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W.L. Gore and Runner’s World magazine have entered into a licensing agreement that will establish a performance apparel line of Gore-Tex and Windstopper fabrics for runners. The new collection of apparel offers nearly 60 SKUs providing head-to-toe products, all carrying the Runner’s World brand name.
SNEWS has learned that the Runner’s World Performance Apparel collection will be carried by retailers beginning in March 2004, including Galyan’s, regional specialty running stores, and more. SNEWS has heard that EMS is on the distribution horizon but we’ve been told final decisions have not been made as yet. Gore representatives have assured SNEWS that the product line will not be sold on the Runner’s World magazine website. In addition, Gore tells us they are still in the process of finalizing their own web policy regarding sales of product online, including the Runner’s World Performance Apparel collection.
The business strategy of establishing a Gore brand in an area the company feels is underdeveloped is not new ground for Gore — the company launched Concurve Apparel (www.concurve.com) in the United States in 2002 and Gore Bikewear into the European market over 15 years ago. Gore is launching Gore Bikewear into the United States at Interbike this year, and the Concurve brand will slowly disappear.
Although this is not a new direction for Gore, it is for Runner’s World and, as you might imagine, the deal has raised more than a few eyebrows, including a full set of eyebrows here at SNEWS once we began getting emails and calls asking us to dig beyond the press release.
In the following paragraphs, we’ll take a look at the issues as we see them, along with the questions others have posed to us seeking an answer, and attempt to at least provide insight and understanding, if not the ultimate answers many are seeking.
What is Gore thinking?
Bottom line, the Gore team feels that the running market is a market that Gore-Tex and Windstopper products should be a category leader in and since the company has been unable to convince its key vendors they should produce and sell running apparel with Gore products, Gore is going to enter the market itself.
“We will look at developing strategic trademarks, such as Gore Bikewear, and Runner’s World Performance Apparel, to prove the value of Gore products and open up the market for our partners,” said Steve Shuster, Gore Consumer Fabrics business leader. “We have open dialogues with our partners and make it very clear to them that we are going to be the catalyst to develop the market and that we will stay in the market once it is developed, but we also welcome their participation.”
That strategy worked very well for Gore in Europe. Fifteen years ago, Gore couldn’t get any of its vendor partners to produce bike apparel, so Gore Bikewear was launched. Today, there are 10 other partners selling bike apparel, along with Gore Bikewear and the category has proven to be quite profitable for the company.
Here in the United States, Gore’s recent agreement with Runner’s World is a strategy born of lost market share and the belief Gore should be the dominant supplier in the category. Not so long ago, in the age of tracksuits and shells, Gore realized between $7 million to $10 million in business derived from the running market. Today, sales are a fraction of that number, with only Road Runner Sports making a serious commitment to offer a line of running apparel utilizing Gore technologies.
“We are taking the approach that runners need what we have to offer and that is innovative styles utilizing the lightest and most functional technologies available,” Shuster told SNEWS. “It is our feeling that with the Runner’s World brand, we will have very satisfied consumers, consumers who have been asking for Gore product, and that will convince more of our partners to carry product targeted at the running market.”
Shuster did add that Gore is currently looking at what the company dubs “white spots” or other markets where it feels it should be the category leader and is not, and the company will not hesitate to enter those markets if Gore determines there is a clear opportunity to strengthen and grow the Gore brand.
He did allow that Gore will not be trying to enter into the backpacking or hunting markets with garments that would compete with the company’s core customers.
“The backpacking and hunting markets are core markets for us and very well served by our customers,” said Shuster.
How do Gore’s partners and competitors feel about this deal currently?
The feelings are far from mixed. In fact, not one running apparel manufacturer or current Gore supplier was supportive of Gore’s decision either openly or off the record — and perhaps that is to be expected.
Mike Egeck, president of The North Face, one of Gore’s largest customers and a customer who has offered technical apparel for the running market, told SNEWS, “We find Gore’s approach troublesome and at some point they will have to strategically decide whether they want to be a materials vendor or a wholesaler of finished products, because I think it will be difficult for them to do both.
