FEBRUARY 03, 2006 --
Stan Mavis named President of Sugoi
Stan Mavis will be named President of Sugoi Performance Apparel; a wholly owned subsidiary of Cannondale Bicycle Company.
Mavis co-founded Pearl Izumi in the USA and held the titles of President and Chairman for 12 years. Most recently, he was the Sr. Vice President of Product for Brooks Sports, where he was responsible for design and product development for apparel, accessories and footwear. Cannondale said he is a pioneer in fabric and fiber design development to help athletes achieve optimal performance. Mavis was also a world class runner with the Athletics West Track Club and participated personally in Nike’s product development process. He remains a runner and an avid cyclist.
“We are tremendously excited to have an icon such as Stan join our team in this leadership role,” noted Matt Mannelly, CEO of Cannondale. “Our Apparel and Accessories products are an important part of our mission to deliver innovative products to runners and cyclists around the world. As President of Sugoi, we’re looking forward to Stan’s vision and capitalizing on his international experience in product design, merchandising and distribution to bring our premium-performance products to market.”
Said Mavis, “The people at Sugoi have done a tremendous job which is apparent by the technical and innovative design direction the company is taking,” said Mavis. “I’m looking forward to working with the team to create great products that meet our consumers’ needs. I’m also excited about the opportunity to return to the cycling industry and re-establishing relationships with the great people in that community.”
Mavis will be located at Sugoi’s worldwide headquarters in Vancouver, Canada.
Fleet Feet Promotes Rowe And Pointer
Fleet Feet has promoted Luke Rowe to VP/business development, and Joey Pointer to director of franchise operations.
As V.P. of Business Development, Rowe will oversee new store development, vendor relations, and all other business development initiatives, including Fleet Feet’s proprietary Personal FIT Process. He will have responsibility for all of Fleet Feet’s vendor relations, including their newest brand management partnership with Brooks Sports as well as their ongoing partnerships with New Balance Athletic Shoe, Superfeet, Moving Comfort, Champion and Balega Sports International. Rowe has served as New Balance Brand Manager for the franchisor since 2003, and brings more than 20 years of specialty retail and vendor experience to his new role.
According to Fleet Feet, Inc. President Jeff Phillips, “Luke has done a tremendous job of developing our vendor partnerships and the Personal FIT Process, and in his new role, will help us take advantage of the opportunities that lie ahead in 2006 and beyond.”
As Director of Franchise Operations, Pointer will oversee UFOC compliance, store policy and procedure, information technology, financial and inventory management, and ongoing store business reviews and analysis. He has served as Financial Manager for the franchisor since 2004, and prior to joining Fleet Feet was a Senior Tax Consultant for Ernst & Young.
“Joey has done an outstanding job of solidifying the financial planning and management of the company while taking store business analysis to a new level,” says Phillips.
“These promotions and structural changes within Fleet Feet, Inc. will enhance our ability to support existing franchisees and develop new franchisees, as well as expand and strengthen the relationships with our vendor partners,” he continued.
Fleet Feet, Inc. is the industry leader in franchising athletic footwear, apparel, and accessory stores focusing on lifetime fitness sports. Headquartered in Carrboro, NC, the company has 67 franchises nationwide, with plans to open an additional eight locations in 2006.
Saucony Acquisition Pushes Strite Rite Into The Red
Stride Rite reported record 4Q and FY05. Net sales were $131.7 million and $588.2 million, increases of 13% and 5%, respectively, compared to the same periods in the prior year. Fiscal '05 contained 52 weeks compared to the 53 weeks in '04, which had one extra week in 4Q. 4Q05 also included $23.2 million of Saucony net sales for the 11 weeks subsequent to the acquisition, which drove results into the red.
The 4Q net loss totaled $3.1 million or 8¢ per diluted share, as compared to the net income of $51,000 or 0¢ per diluted share in 4Q04. FY05 net income totaled $24.6 million, a decrease of 4%. FY EPS of 66¢ were flat versus last year.
4Q05 included a pre-tax expense of $5.4 million related to the write-up of inventory purchased in the Saucony acquisition as required by GAAP accounting rules. In addition, the quarter includes pre-tax acquisition related integration expenses of $800,000.
