Inside: The Greatest Shoe Dogs of All Time - Footwear Insight
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comfort WORKING Inside: The Greatest FOOTWEARINSIGHT.COM • NOVEMBER/DECEMBER 2016 Shoe Dogs of All Time
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M O Editor in Chief C T. Mark Sullivan H msullivan@formula4media.com G SI 646-319-7878 N RI Managing Editor EA Cara Griffin TW Senior Editor O FO Bob McGee Contributing Editor Jennifer Ernst Beaudry Art Director Francis Klaess Associate Art Director Mary McGann Contributors Nancy Ruhling Tim Sitek Suzanne Blecher Publisher Jeff Nott jnott@formula4media.com 516-305-4711 Advertising Jeff Gruenhut jgruenhut@formula4media.com 404-849-4156 Christina Henderson Working Comfort: See page 40 516-305-4710 chenderson@formula4media.com Troy Leonard tleonard@formula4media.com 352-624-1561 Katie O’Donohue kodonohue@formula4media.com 828-244-3043 Sam Selvaggio sselvaggio@formula4media.com 212-398-5021 Production Brandon Christie 516-305-4712 bchristie@formula4media.com Business Manager Marianna Rukhvarger 516-305-4709 mrukhvarger@formula4media.com Subscriptions store.formula4media.com PO Box 23-1318 Great Neck, NY 11023 Phone: 516-305-4710 Fax: 516-441-5692 www.formula4media.com Formula4Media Publications Sports Insight Footwear Insight Inside Insight Outdoor Insight Team Insight Textile Insight Trend Insight Running Insight sportstyle Footwear Insight® is a trademark of Formula4 Media, LLC, Great Neck, New York. ©2016 All rights reserved. The opinions expressed by authors and contributors to Footwear Insight are not necessarily those of the editors or publishers. Footwear Insight is not responsible for unsolicited manuscripts, photographs or artwork. Articles appearing in Footwear Insight 12 22 26 40 46 50 may not be reproduced in whole or in part KICKS CHAOS RUN MARKET SHOE DOGS WORK IT THE DISRUPTORS LINES WE LIKE without the express permission of the publisher. Amid the chaos, the An analysis of the Footwear Insight offers Brands share how they Taking a different path These performance Footwear Insight is published bi-monthly: athletic shoe business road ahead for the up our listing of the are “making it work” with retail distribution running shoes are Jan/Feb; Mar/Apr; May/Jun; Jul/Aug; Sep/ is set up for an running industry. Plus, footwear industry’s in the hospitality, can pay off for brands. scoring points Oct; and Nov/Dec by Formula4 Media LLC. eventual renaissance a look at the energy “geatest shoe dogs of healthcare and light We take a look at some with tech stories Subscriptions: one year, $24.00 (U.S. Funds) starring three brands. running category. all time.” duty segments. prime examples. and curb appeal. in the United States. All other countries, $54.00 (U.S. Funds) for surface mail. Postmaster: Send address changes to Footwear Insight, P.O. Box 23-1318, Great Neck, NY 11023 On this page: Powertrain Sport by Timberland PRO. On the cover: Alegria’s Deb clog with Sugar Skulls design, MSRP $129.95. Photo by Frank James.
TIMEOUT | MARK SULLIVAN TRULY INNOVATIVE INNOVATION IS ABOUT THE HIGHEST COMPLIMENT THAT CAN BE OFFERED IN business. So, let’s start out by giving credit to those who deserve it. With its Flyknit and Lunarglide product, Nike has brought incredible innovation to shoe design and manufacturing. The impact of those designs is evident in the collections of every athletic brand and many casual and dress lines, too. As it has many times over the past 30 years, Nike has dramatically changed how consumers think about their shoes. Apple is the other company that pundits refer- ence as true innovator and deservedly so. They’ve changed the way we buy and listen to music, the way we use our phones and, oh by the way, Apple created the tablet, a whole new category of prod- uct. And they have the best sales per square foot, $4500, of any retailer in the country. It’s been a remarkable run for both of these companies and they’ve lifted entire categories by their great work. They’ve drawn consumers into stores and they’ve set standards at which their competitors can take aim. But both admit that their innovation trains are Where do we turn slowing down and there’s not a lot in the pipeline for the next few product cycles. for innovation and So, where do we turn for innovation and inspi- inspiration in the ration in the shoe business in the coming year? I shoe business in actually like what Foot Locker is doing. Their new the coming year? flagship on West 34th Street in Manhattan is bold and – dare I say it – innovative. For those of you who have not seen it, these folks dramatically revamped a successful, productive store on one of the world’s top shopping streets. They have completely done away with the street level entrance and giant windows and replaced it with a discreet entrance and a second-floor layout that features brand boutiques from Puma and Adidas, along with special areas devoted to two of its own store layouts, House of Hoops and SIX:02. The layout and concept are dramatically different from its predecessor store, which looked like a gigantic Foot Locker with men’s shoes on one wall, women’s on the other and a bunch of T-shirts and socks in between. The old store was not bad, but this is Featuring Lynco® orthotic support way better. And credit to Foot Locker for breaking its old mold and trying something and memory foam cushioning different. The chain’s business is good; its stock price is up and Foot Locker has great for superior comfort buzz. When you have 3500 stores and $7 billion in revenue, it’s tough to get buzz going, but it’s genuine and deserved. The new Foot Locker layout is easy and fun to shop. And that may be an even better compliment than saying it is innovative. O the healthiest shoes you’ll ever wear ®