“I am not saying this particular partnership is a mistake, but they are walking a very fine line,” added Egeck.
And while Paul Done of Sugoi understands Gore’s decision to a point, he added that this kind of strategy certainly affects loyalty and influences what a company will choose to buy in the future. Done also points out that from Sugoi’s perspective, Sugoi is no longer offering a single storm shell piece in its line and is focusing almost entirely on stretch-woven waterproof/breathable fabrics for the company’s running line with non-Gore technologies Sugoi feels are superior.
Lee Turlington, director of apparel for Nike ACG, told us that, “I have been made aware in the last couple of weeks that this program was coming online and we are talking inside Nike and the apparel organization to determine how we feel about this. I am not prepared to issue a formal statement other than to say we are very disappointed in how this has been handled by a very good materials supplier and we are currently working to understand what is going on and what this means.
“I also wonder what this means for the future and other direct to retail ventures by Gore either with existing or other technologies now in development,” Turlington added.
Brian Enge, general manager of Hind, pointed out that the technical running apparel market Gore is trying to gain a solid footing in is not a huge one at the specialty level by any stretch of the imagination. In fact, any company that has a 10 percent market share should consider itself very successful, and that’s a 10 percent market share of a market sized at around $100 million give or take a few dollars by many estimates.
“If you are seeking to gain a 10 percent market share starting from ground zero, that is a very tough road,” Enge said. “Gore has not proven they can be successful in this country and I am not sure that this extension will be embraced.”
And finally Jerry Edwards, president of Pearl Izumi, told us that, “Gore needs to focus on the questions relevant to why no one in this industry is using their product.”
SNEWS View: Unlike in the bike market when no one was willing to give Gore a try in Europe, Gore has been tried and tested in the U.S. running apparel market with mixed results, according to Gore customers. Like Edwards, we also wonder why not one technical apparel company selling into the running market is currently embracing Gore technologies? Not Hind, Brooks, Asics, Adidas, Nike, Sugoi or Pearl Izumi. Is it a price issue? A control issue? Or something else? Clearly, Gore believes others will jump on the bandwagon once the company proves Gore products will sell well at retail to consumers, but it is a decided gamble for the company and only time will tell how the gambit will play out here in the United States.
While it is Gore’s intention to grow the brand’s presence in what it feels is an underserved market for the company, several readers we contacted wondered what impact that will have on Gore’s partners who are also selling into the very competitive retail environment.
Shuster told SNEWS the company is seeking to target only the running customer who goes into a Galyan’s or an EMS and wants to buy a Gore product for running use.
But while Gore and Runner’s World might work hard to put a fence around the product in terms of the line’s target demographic, in the store, that fence no longer exists. Customers will buy what appeals to them in terms of style, color and function, as well as price of course.
What is different about the Runner’s World line of technical apparel is that for the first time, Gore is offering product that could be perceived as directly competitive with the supplier’s own customers. The Runner’s World Rising Sun N2S running glove is made by Manzella for the Gore program at Gore’s request and is, for all intensive purposes, a Manzella glove that Manzella sells in its own catalog.
There is the very real possibility, and this causes legitimate consternation among key Gore companies, that the Runner’s World line of apparel could supplant current inline offerings as open-to-buy dollars remain tight.
Of course, all of that assumes the Runner’s World line will be a huge success at retail. Considering that Runner’s World boasts over 500,000 readers, and the brand is a very recognizable and strong name, there is no reason to think otherwise.
Bottom line here is only time will tell. IF Runner’s World product begins to replace key Gore customers’ products on the retail floor, then the issue becomes much more serious and could backfire dramatically on the venerable supplier. IF, however, the Runner’s World brand does well, and in turn the category is grown as Gore hopes, then this becomes a moot issue.
What about conflict of interest issues?
Of greater issue in this partnership is the fact that Runner’s World, check that, Rodale executives who control the Runner’s World brand, feel that there is nothing wrong or risky about a respected media entity offering a line of products that carry the magazine’s name for sale at retail.
