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SEPTEMBER 3, 2012ISSUE 1236

The Weekly Digital Magazine for the Sporting Goods Industry

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SEPTEMBER 3, 2012 | SGBWeekly.com 3

Copyright 2012 SportsOneSource, LLC. All rights reserved. The opinions expressed by writers and contributors to SGB WEEKLY are not necessarily those of the editors or publishers. SGB WEEKLY is not responsible for unsolicited manuscripts, photographs or artwork. Articles appearing in SGB WEEKLY may not be reproduced in whole or in part without the express permission of the publisher. SGB WEEKLY is published weekly by SportsOneSource, LLC, 2151 Hawkins Street, Suite 200, Charlotte, NC 28203; 704.987.3450. Send address changes to SGB WEEKLY , 2151 Hawkins Street, Suite 200, Charlotte, NC 28203; 704.987.3450

SGB PROFILE 4 BIGAGNES SGB INTERVIEW 5 BILLGAMBER, Co-Founder & Co-Owner, Big Agnes & Honey Stinger

FEATURES

6 SKISEASONPREVIEW Fall Sales on Everyone’s Lips 10 SKIREXKicks Off Ski Season 12 REEBOKFitness Comes to Retail DEPARTMENTS

18 CALENDAR

The Weekly Digital Magazine for the Sporting Goods Industry

SEPTEMBER 3, 2012ISSUE 1236

6

ON THE COVER: Reebok CrossFit Fifth Avenue store. Photo courtesy of Gensler

Senior Business EditorThomas J. Ryan

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Contributing EditorsAaron H. Bible, Fernando J. Delgado,

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4 SGBWeekly.com | SEPTEMBER 3, 2012

ig Agnes was born in a little red house in downtown Steamboat Springs, CO, where Bill Gamber and a small handful of employees and friends sewed fleece apparel and

sold Smith sunglasses and Smartwool socks to locals. In the late ‘80s and early ‘90s, Gamber was buying factory rem-

nants from Malden Mills and making fleece jackets, pants, hats and dog beds, under the name B-Wear Action Products. “It was a lot of fun,” Gamber said nostalgically. “We spent tons of hours outside with the answering machine on. We worked at night after good power days.” He was also one of the first in the industry to work with span-dex, making cycling clothing for himself and friends.

Fast forward a dozen years or so and Gamber is now the co-owner of two of the most important and growing brands in the outdoor space, one in hardgoods and the other in energy foods. After years of research both in the backcountry and the factory, Gamber launched Big Agnes sleeping systems in 2001, followed very closely by the creation of Honey Stinger energy foods in 2003.

Since it’s inception, Big Agnes has run away with award after award, with more than a dozen product innovation recognitions to its credit, from its first Backpacker Magazine Editor’s Choice Award in 2004 for its game-changing Insulated Air Core Pad, to this year’s Outside Magazine Gear of the Show and GearJunkie.com’s Best in Show for

B

By Aaron Bible

SGB PROFILE l B ig Agnes

Photo courtesy of Andrew Burr

the Fishhook SL2 Zipperless Tent. Honey Stinger is recognized for having achieved a number of USDA organic certifications, including its new Organic Energy Gel, the first in its category to gain this certification.

What would his employees say about him? “They would just smile and laugh,” said Sarah Uhl, who works in marketing at Big Agnes un-der co-owner and director of marketing Len Zanni. Working alongside Zanni is co-owner and director of finance Rich Hager. “I have to give Rich and Len big kudos,” said Gamber. “They’re super important to our success and are great friends and partners.”

Gamber is a serious competitor with 14 ironman-distance triath-lons and dozens of other triathlons and mountain bike races under his belt. He actively tests all his own products. Growing up in the honey industry (his grandfather Ralph Gamber was the founder of Dutch Gold Honey in Lancaster, PA and the inventor of the “honey bear” we all know and love), Bill started using honey as a replace-ment for synthetic gels because he knew it would be a longer lasting and more easily digestible energy source. And, as they say, the rest is history.

Still locally based in Steamboat Springs, CO, Big Agnes was named for an iconic peak in the nearby Mt. Zirkel Wilderness, just one of the many testing grounds for the company’s products.

Bill Gamber Births Two Outdoor BrandsAN AUTHENTIC COMMITMENT TO OUTDOOR SPORTS, A DEDICATED FAMILY WORK ETHIC, AND THE RIGHT TEAM MEMBERS COMBINED TO BRING TWO OF THE INDUSTRY'S MOST IMPORTANT CURRENT BRANDS TO FRUITION.


