Monthly Archives: August 2017

Slugging it out: sale of Hillerich & Bradsby Co. wooden bats up 500,000 a year

The crack is back.

The distinctive sound made when a wooden baseball bat meets flying horsehide, that is.

Few people will be surprised to learn that Louisville’s Hillerich & Bradsby Co. is moving its Southern California aluminum bat plant to a larger building because of increased demand for aluminum Louisville Sluggers. After all, everyone knows metal usssa softball bats have supposedly been bashing their wooden counterparts toward obsolescence for nearly two decades now.

But baseball is a game of statistics. And here’s an interesting one: Since 1986, sales of wooden Louisville Sluggers have increased by 500,000 a year–while sales of aluminum Sluggers have risen by just over 400,000 annually.

Although trends, percentages and revenues continue to predict a more metallic future, the surge in the company’s wooden-bat sales–from just under one million in 1986 to 1.5 million in both 1990 and 1991–represents a 50-percent increase.

Competitors report similar results.

For instance, Worth Bat. Co., of Tullahoma, Tenn., said it has doubled wooden bat sales to 200,000 a year since 1988. And Rawlings Sporting Goods–maker of Adirondack bats–said its wooden bat sales are also up considerably.

That’s not to say wood is winning the war. Metal bats still outsell wooden ones by a 3-to-2 margin worldwide–although that ratio is reversed at Hillerich & Bradsby.

Observers say there are several possible explanations for the comeback of wooden bats.

* Cost. Aluminum bats are far more durable, but they retail at $20 to $70. Wooden bats cost between $10 and $15. Fast-growing discount retail chains like Target and K mart stock both, meaning tens of thousands of extra sales each year.

“Every time a Herman’s or a Wal-Mart opens, they order 200 or 300 wooden bats,” said Bill Williams, vice president of advertising and promotional sales at Hillerich & Bradsby.

* The memorabilia craze. Sales of limited edition, commemorative bats to major-league stars and stores for resale to collectors now make up 7.5 percent of Hillerich & Bradsby’s wooden-bat sales, said Williams. Another 6.5 percent goes to corporations for use as premiums for customers and incentives for employees. That market alone is up 29 percent in the past year, he said.

* Major-league dreams. Aluminum bats, which are harder and have a larger “sweet spot,” are banned in professional baseball. Some observers say more and more college and other amateur players are switching back to wooden bats–at least for practice–in the belief that it’ll make the adjustment to the pros easier.

Williams, for one, doesn’t buy that explanation. Even though amateur players buy three out of four wooden bats sold by Hillerich & Bradsby, Williams believes most amateurs with professional aspirations are sticking with aluminum, hoping to impress scouts with higher batting averages.

While Hillerich & Bradsby still sells 50-percent more wooden bats than aluminum ones, metal bats account for more than twice as much of the firm’s annual revenue.

For fiscal 1990, aluminum bats accounted for 30 percent of the company’s $80 million in revenue, while wooden-bat sales brought in just 13 percent. Williams said final figures aren’t in for 1991, but he suspects aluminum’s share rose slightly–a trend the company expects to continue.

The big reason is the difference in cost.

Not only has the number of aluminum bats sold by Hillerich & Bradsby skyrocketed from just under 600,000 to over one million annually in the past four years, Williams said, “but the average selling price has just zoomed.”

That’s because most of the new sales were generated by the introduction of Louisville Slugger TPS softball bats and TPX baseball bats–the company’s most expensive models.

During each of the past two springs, the company has had difficulty filling orders for aluminum bats from its small plant in Santa Fe Springs, Calif., in suburban Los Angeles.

That’s why it’s moving to a leased 80,000-square-foot building in nearby Ontario in late August, Williams said. The new building is twice as large as the old one, although it will also replace warehouse space the company had used at a third location.

Tom Harris, manager of the aluminum plant, said the factory has increased its number of employees by 35 percent because of the move and increase in demand. Williams said that figure equates to between 10 and 15 new jobs.

Meanwhile, Hillerich & Bradsby President Jack Hillerich has said that changes in technology and in delivery systems have left the company’s wooden-bat plant in Southern Indiana with too much space. The company is currently studying a possible move of that plant to the Louisville river-front in conjunction with a proposed baseball museum.