Excluding acquisition related integration costs and the inventory write-up, net income would have been $500,000 and $28.6 million for 4Q and FY05, respectively, while diluted EPS would have been 1¢ and 7¢ for the periods, respectively.
David Chamberlain, COB/CEO of Stride Rite: "With the purchase of Saucony, we added a highly respected $150 million brand in performance running. We see growth opportunities for Saucony in running, international and children's. We expect that '06 will be a year of transition for Saucony as we set the platform for '07.
"Sperry Top-Sider enjoyed a fourth year of increased sales and significant profit growth. Our products are strong, and we expect continued growth in all retail channels as well as in the women's area."
"International had strong sales and record profit, helped in part by Tommy Hilfiger. With Saucony, we double our international business presence and add significantly to sales in Europe - an area of focus for us."
"Keds had a challenging year as we repositioned the brand back to its '16 heritage as 'America's sneaker' with Mischa Barton as spokesperson. We believe we have effectively accomplished our marketing strategy, as Footwear News recently named Keds 'The Marketing Brand of the Year'. Success in '06 will depend upon the retail performance of our products."
"Our Tommy Hilfiger business was impacted predominantly by softness in men's sales. The pending sale of Tommy Hilfiger Corp. to Apax Partners, with their objective of focusing on the higher-end business, is a positive announcement."
Assuming reasonable retail and economic conditions in 2006, Stride Rite is projecting sales growth of 23% to 27% and EPS of 82¢-88¢, including a full year of Saucony financial results. Included in the projected earnings is the annual impact related to the expensing of stock options, which is projected at approximately 5¢ per diluted share. In addition, these projections include the cost of sales impact related to the write-up of inventory purchased in the Saucony acquisition, which is estimated to reduce EPS by 5¢. Acquisition-related integration costs of approximately $2 million, or 3¢ per share, are also included in the earnings projections.
Columbia Acquires Montrail
Columbia Sportswear Company announced that it has acquired substantially all of the assets of Montrail, Inc. for cash consideration of $15 million plus the assumption of certain liabilities.
Brad Gebhard, Vice President of Footwear at Columbia, will now be responsible for design and merchandising for all of the company's footwear brands including Columbia, Montrail, and Sorel. Scott Tucker, former President of Montrail, Inc., will lead the Montrail brand as General Manager.
olumbia said Montrail is recognized around the world as a premium outdoor footwear brand with a reputation for delivering technical, high performance trail running, hiking, and climbing footwear for outdoor enthusiasts.
"We see this as an exciting opportunity for both Montrail and Columbia. Montrail is known for making authentic, premium footwear products for the outdoor enthusiast and the brand has an excellent reputation for fit, quality and use of technology in its footwear," said Tim Boyle, President and CEO of Columbia Sportswear. "We understand the unique value, positioning and integrity of the Montrail brand and we believe we can leverage our sourcing, logistics, and capital strength to develop even more opportunities for the Montrail product. Leveraging the performance and fit characteristics of the Montrail branded products will improve the fit and quality of our other footwear brands as well."
"The acquisition of Montrail adds a pinnacle brand to the Columbia portfolio of footwear. Montrail carved its niche in the specialty outdoor market by creating a better fit and pioneering high performance lightweight footwear," said Menno van Wyk, CEO of Montrail, Inc. "Superior products will continue to be a hallmark of the Montrail brand. Columbia's sourcing, worldwide distribution systems, and efficient operations will give Montrail products a competitive advantage. In particular, the Columbia infrastructure will help us to design and develop ever-better Montrail products and more efficiently deliver them into the hands of discerning users."
European Commission Approves Adidas/Reebok Merger
Adidas-Salomon AG announced that the European Commission has unconditionally cleared its proposed acquisition of Reebok International Ltd.
No other anti-trust approvals are required to complete the transaction. Reebok will hold a Special Meeting of Shareholders to approve the transaction on Wednesday, January 25. The transaction could close as early as January 31.
