply expertise in both apparel and fitness to further leverage our brands as fitness enthusiasts pursue technically-superior equipment." Jerry Edwards, president of Pearl Izumi USA, says, "Pearl Izumi and Nautilus share a similar culture and passion for building a business that will help more people enjoy a lifetime of fitness and good health. Together, we will be able to leverage our innovation, marketing and presence to increase the presence of our industry-leading brands wherever people shop and exercise." Nautilus, the maker of Nautilus, Bowflex and StairMaster fitness products, said it expects the transaction to be neutral to its 2005 earnings and add about 6 cents to 8 cents per share to 2006 earnings. Nautilus posted sales of $524 million in 2004 and employs about 1,250 people at locations around the world. Pearl Izumi USA employs about 130 people. The leadership and staff are expected to continue with the organization. Eventually, some administrative functions may be moved to Nautilus world headquarters in Vancouver, Wash. The transaction is expected to close during the third quarter of 2005 following completion of a regulatory process. Nautilus expects to provide additional details on the acquisition when it reports second quarter earnings in July. Established in 1951 in Japan and first distributed in the United States in 1981, the Pearl Izumi products are distributed through 2,600 independent bike dealers and 600 running-focused specialty retailers worldwide. PEARL iZUMi also operates nine retail outlet stores in the United States and an online store at www.pearlizumi.com. Diadora America Acquires Kaelin License Diadora America, Inc. acquired the Kaelin license from Ermine Investments of California. Under the licensing agreement, Diadora America has the worldwide license (excluding Japan) for the Kaelin brand. From an operational standpoint, the licensing agreement fits into Diadora America's long-term strategic plan, explains Bill Nuttall, president of Diadora America, Inc. Based in Kent, WA, Diadora America recently moved into a new and larger corporate office and warehouse facility to accommodate its growing soccer, tennis, and running footwear, apparel and accessory business, making the Kaelin agreement possible. The company said it can now produce product under the Kaelin name while consolidating its already established sourcing, customer service, account-base and other operational functions, notes Nuttall. “Kaelin has a great reputation in the tennis business,” says Nuttall. “And it's a reputation we will live up to by adhering to the quality and performance standards Kaelin customers expect.” Since 1983, Diadora America is a wholly owned subsidiary of the Diadora-Invicta Group. Sorbothane Performance Insoles To Sponsor Philadelphia Triathlon Sorbothane Performance Insoles signed on as a sponsor for the Philadelphia Triathlon in Fairmount Park (www.PhillyTri.com), the nation's newest, big-city, Olympic-distance triathlon, on June 26, 2005. The relationship provides a foot-bed of direct contact with the 1,400 or so athletes and additional fans through high-traffic, on-site signage, exposition space, product placement in athletes' bags - each participant will receive a pair of the sponsor's insoles, Web-based marketing, and other marketing and public relations elements. “Triathlons are life-enhancing experiences,” says Megan Russell, director of marketing, Penguin Brands, Inc., Sharon Hill, Penn., parent company of Sorbothane, one of the nation's leading performance insole manufacturers. “We are so pleased to support the Philadelphia Triathlon because it will provide that experience to so many athletes and their families.” The company has committed cash, product and staffing for the inaugural event, which will feature many of the city's most historic and picturesque areas along its Olympic-distance course (1.5 km swim/40 km bike/10 km run), including a challenging-yet-fun swim in the Schuylkill River, two-loop bike course winding through Fairmount Park and past Boathouse Row, and a scenic run along the Art Museum loop. The Philadelphia Triathlon in Fairmount Park reached its first-year target of 1,250 athletes in just 10 weeks of registration and five months before the race. Sixty percent of the triathletes will come from Pennsylvania, and the others will travel from 30 other states. Demographics are comparable to the sport's national standard: 75% are male; and 60% of the men and 54% of the women are between 30 and 44 years old, with the field ranging from 16 to 64. “We'd like to see the Philadelphia Triathlon become the city's heart and 'sole' of fitness events,” says Russell, “and we anticipate this will be come a long-term relationship for Sorbothane and Penguin's other brands.” The company also produces Penguin Sport-Wash, Penguin Shoe Care and Nathan Sports running gear, and all will contribute to the race. “Our employees are runners and triathletes, so we've got the understanding and passion for what triathletes - hard-working, always-moving, achievers - endure through training and racing, and what they need to succeed,” she explains. Sorbothane Performance Insoles minimize injuries and maximize performance, enabling runners, triathletes and other sports enthusiasts to extend by years their ability to train and compete. “Still, anyone, athlete or not, would benefit from the unrivaled shock-absorption Sorbothane Insoles offer. We hope Philadelphia Triathlon media coverage and general awareness will attract more people to the sport, encourage an active lifestyle and teach people to treat their feet better.” Fila Returns To In-House E-Commerce With Filativa Fila is relying on Coremetrics to help create a rewarding online experience for visitors to its new www.filativa.com Web site. The site, which just went live with eCommerce functionality, marks Fila's return to in-house eCommerce after several years. In creating the new site, Fila turned to Coremetrics to help track and analyze online consumer behavior to improve marketing, merchandising, and site design. The new site showcases Fila's new Filativa line, which features products inspired by Fila's core sports categories (running, court and fitness) fused with lifestyle activities and cultural influences to create footwear, and later apparel, that appeals to a younger, more style-driven