Bridging the gap between lifestyle and performance with New Balance

Jay Asser 25/09/2017

New Balance’s name refers to arch support, but it now also appropriately sums up the brand’s identity between lifestyle and performance.Once known solely as a running brand, New Balance has morphed into a multi-dimensional entity whose roots have spread far and wide to encompass more than just sport.Fashion has become more of a priority as the brand seeks to offer something for everyone, with the GCC especially targeted for its potential, which is why the opening of its newest store in Dubai Mall Sunday is telling of both where New Balance see themselves today and of where they want to go.While New Balance already had nine stores previously positioned in the GCC – five in the UAE, two in Saudi Arabia and two in Qatar – the new Dubai Mall location offers the brand a face for retail in the region.Located near the main entrance and by the aquarium, the relatively compact store holds premium real estate in one of the world’s premier shopping locations.“This is really a statement for the brand and its expansion,” Stuart Henwood, country manager of New Balance Middle East and India, told Sport360°.“We’ve now been in operation for around 18 months, building the brand in the GCC and opening up stores in various locations, but Dubai Mall is really the epicentre of where retail is in the GCC.“Eighty-plus million people walked through that mall last year and really looking at the consumer mix in the region, with Saudi Arabia and consumers across the Gulf, it’s really a flagship location with where we’re positioned in the mall.“We’re close to the entrance and that’s really a statement of intent of what the brand is doing from an investment standpoint in the region. It’s to say ‘We are here, we’re a brand that’s been existing for a long, long time and we’re really here to build the brand in a really strong way in the Gulf.’”If New Balance’s intent with the Dubai Mall store was to signal their presence, it was surely felt yesterday at the official opening. Mall goers’ curiosity was piqued as a large contingent surrounded the shop and pushed to get inside.It may have just been a herd mentality, but whatever the reason, New Balance surely won’t mind attracting passersby if it means drawing eyeballs to their range of products.And those products are given equal footing – pun intended – in the store, with one wall dedicated to New Balance’s roots of running and another featuring lifestyle footwear.On the running wall, the words ‘fast’, ‘far’ and ‘style’ are prominently displayed above the shoe display, which Henwood describes as a new way for the brand to communicate to consumers. It’s also a reminder that while efforts on the lifestyle side have been ramped up, the performance of the running products hasn’t been taken for granted.The opposite wall is covered with New Balance’s core lifestyle shoes – the 996, the 574 and the 247 – in a clear effort to show how far the brand has come in that regard.And in the back of the space, extending to the ceiling, is a curved digital screen that adds a unique touch and life to the store.“We’ve taken inspiration from only one or two select locations from around the globe,” said Henwood. “One of those was Japan, where we’ve seen the sport consumer really evolve and that’s been a true testament to where we see ourselves today.“There’s also a very unique curved digital screen that is in the store that’s been executed nowhere else globally within New Balance stores. We’ve given it the importance as a flagship location globally and the demographic of consumer we’ve been able to fit in to this store with some unique elements while taking some inspiration from Japan and also Europe.”Japan, and Asia as a whole, has been a successful region for New Balance’s growth. While the brand’s origins are in North America, specifically Boston, the East has yielded fruitful dividends.But while Europe and Asia are mostly saturated markets, Henwood views the GCC as emerging and untapped. The multi-cultural nature of the region, namely in the UAE, has attracted New Balance, but so has the sneaker consumer.“We saw an opportunity in the region that we just didn’t play in before,” Henwood said. “Our

aspiration is to be a top-three global athletic brand and so we have to be in these emerging markets. We’ve been surprised in a very positive way in the last 18 months at not only our sales, but also people’s affiliation with the brand.

“Where we’ve seen the ball flung in this market is certainly on what we call ‘sports style’. It’s using the performance technology in the mid-sole, fused with a more classical style uppers. That’s really where the UAE and Qatar markets are.

“If I look more into Saudi Arabia, it’s more on the performance side and that’s been reflected in our sales. Also globally, if you look at other brands and where they’ve had great success, is in that performance bottom with that comfort and everyday use, but also people want to be seen with some stylish and classical products.”

New Balance’s focus on football in Saudi Arabia has already netted them a kit partnership with Al Nassr FC, one of the biggest clubs in the Kingdom. That union was largely made possible by New Balance’s record-breaking £300 million (Dh1.4bn) kit deal with Liverpool back in 2015.

That exposure has resulted in what Henwood calls “cross-category selling”, in which the brand can market to consumers, whether they’re football customers, running customers or just looking for a comfortable pair of shoes.

More deals like the one with Al Nassr appear to be on the way for New Balance in the GCC. Henwood anticipates further strategic partnerships with athletic clubs, federations and on the lifestyle side, with key signings that will be announced soon.

