U.S. athletic firms find ISPO int'l sales boon
MUNICH (FNS) -- U.S. athletic footwear companies may have left this Bavarian beer town before the annual Oktoberfest, but they were celebrating nonetheless as international sales growth continued unabated during last week's ISPO, the 33rd International Sporting Goods and Sports Fashion Trade Fair, here.
'Our stand has been overwhelmed with people,' said John Duerden, president of Reebok International Ltd., Stoughton, Mass. 'It's the best attendance yet.'
Richard Donahue, president and chief operating officer of Nike Inc., Beaverton, Ore., added, 'Our people (Nike's German sales staff) think it's the best show we've ever had.'
The four-day show featured almost enough basketball personalities to start a team -- Michael Jordan and John Thompson, Georgetown University's coach, represented Nike; Kareem Abdul-Jabbar and Akeem Olajuwon signed autographs on behalf of L.A. Gear Inc., Los Angeles -- and the announcement that Prince Holdings Inc., Princeton, N.J., was sold to Edizione Holding SpA, the Italian company controlled by the Benetton family
But the appearance of Jordan as well as 50 or more international athletes from track-and-field and soccer, at Nike's Sportfest in Munich's Olympic Hall may have been the biggest surprise of an otherwise quiet show.
'I'm surprised by a lack of surprise,' Donahue said. 'I've been hearing a lot of rhetoric, but I haven't seen any new product, except what we're introducing.'
Still, four major U.S. footwear firms at the show -- Nike, Reebok, L.A. Gear and Converse Inc., North Reading, Mass. -- came away from the show with improved international business.
Nike, which bills itself as the world's largest athletic footwear and apparel company, said international orders for footwear and apparel scheduled for delivery between June and November (its first six months of fiscal '91) are up 42 percent in dollars, 70 percent in units. Nike said it increased its net interto $480 million in the fiscal year ended May 31.
'Outside the United States is the greatest growth area for Nike,' said Philip Knight, Nike's chairman and chief executive officer. 'By the year 2000, more of our business will be done internationally than in the United States,' Donahue added.
Converse sales
Converse, which reported flat international sales of about $100 million in 1989, expects an increase of 15 percent in 1990, according to Kevin Loftus, president of Converse's international division.
Loftus added that shipments for spring '91 are expected to be up 20 percent over last year. Much of Converse's European sales come from its canvas. All Star, which accounts for about 55 percent of all sales in Europe, Loftus said.
The All Star is on the 'beginning of an up-cycle' in Europe, which should precede a similar surge in the U.S. market, he added. Converse mainly is focusing on its canvas All Stars internationally followed by basketball-specifically and Magic by Converse, Loftus said. The classic Chuck Taylor canvas shoe has a 'minimum level of volume and market that will always be there,' he added.
L.A. Gear made its ISPO debut four years ago on the U.S. section, but now operates out of a two-story tent on the show grounds. Sandy Saemann, executive vice president, said L.A. Gear's international business is 'on the launch pad, so to speak. It's only going to get better.'
L.A. Gear for the first time aired its 30-second international Michael Jackson commercial across Europe last week, but Tom Keefer, vice president international for marketing, declined to say how much the company planned to spend for advertising on the continent.
Reebok volume
Reebok expects its international sales to reach $660 million this year, up more than 50 percent from $420 million in 1989, Duerden said.
'I believe Reebok is a very hot brand in Europe right now,' Duerden said. 'It's as hot as we've ever been.'
Duerden estimated that Reebok is the leader in seven of the top 15 international markets in which it competes, and said the company has boosted its advertising by 20 percent from its original plans. He declined, however, to give a total advertising budget.
Nike plans an intensive European advertising campaign, including $15 million to promote Air 180 in spring, said Thomas Clarke, Nike's vice president of marketing. He added that next year's total European advertising budget will top $40 million.
For Nike and Reebok, a second prong of their assault on Western Europe includes the acquisition of distributors.
Reebok will have seven wholly-owned distributors at the end of the year, Duerden said. The company already owns its distributors in the United Kingdom, France, West Germany and The Netherlands and expects to buy out one other distributor this year, although Duerden declined to say which.
Nike distributors
Nike, in the past 18 months, has created company-owned distributors in Italy, Spain, The Netherlands and Denmark, as well as Taiwan, Singapore and Malaysia in the Far East.
Nike also has notified distributors in Hong Kong and Australia that their agreements will not be extended, Donahue said.
'Using a distributor gives you only the power of persuasion,' Donahue explained. 'Having a company-owned distributor gives you the power of direction.'
In Italy, for example, Donahue said, Nike took over the distributor, completely turned over the sales force, reversed the emphasis from low-end to high-end footwear and made enough money to pay off the investment.
Converse, however, is planning to stick with its distributors for at least the next two years, Loftus said.
