Icon breaks tradition by purchasing shoe company
Icon Health & Fitness recently took a chance and stepped away from its fitness equipment roots by purchasing another Utah-based company called Altra Footwear, which specializes in trendy, minimalist running shoes.
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Icon Health & Fitness broke its mold recently when the fitness equipment company purchased a small running shoe brand.
“If we were going to be in footwear we decided we should either build it or buy it – but it had to be innovative,” said Colleen Logan, vice president of marketing for Icon. She said that those who work out need other gear like clothes and shoes. “We wanted somebody that was very distinctive and different in the marketplace.”
So the company chose Altra Footwear (www.altrarunning.com), a company that specializes in trendy and minimalist running shoes. The deal closed March 1, while Altra’s debut under Icon ownership was at the Outdoor Retailer Summer Market, Aug. 4-7, in Salt Lake City, where it premiered some of its new trail shoes.
The fitness company (www.iconfitness.com), which ownsProForm, NordicTrack, Weider, iFit Live powered by Google Maps, HealthRider and Weslo, decided to branch out into the footwear business because running shoes and fitness equipment are both part of a healthy lifestyle.
Altra Footwear is “fitness-related stuff,” Logan said. “It’s an extension of the entire fitness category. When people make a commitment to buy fitness equipment and live a healthy lifestyle, there are a lot of things that they change and buy.”
This isn’t Icon’s first time dabbling in markets other than fitness equipment. NordicTrack apparel, which includes jackets, sports bras, shorts and shirts, can still be found online and at Sears, Logan said.
Logan said the company launched that venture about six years ago, and though it’s not a huge part of Icon’s business, she said she still believes in having those products. Clothing and shoes, she noted, need to be purchased regularly every few months or so, while exercise equipment purchases often happen years apart.
Logan recalled the story of a woman who purchased a NordicTrack elliptical four years ago and is still using it faithfully with no plans to make another purchase in the future.
“I don’t know when we’re going to sell (her) another elliptical,” Logan said. But offering shoes and apparel gives the company a chance to give a balance to a “consumer’s buying cycle to balance out the longer time frame of the larger exercise equipment with things that need to be purchased every six months to a year.”
Logan said investing in apparel lines or footwear is a smart move for any fitness equipment company in light of slower overall equipment sales during the economic downturn for some brands.
“I think it diversifies our product base and gives us an opportunity to learn about running and fitness from a different perspective,” Logan said. “As far as I know we’re the only ones who’ve done it.”
Nautilus did in 2005 acquire Pearl Izumi, which has apparel and footwear for both biking and running, but put it on the market in 2007 — and sold it to Shimano in 2008 — as a part of its reorganization.
Logan said she hopes the move will open up some new sales and distribution opportunities for the company’s fitness equipment. Golden Harper, Altra Footwear’s founder and director of research and development, said the new ownership will help the company grow the way it needs to.
“Exercise products are what we do,” Logan emphasized, adding that this new move is just an extension of that.
“It’s a synergistic relationship,” Harper told SNEWS. Icon is “a health and fitness company and we are an injury prevention, and health and fitness brand.”
Harper said the acquisiton will give the company the muscle and experience it needed to meet demand for its shoes.
Logan said the plan is to keep Altra Footwear solely in specialty running stores, but Icon will offer running stores a special discount on a treadmill for customers to use to try out shoes.
“A lot of times when you go to an outdoor store or a specialty running store they have a treadmill there to analyze a (runner’s) gait,” Logan explained. “This will make it easy for us to have a product in the store for it to use for a functional purpose, but if people like it they could order it.”
Also, it gives Icon a foot in the door for retailers unfamiliar with fitness equipment, Logan said. Shoes and apparel are “still a very small portion of our business, but it gives us diversification and allows us to have conversations with retailers who may not sell fitness equipment. There is vast opportunity.”
It had to be you
Once Icon decided to buy, rather than create, a new shoe brand, it was after something it considered truly innovative, Logan said — a prerequsite for any of its acquisitions, and something in the end that Altra fulfilled.
“We thought Altra was a great fit for acquisition by Icon because of its innovation and distinction in the marketplace,” she said. “We didn’t want to have ‘just another running shoe.'”
Logan said minimalist running shoes are here to stay – at least that’s what Altra Footwear is banking on.
“Right now we’re just focusing on (minimalist shoes) because we believe there is a lot of growth in this market,” Logan said. “There are a lot of companies chasing it – we’re not the only ones.” Click here to read a SNEWS story about minimalist shoes in the summer outdoor magazine.
Altra employs a zero drop design, Logan said. “Most running shoes have a high heel – the drop between the heel and the forefoot is 2-to-1,” Logan explained at Outdoor Retailer Summer Market. The founders of Altra cut off the high heel to make it level, or give it a “zero drop” from heel to forefoot. Getting rid of the high heel leads runners away from heel striking and more toward forefoot or midfoot striking. Altra then keeps some cushioning underneath the entire foot.
“This is a really big deal in the running industry, this concept of zero drop,” Logan said, but Altra’s shoes are different because they feature a foot-shaped, gender specific design for each of the company’s four new shoe models. Minimalist, or barefoot, running, has become a trend in recent years, as SNEWS reported in the O.R. show daily Aug. 6, 2011.
The Altra shoes are designed to protect runners from shock due to the full rubber outsole and sleek sole, plus its trail shoes have protection plates (which protects runners when they strike a rock while trail running) placed between two layers of midsole, rather than directly underneath the insole. Logan claimed these features give a runner a little extra protection from shock, as compared to other companies’ minimal shoes.
“We just feel,” she added, “like it’s a natural extension that makes sense for us.”