WHAT SPORTS AND OUTDOOR ACTIVITIES DO YOU PARTICIPATE IN NOW? Mountain biking, fly fishing, cross country and backcountry skiing … climbing and camping with my kids. My family is my highest priority these days.

WHAT'S YOUR DREAM TRIP? Two years around the world. We want to hit the high mountains, unique cultures, the most classic museums and best remote beaches of the world. It sounds really cliché, but I’m going to do it anyway.

WHO'S THE BUSINESS PERSON YOU MOST ADMIRE AND WHY? My dad. He took a small business and built it into a very solid industry leader. He knows how to lead people and has a huge amount of respect from his employees and peers. Financial wizard. Great fly fisherman.

WHAT IS YOUR ADVICE TO SOMEONE LOOKING TO WORK OR GROW

THEIR CAREER IN THE SPORTING GOODS/OUTDOOR INDUSTRY? Work hard. Even though it’s a great industry, it’s still a job, and committed hard workers advance.

HOW WOULD YOUR FRIENDS DESCRIBE YOU? A pain in the ass…but a solid and committed friend.

BILL GAMBER SGB INTERVIEWS

HOW DID YOU FIRST GET ACTIVE IN THE OUTDOORS? Fly fishing and turkey hunting with my dad back in Pennsylvania.

WHAT OUTDOOR ACTIVITY OR SPORT WAS YOUR FAVORITE AS A KID?

What was your proudest achievement? Wrestling, team MVP, then growing into racing 14 ironman-distance triathlons.

WHAT WAS YOUR FIRST JOB? Washing honey barrels at our family honey business, Dutch Gold Honey. Growing up in a family business set the stage to know I could do anything I put my mind to.

BEST JOB YOU EVER HAD? Worked for a bricklayer all through college summers. Hard work, good money, working outside. I loved it.

HOW DID YOU GET STARTED IN THE OUTDOOR/SPORTS BUSINESS? In college I started racing triathlons, and I hired a friend’s mom to sew tri and bike shorts for me, and I sold them out of the trunk of my Jetta at races.

WAS THERE ONE PERSON WHO SERVED AS YOUR MENTOR FOR YOUR

CAREER? My dad. Hardest working person I’ve ever known.

WHAT DO YOU LOVE ABOUT WORKING AT (RUNNING) BIG AGNES AND

HONEY STINGER? We make our own rules. And we have to camp to be good at our job.

Bill and his dad have a lot in common, including hard workin' and hard playin', as illustrated here on a recent fly fishing outing.

Bill Gamber enjoys outdoor time with his kids

CO-FOUNDER & CO-OWNER, B IG AGNES & HONEY ST INGER


ith last ski season a distant memory, it’s time to look ahead. And while no one was more

ready to put 2011/2012 behind them than manufac-turers of snowsport hardgoods, dealers of such are still wrestling with carryover inventory while at the same time trying to update rental fleets, get the latest and greatest onto store floors, and set themselves up for profitability in a more promising winter ahead.

"Because last year was the worst ski season in as long as many people can remember, most specialty shops have quite a bit of carry-over,” Skiing Business editor Ryan Dionne said in an exclusive interview with SGB Weekly. “Many shops we've talked to plan to dis-count last year's products enough to sell fast while still covering their costs. That means great deals for con-sumers and shops can make room for new products."

Many dealers have had winter merchandise on sale all summer. Others had 2011/2012 merchandise such as technical layers and hard goods boxed up and in storage, ready to be pulled out and repositioned. Side-walk sales spring up Labor Day in strip malls around the country, marking the unofficial start of the season, especially in summer tourist destinations with anticipa-tion of crowds ready to gobble up marked-down mer-chandise. But once the gobbling is over, what is the forecast for full-price, fall-season merchandise and early season hard goods?

“We have two projects that we’re working on to jumpstart excitement this fall in snowshoe,” said Graham Gephart, global brand manager K2 Outdoor Group. “First is consumer workshops. We’re partnering

By Aaron H. Bible

SKI SEASON PREVIEW

FALL SALES ON EVERYONE’S LIPSMANUFACTURERS AND RETAILERS WORK TOGETHER TO JUMPSTART SNOWSPORTS SELLING SEASON

W

Photo courtesy of MTNApproach


awareness to a broader customer base. Fur-thermore, Black Diamond's MAP Policy is designed to allow dealers to maintain margin and compete on service and customer ex-perience, areas where specialty can actually compete. And finally, Black Diamond contin-ues to deliver innovative product, crucial to creating sales, in products like the new Car-bon (fiber) Megawatt and Flicklock Pro poles.