“We are excited to have reached this important milestone,” said adidas-Salomon AG Chairman and CEO Herbert Hainer. “We now expect that the transaction will close shortly, following approval of Reebok’s shareholders. To help ensure we hit the ground running on day one, our two companies have jointly developed an integration plan that leverages the talents and expertise of both companies, which we will implement as soon as the transaction closes. We look forward to quickly realizing the many benefits afforded by our combination with Reebok.”
New Balance Reaches Centential Year
New Balance reached its centennial year and celebrates 100 years of brand milestones and continuous achievements as one of the sporting goods industry’s leading manufacturers of high performance and active lifestyle products.
“Our mission has never been to be the biggest, but to be the best, and that will not change as we enter our second century of business,” says Jim Davis, Chairman & CEO at New Balance. “We are most proud that the core values New Balance was founded on remain relevant today through our focus on integrity, teamwork and total customer satisfaction.”
New Balance employs more than 2,600 people around the globe, and in 2004 reported worldwide sales of $1.5 billion.
From its humble beginnings in 1906 as New Balance Arch, to the 1960’s Trackster (the world’s first performance running shoe in multiple widths), to the breakthrough award in 1976 from Runner’s World for the 320, to its debut of a performance apparel line in 1978, New Balance established and maintained a brand platform of providing superior fit, innovative performance and utilizing domestic manufacturing.
The company grew in the early 1980’s through new manufacturingfacilities in New England and international distributors, and in 1982reached the $60 million mark and debuted the well-received 990 running shoe, the first athletic shoe priced at $100. The 990 series has become the most enduring technical running series in the market and the company will offer a special limited edition version of the 1992 in May 2006 to highlight the 25th anniversary of the series.
In the 1990’s, New Balance developed the New Balance Suspension
System and continues to use multiple technologies to meet the needs
of performance athletes today. The company’s commitment to offering
multiple widths in all of their inline shoes has never wavered, and
the brand’s marketing image of three differently-sized feet is
created as a reflection of this philosophy. The company also
introduced Cyberpark™ USA, the footwear industry’s first fully
interactive, fully constructed website. In 1998, the 801 trail
running shoe captured the attention of younger athletes and sold 1.5
million pairs in one year.
By 2000, New Balance had opened two state-of-the-art distribution
centers on each U.S. coast and increased its manufacturing facilities
to five within New England. The company’s global market share grew
from the 10th position in 1991 to the 4th position in 2000 with the
achievement of $1 billion in annual worldwide sales. In 2004, New
Balance produced 36,000 pairs of shoes per day in the United States
alone. The company developed its proprietary cushioning technology
Abzorb® and continued to use innovations such as 3-D computer
modeling to push design limitations.
In the late 1980’s, New Balance’s “Endorsed by No One” philosophy
emerged as it decided to invest its resources in R&D and
manufacturing instead of celebrity endorsements. The New Balance
Foundation, formed in 1981, continues to fulfill the company’s
commitment to the communities where its facilities are located and to
act as a socially responsible citizen.
In 1991, the company joined forces to eradicate breast cancer with
the Susan G. Komen Breast Cancer Foundation and remains a national
sponsor of their Race for the Cure series today.
For its marketing mix, New Balance has focused on inspirational and
thought-provoking advertising campaigns, grassroots athletics and
retailer partnerships. The brand has been a proud sponsor of The
LaSalle Bank Chicago Marathon since 1997, where it has seen multiple
world and U.S. record-setting races.
Over the years, New Balance has worked to maintain its goal of
profitable growth without compromising brand quality or integrity.
In 1998 it purchased Dunham, an outdoor performance brand, acquired PF Flyers in 2001 for the active lifestyle market, and created Aravon comfort performance footwear in 2004. Since 2003, it has added nine New Balance licensee partners to help the brand enter and expand in key product arenas. In 2004 the company acquired Warrior Lacrosse, which recently added a hockey division, to help New Balance gain additional expertise in the Team Sports market.
New Balance’s first international sales office and first European
manufacturing facility both opened in 1978 in Europe. Since then the
brand has expanded around the globe from Europe and Asia to the
Middle East, Latin America and Africa. With the exception of a few
African countries, New Balance is represented in nearly every corner
of the world today.