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THEFOOTWEAREYE COMPANY REVIVAL A Comeback Story H ood Rubber Company was born 120 years ago in 1896, sold the year she was born, but she grew up wearing her own last name and by the 1920s was making 90,000 pairs of shoes on the heel of her sneakers, something she never expected to do again. per day in its factory in Watertown, MA, as the largest That new lease comes in no small part at the hands of Janelle Samson vulcanized rubber shoe factory in the world, shipping and Marc Scepi, brand and creative directors for Hood Rubber and parent its classic rubber work shoes to 56 countries worldwide. company Pinnacle Brand Group. “Initially we asked ourselves, what would Hood was renowned for its technical craftsmanship, Hood Rubber Co. look like today if it never went away? It’s important to us steel toes, and, an anomaly of the day: stylish versatility. The replaceable to acknowledge the heritage of the brand, as it was pretty groundbreaking rubber heels – of which you can touch and feel some of the last remaining at its peak in the early 20th century,” Samson says. artifacts in their original boxes at trade shows – are just one of the “As designers who live in New York City, there’s constant inspiration cool little things about these classic work shoes. You could replace and insight on what’s needed and we often find ourselves in need of the heels yourself or take them down the street to the cobbler. footwear that not only looks and feels great but can take us through “On a local level it was important because of the number of people changing environments. This type of shoe that embodies the idea of the company employed and its innovative practices that were coming metropolitan meets function, didn’t really exist, so we really created into prominence, such as offering medical and dental services,” Laura a niche market and made it happen,” Samson says. Weekes and Rick Hood, great grandchildren of co-founder Frederic “We see ourselves as advocates for the consumer,” adds Scepi. “All Hood, say. “On a national level, the high quality of products – from of the small details such as innovative materials, premium leathers shoes to tires to medical devices – made it a recognizable brand. And and comfort features are vital in each shoe we design and we hold on a global level, the importation of rubber internationally, worldwide each other accountable. We continue to highlight the use of rubber marketing and the needs that arose for rubber products during World on every shoe, whether on an outsole or the upper. Not only did we War I, and under Goodrich’s control in World War II, made the company create something special, but it also relates to the brand heritage, as important in filling many needs.” the vintage product was truly multifunctional. We see the new Hood Rubber Co. as an evolution of the original brand, a true street to trail Hood Rubber shipped its last pair of shoes in 1969... until now. Concept that will crossover to a variety of retailers.” “On first thought, the prospect of reviving the brand seemed remote,” Scepi and Samson’s talent, paired with the marketing, brand and says Elizabeth Hood Pigford, granddaughter of Frederic Hood. “Upon product information preserved from the first three decades of the 20th reflection, however, the fact that Hood Rubber Company made high- Century, have armed Hood Rubber with the vision and resources to quality products that consumers came to trust and seek out made the bring the brand into 2017 — as if it had never gone away. products seem like a perfect prospect.” Hood Rubber Company was — Aaron H. Bible 6 • Footwear Insight ~ November/December 2016 footwearinsight.com
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THEFOOTWEAREYE INNOVATION On Your Feetz D SW and former Reebok chief Uli Becker are helping to bring to market a company that is using 3D printing technology to make custom fit sustainably made shoes. The Feetz brand was founded in 2013 by mathematician and entrepreneur Lucy Beard, who came up with the idea during an unsuccessful shoe shopping experience. As she walked into a Starbucks and ordered a “grande mocha light with two pumps,” Beard realized that standardized sizing does not meet individual needs for fit and comfort. Feetz’ proprietary SizeMe technology uses a mobile scanner to capture 5000 datapoints and 22 dimensions and produce a customized 3D printed shoe in less than two weeks. Feetz shoes are made with recyclable materials. Feetz launched this fall with Pop-Up measurement shops in DSW’s stores in Manhattan and San Francisco. But the company will also measure feet and sell shoes through a smartphone app that guides consumers through taking three photos of each foot. The fitting process takes more than 30 measurements from each foot to get exact sizing on each foot. The shoes are made from rubber and plastic and Feetz offers consumers the opportunity to recycle their used shoes in return for a discount on a new pair. Feetz is currently manufacturing in the U.S. with American made materials, technologies, and labor in San Diego. O Feetz custom shoes utilize its SizeMe technology and can be ordered in-store or through a smartphone app. 8 • Footwear Insight ~ November/December 2016 footwearinsight.com
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THEFOOTWEAREYE 1! Back in the Race of swagger and comes from the apparel angle, D ave Larson is back in the race. After different. Then Under Armour called and I nearly a dozen years at Brooks, was intrigued. It’s a growth brand with a lot of which is a big advantage given the importance where he crafted the company’s opportunity in the running world. I’m excited to of fabrication and materials in this new era of “Run Happy” campaign and helped see where we can take the brand in this category. knitted and woven uppers in footwear. Also, spark Brooks’ ascent up the Under Armour owns the largest digital health performance running ladder, Larson retired in What’s at the top of your white board right now? and fitness community of more than 175 million June 2015. That respite, however, proved short- Continuing to build a credible run brand that is unique registered users on its connected fitness lived for the active and energetic Larson. This authentic to runners and Under Armour. The DNA platform (MapMyFitness, Endomondo and past summer, the Stanford-educated Larson of this brand is rooted in performance that has MyFitnessPal). Access to this gigantic database moved cross-country to become general manager a unique voice and I want to integrate that into of active people in the world could be a huge of running at Under Armour, where he “will everything we do on the running side. advantage for us. own the