Outside of retail, Henwood has also placed an importance on signing more wholesale partnerships and building foundations with the likes of Foot Locker, Go Sport and others to ensure New Balance can reach the greatest amount of consumers possible.

And, of course, many more stores are planned to open across the region, with Henwood pegging it around 50 by 2020.

“It’s really building a structure here in the Gulf and we’re going to branch out into those other markets,” he said.

“We have huge ambitions. It’s the full 360. It’s not just about retail store, it’s about getting all that together and delivering a service to the customers in which I believe there is a gap in the market here.”

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Business of Sport: ASICS tread own path to get ahead

Denzil Pinto 28/03/2017
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Gael force: French tennis star Monfils is one of ASICS’ most visible ambassadors.

Given their pledge is to always “bring harmony to the body and soul”, of their customers, ASICS certainly stayed true to their words when they opened their new subsidiary in the UAE earlier this month.

There was a distinct atmosphere, helped by the sound of catchy music, as more than 120 guests got a close look at their new Dubai Design District showroom.

For the Japanese sports manufacturer, it was no ordinary occasion. This was something big and just the start of ASICS pushing themselves ahead of their competitors in their bid of claiming a bigger slice of the market in the Middle East.

Since founder Kihachiro Onitsuka first started making basketball shoes in 1949, ASICS have come a long way and are now not only one of the most famous names globally but considered among the best running brands. The company already find themselves in a strong position in the UAE.

At any major shopping mall in the country, you’re most likely to find one of their branded stores, while local retailers like Modell’s, Go Sport, Foot Locker and Stadium, present more opportunities for consumers to purchase merchandise.

With major rivals continuing to push in such a competitive market, ASICS have decided to go alone and take matters into their own hands by replacing distributor Falaknaz, who had played a role in their success since 2003.

It means ASICS will now take charge of their own distribution, sales and marketing plans in bringing more success to their business, which already has more than 100 stores across the region.

It might well be more expensive than working with a distributor but the advantages are huge, giving them further room to expand their footprint in the region, while reinforcing their premium positioning.

They plan to increase their marketing investment, using up to 20 per cent of their budget, while also developing direct relationships with key retailers.

It’s part of their vision in not only bringing innovative products to the the market but offering consumers a “premium and unique retail experience.”

For Alistair Cameron, CEO of ASICS Europe, Middle East and Africa (EMEA), this step is a “new beginning”. “We are a $3.5 billion company and are big in America, Europe and Asia,” he said.

“With this in mind, it’s really important that we can articulate the benefits of the ASICS brand. Although we have been in the region for some time, our brand positioning globally as the No1 running brand hasn’t yet been discovered to its full extent in this region.

“Our distributor has done a really good job and helped us establish ourselves. But for us, for them to significantly invest at a level on what we want, is a tall order, and so that’s why we have come in and done it ourselves.”

While financial figures for 2016 are yet to be released, the move comes after profits for 2015 fell by approximately $80 million, more than 50 per cent than 2014. It was the first time since 2011 they saw such a decline.

With that now in the past, they are looking to the future and Cameron remains optimistic this region can become as valuable as Europe, Asia and America. “The UAE and Saudi Arabia will be the big markets for us,” he said.

“To maximise our opportunity, we will continue using premium retailers like GO Sport. But we will also be driving a much stronger premium level of presentation of all our products, including accessories, which will involve a lot of technical training.”

To ensure that consumers purchase products that are best suited to their needs, they plan to introduce more of their ASICS Foot ID systems in partner stores which have been rolled out in the US and Europe.

The high-tech shoe selection service combines static and dynamic measurement and analyses your movements to determine the right shoe for you.

With that now in place in certain countries, as well as the high volume of sales and the fine detail to research put in by scientists in Kobe, Japan, it’s easy to see why their footwear still remains their biggest seller with 346,080 million Japanese Yen ($311m) in net sales in 2014.

“In terms of running, we are the No1 global running brand,” declares Cameron. “At most businesses, there will be big volume for the lowest priced products but at ASICS it’s the other way round.

Our most expensive products does the volume for us and that’s because our science and technology is far superior than anyone else.

“Here in his region, while we want to extend our business to more branded stores, there will be more need for sales staff to be trained and well-equipped to sell and handle technical products.”

Their cause of hopefully seeing positive results in the future is helped given the importance of health and fitness. In the UAE, the facilities are second to none while Dubai and Abu Dhabi’s sporting calendar is packed with countless events throughout the season.

“With the world moving, there’s a switch in society and we’re seeing that health and movement is becoming important for people,” adds Cameron.