In April, 1972, when Jim Davis bought the company, New Balance
employed 6 associates that made 30 pairs of shoes per day. In 2004,
New Balance had 2,600 associates worldwide, achieved $1.5 billion in
global sales and manufactured more than 35 million pair of athletic
“As we enter our second century, we will focus on executional
excellence in everything we do to achieve our goal of $2 billion in
global sales by 2008 and sustainable growth over the long-term,” says
Davis. “We will continue to develop and introduce leading-edge
technologies and innovative fit enhancements in all of our products.”
“Performance and fit remain the brand’s primary product drivers as
New Balance moves into and beyond its centennial year,” continues
Davis. “At the manufacturing level, executional excellence (or 2E),
means we will continue to use our domestic production capabilities to
provide lower inventory levels, higher turns and ultimately higher
profit margins for our retail partners.”
New Balance Denies NLC/CLW Allegations
In response to a January 6 National Labor Committee (NLC), China Labor Watch (CLW) Press Release, New Balance said does not contract, nor has ever contracted product at the Hongyuan factory identified in the press release.
New Balance said the factory that does produce New Balance product is located in Houjie, Dongguan City. It added that this factory is closely monitored by a New Balance Compliance Team, including a Compliance Manager for China and a Compliance Specialist. New Balance said he Compliance Specialist is based in the factory and is there every day.
New Balance also noted that workers at factories in China producing New Balance footwear are limited to a maximum of 54 hours a week. That includes 40 regular working hours with a maximum of 14 additional overtime hours. All overtime is voluntary.
New Balance Athletic Shoe, Inc. said it “operates with the highest ethics and stands for integrity of people and product. We have a strong compliance program and aggressively promote our standards and monitor supplier factories continuously with a full compliance team in China. Our standards are rigorously applied through a process which includes training, establishing standards of performance, sharing of ideas and methods for compliance, monitoring by New Balance, and monitoring by an independent third party.”
The Sports Authority To Go Private
The Sports Authority Inc agreed to be bought by a private equity affiliate of Leonard Green & Partners LP for around $1.3 billion, including debt.
The buyout group includes members of Sports Authority's senior management team. Shares would be acquired for $37.25 each in cash, representing a 20 percent premium over the then trading value of TSA shares. Over the past 12 months, shares of TSA had ranged from 23.40 to 34.36.
Gordon Barker, chair of the special committee of Sports Authority's board of directors that approved the transaction, said, "The company received an acquisition proposal from Leonard Green & Partners and after extensive negotiations and careful consideration in conjunction with our independent advisors, the independent committee of Sports Authority's board has unanimously concluded that this transaction is in the best interest of our shareholders. This transaction, which will provide Sports Authority's shareholders with an immediate and substantial cash premium for their investment in the Company, reflects the success of the merger and integration of the Company's predecessors Gart Sports and The Sports Authority.”
Doug Morton, TSA's chairman and CEO, said, "Not only does this transaction provide Sports Authority's shareholders with a substantial premium for their shares, but we believe it will be good for the company's associates, customers and suppliers. As a private company, Sports Authority will have greater flexibility to accomplish its long-term goals. Leonard Green & Partners has an excellent track record of building value at its portfolio companies by providing strong financial and strategic support. Leonard Green & Partners also has significant past experience in the sporting goods industry from its prior ownership of several sporting goods retailers."
The transaction is expected to close in the second quarter of 2006 and is subject to Sports Authority's shareholder approval. Sports Authority's board of directors has unanimously approved the merger agreement and recommends that shareholders adopt the agreement, the company said.
The company will conduct a market test for the next 20 days to ensure that the transaction is the best for the company's shareholders, Gordon Barker, chair of the special committee of Sports Authority's board of directors, said in a statement.
Jonathan Seiffer, Partner of Leonard Green & Partners said, "We are pleased to have the opportunity to partner with this exceptional management team and build on the company's track record of growth and success in the retail sporting goods industry."
Nike's CEO Perez Resigns
Nike Inc. CEO William Perez has resigned following disagreements with founder and chairman Philip Knight over how to lead the world's largest athletic shoe company, Nike said on Monday.
Nike brand co-President Mark Parker will take over from Perez, who steps down after just 13 months with the company. As a result, Charlie Denson the other co-president of the Nike brand became the sole president of the Nike brand.