When it comes to technology-driven sales, a number of innovations are happening in the backcountry/sidecountry market. Advances in performance and weight in Alpine Touring boots, and packs with integrated avi systems and airbags, are the two biggies. MTN Approach is a young company opening more doors to backcountry snowboarding with a new system of products called the Deep Winter Kit. It is an all inclusive kit including a three-piece folding MTNApproach ski system (patent pending), a set of lightweight carbon composite touring poles, a telescoping aluminum shovel and a 10 foot aluminum avalanche probe. The system also includes a proprietary backcountry pack ($795 includes skis with climbing skins, bindings and backpack). “Sales are looking strong, domestically and internationally. The pre-hype has been mostly involved with the buyer’s guides in the major magazines, lot of press and the top pros are backing the

the season with a bit of a competitive ad-vantage, being able to leverage against sum-mer cash flow. One success story comes from climb and ski specialist Black Diamond Equipment. Black Diamond's North Ameri-can director of sales Brian Mecham has no shortage of tricks in his bag to help retailers get past last year's dismal winter. The Black Diamond rep force has been participating in earlier-than-usual season dealer promo events - and seeing good traction with skis and ski accessories. Like other core-participant suppliers, Black Diamond deliv-ers "best-in-class" product training through sales clinics and other sales training events. Black Diamond is also partnering with deal-ers on demo programs and early season ski events that will allow customers to test prod-ucts. The company has increased brand pre-sentation with key partners like Christy Sports, which are actively pitching the innovation that Black Diamond has brought to backcountry/sidecountry skiing in recent years.

While most dealers are flooded with alpine-based products, the sweet spot is currently in the backcountry/sidecountry domain, where Black Diamond is rooted. It’s easier to stay core than to get core, as many brands have found out the hard way. To that end, Black Diamond continues to focus mar-keting and advertising efforts to drive brand

with REI to deliver a series of 40 workshops in their top winter retail stores on how to get started snowshoeing. An hour-long presen-tation on the basics of choosing gear, un-derstanding how to dress for winter, finding trail information, and delivering inspiration to get out there, the workshops are targeted at generating early season enthusiasm and education to get people thinking about the activities early.”

In addition to these “Snowshoes.com Get Going!” workshops, K2 is launching a media campaign using winter weather kits. Working with Verde PR, they’re developing a set of regional press kits pre-season that, “will be ready to rapidly deliver with timely weather/storms across the country, with product, lo-cation, retail, and other activity information that we can use to capitalize on at-once weather events (with local TV, newspaper, etc),” said Gephart.

“Things are cautiously optimistic right now, but the main focus is on creating tools like these that will get the consumer excited and thinking about winter early,” Gephart explained. “And convert them to sales when the snow starts to fly.”

For Salomon, the solution is somewhat more traditional. “We’ve expanded our in-store fixturing/merchandising to increase the visual impact of the product and more ef-fectively convey the benefits and features to the consumers. Both our sales representa-tives and tech reps are spending more time educating the shop employees in clinics and training,” said Jeff Larsen, Salomon director of softgoods. “We give reps and dealers links to books of monthly media coverage to show customers an editorial, third-party review of the products they are carrying in order to drive purchases.”

Continued Larsen, “We’re kicking off the season with a series of events - a nation-wide trail tour, which has included runs, clinics, give-aways, shoe fittings, etc. Keep in mind this program includes trail running shoes and apparel for people training to get in shape for ski season. There will be op-portunities to win product, demo shoes and gear, and go for a trail run.”

Companies selling year round come into


system, it's only a matter of time,” said founder Cory Smith.

According to Randy Bush, regional man-ager of six Colorado Front Range locations of Colorado Ski & Golf, a major retail branch of Specialty Sports Ventures, pre-season sales are used to liquidate up to 70 percent of last year’s left over merchandise. The other 30 percent comes from special buys, sample and demo fleet close outs, overstocks and carryover merchandise from other stores in its chain.

So how much can suppliers help out deal-ers with pricing, in addition to all of the ad-vertising, POP and clinic support that is typi-cally utilized? Depending on the purchasing power the retailer has, and the relationship the individual buyer has with the vendor, and the year, it varies. “They are certainly seeing more partnership in sales events this year,” Bush said. More importantly, Colorado Ski & Golf is willing to sacrifice margin for relation-ship building. Gaining a customer and get-ting more people out on the slopes is their ultimate goal.