vision, strategy and the consumer” on the Baltimore-based brand’s running platform Under Armour leadership has earmarked the Under Armour has undeniable brand momentum while ensuring alignment toward the company’s running category as one of its top business from endorers such as Steph Curry and a slew broader mission and goals. priorities. Why? of NCAA team deals that will further heighten its It’s a unique task at Under Armour, a brand Running delivers a multi-billion dollar global visibility. How might these positive vibes bolster that boasts significant appeal and brand equity market. As a top sports and athletic brand, it’s a Under Armour’s efforts in running? in the marketplace, but continues battling for space we should be in. These big brand plays will surely add to the brand’s cache with young athletes, many of them runners. The NCAA team deals will definitely affect the college runner, especially given Under Armour’s unique on-campus activation programs. Outfitting and supporting these cross-country and track and field programs will also drive the business and the brand. What do you see as some of Under Armour’s biggest challenges in the run specialty channel and how are you going to attack those? We need to be credible with these “high priests” of the running world. Product excellence, account service and relationships and being an active part of running culture are critical. Under Armour has already made big strides by adding specialty reps, running ambassadors, a new spike line, a new cross- country line and some exciting new products. The best is yet to come. What can running specialty retailers expect from Under Armour moving forward? They can absolutely expect us to continue to build credibility and authenticity as a running Dave Larson came out of retirement to drive Under Armour’s running efforts into 2017. brand with better product and more outreach to the running community. We’re interested a greater presence in the performance running To date, Under Armour has struggled to make in driving customers into running stores and landscape. Though Under Armour is the fastest significant headway in the running specialty believe we’re one of the few brands that can growing brand for distribution and market share channel. What do you believe has stood in the bring in younger consumers, in particular. But in specialty stores, according to Sports Marketing brand’s way? we know the product has to be right and the Surveys, its distribution remains under 50 percent. You absolutely have to invest in the culture of intentions sincere. It needs to be a committed In a recent Q&A, Larson discussed his return to the sport. It requires grassroots work — being effort and that’s what running retailers can expect from Under Armour. Photo: Under Armour/Matt Ryb the running industry and his efforts to propel the at events, offering spikes and so on. Today, running business at Under Armour. Under Armour is committed to doing just that. What has you most excited for Under Armour’s After nearly a dozen years at Brooks and some How would you characterize Under Armour’s future in the running world? time away, what attracted you to this position at potential in the running landscape? Being able to lead a team that will truly make Under Armour? I think Under Armour is one of the few brands a dent in the world of running. We won’t do I really did hang it up over a year ago. I felt I that can energize a new consumer — the status quo. We will revolutionize things. If not, had given my best to Brooks, so I retired and was millennial runner. Under Armour has big brand I’ll be selling Popsicles by the beach. going to start a new chapter doing something pull with this consumer, brings a new sense —Daniel P. Smith s &OOTWEAR )NSIGHT ^ .OVEMBER$ECEMBER FOOTWEARINSIGHTCOM
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THEFOOTWEAREYE ANALYSIS PEOPLE Burnett Joins Rack Room Kicks in Chaos By Bob McGee Any way you look at it, 2016 has been a difficult year for the mature U.S. athletic shoe business. Multiple retail bankruptcies, fast-moving fashion trends and the ever- connected consumer have forced the major players to pivot in directions that were not required during the segment’s roaring years. The need to strike the proper A balance between own retail and wholesale, the challenges fter eight years at Sports Authority and technical details associated with direct and digital and and five years at Finish Line, Brian the requisite to establish local market labs to test and fuel Burnett says he’s ready for his new future innovation are but three. role as VP/GMM at Rack Room. Still, amid all this chaos, observers contend these actions are setting up the Burnett joined the family retailer earlier this athletic shoe business for an eventual renaissance, if you will, that will be driven and fall, succeeding industry veteran Terry Apple. nurtured, not by a single brand but three. “The landscape in the shoe business is chal- In the months since the retirement of co-founder Phil Knight, market behemoth lenging,” Burnett tells Footwear Insight. “The Nike has been rattled by mounting competition from rivals Adidas and Under consumer has access to all the information she Armour, softer order demand, cries that its R&D investments are waning, needs and can purchase shoes at any time. But innovation pipeline is drying up, and three key Wall Street stock downgrades we believe our customer also still likes to shop since June 1. The latest, on Halloween from Bank of America, was the equivalent in the store, touch and feel the product and try of a “sell” on the stock. There must be a lot of soul searching inside the berm. it on before buying.” Still, a national retailer, while admitting he has serious concerns about In his new role, Burnett will be responsible current demand for key Jordan and Converse products, insists there is plenty for the strategy behind Rack Room Shoes’ of Nike business in the marketplace. entire merchandising division, including all “Plus, in two years, Nike will be a stronger company and brand from all categories for women, men and children. In this,” this retailer opined. addition to his time at Sports Authority and That 24-month window, which takes the sneaker business into 2019, is likely