“Particularly, if you take Saudi Arabia, where there are high obesity levels, there are a lot of initiatives for authorities to invest in gyms and get people moving. It’s a major territory to grow.”

While sales is key to growth, so too is sponsorship and their multiyear partnership with athletics governing body IAAF is another indication of how they’re reaching out to global audiences.

The deal, which saw them replace adidas, who ended their agreement three years early, will not just see their logo on display around the stadium but will also see all IAAF officials kitted in ASICS apparel in all of the World Athletics Series meets as well as the 2017 and 2019 World Athletics Championships in London and Doha, respectively.

“If you take London, there will be 80,000 spectators every day over a 10-day period,” said Cameron. “After London it will be held in Doha in 2019 and that is a massive investment for us in this region and for us it will be how we can maximise that opportunity.”

Despite being the top-ranked brand for runners, that hasn’t stop them from exploring other sports. On their books are players in tennis, triathlon and volleyball as well as interest in cricket and rugby.

World No11 Gael Monfils of France, 2011 US Open champion Samantha Stosur of Australia, and British world No11 Johanna Konta are among their tennis ambassadors.

Rio Olympic gold medallist and two-time world triathlon champion Gwen Jorgensen of USA also put pen to paper. Ambassadors are paramount to the company.

They visit Kobe to ensure their apparel is up to their exact standard, while giving ASICS crucial feedback that allows them to enhance their products. And it isn’t just their results that attract ASICS. “We are really careful that they fit the brand,” said Cameron.

“It’s really difficult in today’s world to find a personality who is humble and would want to work with you and be inspired by what you do. “Gael has really helped us by helping testing products and everyone’s a great ambassador.

“We’re always on the lookout and it’s a competitive game.”

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Business of Sport: Aston Martin's Second Century Plan

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Leading from the front: Andy Palmer has already inspired a new team spirit at Aston Martin.

For the moment, James Bond may be more synonymous with Aston Martin than Andy Palmer but if things go to plan that may well change in the not too distant future.

Palmer has a mission to put Aston back into profit, to lead the 103-year-old company into what he calls ‘The Second Century’.

He has already refinanced the company which has had several owners over the years, transformed the management structure, launched the stunning new DB11, and formed a fascinating alliance with Red Bull Formula One team to produce a hypercar, the sensational looking AM-RB 001 (below).

He took some time away from his hectic schedule to talk to Sport360° editor Steve McKenlay about the future.

How long have you been with Aston Martin now?

For just over two years. Prior to that I was chief planning officer for Nissan based in Japan. I was 23 years with Nissan, 10 years in the UK and the rest of the time overseas and I am a mechanical engineer by training.

Aston came in for me. I had a little bit of insight into Aston beforehand because at Nissan we looked at whether they would fit into our portfolio or not so I had a reasonable understanding of the challenges but the turning point for me was the five per cent shareholding with Daimler which gave Aston access to the technology it clearly needed plus assurances from the two other shareholders, Investment Dar in Kuwait and Investindustrial in Italy, that they would back my plan.

What did you see before you came into Aston Martin that persuaded you to join them and what were the main challenges you expected to face?

What I saw was a great brand which I thought I could take somewhere special. There was an emotional side of that of course in that I reached 50 years old at Nissan where I had a great job and could have continued doing that.

However, I always wanted to be the CEO of a car company and I always thought it was a huge shame that the UK has barely any of its own car industry left.

Aston is it basically, so it was a bit of bringing the head and the heart together with a sincere belief that given the right team, the right challenge and the right motivation I could at least turn Aston into the British Ferrari. I don’t mean copy Ferrari but as a stand alone manufacturer and maybe more.

Ferrari already sets the bar high. It just recently had a successful IPO (Initial Public Share Offer) and set a very high target but we can go further because we aren’t limited to only making sports cars. We can do SUVs and Lagondas.

What was your opinion of Aston Martin cars when you joined the company?

The cars are great. We can talk about the old VH (vertical/horizontal platform) architecture but it was really ahead of its time but the models are ageing and in particular the electrical architecture was starting to show its age.

So, coming in I knew I wanted to do something about the navigation system in the cars which was one of its major weaknesses and I wanted to do something about the gearbox by giving an alternative to the single-clutch gearbox and update the interior. So, on a product basis it was a case of go ahead to do it.

I did all that and that is before the new product comes. There was a whole bunch of other things I needed to do within the first two years which was a stabilisation period. I put together a corporate plan which was approved at board level, got it funded and started to put the management structure in place.

I have taken out two levels of management trying to create a large flat structure, started a cost reduction programme and regrettably had to make some redundancies – about 400 – and started a whole new quality process. That comes from my Japanese training because they are obssessive about quality.