And Bush couldn’t agree more that new technology boosts sales. While previous years’ or simply “current” technology is avail-able nationwide at closeout, new technology isn’t widely available, and isn’t discounted. And scarcity keeps demand and price high. According to Dionne, innovations are most

According to First Degree boot co-founder Marty Carrigan, retailers are finding the business model as pleasing as the product itself. “We want to be a solution for retailers,” said Carrigan. “We’re a smaller premium brand providing a premium product. And our goal is to protect our specialty retail partners.” Carrigan said that, in part because Icelantic skis are made locally in Colorado, the company is able to produce limited runs and sell out of product each season, and still plan for limited re-orders. The company grew sales last year despite the industry downtown. Remarkably, Carrigan said that 40-store-retailer Christy Sports only had

notable in technology-laden goggles, gad-gets and POV cameras; helmet-to-goggle integration; sidecountry gear and avalanche airbags; and hydrophobic down jackets, such as Sierra Design’s DriDown.

When it comes to softgoods, which typi-cally have higher margins and maintain truer MSRP pricing, the newer, more tech driven, lighter weight fabrics and coatings will al-ways sell to the early adapter and the choosy consumer at full price. According to buyers, both brights and camp-neutrals are still in for this year, and “lighter weight” is still gaining traction among non-core consumers. Cus-tomers will go to discount tents for the ba-sics, such as Patagonia R series underlayers, because they haven’t changed too incredibly much, but for the latest outerwear from Mar-mot or Spyder, they have to walk inside and pay full price.

In boots, again, technology drives the mar-ket. Up to 60 percent of new models on re-tail floors now feature some kind of “walk” mode, up from just a few models in the last few ski seasons. Three buckle technology is also catching on with reduced weights and ease of use, thanks to stiffer materials and better technology overall. Ever-increasing lateral stability is also taking boots to the next level. Want last year’s boots? Spend 40 per-cent or more less. But for Salomon’s X-Max full custom shell alpine boot, core skiers will fork over catalog price every time.

Enter Icelantic Skis and its “One Degree Collective,” introducing for Fall 2012 its First Degree alpine boot. While the company isn’t expecting this innovative boot to dramatically affect bottom line this year, it is part of an overall strategy to provide industry solutions, to be a profit center for dealers, and to slowly grow its brand. The boot is coming out in very limited numbers, restricted to 50 hand-picked boot shops nationwide; and more im-portantly, is being backed by Icelantic with banner ads in print and online in support of the retailers. They are promising strict 50 percent margins, something mostly unheard of in snowsports hardgoods.

Black Diamond Carbon Probe with Flicklock technology

Black Diamond FlickLock Pro is a locking device used on two- and three-part poles.

Photo courtesy of Salomon

20 pairs of skis left at the end of the season. Another way Icelantic is protecting margins is by only listing one catalog price, versus a MAP and an MSRP.

The boots themselves (primary model is the Storm Trooper 1 at MSRP $599) boast a walk mode; a custom insole and liner with a new, first-to-market DFP liner with zero pack out; a lightweight three-piece shell with four buckles; and an aftermarket optional powerstrap.

Skis may not benefit as much this year from a tech-nology boost, although recent innovations and hordes of new manufacturers are still trying to catch up to them-selves and suss things out. Look at what shaped skis did and then what reverse camber did again several years ago. That’s not happening this year, but rockered boards will still dominate the market both in previous-year’s and in full-priced skis and boards. V-shaped noses are one

innovation that is pushing customers to 2013 models however, combined with less tail rocker in a more all-mountain design trend.

“We see the Armada JJ, Armada Magic J, Salomon Rocker 2 115, Rossignol Squad

7, 4Frnt Renegade, K2 Petitor, and the Dynastar Cham series as the ski products that will give us a big boost this year,” said Backcountry.com brand marketing manager Marit Fischer. “All are pinnacle products.”

Online, things seem to be on the up and up. Consum-ers continue to go online in search of deals and no sales tax. “I can't speak for other retailers but we are ready for fall,” Fischer continued. “We are prepared with a breadth and depth of gear - including high-end pinnacle products like the ones I mentioned; quality, informative content; a community of passionate customers; and a brand new, redesigned website that was designed to deliver a cus-tomized shopping experience. We're looking forward to a great season, this year with snow!”

Going into this fall’s selling season, there are two schools of thought, said Ski & Golf’s Bush. One is from retailers who are not going to buy, playing it safe against a down season last year. The other are those retailers who believe there is a lot of pent up demand in the market-place, are optimistic about the weather, and are buying accordingly.