Finish Line, Burnett has worked at FootAction to provide Adidas and Under Armour more opportunities to grow market and Just for Feet. He says all those experiences share, both here and abroad. But the Three Stripes, which has enjoyed a will come into play as he oversees business at phenomenal run over the last 18 months, including in the U.S. under Mark the 420 Rack Room stores, where he will have King, isn’t punch-drunk about its gains. The brand doubled its U.S. footwear to balance fashion, athletic and casual footwear market share to 10 percent for the 12 months ended September 30. for the store’s core customer: the millennial “It’s important that we continue to make sustainable progress around the mom. Adidas brand in the U.S. because not only do we need a bigger market share “Open-to-buy is always precious, but we’d position…we need a greater contribution on the bottom line, new Adidas like to be on the offense and stay trend right for Group CEO Kasper Rorsted told investors last month. our consumer and integrate style, color, selec- For its part, Under Armour is promising to grow its topline by about 50 percent tion and value,” says Burnett. to $7.5 billion in 2018 through additional investments in international markets, IT Like other retailers, Rack Room is striving to and distribution. Athletic footwear and international will be the primary focus as offer its shoppers an omni channel experience the brand aims to expand its points of distribution worldwide. O and he sees an opportunity to get the Rack Room shopper more involved online. “We’ll communicate with her more about what we offer online, but we’ll keep it simple,” says Bur- A version of this article originally appeared in the digital magazine Inside Insight. nett. “Just like in the store, we want to provide To subscribe, visit insideinsight.com the best possible experience online, too.” O 12 • Footwear Insight ~ November/December 2016 footwearinsight.com
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THEFOOTWEAREYE RETAIL PRODUCT Mephisto Opens San Diego Store Santos Clause Mephisto USA has opened its fifth company-owned store located at Westfield UTC in San Diego. The overall vision for this 1200-square-foot store is consistent with Mephisto’s other locations: two in Manhattan, one in Atlanta and one in Las Vegas. The store opened in early November with a number of events, including a gift with try-on, a special gift with purchase, weekly free pair giveaways during the month and a grand prize drawing for a $1000 Mephisto gift certificate. O The new limited edition Santos Collection from Dansko. E arly next year, Dansko will begin shipping its new limited edition Santos Collection of clogs handmade in Brazil. The shoes include hand carved and sanded wooden soles that are then flame bur- nished and stained. Individually hammered nails fasten the leather uppers to the finished soles. The shoes will retail for about $190 a pair. O 14 • Footwear Insight ~ November/December 2016 footwearinsight.com
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THEFOOTWEAREYE BRANDS Running On The On Running Cloudflow is billed as “a short cut to runner’s high.” By Jennifer Ernst Beaudry O n Running is looking ahead. Caspar Coppetti, co-founder of the Swiss performance running brand, says that On has seen growth rates glob- ally between 70 and 300 percent in 2016, nearly doubling its overall busi- ness from the year prior. And they’ve done it profitably, he added. “Our full-price and premium strategy is really paying off,” he says. According to Ted Goodlake, director of North gone into the athleisure world,” he says. “The American sales, the U.S. market in particular running specialty trade channel has always been The Swiss brand is is on pace to grow between 90 percent and 100 percent for the year. And he attributes the our main focus and will continue to be that way.” To that end, On is releasing two new products betting on performance. growth to the brand’s decision to stay focused for 2017 aimed at the serious runner. on performance. The new $139.99 Cloudflow style is designed “A lot of our competitors have veered off and as a lightweight, cushioned style with a smooth transition for easy, effortless runs — the “short cut to runner’s high,” Coppetti says. The style will be the focus of a grassroots marketing push, which kicked off with sur- prising 10 runners to switch to the style to More Grip. run this month’s New York City marathon. The brand is also betting on the Cloudflash, a racing flat designed with all the technology On could stock it with. Priced at $180, the Less Slip. shoe is “by far the most expensive racing flat in the market,” Coppetti says. The thinking? Runners willing to spend $700 on the entry fee for a triathlon or spend hundreds or more on a world marathon want the best. And On is betting that their top-tier flat, which removes Check out the the midsole to build the shoe directly on STABILicers Run TM the flex plate, and uses a resilient new EVA compound the brand is calling Zero Gravity at stabilgear.com Foam 2.0, will appeal to that consumer. “Our R&D team went all out and went crazy on the technology they were able to use,” Coppetti says. Heading into 2017, Goodlake and Coppetti are feeling optimistic. Goodlake flagged the West Coast, Southeast, and Midwest, particularly Chicago, as target markets. Coppetti says the team would be adding 10 positions to the U.S. team — part of 40 being hired globally. (The U.S. represents about 25 percent of On’s total business, he says.) The new hires will be across the board, but with a focus on adding tech reps, sales reps and customer service people to service ® anticipated growth. “We’re still scratching the surface in U.S.,” Coppetti says. “Based on futures, we think we can double the business again.” O 16 • Footwear Insight ~ November/December 2016 footwearinsight.com
A Trade Show, Business Conference +Consumer Expo Images courtesy of: New Balance, Lolë, Brooks, Skechers, Timberland, Public Rec. Fort Lauderdale Convention Center Florida sportstyleshow.com June 14-15, 2017 June 16, 2017 Trade Show Consumer Expo Showcasing the best footwear, An opportunity for brands apparel, wearable technology to connect and interact and accessory brands. with VIP consumers.