consumer. "Filativa, from Fila and attiva (which means active in Italian), is the ironic yet irreverent sport-inspired face of the Fila brand," said Rob McClellan, general manager for Fila Online. "The Filativa customer is well-educated, trend-conscious, tech-savvy and expects a one-to-one conversation with their brands." "Coremetrics is the only Web analytics solution that bridged the gap between our branding objectives and the nuts and bolts of marketing, merchandising and site design," McClellan continued. "Live Profiles allow us to drill down to the level of the individual and present them with the most relevant content to help Filativa make the best possible first impression. Anonymous, aggregate data wasn't an option. Coremetrics is the only choice for the answers I need." With the launch of Filativa, Fila chose to bring Web site design and eCommerce functionality back in-house to focus on a new one-to-one marketing strategy. Fila, which is marketing the Filativa brand through a variety of online and experiential campaigns, will utilize data provided by Coremetrics in a number of ways: To combine Coremetrics' behavioral data with ExactTarget's email marketing solution to develop highly targeted email campaigns based on expressed interests and online behavior; to increase online conversion by optimizing site tools and decreasing abandonment rates; to identify the best cross-sell and up-sell opportunities and product combinations; and to use trend data captured online to measure consumer interest and optimize inventory and merchandising. The Athlete's Foot Hires Ad Agency The Athlete's Foot has hired Fain & Tripp Inc. as its advertising agency. The Atlanta-based agency will handle the company's creative, marketing, media placement, and advertising. “Fain & Tripp has the specific in-depth experience to provide top-drawer marketing and advertising for our company,” said Robert J. Corliss, president and CEO of The Athlete's Foot. “Their high level of creativity and expertise will enable them to build successful marketing programs for our franchise network.” “Debbie (Fain) and I created and executed all the advertising programs for one of the most aggressive marketers in the retail athletic footwear business, before founding Fain & Tripp,” said Russ Tripp, agency president and co-founder. "Our focus as in-house marketing staff was on making things happen at the local level. That experience will be a big benefit for The Athlete's Foot's franchises." ING New York City Marathon 2005 to Offer Largest-Ever Marathon First Place Women's Purse Through an added bonus from the ING Run for Something Better program for women, the ING New York City Marathon 2005 will increase its prize purse to $130,000 for the women's champion, the largest guaranteed first place prize in the history of marathoning. "Today in collaboration with our partners at ING, New York Road Runners takes another milestone step in the support and encouragement of women's running," said Mary Wittenberg, president and CEO of New York Road Runners and the race director of the ING New York City Marathon. "We believe this to be the first time that any major sports event has put up more money for the women's winner than for the men's. So we are breaking ground not only in the sport of long distance running but in all of sport," said Wittenberg. Wittenberg made the announcement at a luncheon at Restaurant San Domenico NY, located along the marathon course. Joining her were the first three professional women athletes signed for the race: Olympians Jen Rhines of the United States, Marie Davenport of Ireland and Lornah Kiplagat of the Netherlands. Rhonda Mims, president of the ING Foundation and vice president of community relations for ING, was also at the luncheon. The men's champion of the five-borough 26.2-mile race on Sunday, November 6, will collect $100,000. The added $30,000 for the womenˆs winner comes from the ING Run for Something Better, the cause-related cornerstone program of ING's title sponsorship. Additional prize money will also be paid to the women's second place ($20,000 additional for a total $65,000), third place ($10,000 additional for a total $40,000) and fourth place ($5000 additional for a total $25,000) finishers. ING became the marathon's first title sponsor in 2003 and recently extended its title sponsorship through the 2007 race. Since the ING Run for Something Better program's inception in 2003, ING has contributed close to half a million dollars to community and youth running organizations. In addition to the ING Run for Something Better prize money, ING will also donate a total of $150,000, equally split between the New York Road Runners Foundation and the City Parks Foundation, in the names of the top four women finishers. Both organizations reflect NYRR's and ING's shared commitment to the sport of running, to youth and to the local community. Rodgers and Salazar Participate To Participate In U.S. Air Force Marathon Legendary runners Bill Rodgers and Alberto Salazar will be part of the ninth annual U.S. Air Force Marathon in September. On September 16, the day before the race, Rodgers and Salazar will conduct separate free afternoon running clinics and sign autographs at the marathon sports and fitness expo held at Wright State University's Ervin J. Nutter Center in Dayton, Ohio. The pair also will be keynote speakers at the pre-race pasta dinner at 6 p.m. the same day. The U. S. Air Force Marathon will be Sept. 17 near the National Museum of the U. S. Air Force here. Opening ceremonies will be at 7 a.m., with the race beginning at 7:30 a.m. It will be the first visit to the Air Force Marathon for Rodgers and Salazar. "You build a marathon gradually, so it will be fun for me to come out to, running around a base and having the Wright brothers' influence around me," said Rodgers in a press release. "It's been shown there ( aren't ) as many marathons as there were, but new ones coming in ( can ) be successful, especially being backed by the Air Force," said Salazar. "People are looking for races like this." The Air Force Marathon offers several races, including the full 26.2-mile marathon and wheelchair race; a 13.1-mile half marathon; a four-person relay race in which each member runs a section of the course; and a 5k race. Registrations will be taken through Sept. 2.