All this being said, there is no one single factor that can drive fall sales, except for the white stuff. Labor Day will be the peak discounting period, followed characteristically by a major lull until temps drop - until that first snowfall rears its head somewhere in the country. “The possibility of the future is on everyone’s lips,” said Bush. ■MTNApproach ski system

(patent pending) includes skis with climbing skins, bindings and backpack

First Degree, Storm Trooper 1 Salomon’s X-Max full custom shell alpine boot

Salomon's Snowcross trail runner



100,000 square feet of sale space in six Front Range locations. It is by all accounts the largest snowsports clearance sale in the country, run-ning annually from Labor Day until the following weekend, about 10 days each year.

While Ski Rex has a couple of major competitors - Sports Authority’s Sniagrab and Christy Sports’ Powder Daze - SSV has come to dominate the scene. Specialty Sports Ventures is a chain of outdoor specialty shops that caters to the ski, golf, cycling, flyfishing, camping and hiking markets. In April 2010, Vail Resorts, Inc. of Broomfield, CO, acquired full ownership

The annual monster Labor Day tent sales around the Front Range and High Country of Colorado serve as the unofficial start to ski season each year.

And none is as monstrous as Ski Rex, held at Denver-area locations of Colorado Ski & Golf, a subsidiary of Specialty Sports Ventures (SSV), with the giant tent sale now in its twelfth year. Billed as the “Na-tion’s most aggressive ski and snowboard sale,” the event occu-pies a 10,000 square foot tent, a 2,000 square foot junior trade tent, 24,000 additional feet of staging warehouse space; and a combined

By Aaron H. Bible

AN INSIDE LOOK AT THE NATION’S LARGEST WINTER KICKOFF SALE

REX KICKS OFF SKI SEASON

SKI


of the company. Launched in 1994 by the Gart brothers of Denver with the acquisition of three Colorado Ski & Golf shops, it has now expanded to more than 170 shops in four states in both urban and mountain settings, with dozens of retail and brand-specific shops at mountain destinations in Colorado, California, Nevada, and Utah. They also own rental shops such as Breeze Ski Rentals and online rental service Rentskis.com. The online retail operations (O2GearShop.com) are headquartered in Appleton, WI.

The Gart’s were the first to implement the giant tent sales in Colorado, and Sniagrab is now in its 58th year, according to advertisements. Both retailers offer up to 75 percent off “previous years’” equipment, as well as price matching.

Being owned by Vail Corp., Colorado Ski & Golf is also able to draw hundreds of customers to take advantage of the company’s lowest season pass prices, although other resorts sell passes at the tent sale as well, and passes to most mountains are sold at the company’s competitors also. And even though skier visits were down, Vail is reporting its highest number of early-season pass sales ever.

But what SSV does give to Colorado Ski & Golf, is buying power. “We have a unique advantage of being able to buy individually for each store, and be market specific,” said merchandise manager and softgoods buyer Mary Mancini. “But volume is still volume.”

The company increases employees by 50 percent each August to meet demand and maintain high-level customer service, and offers in store services including custom boot fitting, precision ski tuning, and a Junior Trade-In program (its discounted rental equipment program for kids 3-16) for skis, snowboards, golf clubs, and bicycles. Last year the store intro-duced a paging system for parents waiting in line at the junior tent, and handed out water bottles, to improve people’s shopping experience. The trade-in program has an 80 percent customer return rate.

According to Colorado Ski & Golf regional manager Randy Bush, “we have a vested interest in people getting out to ski and ride. That’s our primary job.” Bush came to SSV several years ago from a rich retail back-ground at Bass Pro Shops, Dick’s Sporting Goods, and formerly at Nike. He manages five buyers (one per category) and six Front Range locations (five Ski & Golf’s and the recently acquired Boulder Ski Deals). Additionally, said Bush, “we will never turn a customer away.” The company offers a five-time fit guarantee with it’s boot fitting. To fund it, the company funnels returned boots into its demo program.

Surprisingly, the store is going into the sale with a relatively clean inventory position, but nothing like two seasons ago, where everyone saw big buys two years after the recession. As last year’s models sell through over the course of the sale, the store will restock tents with current model merchandise, and continue to drive folks “inside” to shop for regular priced goods. Ski & Golf is fortunate to be able to have inventory to fulfill these sales. “Most manufacturers won’t ship early season deliveries,” Bush said. “We’ve got some great buyers with awesome relationships with our vendors.”