Images courtesy of: Lucy, Anatomie, Brooks, Public Rec. Blending sports and style. sportstyle will attract key retail buyers The sportstyle name was chosen and executives through scholarships because it captures the strength of performance sports as well Department Stores as the lifestyle aspect of the Apparel Online active category that is driving its Retailers Boutiques expansion. The sportstyle show will include activewear, footwear, Studios accessories and technology. Independent blending sports and style and Health Shoe Stores Clubs The conference will focus on key business topics for our retail attendees. And, the addition of Athletic Sports Specialty a one day consumer expo will Footwear and Apparel Stores Stores attract VIP shoppers from South Sporting Goods Stores 036-(%T7%'8-:)A%*ç9)281%6/)8@
Trade Show June 14 -15, 2017 Consumer Expo June 16, 2017 Showcasing the best footwear, Connect and interact with apparel, wearable technology VIP Consumers in one of the and accessory brands country’s top markets Breakfast Speakers Seminars Demos Celebrity Athlete Appearances Receptions Fashion Show Networking Consumer Expo and Shopping Tie-in with Runner’s Depot
gymstyle trailstyle runstyle walkstyle sockstyle streetstyle sneakerstyle lifestyle blending sports and style sportstyle the show trade show: june 14-15, 2017 consumer expo: june 16, 2017 Contact us now to see how sportstyle can work for you. Jeff Nott Sam Selvaggio Christina Henderson Mark Sullivan jnott@formula4media.com sselvaggio@formula4media.com chenderson@formula4media.com msullivan@formula4media.com 516-305-4711 212-398-5021 516-305-4712 646-319-7878 Troy Leonard Katie O’Donohue Jeff Gruenhut tleonard@formula4media.com kodonohue@formula4media.com jgruenhut@formula4media.com 352-624-1561 828-244-3043 404-849-4156
THEFOOTWEAREYE GIVING BACK Skechers Walks for The Friendship Circle F or company president Michael Greenberg, the Skechers’ 2016 Skechers Foundation’s involvement with the Friendship Walk raised more than annual Pier to Pier Friendship Walk is very $1.6 million for personal. This year The Friendship Walk, The Friendship held in Skechers’ hometown of Manhattan Circle. Beach, attracted 12,000 walkers and raised $1.6 million for The Friendship Circle, a charity that works on bringing children and adults with special needs into the mainstream by providing companionship and support to the individuals and their families. “When I was in the third grade, the teachers came into our classroom and said they needed students to help kids get around school in their wheelchairs,” Greenberg says. “My hand went up to volunteer and I was always happy to do it. And as I got older the idea of helping these kids and their families continued to resonate with me.” Over the past eight years, The Skechers Foundation has helped The Pier to Pier Walk raise a total of $7 million. The walk began in 2009 with 1800 walkers and raised $220,000. Over the years, the event has included more participants and sponsors, including Nickelodeon, retailers Skechers does business with such as Off Broadway, WSS, Modell’s and Zappos, and some Southern California-based businesses. “The support from everyone has allowed us to build this event,” Greenberg says, “and really see what The Friend- Photos: Skechers / Will Hartman – Desert Rose Photography ship Circle has accomplished.” Greenberg says he has ob- served that “there are fewer barriers for kids with special needs when The Friendship Circle is involved. You’re seeing families get involved by taking kids with special needs to the beach or the movies or a ballgame and that makes a great difference in their lives.” 2016 marks the second year The Skechers Foundation will oversee a scholarship program and Greenberg says the company’s joint venture partner in Shanghai is looking to start a similar event in its hometown. “We’d love to see this event grow so we can help The Friendship Circle here in our own community, but also around the world.” O Adidas Accelerates Parley Ocean Project AN APRIL 2015 PARTNERSHIP BETWEEN ADIDAS AND PARLEY FOR THE Oceans takes another step forward this month with the introduction of 7000 pairs of the UltraBoost Uncaged Parley running shoes ($200 retail), the first mass-produced footwear using Parley Ocean Plastic. The Uncaged Parley was created with new technologies engineered to upcycle marine plastic debris into technical yarn fibers. Each new running shoe re-uses 11 plastic bottles in production of its Primeknit upper mixed with plastic waste retrieved in the Maldives and five percent recycled polyester. With a design inspired by ocean waves, the style also has shoe laces, heel cap base material, webbing, lining and a sock-liner cover made Adidas with recycled materials. Adidas senior executives say the company is UltraBoost Uncaged committed to scaling its initiatives with Parley Ocean Plastic and will make Parley shoes one million pairs of shoes in 2017 using materials collected by the group re-use 11 that wants widespread implementation of policy that aims to end the cycle plastic bottles of marine plastic pollution long-term. O in production. footwearinsight.com November/December 2016 ~ Footwear Insight • 21
RUNANALYSIS Reset on the Running Business they sell their shoes everywhere includ- ing their own websites, run stores need to make smarter buys. Clearly, the industry was overbuilt. Vendors are trying to deal with it by reduc- ing the number of accounts they sell to and the number of reps they have serving accounts. This is a delicate balance. Most stores will tell you they need more attention and service from brands, not less, and will gravitate to the brands that support them with great product and service. This leads to our next point, which is… Brand Leadership Opportunity Brands have played a critical role in the rocket ride of run specialty. They have backed the channel with great product and marketing support. They do this not out of By Mark Sullivan experienced consolidation with Fleet Feet The good the goodness of their hearts, but because and The Running Specialty Group snapping news is they can make money selling through this A fter nine months of ups and up stores, but that consolidation is small that the channel and because run stores are a great downs, the run specialty potatoes compared to what is happening running place to build brands. Vendors need to market could be bouncing in other retail channels. Macy’s is closing shoe remember this. If they engage in practices back. By all accounts October 100 stores in 2017, about 15 percent of its silhouette that harm the specialty run channel, the was a solid month across the channel fleet. Finish Line will close 25 percent of all is the most golden goose may not die, but it will get and many see it as a sign that the running its stores over the next four years. Sports popular sick. And run retailers need to support market is moving back into growth mode. Authority closed 460 stores. Sport Chalet footwear innovative product and new brands. An In our annual state of the market report, shuttered 47. City Sports shut 26. So, the style on executive of a major shoe brand suggested Footwear Insight looks at the factors influ- running channel may be losing some doors, recently that if Vibram or Hoka were launch- the planet. encing the market as it heads into 2017. who are not well