Even though Hillerich & Bradsby doesn’t expect sales of wooden Louisville Sluggers to approach their 1971 peak of 6.9 million again, the wooden model does have one ace up its sleeve.

The expansion of Major League Baseball into Denver and Miami in 1993–and the resulting minor-league franchises that will be created–are expected to generate about 30,000 wooden bat orders a year.

And Louisville Slugger currently controls about two-thirds of the professional market.

Stalking walking

Step right up, step right up. There, you’ve gone and done it already! You, lucky ladies and gents, have just participated in America’s newest fitness trend. Did I say trend? Craze, folks, and I mean craze.

Introducing the next fitness boom — walking!

Will the American public really rally to the cry of, “Heel, toe and away we go?” Will marketers be able to convince consumers that they need special equipment to do something that they do as naturally as eating or sleeping?

“It’s just a question of waking people up to the fact that this is something they already do,” answers one shoe retailer who markets a number of walking shoes.

Walking has been a part of the sports scene for years, though it’s been an elusive marketing opportunity. To put it in a more timely perspective, race walking has been an Olympic sport since 1906. But as recently as five years ago, walking flubbed as a fad. The few enterprises that tried to make walking something Americans consciously embraced as a sport — and would be willing to buy equipment for — just never got off the ground. Nike Inc., for instance, launched the “Pathfinder” shoe in 1982, hoping to latch onto some of its running shoe customers who might have slowed down to a walk. Sales were disappointing and the shoe was phased out about a year later. Walking! Journal was launched in 1983 by Orenda Media, but didn’t fly either.

But while their timing was off, their thinking was apparently right on. According to American Sports Data Inc., which promises an in-depth look at the activity via a two-phase national research study beginning January 1987, current figures on walking suggest the time has come: 84 million Americans walked for fun at least once last year; 40 million participated at least once in brisk, “aerobic” walking; 20 million went on brisk walks an average of once a week; and 1.9 million put in at least 1,500 briskly walked miles over the course of the year. It’s official: The figures now stack up in favor of a “trend” — the magic point for marketers.

The Sporting Goods Manufacturers Association didn’t bother tracking walking shoe sales until 1986. Now, not only were walking shoe manufacturers included in the association’s annual convention this year, but the group is also gathering stats on the strolling market. In the first quarter of 1986, walking shoes sold 1.4 million pairs, priced anywhere from $40 to $100, with retail sales totaling $36.6 million. For the same period, running shoes sold 3 million pairs and rang up $86.1 million in sales. By year end, walking shoe marketers are hoping to stroll away with a healthy chunk of the nearly $8 billion athletic shoe market.

“I really believe the potential market for it is much larger than it was for running,” states Richard Polk, owner of a group of Colorado-based stores that sell walking shoes and paraphernalia. “Also, the lifecycle of the market is potentially much longer. You can do it ’til you drop and, if we’re right about [its benefits], you can drop a little later.” Polk’s stores, each called The Pedestrian Shop, sell things like walking guide books, walking sticks, walking shorts and pedometers. He opened the first shop eight years ago, now has three and says he is looking to franchise others across the country.

Two walking-oriented magazines, Walkways published by Walk Inc. and The Walking Magazine from Raben Publishing Co., have sprung up to get in on the trend. The Walking Magazine, launched in May 1986 with a guaranteed circulation of 300,000, will grow to 500,000 after its fourth issue. In addition to selling ad space to walking shoe marketers, the book boasts advertisers like General Foods, pitching its cereals and Sanka decaffeinated coffee, Casio televisions, Maserati cars and MacGregor tennis rackets, as well as some apparel makers. And the magazine itself has an ongoing print media plan of its own, with buys in trade and consumer magazines.

There are a number of facts that support the notion that walking could be the next big money-generating sports craze. The number of fitness walkers is expected to grow to between 80-90 million by 1990 (you rate the title “fitness walker” if you hit speeds of 2.5-to-5 mph). The number of walking events grew from 2,500 in 1985 to 10,000 this year. The number of running marathons, in contrast, declined 38% between 1980 and 1985. The number of people who called themselves joggers dropped, according to a recent Gallup Poll, to 15% of 1985’s respondent sample from 18% in 1984.