And while Ski Rex continues to be touted as the largest sale of its type in the country, due to anti-trust regulations and corporate policy, the company is unable to release any exact sales numbers related to the event at this time. ■


By Thomas J. RyanFITNESS COMES TO RETAILReebok

Photo courtesy of Gensler


epresenting the full manifestation of Reebok’s renewed focus around fitness, the company recently opened its first Reebok Fit Hub in the U.S.

The store, on the corner of Manhattan’s 37th Street and 5th Avenue, is the first full-price store the brand has opened in years in the U.S., joining the NHL Powered by Reebok store nearby on 47th Street, and a store adjacent to Gillette Stadium in Foxboro, MA, as the brand’s only full-price retail stores in the U.S. But this new addition stands out with a Reebok CrossFit Box (gym) on the lower level.

“We didn’t just want to open a fancy location,” said Uli Becker, president of Reebok, in an interview with SGB Weekly at the store. “We wanted to immerse consumers in the full Reebok fitness experience.”

Reebok CrossFit Fifth Avenue, which is operated by a CrossFit Box operator that the brand had already partnered with in Miami, features a state-of-the-art 130-foot pull-up rig, with a complete offering of CrossFit equipment to cater to the cult fitness movement. Box amenities also include a full locker room and a ‘recovery center’ with a hyperbaric chamber for members to take advantage of its therapeutic qualities. The gym offer 15 classes a day starting at 5 a.m.

The Fit Hub store above is staffed with fitness and product experts to give consumers first-hand advice on Reebok footwear and apparel technologies as well as a range of fit-ness and training topics. With tools and fittings reminiscent of a CrossFit Box, the store also plays up CrossFit gear, which Reebok owns the exclusive license for as part of its

R


partnership with CrossFit Inc., and some select merchandise exclu-sive to the 5th Avenue location. The store also promises to serve as a community hub for the local CrossFit community.

“You can come into the store to get advice on whatever type of fitness you do,” said Becker. “Then you have product that is actually made for those activities. And then if you want, we have a venue where you can actually do fitness with all those products. So it’s more about creating an engaging customer relationship rather than just a transactional experience or selling product. You can come here to get a better understanding on what you can do, why you can do it, why you have to do it, and how you can go about getting fit.”

Reebok Fit Hub stores debuted in Korea and Russia last year and one opened in Dubai this month. Reebok’s looking for other places for Fit Hub locations, but no deals have been finalized.

The store opening follows Reebok’s launch in January of this year of “The Sport of Fitness Has Arrived,” its biggest campaign in more than a decade that was wrapped around CrossFit. The store also represents a further step to ingrain the brand around fitness.

Becker said the fitness emphasis takes Reebok back to its roots. In the 1980's, products such as Freestyle and programming such

as Step Reebok defined the aerobics craze. Reebok’s new push also fits in line with the overall health & wellness trend that encourages physical activity and better nutrition habits. Said Becker, “It’s not just here in the U.S. but everywhere in the world.”

Reebok’s fitness emphasis includes yoga, dance and other work-out activities, but the pinnacle is the CrossFit strength and condition-ing training movement. Founded by former gymnast Greg Glassman in Northern California in 1995, CrossFit is a vigorous workout that combines weight training, aerobics and gymnastics all in one with the goal of becoming functionally fit. With heaps of grassroots and media buzz, participants have grown quickly to now support 4,400 CrossFit Boxes, including about 4,000 in the U.S.

Reebok's long-term partnership with CrossFit Inc. began in 2010. It was the title sponsor of the sixth annual CrossFit Games last month for the second year and has 67 licensed Reebok CrossFit boxes, including four in the U.S. It also works closely with many of the other CrossFit Box affiliates across the country helping support their mem-ber’s footwear and apparel needs.

Reebok’s CrossFit partnership is already helping cement the brand with CrossFit enthusiasts. At the recent CrossFit Games, a wide ma-jority of participants were wearing Reebok gear versus a scant few the prior year. Said Becker, “It’s not because we are a sponsor, but they feel they are the best shoes to do their activities in.”

Internally, the CrossFit focus is also helping shape up Reebok’s staff. A recent Boston Globe story noted how 425 employees at its Canton, MA headquarters lost over 4,000 pounds collectively during 2011 through CrossFit workouts.

“We have many, many stories inside the company that illustrate that what we are trying to accomplish works for people,” said Becker. “If (the benefits of CrossFit) are understood, the probability for suc-cess is pretty high, and that’s what we’re trying to bring to life.”