capitalized or well man- ing today that they’d have trouble getting The bad aged. But it’s doing way better than the shelf space. What he neglected to point news is The Big Picture other guys. Interestingly, the run channel out is that when those brands launched a The good news is that the running shoe may be the last man standing in the battle that every number of years ago, they did indeed have silhouette is the most popular footwear for running shoe sales to consumers. retailer on trouble getting placement. Early adapters style on the planet. The bad news is that the planet such as Boulder Running and Playmakers every retailer on the planet knows this and What Will it Take to Prosper? knows carried these brands from the outset and is carrying running shoes. This has led to The era of steady double-digit growth is this and is were able to provide newness to their cus- market saturation, particularly at mid-range gone. It will be replaced by an era where carrying tomers that they couldn’t find elsewhere. price points. That, combined with a lack of the best stores focus on better management running Stores would be smart to make space for a breakthrough product innovation by ven- practices, especially inventory management shoes. the next innovative product out there. The dors, has driven a market slowdown that and cost control. A few years ago, stores business is in need of the next big thing or some say was a few years overdue. “We could grow their bottom line by growing the at least a few next small things and open were headed in this direction a few years top line. In a slow growth environment, cost minds at retail are key to incubating that. ago, but then the minimal movement came controls will be essential and the stores Beyond product development, brands along and that sparked a ton of interest in that do it best will be the winners. Stores have another opportunity to lead by bring- running shoes and that was great for spe- also need to look in less obvious places to ing consumers into stores. Run stores are cialty stores,” Jeff Phillips, CEO of Fleet Feet grow sales. Apparel and accessories must in need of younger consumers and brands told Footwear Insight recently. “Now that be an area of focus. And run stores need to such as Under Armour, Puma and Nike minimal has quieted down, we are where diversify away from shoes that are widely have the resources and cachet to draw in we might have been a few years ago.” distributed. Rather than bitch that top-sell- younger running consumers. Under Armour Where we are is in a big flat market with ing shoes are available everywhere, run created the modern performance apparel more retailers trying to take bites out of a stores need to carry brands and styles that business. Puma is crushing it in sneaker- pie that is not growing. To stick with the are “special” to them. In the coming years head shops with a line built around the food metaphor, the running business is in that could mean offering their customers singer Rihanna. Young women are waiting a digestion phase, letting out a big burp collaborations, custom uppers and brands on line before shops open to buy the shoes. after more than a decade of steady double- that are not sold everywhere. Brands will It would be great if any brand can create digit growth. The run retail market has also need to take their medicine here. If that level of excitement for running stores. 22 • Footwear Insight ~ November/December 2016 footwearinsight.com
Selling Energy Beyond the Hype: How Should Retailers Promote Energy-Return in Shoes? Innovation Please Go into your closet and look at your favorite running shoes from five years ago and then 10 if you save them for that long. Now look at your current shoes. The design differences are most likely star- tling. Running shoes today are sleek and architectural in design, which makes them perfect not only for running but other fit- ness activities and casual use, too. Nike deserves a great deal of credit for this. While other brands were messing around with toning shoes, they were develop- ing the next generation of running shoes. Nike’s innovation with Flyknit and other upper designs has changed the look of running shoes forever. But what’s next? Innovation from Nike and other brands has slowed and Nike CEO Mark Parker admits the Swoosh will have to develop the next breakthrough product to achieve its ambitious growth targets. The same holds true for the running category in general. Innovation does not need to be focused strictly on product development. Innovation can be about customization, speed to market and process. The big win will come if it is about all of these. Inventory Issues An invisible factor in the market right now is inventory. The running market has had to work through a ton of inventory over this past year. When Sports Authority and City Sports liquidated this year, consumers Boost led the move into energy-return technology in footwear. gobbled up lots of running shoes at bargain basement prices. Footwear Insight observed one runner who gobbled up four pairs of Saucony Guides for $50 a pair. Based on By Jonathan Beverly scientists and designers from every company that, this consumer will not buy shoes in all agree that no one can contradict the laws I a run store for at least a year. And there n the beginning was Boost. Now everybody of thermodynamics. No material or machine are most likely thousands of other runners is getting into new midsole materials that can return more energy than put in. There is who stocked up in a similar manner. The promise more than cushioning. Brand always some energy lost in each footfall. As inventory from those stores has washed advertisements suggest that the shoes are Eric Fruth, co-owner of the Columbus Running through the system. We don’t know what a power supply: “Endless supply of light, fast Company says, “No shoe is going to do the impact it will have on sales going forward, energy,” says one. “Energy in. More energy out,” running for you.” which increases the urgency on brands to promises another. The term “energy-return” comes from mea- create new innovative shoes and for retail- Is the trend toward energy-return materials surements that show that these new foams ers to make way for that product on their simply another marketing ploy or are there true lose less energy than equivalent materials. shelves. The great unknown factor is how benefits for the runner? As more companies get While they still dissipate roughly 30 percent much inventory is sitting in the stock rooms on the energy-return bandwagon, customers are of the energy sunk into the shoe, these materi- of retailers and how much inventory certain asking, “What is it all about?” says Victor Orne- als bounce back 15–25 percent stronger than brands are dumping into closeout channels. las, senior franchise support manager for Fleet traditional EVA midsoles. The channel won’t really be able to start Feet. “If there are benefits, how can we best com- That sounds good, getting back more energy, rolling until the inventory gets down to municate to the runner what they are getting?” but the question remains whether it is useful acceptable levels, which we estimate will be once returned. Running is a complex interac- in Spring 2017, just around the time it starts No Free Lunch tion of forces, levers and moving parts. “Basi- getting warm out. O One thing is clear, marketing aside, cally, these materials are designed to store footwearinsight.com November/December 2016 ~ Footwear Insight • 23