Nike is still enjoying robust demand within the United States for its shoes and apparel, but investors and analysts have shown concern over increased competition from the pending merger between Adidas-Salomon and Reebok International Ltd and challenging market conditions in Europe and Japan.
Nike, based Beaverton, Oregon, said its board and Perez mutually agreed to end his relationship.
"Succession at any company is challenging, and unfortunately the expectations that Bill and I and others had when he joined the company a year ago didn't play out as we had hoped. I want to personally thank Bill for his dedication and commitment over the past year.”
Perez joined Nike in December 2004 after a long career with consumer products company S.C. Johnson & Sons, and was expected to be instrumental in taking the Nike brand further into international markets, as well as growing a stable of brands beyond Nike. However, worries over his lack of experience in the athletic shoe business have trailed him
"I have great respect for the Nike brand, the company and the
Board," Perez said. "Nike is an incredible organization with
tremendous growth opportunities. However, Phil and I weren't entirely aligned on some aspects of how to best lead the company's long-term growth. It became obvious to me that the long-term interests of the company would be best served by my resignation."
Regarding the promotion of Mark Parker, Knight said, “Mark has a proven track record in driving creativity, innovation and growth. He's an experienced, talented executive
and has played an instrumental role in building our business and making the Nike brand as strong as it is today. Mark is the right person to drive our business forward."
Parker, 50, joined Nike in 1979 and and has served in various
management capacities in product design, development, marketing and brand management. Nike said he is widely recognized as the product visionary for the Nike Air franchise and many other industry-leading product design and performance innovations. Prior to heading the Nike brand, Parker ran the company's multibillion dollar footwear and apparel businesses.
"I've spent my life building the Nike brand, and I'm excited to lead one of the world's most dynamic organizations," said Parker, who will also succeed Perez on the company's board. "I am committed to continue delivering profitable growth for our shareholders, creating distinctive product innovation and compelling brand connections for consumers, and building strong relationships with our retail partners. We have a strong management team in place that I will continue to develop, and I have tremendous confidence in our ability to continue growing the Nike, Inc. portfolio and delivering long-term value to shareholders."
Meanwhile, Denson, 49, the new president of the Nike brand, also joined Nike in 1979, starting as an assistant manager in one of Nike's original retail stores in Portland, Oregon. He has held a variety of senior general management roles including leadership of Nike's U.S. and European businesses.
Sof Sole Launches Women Footcare Accessory Line
Sof Sole announced the launch of Sof Sole energy, the first line of footcare accessories created just for women.
Developed with leading female athletes and United States Tennis Association Women's Podiatrist Dr. David Sharnoff, the energy line is designed expressly for a woman's foot and to provide gender specific stability and support. The line includes performance and gel cushioning insoles, technical and sport-fusion socks and pre and post work-out footcare products.
Sof Sole energy insoles feature a narrower width, a deeper heel cup for added stability and a low-profile forefoot area for better fit. These benefits combine to create an advanced combination of performance enhancing benefits for women's footwear. energy products also feature a new Aloe Vera infused fabric in the insole top cover and select socks. The Aloe invisible moisture beads are continually released as the foot moves keeping skin silky soft and smooth.
"Women that use the energy line will notice a dramatic decrease in leg and joint fatigue," said Dr. Sharnoff. "I recommend it to all my clients that are physically active from world class athletes to casual walkers".
"We've seen amazing results with gender specific products and positioning in other segments of our business," said John Andrews, Implus vice president of marketing. "Female consumers are discovering the performance benefits of footwear accessories and we intend to give them the most advanced products available."
"All of our retail partners are seeking a way to dramatically increase their accessory category penetration," said Kurt Wineman, vice president of sales for the Sof Sole brand. "Sof Sole energy speaks to the female active athletic segment that our initial tests show respond well to the Sof Sole energy concept".
Super Show In History In '07; SGMA Will Hold Two Shows
Beginning in '07, the sporting goods industry will have new trade show options. The Sporting Goods Manufacturers Association announced its response to the changing industry dynamics. It says it will offer a trade show strategy focused on two new market events for next year. SGMA confirmed that The Super Show/2006 will be the last.