But the inroads into the fitness world have yet to translate to Reebok’s bottom line. Indeed, Reebok’s business has taken a step back this year after rebounding for the past several years on the

Photo courtesy of Gensler


rapid growth of the toning category as well as successful launches such as its Zig and Flex franchises. Reebok's revenues slid 12.9 percent to 787 million euros (U.S. $990mm) in the latest six months, and were off 16.4 percent on a currency-neu-tral basis.

Becker said the decline was partly due to the shift of the NFL license from Reebok to Nike, the sudden implosion of the toning footwear category, and the ongoing resolu-tion of commercial irregularities involving its franchise partners in India. But he also admits that the brand’s underperformance had more to do with the lack of new prod-uct initiatives. Describing Reebok as “very product-concept driven,” he said the brand hadn’t created enough a solid foundation for sustainable growth. The developing fitness-focused platform should set the brand up for more predictable and steady growth in the years ahead, he predicts.

“If you want an analogy, six years ago we were a patient in intensive care on life sup-port,” remarked Becker. “We got out of that with our new product concepts. But because we focused a lot on that, we’ve got a cold now. But we have the right medicine and within a year we’ll be out on the street again and driv-ing this business to a fantastic place.”

Becker looks to 2012 as a “consolidation” year with the NFL changes, ongoing toning distribution issues, and the resolution of its India situation with 2013 positioned to be another comeback year.

Reebok’s sales also declined in North America in the half but are expected to get a boost in the second half from the introduc-tion of ZigLite, the CrossFit Nano 2.0, and a SmoothFlex running shoe.

Becker said overall demand for its Zig and Flex franchises remains solid, with Zig particularly seeing positive sell-throughs lately in kids and its Shark models. However, seeking to compensate for the declines in toning, Reebok wound up over-flooding the market with Zig and Flex product and both franchises are facing inventory challenges. Added Becker, “Once we’ve take care of the inventory issues, we’ll be fine with Zig and Flex.”

One particularly encouraging category is Classics, which is resuming growth after struggling with inventory issues and trends working against the overall category for the last few years. Several “very successful” retro basketball introductions over the past couple have given Classics a lift, but its staple all-white leather lines, which had been a promotional item for many years, is also finally gaining traction. Becker said the turnaround for all-white leather classics comes after a long period of inventory rationalization.

“We reintroduced it two years at a $65 price point, which drew mediocre sell-throughs but all of a sudden it is picking up,” said Becker.

Another category gaining momentum is apparel, which Becker admitted “is not much of our history.” Reebok’s "basics line" licensed to Dick’s Sporting Goods continues to deliver steady growth. But Becker was particularly enthused about a new CrossFit line that was launched in June at 75 specialty doors, including Sport Chalet and Luke’s Locker.

“For the first time we’re actually seeing a great amount of sell through on the apparel side and it’s coming from not just the basic business but actually meaningful brand related business,” said Becker. “It’s not a big business yet but nothing works if there’s not a starting point that creates the fire and energy.”

Regarding toning, Becker said he was hoping for a relaunch of the category by Spring 2013. But he now believes it may take longer to further “dry out” inventories in the marketplace.

“It may be Fall 2013 or 2014, but I’m not relying on it because we have so many other promising initiatives in front of us,” said Becker.

Nonetheless, Becker said Reebok continues to believe in the benefits of toning footwear and the viability of the category down the road. Over-distribution issues first hurt the cat-egory as inventories eclipsed demand. But demand further weakened after the Federal Trade Commission’s settlements with both Reebok and Skechers over deceptive advertising claims garnered front-page headlines across the country.

Both Reebok and Skechers settled to avoid any protracted litigation. But Becker said this was the first time the FTC regulated claims around footwear at the same level they typically investigate pharmaceuticals. Said Becker, “On the sporting goods side, that protocol was never there. We obviously acted with good will and good intentions with what we did.”

L to R: Chris Spealler CrossFit Athlete, Rich Froning, Annie Thorisdottir, the winners of the 2012 CrossFit Games and Uli Becker, the President & CEO of Reebok


Becker said that similar to Classics, toning has to overcome over-distribution challenges. Said Becker, “Before you start it back, the toning challenges in terms of distribution and discounts need to flush out. We need to wait a little bit and then revise that proposition.”

After its “painful learnings,” Reebok has also significantly upgraded its testing procedures and is prepared to offer a much more scientific basis for touting toning’s merits, albeit following the FTC’s guidelines. Becker said he regularly wears toning shoes to compensate for his two knees that have been wrecked from his days playing sports.

