With the economy improving and a health & wellness trend providing a boost for most categories, 2014 appeared to have turned out to be a solid to strong campaign for most companies in the active lifestyle. According to retail point-of-sales data compiled by SportScanInfo (SSI Data), the Sport Footwear business in calendar year 2014 increased in the low-single-digits as an uptick in average selling prices offset unit sales declines. On the Sport Apparel side, sales retail sales were up in the mid-single-digits for the year.


So what's up for 2015? Sports Executive Weekly reached out to a host of active lifestyle industry executives to gauge their outlook for 2015, including exploring their concerns and what gives them optimism.


With
the economy improving and a health & wellness trend providing a boost for
most categories, 2014 appeared to have turned out to be a solid to strong
campaign for most companies in the sporting goods industry. What's up for 2015?

 

Sports
Executive Weekly reached out to a host of executives to gauge their outlook for
2015, including exploring their concerns and what gives them optimism.

 

Kevin Davis, President & CEO, Performance Sports Group: Performance Sports Group (PSG), we're very excited about 2015 and the year ahead both across the sporting goods industry and within the sports we serve, including hockey, baseball, softball, lacrosse and soccer.  Across our portfolio of brands – Bauer, Mission, Maverik, Cascade, Inaria, Combat And Easton – we are very excited about each business' growth opportunities.  Driven by performance innovation as a result of our investment in R&D and authentic brands, we plan to grow across each product category and expand into new markets.  As consumers continue to demand the ultimate in performance and protection, we’ll continue to deliver game-changing technologies that elevate their play and safety. Additionally, our expansion into team apparel and uniforms will drive continued growth for all of our brands…Ranging from Bauer To Easton, our brands resonate with young athletes as authentic and for continually driving innovation, such as the Bauer Tuuk Lightspeed Edge holder, the Easton Mako Torq bat and sensor-technology that helps athletes perfect their game.  Looking ahead, we're optimistic that our future product lines will continue this tradition of excellence with game-changing technologies that players of all levels and ages demand…Even as we're very optimistic about the growth opportunities ahead, we expect that global politics and economics will continue to be a concern for our industry in 2015, particularly in Russia.  Significant fluctuations in foreign exchange rates provide both opportunities and risks, not only in Russia but across the globe.  Unstable foreign exchange rates will continue to impact our business, our partners globally and in some cases even our consumers’ disposable income.

Matt Carlson, president & CEO,
National Sporting Goods Association (NSGA): The sporting goods industry continues to
be one of great opportunity for innovators and entrepreneurs and that is a real
reason for optimism. It is exciting to see a constant flow of new products
being developed and ideas being generated to inspire people who are looking for
the newest ways to improve their fitness and athletic skills. We are also
hopeful that 2015 will be the year the Marketplace Fairness issue is finally
resolved in Congress because it will put the industry’s brick-and-mortar
retailers on a level playing field with their online-only competitors.  We would also like to see a successful and
fair resolution of the West Coast Ports labor dispute…Concerns include the
continued evolution of consumers and the changing relationship between vendors
and their selling partners.  It is sad to
see local businesses that have served their communities for decades closing
their doors. The declines in sports participation and the increase of
inactivity are continued concerns, not only in terms of dollars lost by the
industry, but also because so many people are missing out on the physical and
mental benefits of an active lifestyle.

Jeff Phillips, CEO & President, Fleet Feet Inc.: I think [the 2015
outlook] is very exciting and not without its challenges. We have unprecedented
proliferation of product distribution, so customers have more options for
getting the products they need, even more so than they did just a couple of
years ago. As a whole, running specialty stores must contend with presenting a
very clear and authentic value proposition to consumers, and back that up
in their stores and communities. Stores that do that can continue to grow,
even after a somewhat middling year overall…Among my concerns, remaining
important to our digitally-empowered consumer remains a priority. Our
customers’ shopping habits continue to evolve, and we need to ensure the
service, programs, and products we’re providing resonate with – and are
accessible to – our customers. This at times may mean stepping outside of our
comfort zone, but stepping out in a thoughtful and supported effort, which
we’re already doing with the launch of our e-commerce site…As far as
what offers optimism, that’s an easy one! We have indisputable
advantages as a growing national brand – we're fueled by entrepreneurial local
owners and operators; we have support resources in place as an organization;
and we have built tremendous partnerships with key vendors. The continued
opportunity we have to utilize those advantages to create an iconic experience
for our customers and support local running communities gives me optimism for
2015 and beyond. 

 

Rob DeMartini, President & CEO, New
Balance:
We are very optimistic about 2015. We expect solid growth in the US as well as
around the world. At New Balance we are always looking to change the game and
offer innovative product to athletes and consumers. In 2015 we will continue to
expand our performance running footwear with new styles launching under the
Fresh Foam platform, as well as new Lifestyle product to drive sales around the
world.