While Jay Heinrichs, editorial director for the Rodale Sports Group, said all the right things to SNEWS, this news breaks just as he and new editor David Willey are revamping the testing program at Runner’s World to, of all things, ensure a greater level of integrity.
“We are not in the business of selling apparel. This was a licensing deal and as editors we have no incentives to helping them sell,” Heinrichs told us. “I understand how folks would be concerned that we are putting the Runner’s World logo on something, but it is important to understand that this is a licensing agreement, not a product endorsement. Gore wanted to use the Runner’s World reputation for its value and clearly it does have value.”
Heinrichs went on to assure SNEWS that Runner’s World would never test or write about the Runner’s World brand in the magazine. In addition, he assured SNEWS that RW editors would not hesitate to accurately review Gore-branded product from other vendors.
While all that is well stated, we come back to the question of product endorsement, which Heinrichs insists is not the case in this deal. The minute you allow your brand name to appear on a product, though, you have implicitly endorsed that product, whether your intention was to do so or not. And not one current or possible Runner’s World advertiser we spoke with sees it any differently.
“The moment you dance with the devil, you have sold your soul,” said Enge. “Runner’s World has just lost its neutrality.
Added Edwards, “Certainly I think that by allowing someone to market their (Runner’s World) own line of apparel, they are opening themselves up for a perceived conflict of interest. This sends tremors through the industry as we value what Runner’s World has meant to the industry and we would hate to see that value eroded in any way.
“I have to wonder what would motivate a publisher to take on a business strategy this extreme,” said Edwards. “Is it because they can’t publish enough relevant content to make the publishing model work for them?”
We’d publish other comments, but frankly they were even harsher than Edwards with several hot enough to light our keyboards on fire as we were transcribing notes.
To be fair, other magazines do currently “dance with the devil” in some respect, including National Geographic with its line of licensed apparel, footwear and soon we hear furniture. However, the program is more targeted at the membership base and the National Geographic magazine, and not at National Geographic Adventure.
We asked Hal Espen, editor of Outside magazine, what his take on the development was.
“Certainly, it is an interesting development that seems fraught with potential pitfalls and contradictions, but in an era of hyper-marketing and hyper-branding, those contradictions may become less problematic than they used to be,” said Espen.
Perhaps. While there is little doubt advertisers and other media observers, including SNEWS, are highly critical of Runner’s World’s decision to allow their brand to be licensed, perhaps RW readers will be less judgmental. Perhaps readers will still believe that Runner’s World’s editorial buying advice and reviews remain credible and perhaps they won’t wonder about the possible implications of the magazine they have grown to trust now selling its own line of apparel. Perhaps. Perhaps not. Again, only time will tell.
Curious about the trend, we asked Backpacker Executive Editor Jon Dorn if this was a Rodale business direction we might soon expect to see at Backpacker magazine as well?
Dorn responded quickly, “I can say with certainty that Backpacker is not and will not be considering a deal like this!”
SNEWS View: We believe firmly in the separation of church and state when it comes to editorial and money-making business ventures from the publishing side. However, as magazines and publishers explore ways to increase the profits and bolster the bottom line, the gray areas of appropriate ventures that were once avoided for fear of tainting the integrity of a magazine are now being walked on so often they’ve become less gray and more like a well-defined trail. We believe the Runner’s World venture to be a very dangerous one. What Runner’s World has to sell, and is in the business of selling as a media entity, is useful reporting and product evaluations that can be trusted by all. For them or any magazine in Runner’s World’s position to choose to become a player at retail is really odd and disturbing beyond the simple fact that the magazine is essentially now competing with its own advertisers. Imagine if Motor Trend began offering a licensed brand of automotive repair products. There’s a good reason why newspapers do not allow their business reporters to own stock, because the perception is that it might taint their reporting. There was no good reason for Runner’s World to have taken this approach, save one — another revenue stream. And in an age when integrity is being more scrutinized than ever, that reason simply shouldn’t have been allowed to gain a toehold at a magazine in the business of offering product and buying advice.