RUNTRENDS and return elastic energy,” says Simon component among many. Bartold thinks Bartold, podiatrist and shoe consultant, this might be the best solution at the now with Salomon. “But if you’ve got a moment. “Some materials are better at foot that’s functioning reasonably well, shock attenuation, other materials are the structures in the foot are going to better at vibration dampening, and other do that superbly anyway.” are much better at rebound or resil- Biomechanical researcher Benno Nigg ience,” Bartold says. “You need a combi- says that in order for that energy to nation of all those things in a midsole.” be applied to your stride, it has to be Jim Monahan, president of 361 Degrees returned at the right time, the right fre- USA, whose shoes combine layers of quency and the right location. “We have rubber-infused Qu!ckfoam with tradi- measured and the energy dissipation is Saucony’s Freedom ISO tional EVA, says, “It’s a matter of finding a less,” Nigg says about the new foams. features Everun tech, which blend that does provide a feeling of being “bounces back quickly.” “But it doesn’t return at the right time.” soft, but then sets back up and addresses that same feel in the next footfall. It’s Good Feelings more about feeling and durability of that Just because the shoe doesn’t magi- Spencer White, VP of Saucony’s Human material.” cally propel you doesn’t mean it doesn’t Performance & Innovation Lab, explains Apart from physics and feel, this work, however. Runners like how the how the brand’s “Topsole” performs this extra durability is one other benefit that new materials feel underfoot. dual feat. “Forefoot cushioning is not energy-return materials appear to offer, Fruth says some customers do come about absorbing energy,” White says. which Ornelas points out is a particularly in, having heard the term “energy- “Because we want you to generate force nice selling point given rising shoe prices. return,” and expect something magi- so you can move. We’re taking the force cal. “What we’re seeing is, it doesn’t you push into the ground and trying to The Differentiation Factor necessarily have the feel they expect,” spread it over more of the bottom of All of this may be over the head he says. “But once they experience it, a the shoe by making it conform to the and largely irrelevant to many of your lot of people are moving toward those shape of your foot.” The advantage customers. “Your average weekend materials and shoes.” of their Everun material is that, after warrior may not be as concerned Even the scientists acknowledge this. conforming, it bounces back quickly with energy-return as with straight-up “We don’t know why it feels right,” says and allows you to push against it. And, cushion,” says Fruth. Your average Nigg. “Every test showed less energy because it keeps bouncing back reliably, person wants to know, “Is this shoe going demand than a comparison shoe. Every over the run and the life of the shoe, to provide extra cushion because my shoe showed more comfort than a com- they can accomplish this with a thin, shin hurts?” parison shoe. The facts are clear; this is soft layer close to the foot. Even for these runners, however, fantastic. Why it is, nobody knows.” One way to visualize what all energy- Ornelas likes having another way to We may not be able to explain it, but return materials do is to look at the pods talk about cushioning. “It’s more a way runners can describe it. “A lot of them on the outsole of On shoes. “I do not be- to highlight a product,” he says. You are picking it because they find it com- lieve in energy return in running shoes,” can point out that the texture is a bit bines that cushy, protective feel that so Olivier Bernhard, co-founder of On, different, and talk about the material. many runners enjoy, with that perfor- states very clearly, citing Nigg’s work. “We’ve got this technology, here’s what mance-driven, responsive feel that you But what the shoes accomplish is the “We don’t makes it a bit different, how pellets used to get mostly from a lightweight same as what the proponents of the new know why it interact to give you a more lively, trainer or racing flat,” Fruth says. foams claim. “We call it energy transi- feels right. responsive experience.” tion,” Bernhard says. “It is about absorb- As the shoe world moves away from Every test Double Duty ing energy upon landing, then making traditional control categories, retailers showed This combination is exactly what the sure the runner has a swift push-off.” appreciate ways to differentiate between less energy shoe designers are looking for. “In the Note that this all happens in the products. “It’s less about, ‘Here’s how it forefoot. “Most people need cushioning demand will control the foot or manage the foot,’” past, responsiveness usually ended up being firmness, because it allowed you and energy absorption in the heel, and than a says Ornelas. “More about, ‘Here’s what to propel faster and more quickly off energy return is not important,” says comparison you’ll feel: livelier, bouncier. Here’s what the midsole,” says Chris Brewer, run- Martyn Shorten, a shoe researcher who shoe. the experience is like.’ More importantly, ning category director for Adidas. But runs the Biomechanica lab in Portland, Every shoe let’s get it on your foot, and you can tell the forefoot also receives the majority OR. “The forefoot is the platform for showed what is comfortable.” of impact forces in the stride, regard- propulsion, so stiffness and resilience more That personal comfort – does it feel less of where on the foot you land, so are more important there.” Bartold and comfort right for you? – is not only the key many runners want and need cushion- Nigg agree, pointing out that not only than a to selling, but as Nigg’s research has ing up front as well. Energy-return ma- is the timing of the energy-return more comparison shown, the best way to find the most terials, by compressing then bouncing likely to be appropriate in the forefoot, shoe. The appropriate shoe for the customer. “Our back, are able to provide both respon- but it is where it could make a difference. facts are staff will bring up the concept of energy- siveness and cushioning. “A lot of the “While you take off, you can lose energy,” clear; this return, and explain it,” says Fruth. initial problem is solved by having a Nigg says. is fantastic. “But for the most part, we’re going to material which does these two things You’ll see a few “pure” energy-return Why it is, get it on someone’s foot and let them that were mutually exclusive for a long, midsoles, but most companies are put- nobody experience it for themselves. The proof long time,” Brewer says. ting these materials into shoes as one knows.” is right there.” O 24 • Footwear Insight ~ November/December 2016 footwearinsight.com
