Textile Insight

FOOTWEAR | COMPANY NEWS Sneaker Shake Up Performance Athletic Shoe Market Takes a Hit in Sales, Layoffs Not a good start for Finish Line in the 3rd quarter. *PU Magazine – VOL. 5, NO. 4 – August/September, 2008 O rthoLite leads the industry in the innovation, development and production of environmen- tally friendly insoles containing proprietary castor oil and recycled rubber formulations. A substantial number of insoles the brand creates replaces a significant percentage of the more common petroleum with a bio-oil made from castor beans, a non-food plant source that demonstrates significant ecological advantages in terms of energy and resource consumption, according to PU Magazine*. In addition, an integral part of every formulation includes 5% recycled shoe rubber. OrthoLite foams use more than 75 metric tons annually of recycled rubber– which provides the brand's signature 'speckled' look while helping to reduce the carbon footprint. Environmentally friendly, bio-based formulation. Replaces 12% of the petro- leum with a bio-oil substitute made from castor beans that makes this formulation a renewable resource that reduces the shoe's carbon footprint. Contains bio-oil content made from OrthoLite's proprietary castor-oil for- mulation. Offers a unique plush "ride" that delivers superior cushioning in all types of footwear. No other PU foam offers the same combination of performance benefits with this level of "green". A high rebound formulation with over 40% elasticity rating and 12% bio oil made from castor beans. EcoX40 is an excellent choice for high-impact activities like running and basketball and also provides a high-level of cushioning in thinner applications, great for low profile footwear or dress products. Composed of 50% bio oil from castor beans, OrthoLite Impressions is slow recovery foam that delivers a customized fit by taking on the shape of the foot over time. Impressions is best used as a top layer on a firmer foam such as EcoOrthoLite or EcoPlush to deliver a custom layer of support for ultimate cushioning. ortholite.com Customize your Next Shoe with OrthoLite Eco-Friendly Insole Formulations. he already battered premium- priced, performance athletic shoe market took two more direct hits recently that left some speculating that it might not recover until next year's Back-to-School period. Nike and The Finish Line were at the center of the storm. In Beaverton, the second round of a previously announced 1,400 layoffs (an estimated 1.9 percent of the Swoosh's global workforce of 74,000) commenced. One of the casualties, Tiffany Beers, a 13-year Nike veteran and special projects engineer who was the creative force behind the Hyper Adapt 1.0 and self-lacing MAG shoe, is moving on to Tesla, which former Nike executive Willem Haitink joined in April. Meanwhile, at Nike advertising agency Weiden & Kennedy, managing director Tom Blessington is off to Youtube as VP of brand, media and experiences. The latest Nike exodus came days after Morgan Stanley proclaimed, "Nike has lost its core sneaker enthusiast customer to Adidas" and The Finish Line, citing sales and gross margin pressures from the highly promotional athletic shoe market before and during the Back-to-School season, pre-announced weak second quarter results and simultaneously lowered guidance for the remainder of the fiscal year. FINL shares fell 28 percent after the revised outlook was released. Cannacord Genuity was quick to cite the persistent promotional environment for athletic shoes and Nike's "innovation lull" as the key contributors that are "crippling the retailers." In its August 29 report, the investment house suggested sales of Nike's previously top- performing platforms in Roshe, Hurache and Jordan Retro were slowing at a faster rate than anticipated and the Adidas BOOST platform is still facing manufacturing constraints. One bright spot for all marketers and retailers of premium athletic shoes, including Nike, is word that consumers' appetite for new and innovative products remains strong. Build and market it and they will come and buy. That forecast bodes well for the athletic shoe brands that can speed up their supply chains and release the proper quantities of product to whet consumer appetites without oversaturating the market. Sneaker historians might remember that Nike has been in this market position before in the late 1980s when it lost its dominant U.S. market share lead to Reebok only to come storming back before decade end in the then $4.5 billion U.S. athletic shoe market. Finish Line, which expects to report a 7 to 8 percent decline in inventory level, expressed confidence that it will be able to enhance its merchandise assortments to improve its topline in early 2018. But some circles, given the current traditional retail and athletic shoe climate, wondered if there is a real need for two mall-based purveyors of premium-athletic shoes. Caleres-owned Famous Footwear, like rival DSW, realized an uptick in its sneaker business in the second quarter, bolstered by a 20 percent increase in lifestyle athletic with men's and women's athletic comps rising mid-single digits and kids' gaining high-single digits. The retailer said the addition of Under Armour in its merchandise assortment was a key contributor to its 2.8-percent increase in second quarter comparable store sales. Shoe Carnival reported a slight decline in its second quarter adult athletic comparable sales, which it attributed to a decline in men's basketball and continued strength in men's and women's running. SCVL said it believed the positive athletic and athleisure trends will continue in the family footwear retail segment and re-allocated buy dollars to both segment for fall. O textileinsight.com September / October 2017 ~ Textile Insight • 27 SPONSORED CONTENT

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