“”It’s not just the toning aspect,” said Becker. “But it actually helps me to feel less pain when I walk all day through the city. So it does have a functional benefit. And that’s what women feel about it and what we needed to bring back to life.”

Asked to estimate the size of the toning category on its return, Becker said Reebok plans bring it back in small distribution, similar to Classic, and that will determine the size. But he also notes that many women continue to be “very happy with the toning proposition” and many more were during the height of the toning trend. Added Becker, “If you can reach them all again, there’s your potential.”

But the most promising platform for Reebok continues to be fit-ness. For example, Reebok is currently doing a particularly strong business in longer socks that are required for a few CrossFit activi-ties. Said Becker, “Six years ago we would have been happy to sell a t-shirt at the prices we’re now selling socks at.”

The CrossFit/fitness angle is also enabling Reebok to take a distinct approach to the running category. Becker said the CrossFit

philosophy is focused more around bringing metabolic conditioning (exercises intended to increase the storage and delivery of energy) into a fitness routine. Instead of isolated ten-mile runs everyday, it encourages interval training and short to mid-distance running. Becker said Reebok is developing shoes specifically for briefer, quicker runs, including a new Zoning franchise expected to gain a big marketing push for 2013.

Becker admits the CrossFit/fitness theme doesn’t yet resonate with everyone, but predicts growth as fitness trends expand, as does fighting obesity. He also notes how music plays a big part of in energizing gym workouts and that its star ambassador, Swizz Beatz, American hip hop recording artist and producer who is helping revive its Classics lines, is a big CrossFit fan. Moreover, Becker expects the fitness theme to eventually run across both Reebok’s performance and lifestyle side because the brand originated in fitness. Said Becker, “There’s no reason why we can’t bring it together, because our history is our future.”

Overall, while some competing athletic brands focus on some aspects of fitness, Becker expects Reebok will benefit from its sole focus around it. He likens the opportunity around fitness for Reebok to the wild success Lululemon is having dedicating itself to women’s fitness. As a global sports brand, he believes Reebok is much better positioned to make a bigger statement around the fitness opportunity.

“There’s not one company that takes this holistic look like we do,” Becker said. ■

Reebok CrossFit Fifth Avenue features a complete offering of CrossFit equipment to cater to the cult fitness movement

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SEPTEMBER 2012

6-8 Surf Expo Orlando, FL

7-9 NBS Fall Semi - Annual Market Fort Worth, TX

11-12 EORA Mid-Atlantic Market Lake Placid Olympic Center

19-21 Health & Fitness Business Expo Las Vegas, NV

19-21 Interbike International Trade Expo Las Vegas, NV

27-29 Imprinted Sportswear Show (ISS) Fort Worth, TX

OCTOBER 2012

3-5 OIA Rendezvous Boston, MA

6-7 The Retailing Summit Dallas, TX

NOVEMBER 2012

3-4 NBS Fall Athletic Market Indianapolis, IN

8-9 TAG Fall/Winter Show N. Charleston, SC

13-14 A.D.A. Fall Show Las Vegas, NV

18-20 Athletic Show Sports Inc. Las Vegas, NV

DECEMBER 2012

3-4 Sports Inc. Footwear & Apparel St. Charles, MO

3-5 EORA Southeast Market Asheville, NC

5-7 Atlanta Fashion Shoe & Accessory Market Atlanta, GA

JANUARY 2013

5-7 ASI Orlando Orlando, FL

7-8 ATA Show (Archery Trade Association) Louisville, KY

10-12 Surf Expo Orlando, FL

15-18 SHOT Show Las Vegas, NV 17-20 NBS Winter-Specialty Market Denver, CO

17-19 Sports Licensing & Tailgate Show Las Vegas, NV

18-20 Imprinted Sportswear Show (ISS) Long Beach, CA

22 Outdoor Retailer All Mountain Demo Salt Lake City, UT

23-26 Outdoor Retailer Winter Market Salt Lake City, UT

23-26 PGA Merchandise Show Orlando, FL

24-27 ASA-ICAST Chicagoland Fishing, Travel & Outdoor Exposition Schamburg, IL

29-31 WSA Show Las Vegas, NV

31-3 SIA Snow Show Denver, CO

FEBRUARY 2013

1-5 NBS Spring Semi - Annual Market Fort Worth, TX

3-6 ISPO Munich 2013 Munich, Germany

5-7 FFANY New York, NY

6-8 ASI Dallas Dallas, TX


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