1998 Ad

Discount Store News, Feb 23, 1998 by Mike Troy

ATLANTA -- Even though the sporting goods industry is wracked by consolidation, weak sales growth and low margins, it didn't seem to matter to attendees at the Sporting Goods Manufacturers Association's annual Super Show held here earlier this month. Buyers from various trade channels ignored the grim undercurrent and sought out bright spots within various categories, and manufacturers offered a number of intriguing products.

Among their findings were:

* Golf continues to be a strong category, one for which retailers report strong sales. The hottest segments of the business are juniors, beginners and women.

* Activities classified as extreme sports continue to be popular, with the best example being snowboarding. Once strictly a teenage phenominon, the market has expanded to include older skiers. And exposure at this year's winter Olympics is expected broaden its appeal.

* Slothful teenagers continue to challenge the strength of team sports categories, but technological advances in softball bats and safety equipment are offering retailers higher ticket sales to compensate for weaker demand.

* The fitness equipment category, while experiencing sluggish sell-through during the holiday season, can look forward to more steady growth as elliptical trainers gain popularity. Ellipticals are a cross between an inclined treadmill and a stepper, where the users feet travel in an elliptical motion that lessens the impact on the joints.

In fact, the fitness category and elliptical products in particular were everywhere at the Super Show. There were at least 17 companies displaying an elliptical product, with retail prices ranging from $99 to $4,200. The products appeared to offer salvation for the fitness category when they arrived in mass retailers last fall. However, buyers who spoke with DSN said the newfangled products have been slow to gain acceptance among consumers.

One dark cloud over the category is on-going patent infringement litigation among various manufacturers. Precor pioneered the elliptical category several years ago when it introduced its $4,000 EFX product into the health club equipment provider Life Fitness also introduced a high-end model. those models were available through specialty fitness stores, but last fall retailers such as Sears, Service Merchandise and The Sports Authority began offering several models in the $450 to $650 price range from NordicTrack and Icon health & Fitness.

Now, it seems virtually every fitness equipment manufacturer has introduced a variation of an elliptical trainer. although the sub-$1,000 models have not taken off in the mass channel, specialty fitness equipment retailers report strong sales of machines costing several thousand dollars to affluent consumers who have used high-end machines in health clubs.

Beyond the plethora of low-end elliptical products, the Super Show is always a treasure hunt for unique items. One of the most interesting was a prototype product displayed by Cooper called Putter Pool. Players use putters to play pool on a low-pile carpeted surface that employs molded plastic as rails. The lightweight product ships in a box 12 in. by 12 in. and 4-ft. long. Cooper is working to get the price below $100. The company plans to refine the product and ship by June or July for the 1998 holiday season.

Other products create demand for themselves by expanding their versatility. That is he case with Huffy Sports' collapsible and portable NBA licensed basketball goal called the Double Down. Unlike other portable units, the product collapses so it can be stored vertically against a garage wall or horizontally if the base is filled with sand or water.

Versatility is also an attribute of Coleman's new multitool plier product called the Pro-Lock Cartridge Tool System. It's made of stainless steel and offers many of the same features as similar products. However, the Pro-Lock has different cartridges with different tools that are sored in the plier's handles or can be removed and used separately.

Despite several growth categories and interesting new products, the general consensus among retailers is that 1998 looks to be another tough year for sporting goods chains. Industry bellwether The Sports Authority is forecasting modest same store sales growth of 2% to 3% after reporting disappointing sales and earnings last year.

"Someone drilled holes in my crystal ball," said TSA chairman and ceo Jack Smith. "I was very optimistic at the beginning of 1997. Now, I'm wipping egg off my face, holding conference calls and sending out press releases two months before we release earnings."

Even SGMA president John Riddle issued an uncharacteristically harsh assessment in his state of the industry report. He said: "With such an oversupply of retail space, it's clear that retailing formats will succeed or fail much more rapidly than in the past, perhaps increasing the chance that stores will have to be closed or altered to survive. The intense competition will continue to put pressure on retailer margins, and there will be continued consolidations down the road."