After a very tough July at retail for the Sport Footwear business, the
results posted for August had many breathing a sigh of relief as sales
increased in the mid-single digits and average selling prices inched up
again after sandals, canvas, and a very promotional mall environment
cut into ASPs in July.
Based on retail point of sale data compiled by SportScanINFO, sales of
Sport Footwear grew nearly 7%, led by a very robust family footwear
business that jumped in strong double-digits. That gain was
followed closely by a high-teens increase in the discount/mass channel
and a mid-teens gain in the Internet/catalog channel. The mall
saw low-single-digit growth and sport specialty retailers tracked by
SportScanINFO saw footwear sales improve in the
high-single-digits. Surprisingly, full-line sporting goods posted
the only negative result for the month as consumers focused on more
casual footwear heading back-to-school.
But before anyone gets too excited about the August results, it is
important to examine them in context. Looking back a year, August
2006 was a horrible month for the industry, with sales down in the
mid-singles-digits, making the comparisons relatively easy. The
increase in Sport Footwear in August this year basically brought the
market back to what was lost year ago.
At the same time, many retailers have also pointed to a shift in sales
later into the back-to-school selling season that was further magnified
by a shift in tax holiday weekends in a number of states that stole
sales from July.
Nike had a strong performance in August with sales up in the
high-teens, as virtually every category except Classics showed
improvements. Nike overall market share improved 400 basis points
to 42.9%, with the companys segmentation at retail likely a big part
of the overall strong results. Anecdotally, the liquidations of
Air Force 1 have improved, and the Nike Plus (I-Pod) product continues
to grab running share. When looking at the top sellers for Nike,
some interesting underlying industry trends emerge.
First, the number two top seller for Nike in August was a skate shoe,
the Banger (about $49), and the only Nike basketball shoe that made the
top ten was the Retro Jordan 11. The rest of the Nike top sellers
were Air Force 1 iterations, Shox Classics and Shox Turbo Plus and the
Team Code football shoe which shifted the balance of power in football
cleats this year.
Skechers remains the hottest large brand in the market, with sales for
the brand up more than a third for the month and market share again
expanded over 100 basis points to 5.2%. Skechers has nearly
eclipsed Reebok for the #4 share in athletic footwear for the
year-to-date period. The new Cali Gear line of molded footwear is
starting to catch fire after a tough start.
Vans turned in a strong performance with a solid increase in sales and
share, but also surprised many as the brands skate shoes captured two
spots on the top ten sellers report for the month, the Widow and the
Mercer. This is the first time the market has had three skate
shoes in the top ten and the first time Vans has made an
appearance. Vans has a 37.5% share in skate shoes in the
retailers measured by SportScanINFO.
Reebok posted an increase for August as the two year negative trend in
Classics has finally reversed itself. Reebok posted a
low-single-digit increase overall and a high-teens increase in Classics
for August, but much of it came from a pretty promotional posture taken
with the brand. Top sellers were almost entirely Classics:
Princess, Classic Leather and Classic Ace. The Thorpe football
shoe also made the top ten.
adidas continued to struggle as both share and sales declined for the
month. While the Lifestyle Fashion Athletic category was up strongly
for the industry, adidas posted a decline. adidas top sellers
were dominated by Superstar 2G, Samba, Microbounce and soccer styles.
New Balance struggled to offset the launch of the 8505 Zip shoes from
last year. While the new 8507 sold well it was not enough to
anniversary the mid-teens increase posted in 2006. Overall sales
of New Balance were down, led by running. Top sellers included
the 992, 8507, 557, 600, 608 and 504.
Back-to-school is an important kickoff for Timberland, but sales
remained soft. The iconic 10061 boot saw average selling prices
improve almost $10 for the period, as supply now appears more in line
with demand.
By category, sandals had a strong month, up about 30%, as the consumer
views this category as nearly a year round requirement.
Basketball improved nearly 20% as sales at the mall were quite robust,
but it was all about Retro and new Jordan styles. Nike improved
share to 85%.
Lifestyle Fashion Athletic was up about 30%, as all brands improved
except adidas and K-Swiss. LFA again sold more dollars than
basketball in August and year-to-date has equaled basketball dollar
sales. Classics were down about 25% again, but are now much less
of a drag on the overall business. The Canvas category, which
rounds out the Casual Athletic segment for SportScanINFO, was up in
high-double-digits.
Running sales were flat for August, as better running shoes (especially for men) hit a wall.
The Skate shoe category had a 30% increase with more than 80% of sales coming from the value channel.
>>> In
the end, the overall results in August are a manifestation of the macro
trends we have witnessed for the last several years and a flat business
continues to trade dollars across categories and channels.
Back-to-school becomes increasing less important as a major industry
sales event. The underlying business remains very challenged,
especially at the mall. Analysts expect September to be
improved again against weak year-ago comps (down low-singles) and the
shift to a later BTS. Anecdotally, the Labor Day weekend appeared weak,
again underscoring the overall challenging environment…
