ROCKPORT: EXPANDING IN THE CASUAL LIFESTYLE MARKET
Rockport is a leading global, lifestyle footwear brand. It combines
modern and stylish design with advanced comfort and
performance technologies derived from the athletic footwear
industry to provide a unique competitive advantage.
From a category perspective, Rockport has major growth initiatives targeted at the urban/metro, outdoor, technology-oriented and women’s segments of the casual lifestyle market. The brand strives to connect with many different consumer groups through a well-defined product segmentation, a disciplined channel-specific distribution strategy and the continued incorporation of industry-leading technologies such as adidas TORSION® into its product. Leveraging the Group’s infrastructure (e. g. in emerging markets) is also a core element in Rockport’s growth strategy. The brand expects to continue to grow its North American business while achieving increased sales internationally (i. e. outside of North America) going forward. By 2010, more than 50 % of Rockport sales are expected to be generated in Europe, Asia and Latin America.
OPTIMIZING EXISTING DISTRIBUTION
The wholesale business
accounts for 84 % of total sales in the Reebok segment. Historically,
Reebok’s distribution base has been rather narrow,
comprising only certain channels (i. e. athletic specialty and
family footwear) and a small number of customers. This distribution
approach created an overdependence on, and an overexposure
to, particular retail partners. Subsequently, Reebok’s
bargaining power and brand image were negatively affected. In
line with the Group’s approach to diversify distribution, Reebok
is now broadening its distribution mix and increasing its presence
in other retail formats (e. g. sporting goods and department
stores) in order to:
Improve brand image and regain credibility in sports,
Better service existing distribution channels, and
Reduce its customer risk. 
see Risk and Opportunity Report
In addition, Reebok increasingly differentiates its product assortment amongst retailers to best meet the needs of various consumer groups. The core distribution channels for Reebok-CCM Hockey are specialist stores and sporting goods retailers. Rockport products are primarily sold in department stores and the family footwear channel. By segmenting the brand and differentiating the product offering available for retailers, Rockport ensures a broad-based distribution of its products.
GROWTH OPPORTUNITIES THROUGH CONTROLLED SPACE
Reebok increasingly focuses on the roll-out of shop-in-shops
with retail partners in mature markets, while expanding
its own-store base as well as its mono-branded store network
in emerging markets. In the near-term future, factory outlets
will remain the most important format within Reebok’s ownretail
strategy in North America. Reebok-CCM Hockey mainly
focuses on working closely with partners such as the NHL to
establish jointly managed co-branded stores.
Building on its 2007 momentum (e. g. store openings in Russia and China), Rockport is expanding its own concept store base (particularly in emerging markets) and increasing its efforts in partnering with retailers via shop-in-shops. Further, Reebok and Rockport are significantly extending their e-commerce platforms to make the online channel another important element of their distribution mix. Overall, own retail accounts for 16 % of Reebok segment sales.
IMPROVING BRAND MANAGEMENT AND GAINING MARKET
SHARE VIA DISTRIBUTOR BUYOUTS
Reebok, Reebok-CCM
Hockey and Rockport have each established own sales organizations
in major markets around the globe. Nevertheless, all
three continue to work with third-party distributors in many
markets. To better control brand management and gain market
share, Reebok and Rockport continue to buy back distribution
rights for the Reebok and Rockport brands or wait until
expiration of existing agreements with distribution partners to
eventually set up their own sales organizations. The buyback of
distribution rights offers additional sales potential
and represents
the most important area of Reebok revenue synergies. see Outlook
INCREASING AVERAGE SELLING PRICES
To reinforce its position
as a premium sports and lifestyle brand, Reebok’s goal is
to significantly improve and increase its product offering at
high- and mid-price points to drive growth in average selling
prices. This approach may slow short-term top-line development
by voluntarily foregoing commercial opportunities in the
low-price segment. More importantly, however, it enables
Reebok
to build a platform for sustainable sales and profitability
growth and preserves the brand’s image.