In '07, SGMA will launch the SGMA Spring Market and the SGMA Fall Market, spotlighting seasonal selling cycles and targeting retail segments which are critical to these cycles yet geographically diverse to reach. Both events will draw specialty and trendsetting retailers, independent, regional, and small retailers, and team dealers.
The SGMA Spring Market will take place in June '07 in Las Vegas. It will highlight products scheduled for delivery in Holiday '07 and 1Q08. The SGMA Fall Market will occur in October '07 at an East Coast location. It will highlight Back to School '08 and 3Q08 deliveries.
According to SGMA president/CEO Tom Cove, the sporting goods industry still wants and needs a national event to access retailers and convene as a community. "SGMA recognizes there has been a shift in manufacturer/retailer relationships, and our members are eager to reach the specialty and trendsetting retailers that are important to their success. We are proud to produce two new events targeted towards this vital segment of the business and facilitate more efficient and productive sales opportunities for our members."
Cove underscored the responsibility of SGMA to create profitable retailer relationships for member companies. "Since '57, SGMA has consistently provided an industry venue that has met the needs of buyers, team dealers, retailers, manufacturers, and vendors in the sporting goods industry. In our continued evolution, we are responding to industry needs. These world-class events will feature cutting edge education, networking, and media promotion, as well as appropriately timed sales presentations and exhibits. SGMA is committed to delivering the most favorable climate for the sporting goods industry to grow and flourish."
"The SGMA Board of Directors stands firmly behind this decision and feels the sporting goods industry will be better served by these two new events," said SGMA chairman Tom Rogge (Cramer Products). "Timing these new markets with key industry cycles is essential, and helping our members reach these targeted retail segments will be an important catalyst for growth. The Board feels confident that the SGMA Spring and Fall Markets will be dynamic venues for our industry."
Exhibitor and other attendee registrations for the new SGMA Markets will be available beginning in mid-January '06.
John Hancock Financial Services today announced the return of two-time Olympian Alan Culpepper of Lafayette, Colorado, for the 110th running of the Boston Marathon, scheduled for Monday, April 17. This is the 21st year that John Hancock is the major sponsor of the Boston Marathon.
Avis Rent A Car System, Inc announced that for the first time ever they will be the Official Rental Car and Presenting Sponsor of the Athletes with Disabilities in conjunction with the ING Miami Marathon and Half Marathon. Avis will also give "We Try Harder" awards to the first male and female finishers in the Pushrim Wheelchair and Handcycle categories of the competition. In addition, Avis will provide the resources necessary for the "Freedom Team" to travel to Miami and compete in the marathon. The Freedom Team is a group of disabled athletes, many of whom are veterans who suffered injuries while serving in the Armed Forces in Iraq or Afghanistan. The Freedom Team has recently been trained by members of the Achilles Track Club at the Walter Reed Army Medical Center to prepare them to compete in the 26.2 mile running event.
The Boston Triathlon, formerly known as the Monster Challenge, is seeking a title sponsor for its 6th annual triathlon, held Labor Day weekend in Boston's waterfront district and throughout the city's historic streets. This event -- the only urban triathlon of its kind in New England -- was founded and directed by DMSE, Inc. president, Dave McGillivray. The event attracts nearly 1,000 athletes annually, including elite athletes Simon Lessing, Victor Plata, Barb Lindquist, and Karen Smyers who compete at the Olympic Distance. Age groupers and relay teams compete at the shorter Sprint distance. Participants and enthusiasm for the event continue to increase annually, however, organizers will be forced to cancel the 2006 event if a new title sponsor is not found.
"Boston is a town of sports fanatics and health enthusiasts. With the sport of triathlon up and coming among business professionals and weekend athletes, there is enormous potential for growth and visibility for the right corporate partner," says Dave McGillivray. "The newly revitalized Seaport District where the event starts and finishes is walking distance to downtown. It's a uniquely urban venue that can't be beat. Athletes swim in the Harbor, bike along streets packed with history and along the Charles River. This swim, bike and run course is ideal for attracting thousands of spectators."
For sponsorship information and background on DMSE, e-mail [email protected], or visit http://www.dmsesports.com/