But perhaps the most significant statistics of all has to do with the aging of the baby boom generation and the growing percentage of senior citizens.

As exercise becomes a more important and accepted part of life for Americans, more older people make walking their exercise of choice. They currently make up the bulk of what manufacturers see as their market. Older people especially enjoy it as an activity that lets you go slow enough to enjoy the scenery and socialize, yet fast enough to get some aerobic benefits. Walking also allows the participant to avoid the injuries that both running and aerobics are known to cause.

Injuries are where the baby boomers come in. Starting in the 1960’s, they were the ones who made running/jogging a big business. But over the last several years, sales of the flip flops for plantar fasciitis have declined as runners aged, developed injuries that called for cutting back on runs, or stopped running altogether. “If you watched what was happening in the marketplace, it seemed to be diversifying,” comments Nike spokesperson Mary Marckx. “As people were getting into more strenuous activities, they began hurting themselves and began looking around for gentler, yet still strenuous exercise.” According to research, a brisk walker can burn up 100 calories a mile.

Also, the sweat set may just be tired of the fitness rat race. “Psychographics have something to do with it,” suggests Beverly Daane, vice president of marketing at Rockport Co., the company that is by most accounts the market leader in this emerging category. “People are not so much into the burning pain of running.”

In addition, comfort is an important part of the equation. A couple of years ago, Nike reported its market research showed that 60% of its running shoes for bunion sufferers were being bought for uses other than running. Shoe comfort is “in,” even in the notoriously toe-cramping, ankle-turning realm of women’s fashion footwear. “Comfort is becoming more important in footwear in general,” states The Pedestrian Shop’s Polk. “Comfort used to be associated more with geriatric concerns than with fashion, but not anymore.”

Walking’s got something else going for it: It’s cheap. The walker doesn’t have to belong to a club or buy any fancy equipment — only a comfortable pair of shoes.

So, to marketers, the shoe’s the thing. Over 100 of them have reportedly launched casual walking shoes, and at least 25 of those have marched out shoes for the fitness walker. The marketing challenge is to convince consumers that their sneakers, loafers or even old running shoes aren’t appropriate for distance walking.

They might have something there, says Dr. Elliott Hershman of the Institute of Sports Medicine and Athletic Trauma at Lenox Hill Hospital in New York. “It’s true, the running shoe was a great improvement over the regular sneaker, and that’s probably true for walking shoes, too.” Hard to believe, but you can injure yourself walking. “Absolutely,” he says. “Even walking, you can develop stress fractures” and good dress shoes for high arches can help prevent that, he adds.

Marketers have already gotten behind the concept with lingo emphasizing the “biomechanical” needs of feet and legs. Currently, the most common design feature that distinguishes a walking shoe as such is a lower midsole than a running shoe, and more padding on the inside, less on the outside. “Some of the permutations and claims people are making are unfounded, but shoes with proper modifications and cushioning can be a real benefit,” says Hershman.

The Rockport Co., a Marlborough, Mass., company in business for 15 years, is credited as the market leader both in terms of brand identity as a walking shoe company and in terms of sales. Rockport’s 1985 sales reached $64.5 million and are expected to hit the $100 million mark for 1986. The company’s sales have grown, on average, over 40% a year for the last five years.

While it also markets hiking shoes and sandals, Rockport currently pushes several lines of walking shoes that range from casual to race shoes. The company has relied heavily on word of mouth and public relations efforts, like establishing walking events around the country, to get its name known.

Last year Rockport spent $6 million on its total marketing effort, according to Daane. While grassroots-level support and word of mouth will still figure heavily into its marketing plan, the company plans to back ad efforts more strongly now. Having just taken on Chiat/Day as its agency — which until recently had the Nike account — Rockport plans to spend $3 million to $4 million on media alone in 1987. The campaign will probably echo a number of print buys made in the past, which included co-op newspaper ads with retailers, as well as ads in Prevention (which launched its own walking club in April), Reader’s Digest, American Health, Travel & Leisure, Savvy, Sports Illustrated, Esquire, as well as a number of trade books.