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THE GREATEST SHOE DOGS OF ALL TIME T he term “Shoe Dog” is used with both reverence and respect. A Shoe Dog is an industry veteran who has lived the busi- ness and made a lasting contribution through one or more jobs. Shoe Dogs love product and love the gritty details of the business. A sales rep who becomes a product developer and then a sales manager, can be a Shoe Dog. A CPG execu- tive who once sold cake mix and then joins a shoe company can be wildly successful, but can never be a Shoe Dog. Shoe Dogs cross all categories — from athletic to brown shoe. Shoe Dogs come in different breeds. The most popular breeds of Shoe Dogs are: • A Shepherd who rounds up people and ideas to create something. • A Pit Bull. Tough and dogged. • A Blood Hound who sniffs out great ideas and trends. But as in real life, the best in class combine some traits from each breed. Here is Footwear Insight’s report on the Greatest Shoe Dogs of all time. Think we missed anyone? Disagree with what we wrote? Throw us a bone and tweet your thoughts to senior editor Bob McGee @InInsightF4M. TOP DOGS: THE MOUNT RUSHMORE OF SHOE DOGS Q Phil Knight, Nike Knight self-deprecatingly used “Shoe Dog” as the title of his autobiography published earlier this year and it was a fitting choice. Knight created the modern shoe business and established athletic as the silhouette for everyone from European designers to coffee house hipsters. Nike is a $32 billion company, but Knight’s greatest contribution may have been raising the bar for innovation that others continue to try and reach and exceed. Q Jim Davis, New Balance Davis is not just a Top Shoe Dog. He is an American suc- cess story. The son of Greek immigrants, he bought New Balance in 1972, when it was a six-person enterprise, and has presided over its growth as a $4 billion compa- Illustration by Charlie Powell ny that also owns Warrior, PF Flyers and Dunham, and is a partner in Rockport. Impressively, Davis has managed to keep the company private, which has allowed him to run it as he sees fit, including producing four million of November/December 2016 ~ Footwear Insight • 27
THE GREATEST SHOE DOGS OF ALL TIME his company’s shoes annually in plants into Newton Running. Five months later, Q Roberto Muller in the United States. the private equity firm sold its stake in premium all-natural juice maker In his more than Q Horst Dassler, Adidas Evolution Fresh to Starbucks. 45-year career Sticking to a food investment theme, in the sporting Dassler is one in March 2014, FCP acquired a majority goods and athletic of the founding stake in Surfside Coffee Company, footwear business, fathers of the the largest Dunkin’ Donuts franchise Muller has created athletic shoe network in Florida with, at the time, and led multiple business and at 38 stores in and around Fort Myers, shoe brands and this writing his Miami and the Florida Keys. There sports companies beloved Adidas were plans to develop a minimum of and been involved in the player three stripes 23 additional Dunkin’ doors across the endorsement arena. The South brand is enjoying region. Interestingly, one of Reebok’s American, fluent in four languages, got another renaissance. Dassler was the largest endorsers during Fireman’s his start at Levi Strauss in 1972. He modern master of sports marketing reign over Reebok, Shaquille O’Neal, was the founder and CEO of the Pony who understood complicated global recently acquired a Krispy Kreme store athletic shoe brand in 1972 that he partnerships and the fact that $100 bills in Atlanta. sold 14 years later. He also founded the in the shoes of athletes would win their Ewing sneaker label named after for endorsement for at least one night. Q Jon Epstein, Fila the former Georgetown and New York Knick center. However, Muller’s biggest Q Robert Greenberg, Skechers Epstein fell in love play in the athletic shoe business world with the shoe came between 1990 and 1995 when he For anyone who business as a high led Reebok International and made a doubts Greenberg’s school student and serious bid to become the segment’s place on Shoe Dog after working his top brand again, telling analysts at a Mount Rushmore, way up to national 1993 Super Show dinner, “We must finish we offer a simple sales manager at ahead of Nike. We must want to win. We explanation. He has Adidas USA left to must really want to win.” done something no become president At the time, Reebok reportedly trailed other individual in of Fila, where he has spent the past 18 Nike by six share points and $400 the athletic shoe years, excepting a brief leave of absence million in annual sales. industry has ever accomplished — after being ensnared in the Just for For the last two years, Muller, who starting two companies from scratch, Feet meltdown. Epstein has proven earlier in his career founded and sold building them to nearly or above $1 a superb merchant and dealmaker the sports network now known as Fox billion in annual sales and taking each on both a small and grand scale. He Deportes, has served as a senior advisor public. With LA Gear, Greenberg was played a crucial role in Fila’s $1.2 billion to the CEO of VIKTRE, said to be the one of the first to realize the value of purchase of Acushnet in 2011. And globe’s largest athlete-focused media celebrity endorsers such as Paula Abdul although he caught some flack at the platforms. and Michael Jackson. With Skechers, time, his program with Kohl’s looks like Greenberg has elevated his game to a a shrewd move. Q Rick Mina higher level and has shown consistent growth. No one is better at reading and Q Floyd Huff, Foot Locker A Shoe Dog interpreting trends and bringing them to with more than market quickly in a commercially viable The longtime Kinney Shoe executive for three decades of way for retailers and consumers. parent F.W. Woolworth would spearhead experience, Mina the meteoric growth of an athletic successfully turned Q Paul Fireman, Reebok specialty concept called Foot Locker around the Champs to more than 1000 stores. As the first Sports’ business for A decade beyond president of Foot Locker, he forged key parent Foot Locker his $3.8 billion sale relationships with all the major athletic in the early 2000s of Reebok to the shoe brands for the New York company as its president and CEO. He would Adidas Group and and saw the business grow to become follow that experience up with a half nearly 35 years Woolworth/Venator’s strongest business decade as president and CEO of Foot after introducing by 2000. In November 2001, Venator Locker, Inc., overseeing the New York the first women’s changed its corporate name to Foot retailer’s Foot Locker/Kids Foot Locker, only athletic shoe, Locker, Inc. Huff is also remembered for Lady Foot Locker and Champs units. Fireman, 72, is busy trying to launch In the Zone, a private More recently, he has worked in private leading his private equity firm, Fireman label basketball brand within Foot equity and helmed Southern California Capital Partners, into all sorts of new Locker to compete with Nike and other action sports specialty chain Active businesses. His first, in 2009, was a stake brands. ITZ signed Bobby Hurley, then Ride Shop as a stakeholder president. in Los Angeles-based Hudson Jeans. Two a rookie out of Duke, as its marquee Since November 2015, Mina has served years later, in June 2011, FCP made its endorser, but after Hurley was badly as the president of WSS, the California sixth investment by sinking $20 million injured in a car crash, the line fizzled. urban specialty footwear retailer. 28 • Footwear Insight ~ November/December 2016 footwearinsight.com
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