Fashion/Lux Broaden Their Horizons; Thought-Starter For The Under Armour Offsite; Foot Locker Heading South; Puma Getting Freaky
4 min read @ 900 words
September always stirs up good memories of New York City. NY Fashion Week and the US Open are two important pillars, but the most memorable foundation has been built on the countless market trips throughout the five boroughs.
Foot Locker’s recent earnings call (scroll down) brought me back to my first trip. Brand new to corporate life and the industry (thank you Adidas!). I’m in my late-20’s, carrying 100 lbs of sneaker samples in two huge bags, 90 degrees-90% humidity, taxi strike (no Uber then), negotiating subway stairs, narrow turnstiles, packed trains, rookie-confusion with the good cop/bad cop routine of the FL Buyers, post-trip mentor pep-talk (thanks Bo) - all while happily paying my dues for little money. Technically broke, but felt rich.
Wouldn’t trade it for the world.
FASHION’S SPORT OBSESSION IS NO ACCIDENT (BoF)
Catching up on some missed reading from August.
A good piece from Business of Fashion creating a link between fashion/luxury brand strategy, athletes outside the traditional scope of the business and our fragmented media environment.
“Increasingly athletes are brands in and of themselves, at times more influential and recognizable than the teams they play for. Fashion has become a critical component of how they brand themselves and show off their personalities in this contest, while their visibility and cultural clout make them great channels for brands looking to bolster their own images and reach new audiences."
What took you so long?
THOUGHT-STARTER FOR THE UNDER ARMOUR OFFSITE
Under Armour pops up on my radar from time to time but much less than it used to. When it does, it’s either quarterly earnings or new corporate drama with Kevin Plank at the center. If you’ve been around the industry long enough, you’ve heard the stories firsthand.
Founder-led companies tend to have a different and more intense vibe to them. Under Armour is no exception as the executive revolving door spins at warp speed.
Fresh off a new executive hire from Adidas (plus small brand purchase) and recent leadership additions from Puma and Nike/NB, Plank has stated that Under Armour has one of its strongest product teams to-date. Time will tell.
And don’t forget new guys, Kevin’s watch moves a lot faster than ours.
Given two minutes to present at their Sr Leadership offsite, I’d start here:
Question for the group: What do you want UA to be famous for?
Hint: “Everything” is not the answer
Discuss…the clock’s ticking
*Related Founder-Led News*
“Founder Mode”: Y-Combinator co-founder Paul Graham (wiki) sparked a buzzy conversation this week.
The NY Times picked up the story and summarized it here.
FOOT LOCKER Q2 EARNINGS (SGB)
Last week’s Foot Locker earnings call served as a temperature check on CEO Mary Dillon’s “Lace Up” turnaround plan for the global retailer.
Pro Tip: If you are trying to get into the industry, want to learn about the industry or sharpen your skills…the amount of publicly available information is endless if you are willing to look.
A FEW HIGHLIGHTS
1/ Simplify and optimize are words that play a central role in FL’s Lace-Up plan. They serve as subtext to the “How we will do it” part of the plan. Turnarounds are expensive and require capital ($$$). This means - get rid of the costly and/or underperforming assets and put the proceeds toward the new plan.
Good-bye New York City (mostly) / Hello Florida. Most of Foot Locker corporate is relocating to their offices in St. Petersburg in 2025.
End of an era in North America. Wound down Lady Foot Locker, Footaction, Eastbay and Atmos banners.
Northern Europe. Closed Foot Locker stores/e-commerce in Denmark, Norway and Sweden. Smaller scale market with low growth potential.
Asia-Pacific. Closed Foot Locker stores/e-commerce in South Korea. Higher growth potential but lower-end profitability.
Reinvest in high-growth potential markets. Licensed-partner model. Leverage other people’s money and local expertise »»»» Lower financial risk for a piece of the upside in Greece, Romania, India, Singapore and Malaysia.
2/ Brand Updates. No surprises here as FL’s commentary echos what most of us already know. I was hoping for more concrete numbers on brand share of the FL portfolio but understand they have nothing to gain by sharing. FL’s retail power has diminished a bit in the modern onmi-world and has to take a more conciliatory tone with its vendors.
Everybody receives a footwear participation trophy this quarter.
Name checks: Nike/Jordan, Adidas, New Balance, Asics, Hoka, On, Ugg, Vans and Timberland
Vulcanized: Vans received a quick shout-out regarding “encouraging trends”. This aligns with my own gut feel that vulcanized is making a comeback. Stay tuned.
3/ Women: A female CEO highlighting the importance of women to Foot Locker’s business (at the front-end of commentary) was my favorite part of the call.
Women’s basketball clinics in partnership with WNBA athletes in several big markets.
“Women’s has consistently been our fastest growing business for the past few years…”
Context: Investing in Women creates an opportunity for a broader selection of brands and silhouettes on the wall.
The earnings call transcript can be found here. It’s worth a five minute speed read if you are looking to learn and get a leg-up.
THINGS ARE GETTING FREAKY AT PUMA (Canadian Running)
My calf muscles are cramping from the photos alone. I need to see these on a human; standing, walking and running.
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