 

Mike
Dowse, President, Wilson Sporting Goods, Co. I am incredibly optimistic about where
Wilson is headed, particularly from an innovation standpoint which I think is
critical in today’s marketplace. Our Wilson Labs program is the heart of our
innovation process. It focuses on developing products that athletes truly need
to help them pursue their performance goals. 
The relationship between an athlete and their equipment is often
understated. We see that relationship as symbiotic and extremely important. We
have focused on this relationship for 100+ years and will continue to do
so.  We want to be the brand athletes
turn to when they want to play their best game. To that end, Wilson Labs uses
state-of-the-art technology, materials, engineering, game-play expertise, and
design to bring forth products that are game-changers. We are putting
considerable focus and investment in digitally-based products. Consumers and
athletes are more connected and digitally-savvy than ever. Sports equipment
must evolve with that behavior and we must bring to market better training
products, more advanced competition equipment and gamified experiences that
consumers can’t get anywhere else. 
Companies must innovate in this way to be not only competitive, but to
push the sporting goods industry into new, exciting territories.  We’re doing that in our Basketball, Football
and Performance Tennis businesses. I think this emphasis on innovation is an
important as we have fewer young people getting involved in sports. Sports can
play such an instrumental role in the lives of young people – from personal
health to character and self-esteem development.  We hope that by combining kid’s love of
gaming and digital products with sports that youth will find these newer
products more exciting and sports more interesting. We can play a key role in
bringing our youth back into sports by understanding, on a deep level, what
motivates these consumers and identifying what they need from sports in order
to get out and play the game.

Gary S. Smith, CEO, Polartec, LLC: For 2015, Polartec
sees steady growth in our core markets (outdoor), and significant growth in
adjacent markets, especially athletic and fitness/lifestyle. Geographically,
Europe is weak, based on overall macro-economic forces and a weak start to the
winter selling season. North America is showing much improved growth, with Asia
steady. The key for us, as always, is to drive growth through product
innovation (see the 2015 launch of PowerWool) and diversify our customer base to
reduce dependence on traditional outdoor.

 

Kevin
Wulff, CEO and President of Asics America: As the world of sports continues to
expand and the focus on health and wellness intensifies across all segments of
society, Asics sees an immediate opportunity for growth in 2015.  In the past several years Asics has expanded
its reach beyond running while remaining true to our core.  Asics is and will remain the home of
performance running products and we have the most successful franchise in the
market.  We have made 22 versions of the
Kayano’s and sold over 15 million pairs to date; the equivalent of one pair for
every twenty people in the United States! 
Our line of training gear has been wildly successful and has grown tremendously
in 2014 with no signs of slowing down. 
Our apparel line is on the rise and we expect strong returns as we place
more emphasis on tennis and volleyball in 2015. 
Asics is gaining strong momentum in tennis, and our recent signing of
Kerri Walsh Jennings, the top volleyball athlete in the world, cements our
strong position in the volleyball market…A few years back we set a goal to
reach $1 billion by 2015 and we are on target to hit that milestone.  We have one of the top 10 strongest brands
among active consumers, according to SportsOneSource Brand Strength Index.  There is a lot of competition in this space
we play in and maintaining a leadership position requires us to be bold,
focused and innovative.  In 2015 Asics
will remain a leader by continuing to provide the best performance running
products and build upon our successes in our new markets

Dick Sullivan, President
& CEO, PGA TOUR Superstore: PGA TOUR Superstores is a bit
unique in the golf retail industry in that we are growing, adding new stores
and continuing to invest in hiring PGA pros when others are going the opposite
way.  We are cautiously optimistic about
2015, but cautious only because as an industry we have to cycle the promotional
atmosphere that has put pressure on manufacturers and retailers alike over the
past 12 to 18 months. Yet given inventory levels now, it appears most of that
is behind us.  The avid golfers are, and
will continue to be, passionate about this great game and they will continue to
spend the majority of the money spent on new product introductions each
year.  Our business is built off
inspiring every type of golfer to play better, and if we do our jobs we believe
we will continue to gain market share. 
Another point of optimism for us is the strong young crop of talent
emerging on the PGA TOUR including Rory, Rickie and Jordan, among others.  It will be great to see those athletes
compete against Bubba, Phil and Tiger and other PGA TOUR veterans this year.

 

