There are some interesting growth projections in this news item.
Board-Riding Youths Take Sneaker Maker On a Fast Ride Uphill
April 22, 1998 2:31 AM EDT
Vans Inc (Santa Fe Springs, CA) is riding the popularity of extreme sports such as street luge to boost its sales of sneakers. Vans will soon introduce a shoe with the signature of street luger Lee Dancie, and will pay him $100,000/year for the use of his name. US sneaker sales are rising only about 2%/year. But Vans, Airwalk, Etnies and DC have each recorded 20-50% sales increases over the past 2 years. The alternative sneakers now account for about 7.3% of the $7 bil market for sneakers.
There are now some 6.5 mil skateboarders, 4.5 mil snowboarders and 1.5 mil stunt bikers in the US. These numbers could double in the next 3 years. The number of wakeboarders (who ride boards towed behind powerboats) could increase by a factor of 6 from the current 2 mil.
Some ski resorts are changing to attract snowboarders from Generation Y (born after 1980). Mountain Dew has propelled itself from the number 6 soft drink to number 4 by identifying with boarders. Its sales rose 13% in 1997. Nike and Converse are trying to take advantage of the new fad. But the boarders often distrust the big corporations and avoid the brands.Vans was founded in 1966, and by 1995 was a third-string maker of shoes, with sales of under $35 mil/year. But new ownership recognized the growing appeal of board sports, and their anti-establishment attitude. Van's already made shoes for skateboarders and stunt bikers, and started sponsoring alternative sports events and alternative rock concerts. Sales rose 26% in 1997 to $159 mil. Sales are expected to rise 13% in FY98 (ending 5/31/98) to over $180 mil, even though Vans' sales in Japan have collapsed. Foot Locker has now started selling Van's shoes in over 1,000 stores. Foot Locker will co-sponsor Van's alternative rock tour. Vans also is using 236 endorsers, athletes who participate in the extreme sports. ESPN, Fox and MTV are giving these sports more coverage. |
