The Moss Adams Apparel Market Monitor shows that public companies, with the exception of the Youth Lifestyle category, continue to outperform the overall stock market. Previews of Agenda WMNS at Long Beach, Agenda NYC and Agenda Vegas. Now on Industry Insight.
The crew at Podium are some of my most loyal readers and we've been trying forever to get together and talk about what's going on with their business. Everytime we have an appointment, something seems to come up for one of us and we haven't been able to make it work.
We finally decided to go the email Q & A route, and I'm happy to say today we check in with Podium Distribution Vice President Brian Dunlap. Brian answered some questions about Podium and its skate brands: DVS shoes, Matix clothing - including a new headphone launch, and Lakai Limited Footwear.
Q. We're at the half year mark for 2009. How is business shaping up so far this year for Podium?
A. We have actually had a very encouraging first quarter. Year-to-date numbers for all brands are on track thus far with what we had forecasted. With seeing the drop off in 2008, we did our best to plan our sales forecast accordingly. Overall it has been a really tough year, but we have been getting creative with sales and doing our best to keep everything on track.
Q. Any surprises good or not so good?
A. I guess one of the biggest surprises is how creative you become when you are forced to do so. It's amazing the adjustments we have made to design, sales, marketing, and accounting that have really paid off. Let's face it, we are all in the same boat with retailers closing shops, slow accounts receivables, etc. It comes down to proper planning, creativity and aligning yourself up with partners (retailers) that we feel will come out of this mess stronger than before.
Q. What is new with DVS? Are there any categories or channels of distribution that are going particularly well?
A. We have really been focusing in on the product to make sure we have the right product mix for our segments of distribution. Retailers want product that is going to work and are not as open about bringing in large amounts of SKUs as they have been in the past. Product has to be spot on these days. As well there has a been a good working effort to take certain projects like Daewon/Almost/DVS and Chico/LRG/DVS (a shoe collaboration with LRG) and execute a strong plan from conceptual product design all the way through marketing and in store presence.
Q. Are there any interesting business trends happening in the skate shoe market?
A. One thing we are seeing is a lot more at-once orders. In the heyday, retailers were ordering huge prebooks, but for the past several seasons they have obviously curved their buying habits and we have done the same. Retailers have become so cautious on prebooks that top selling styles are running out very quickly. We try to identify those SKUs and have enough on hand, but you never have enough of a good SKU. It is very similar to how things were back in the mid-to-late 90's.
Q. Retailers tell me the juniors business has been tough of late. Are you finding that with Matix girls?
A. Yes, this has been a tough category for everyone. We have been adjusting our line size and designs to trend with what is going on in the marketplace. This business has been driven by a handful of majors and when those dropped off in '08 we felt the effects. The bright part is we have been getting some really good sell-through reports recently, so we know the retailers who are supporting the program are doing well with it. We just finished up our spring line and think it is a by far the strongest collection we have ever built.
Q. What is happening with Matix overall and how do you see the brand evolving?
A. We have really been concentrating to make sure each and every item that goes into the line has a place at retail and fits with the brand's image. Even though times are tough, it is not a time to be offering items or price points that will jeopardize the brand position for the long haul.
We have also been doing everything we can on the marketing front to make sure our brand is visible with the kids through our athletes, print and web media. We just launched a headphone program for Holiday 2009 that will be shipping this October. There was some internal speculation about launching a new program in this environment, but we felt strong about it and moved forward. For Holiday '09 we did a soft launch, and will follow that up with a full category blitz for Spring 2010.
Q. How is business for Lakai? Are there some pockets of strength in the core market?
A. Yeah, Lakai has been a real bright spot and performing extremely well even in these conditions. Since the release of Fully Flared, sales in general have been heading in the right direction. Sell-through at retail seems to be doing really well which is a great sign for the future. Future prebooks are really strong which is great to see in this type of environment. It is a niche market, with a tight distribution, but the kids who get it, really get Lakai.
Q. How has the recession impacted Podium?
A. Just like it has most U.S. companies. Times are tough, no doubt about it. We have been doing this for a long time now and feel we have made the necessary changes to keep us on the right track. There is a really strong group of people here at Podium and our success is not due to one person but the entire group. I can't think of a better team of employees than what we have assembled here. Very fortunate.
Q. Are there a few key things you have learned as a business person during this time that will help you in the future?
A. The biggest thing is controlling expenses. We have had years and years of growth for all brands which means we added new employees, athletes, and marketing adventures year after year. But with the downturn in sales we have had to really scrutinize where our money is being spent. I think in general it is making us run a much smarter business plan which in turn will help our business in the future.
Q. Everybody is looking for some good news during the gloom. Do you have any bright spots to share?
A. As I mentioned above, we are seeing glimmers of light with at-once orders increasing, inventory shrinking, and the knowledge of who we want to partner with well into the future. These times have been very difficult, but it has forced us to be smarter and we will be much better because of that. Our industry needs to go through these stages so we can weed out the excess and get back to the basics. Just be thankful we are in this industry, and not selling cars.