Bob
Puccini, President at Mizuno USA and Chairman of SFIA: 2015 should see modest
industry growth. There is a generally improved economic climate. Unemployment
is down, although real wage growth is anemic, if not down. Running continues to
be a growth category as the benefits continue to be widely embraced…The
“omni channel” issue and how to leverage and “be everywhere
platform” will continue to evolve including effectiveness of  personalized digital relationships. I also
believe that consolidation will continue, although pendulums are known to swing
from one direction to the opposite through learnings and ill conceived
presumptions. I believe specialty channels will always have a place in the
markets as long as the values offered are, well, “special,” in
serving with a greater purpose than the traditional transactions plus
selection…Lack of sports and physical activity as well as reduced sports and
fitness budgets in the school system remains an industry concern. Sports and
fitness activities deliver not only the physical and health and wellness  benefits that are obvious, but sports have
helped shape our society's” value system” which, in my opinion, could
stand a shot on the arm. Many prospective military recruits cannot pass the
physical exam!! Doesn't that create a national security concern? Not to mention
the siphoning of our national budget (and contributing to our growing $18
trillion national debt), to excessive health care costs? Yes, I'm concerned!
Everyone of us can do something about it by contacting the SFIA or PHIT America
and participating. As per my closing comments at this past September's SFIA
Industry Leaders Summit: “If not us, then who?”…As far as reasons for
optimism, outside those macro topics outlined above, I am excited about a) The
convergence of technology with sports and fitness products. Information is
empowering and the digital age has and continues to is enable
“smart,” interactive and “engaging consumer experiences.”
Products alone, in their traditional form, may no longer be enough to meet
consumer expectations. Total experiences provide a higher level of engagement
with the sport or fitness activity, helping ensure sustainability and
“stickiness;” b) Rio Olympics should also generate excitement as a
first time venue for this world event; and c) The values of sport, that are
embedded in so many of our well run organizations in this industry, will
continue to drive us toward meaningful innovation and exciting new experiences.

Brian
Anderson, CEO, Moji: I am strongly optimistic for 2015. 
For the overall sporting goods, fitness and outdoor industries, I expect
a solid year.  Consumer confidence is
strong, fuel prices are low and equity markets are near an all-time high.  In addition, the SFIA has introduced
legislation which, if passed, would enable consumers to use pre-tax dollars to
purchase sports equipment, gym memberships, race entry fees, etc. These things
all lead to people doing more fun stuff and buying the products that help them
enjoy fun stuff.  This is great for our
industry!  However, I must admit that I
am always bullish about our industry.  I
have always believed that our industry is partially insulated from macro
economic conditions because sports, fitness and outdoor activities are an
integral part of life for so many consumers. Moreover, companies that innovate
will always be rewarded, no matter what macro economic conditions exist.  Product and brand innovation are hallmarks of
our industry.  Even in the worst of
economies, there will always be companies that crush it. Just look at the
consistent growth of companies like GoPro, Under Armour and Lululemon over the
past 10 years.  In addition to these
large players, there are thousands of smaller sports & outdoor companies
that innovate, grow and make money, no matter the economic conditions.  Moji is a great example of this.  In Q1 of this year we are launching an entire
line of innovative, best-in-class massage and recovery products for athletes
with sore muscles – runners, fitness enthusiasts, skiers, etc.  This new product line, and the resulting sell
through, will be great for Moji and our retail partners…even if my optimism for
the overall industry is wrong!

Randy Nill, President
& CEO, Nill Bros. Sporting Goods, Inc. in Kansas City: As a
team dealer, the outlook for Nill Bros. Sporting Goods, Inc. and our industry
in general for the coming 2015 year is full of optimism with little to be
discouraged about.  Though state budgets
in Kansas and Missouri are not great at this time, we have found that our
schools and booster clubs have gotten very progressive, innovative and sophisticated
in their ability to raise money for what the student athletics really
need.  We have had to work a lot harder
in finding the outside revenue generators for each school by sport.  However, after these new sources of revenue
have been identified, it makes selling much easier and we get paid much
quicker.  In 2015, we are focusing on
becoming better at decorating; both in trying to reduce our lead times to our
end users but also to put out a better decorated product for screen-printing,
cad-cutting, tackle twill and embroidery. We continue to see an uptick on
sublimated garments also.  We feel
strongly that the economy will continue to grow ever so slightly and with
oil/gas prices so low, there will be more money for everyone to spend. Our
concerns are still the same as they have been in the past.  We continue to compete with our very own
vendor/suppliers as they both give away free product to our schools and they
sell their products directly to the end-user, our customer, over their Internet
sites.  Their advertising dollars are
spent more in offering consumer loyalty programs to on-line buyers than it is
spending advertising dollars on building their own brand for the benefit of
their retailer/team dealers.  And of
course, it is difficult to compete with the online/internet websites that don't
have to charge sales tax to customers outside their own state.  We all should be writing our House of
Representatives to support and vote in favor of the Marketplace Fairness Act, a
bill that has been passed with broad bipartisan support in the Senate in early
2013 but has been stuck in the House since. This bill would ensure that all
businesses, online or offline, large or small, would all play by the same set
of rules in regards to sales tax.  All in
all, we look forward to 2015. 

 

David Weinberg, CFO and COO, Skechers
USA:
For Skechers, the same positive outlook we had on our third quarter 2014
conference call remains for the balance of the year and the coming year. Our
outlook on our business is very, very positive. We are ending the year with our
third fourth quarter of double-digit growth and we will start the year off very
strong with 15 to 20 percent growth in the first quarter. Importantly, this
growth will be across our many product categories and will continue through
2015 on a worldwide basis.

 

Dan Winchester, Chief Operations Officer,
MC Sports: We’re pretty optimistic about 2015. 
Our core category trends continue to be positive and we are making
inventory and square footage investments in those areas.  The overall economic picture also seems to be
gai