So that sort of marked the end of the beginning and we are just starting phase two which is core rebuilding which is the new sports cars, starting with the DB11.

I came to the launch of the new DB11 in Italy and one of the things that struck me was the enthusiasm of the team you now have. Was that enthusiasm already there ready to be tapped or have you introduced it?

There is definitely a real buzz around the place now and it wasn’t there when I came. I think that fundamentally we didn’t change too many people. There was a passion for the brand.

People work at Aston because they love cars but the company was spinning its wheels. There wasn’t really any approval of products there was nobody taking brave decisions so there wasn’t a lot of celebration of how good things could be because there wasn’t any money.

They went back to a kind of feudal system with the heads of all the functions basically protecting their patch and no real teamwork so the hardest thing to start with was the cultural change, engendering a team spirit with a clear, deployable plan and a leadership that works harder than anyone else.

So I think there was a lot of frustration amongst the workforce with nothing to channel the passion into.

New models are in the pipeline for Aston Martin.

The DB11, the first Aston produced under the partnership with Daimler, has been well received so what is next?

You and I are privileged to have driven the car but we need to tell everyone the story about what we have done which is why I will personally be inspecting the first 1000 cars that leave the factory. No car goes out of the factory without my assurance that it is a good car.

What does your inspection involve?

Twenty to thirty minutes depending on whether I decide to give it a test drive or not but it is principally around gaps and flushes, making sure everything works and that there is no damage to any materials interior and exterior.

There is an obssession with getting things right. I wouldn’t put my name on it if it wasn’t right and every car goes with my email address so if there is something wrong then I will hear about it and I answer all my emails.

Have you always been that hands on?

Yes, I left school at 16 and worked on a factory floor and I prefer it like that. I have other weaknesses but I like being on the shop floor.

Tell me more about the future of Aston as you see it.

The turnaround plan it is to make the most beautiful automotive art in the world from a great British car company. There are six pillars of the turnaround plan starting with the luxury products and not just cars – boats for example.

The second is making sure we have got a sales network which is capable of growing to, in the first instance, 7000 cars a year, and then double that; the third is about unrivalled quality; fourth is about great processes; fifth is about passionate, professional people the most important asset in the company and the sixth is having the finance and the discipline there which means we never have to go back to the begging bowl.

How difficult was it to fund your plan?

There were plenty of cynics for sure but the plan is extremely cohesive and my management team has credibility within the investment community and for the last seven quarters in a row I have bettered the budget we had set and that gives confidence to the financial community.

What new cars are next?

In terms of products the next is the new Vantage and then the Vanquish and that covers the next phase of the plan.

Are you going to replace all your models including the Rapide?

The Rapide will become electric. It fulfills two needs. I have obviously run electric car programmes before and I know how hard it is and I know that you need to concentrate on just the things that you are changing ie so it allows us to address that issue of understanding the technology.

It also allows us to meet emission regulations around the world and I think there is room for a luxury brand above Tesla so eventually the Rapide will become our vanguard of the electric car. Then we have the SUV code-named DBX and the Lagonda.

Motorsport has always been important to Aston. Have you considered entering Formula E which is now attracting all the major manufacturers?

Yes, and we will continue to consider it but we won’t be entering until the technology allows a race to be done on one battery.

If you want to be the first electric luxury car company it is a way of showcasing that so it is definitely on the agenda but I think having to change the battery by changing cars half way through the race is just reinforcing people’s perception that electric cars have a range issue.

That will change and I believe that 25 per cent of new car sales will be electric by 2025.

Aston does a lot of limited special edition cars and has just announced a hypercar in a partnership with Red Bull. How important is this business to Aston Martin?

In 103 years Aston has made just 80,000 cars and within a couple of years we are going to be making 7000 cars a year and then 10,000 plus so it’s suddenly a different sort of exclusivity. So in order to preserve the sort of exclusivity to get with a DB5 I want to make every year, two sets of low volume specials.

It also transforms the way people view our product line because we are selling out with significant over subscriptions on every one of these special series that we are doing.

So you are creating a head of steam with people who want to get close to the company and so they also get close to the core range and we now have more than 4000 orders for the DB11.

So, is the association with James Bond still part of your turnaround plan?

We are not Ferrari looking for that fraction of a second more speed, we are not Rolls-Royce and we are not the average of the two.

We position ourselves around the love of beauty and beautiful cars and we have to put it into the minds of the customers that the reason the fictional James Bond will drive that car is because of its beauty, its athleticism; because it suits what he is. He is one of the tools, like racing, that we use to market our brand. So yes, he is still important.

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