LOLZLetter 72 | How Your Favorite Running Brands are Affected by COVID-19
Welcome
Hopefully, everyone is having an enjoyable Memorial Day or the best we can this year. I almost forgot today was Monday! As I’m sure many have said, it feels strange not running an in-person event this year. After the newsletter about how races will be affected for 2020-2021, it got me thinking, “How are running brands affected?”
Working in run specialty, I've known bits and pieces of how some brands are affected and how the running industry will drastically change.
You would think more people are running so more people would be buying shoes and therefore, running brands should be doing well.
The problem is that many brands haven't been able to build their shoes. Many shoes are produced overseas.
After digging and finding the RIA (Running Industry Association) summary, I found more information, including how some of your favorite big brands are hit. For the most part, it was published anonymously so you won't find specific names and details of brands.
Here are a Few Key Stats:
75% of running brands reported they don’t expect normalcy in sales until at least July 1, but many don't expect normalcy until Oct 1.
48% expect more supply chain disruptions in the coming months
80% are using or partnering with eCommerce platforms to support running specialty.
40% of the brands don’t think they will survive if the crisis continues through October and beyond.
Only 20% of brands maintained their "typical" March shipping.
How Will This Affect Your Favorite Running Shoes?
Over half of running industry brands delayed product launches for the next six months. Some of your favorite shoe launches like the Brooks Ghost have already been delayed. Usually, the Brooks Ghost is a summer update, but it’s now pushed back to at least September. 15% of brands have already delayed Spring 2021, but 40% believe it's too early to tell.
What about Brand Employees?
About half of both large and small brand reported layoffs or furloughs. Don't think this effects larger brands as much? I personally know of employees being either let go or furloughed from both Brooks and New Balance.
Joe Preston, the president and CEO of New Balance, announced New Balance furloughed a portion of its retail, factory, and office workers. New Balance also reduced salaries of senior-level associates, and Preston himself said he was giving up 50% of his salary.
According to the Brooks CEO, new factory orders are down over 1/3rd because brands must now work through the inventory they already have.
How is the Supply Chain Disrupted?
First, factories in China closed due to the pandemic. Nothing was made for a few weeks earlier in the year. Before COVID-19 hit the United States, we were already set up to have supply chain issues. We are now several weeks behind in product deliveries that were scheduled to be made in February-March. Products that typically come out in Spring/Summer 2020 have already been made. It's the product that comes out Fall 2021 has been halted.
Now, run specialty and retail stores in the United States are behind in selling products (business is down as well as closures). You can't buy more product when you already have product in the store. Run specialty stores can't keep 100 pairs of the Brooks Ghost 12 and the next edition, the Brooks Ghost 13. They don't have space or money to hold those shoes.
Hypothetically, what if all run specialty stores opened for business as usual and brands conducted themselves as pre-COVID-19? (We know this can’t and won’t happen but what if it did). What if sales went back to the usual June flow? How long would it take for many brands to financially recover from this 2-month stint?
Many brands are saying 4-6 months to recover and get back to typical sales.
If the situation continues: how long can brands continue operating like this?
Many brands have said they have 3-6 months before they will be forced to file for bankruptcy.
Now, how can you help?
Shop locally. Buy your running shoes from your local running store. Your running shoes should be the same price, so why does this matter? When you buy a running shoe from a running specialty store, the running store is purchasing the shoe from the brand and help move the product.
Running specialty stores are interconnected to the shoe brands. When you buy from a local store, you are supporting both the local store and the running brand for the same price. Plus, many stores will get you the shoe faster than you could get online. For instance, at RunningCo. of Haddonfield, if the shoe is in stock and you're local, you might get it within 24 hours.
This helps move inventory so stores will be able to buy new shoes to sell to runners and work down the chain of shoes.
COVID-19 has affected all industries, including the running world.
What's Keeping Me Entertained?
Article: Is it Safe to Run in Groups Again?
Article: Walsh says a decision about Boston will be made in the next week or 2
Podcast: The Morning Shakeout with Nick Willis (Nick is a professional runner who recently signed to be an employee of Tracksmith. Which starts a new type of sponsorship/partnership.
Shoe Review: New Balance Fuelcell TC (The carbon plated New Balance shoe)
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