The company recently established a separate division just to handle the sport walking market. Its first line of shoes, ProWalkers, will be out next March and are expected to sell for between $50 and $85. The line will be a fitness shoe that’s a cross between current Rockports and a running shoe.

This fall, Rockport was bought by exercise-shoe giant Reebok International Ltd. for $118.5 million. The purchase, says Daane, took some at Rockport by surprise, as the company was just preparing to go public. But she says the sale should produce some of the same results the stock sale would have. “We are growing so fast that we need capital. We’re not in financial trouble, but we have to maintain a service level to our distributors and retailers.”

She notes that the sale will help each company increase distribution of its shoe lines. Rockports are mainly sold through family-oriented and department stores, while Reeboks are found mostly in sporting goods stores and specialty footwear shops.

James E. Barclay, president of Reebok’s footwear division and executive vice president of Reebok International, says the buy will give his company diversification beyond its signature aerobic market. And, he adds, Reebok is launching some walking shoes of its own. “I don’t want to give you the impression we bought them just for their walking shoe,” states Barclay. “We plan to be very competitive with our own walking shoe and we will compete with Rockport.”

Even though its sale to Reebok should give the smaller Rockport more marketing clout, it’s going to have to watch its step. It doesn’t have this market to itself anymore. Nearly every big- and medium-sized shoe company has climbed into the ring. Converse, for instance, is easing into things with one line of walking shoes, the Hampton, which will retail for about $80-$90. Other shoe marketers entering the chase include New Balance, Brooks, Danner, Dexter, Clark and Red Wing.

Foot-Joy Inc. markets two lines of JoyWalkers for men and women ($40 to $55 at retail). While Robert Seiler, director of marketing/athletic, says sales to retailers are exceeding company expectations, he admits that “some retailers are saying, ‘I’m not sure what the walking market is going to do.'” Foot-Joy plans to double its ad budget next year, much of it giving a push to its walking shoes. (Leading National Advertisers reports total ad investments of $711,300 for the first six months of 1986; of this, $486,300 went for its sporting footwear, while the remainder was allocated to its golf shoe lines.) Ads will appeal both to the 25- to 45-year-old set, as well as older people. Buys will include People, Sports Illustrated, The Walking Magazine, Prevention, 50 Plus and trade books.

Nike could, perhaps, be Rockport’s most formidable competitor. It not only has a strong marketing department, but extensive research facilities. The company recently introduced the EXW, for exercise walkers, and the Healthwalker, a less technical version. Marketing, says spokesperson Marckx, will begin in New York, San Francisco and Boston, because those cities have strong grassroots support already. In addition to magazine ads, she says, Nike will feature its walkers in newspaper ads and on billboards. It’s also going to pound the pavement for its shoes by hiring some people to walk around with sandwich boards pitching them. In addition, Nike will be sponsoring walk-ins in various cities.

“We consider walking one of our important programs for the coming year,” says Marckx. “Our feeling is, physical fitness as a part of life in America is here to stay, and we see walking as an important part of this.”

There’s little doubt that walking, already popular, will be taken up by more and more people. But can it be turned into a sport, complete with a full-fledged marketing mechanism?

And if so, is it just a case of P.T. (“sucker born every minute”) Barnum redux? “To be honest with you, there’s a little bit of hype in it,” chuckles Matt Zale, president of U.S. Marathon Ltd., a national marketer of athletic footwear. “People don’t need [walking shoes], people don’t need running shoes, tennis shoes, whatever,” he says. Manufacturers just did a good job of making consumers think they needed different footwear for every activity. And U.S. consumers do have a penchant for gear. All agree that once shoppers decide they are “into” a sport, they get a yen for any and all equipment that goes with it.

And, last but not least, there’s the all-important vanity angle to be taken into consideration. Walking shoes have less of the highly engineered, yet oddly flat-footed look of running shoes. “For 10 years, people have been asking me for running shoes, ever since I opened my first store,” says Zale. “Now we finally have a hook: cosmetics. The running shoe look is dead.”

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