SNEWS Special Report: A broken supply chain? The retail perspective

The quest to help facilitate the discussion around finding a solution to a badly flawed outdoor industry supply chain began with an email plea to SNEWS® in March from a number of retailers. The email called out a list of challenges to the way we buy and sell, from a retailer's perspective:

• too many trade shows, both regional and national exist, and yet we keep adding more;
  
• early preseason and pre-show buying deadlines keep moving forward at an alarming rate;
  
• rep line previews are taking longer, as is the amount of time required to write an order, sometimes as much as four days, for a single brand;
  
• minimum order amounts for best terms continue to escalate in price, making them unreasonable for most small specialty retailers;
  
• reps for larger brands demand time in stores from buyers and store owners often during the busiest selling seasons, right when owners and buyers need to be focused on managing their business, brands and staff;
  
• and the pressure from too many vendors -- each selling too much me-too product -- to buy multi-categories from each vendor, often leading to retailers taking on inventory they don't want or need to get best terms.

As SNEWS started to peel back the layers of the onion to work on better understanding the issues from all sides, we quickly realized there was going to be no simple answer to what has become a very complicated issue. We spent several months investigating, including visiting factories overseas, interviewing numerous manufacturers (CEOs, production managers and designers), talking with sales reps, trade show organizers and other retailers. Then we chatted with industry consultants to seek opinions, garner background information and decide how best to proceed. One common thread began to appear among the complexly woven tapestry: Everyone shares some responsibility for how we arrived at the current supply chain problem and everyone must act collectively to find a solution.

Somehow, in the headlong race over the last 15 years to chase the almighty sewing dollar, we have managed to create a production and sales cycle that is so complex even executives coming into our industry from far more seemingly complicated markets shake their heads in wonder. Few retailers and even fewer manufacturers from other industries are making buying and selling decisions a year in advance -- decisions that can make or break a season or even a year.

Order lead times have lengthened, necessitated in part because manufacturers insist they need 10 months or more lead time for greige goods (i.e., unbleached and undyed textiles). That means reps are showing up in key stores in November, asking buyers and store owners to make buying decisions for products that won't deliver until the following August, intended to sell during the months of September through December.

The problem with this, retailers told us, is they often have no real idea what will sell through this year in order to make an educated guess as to what colors and styles might sell well next year. Worse, few feel confident enough about their personal crystal balls to place orders when there is no way to gauge the economy, trends or consumer buying moods that far in advance. In the outdoor specialty market, with few exceptions, the strongest selling season for most retailers is November through January (on average, 25 percent to 30 percent of all sales are made during this time). The second most important selling season appears to be May through mid-July. With the current ordering cycle, reps are coming into stores during the busiest selling seasons, and buyers and storeowners, and often key floor sales staff, are having to spend significant off-the-floor time in meetings. Retailers also point out that once the rep has left, their scramble is not done, as most manufacturers now are demanding paper by December for the fall deliveries and paper by late June and early July for the following spring deliveries.

If it were only as simple as viewing product and placing an order, that might be one thing, but retailers also tell us that during those same peak sales times, they have to be in contact with their sales reps by phone or email, national sales managers by phone, and in some cases, even sales VPs or company owners to ensure turns and profits are maximized and the best terms are worked out. Since every retailer is doing much the same thing, and there are only so many reps and sales managers to go around, retailers tell us that this leads to a circus of voicemail messages, phone tag dances, and games of hide-and-seek that are enormous time wasters. Multiply that scenario by 100 brands all demanding essentially the same performance and one begins to wonder how any business is getting done at all, let alone good buying decisions are being made.

Most retailers we spoke with are responding to the shifting economic climate and consumer buying habits by modifying traditional preseason and fill-in strategies to align more closely with inventory need. The majority is now allotting only 55 percent to 60 percent of their dollars for preseasons with the rest kept in pocket for fill-ins and chasing bargains. But manufacturers still seem to want retailers to essentially super-size their orders to gain the most favorable terms, we were told. And that just doesn't seem healthy either.

Retailers further explained to us that manufacturers seem to be on the same path, despite the economy, of trying to push preseasons earlier and earlier. Retailers assert that manufacturers apparently want to tie up more of the retailers' dollars earlier, so they can garner a competitive advantage and, perhaps, ensure earlier production time on the factory floors in Asia.

Not one retailer we spoke with told us manufacturers were lowering thresholds to garner the best terms -- even in this challenged economy. In fact, most manufacturers appear, according to retailers, to be insisting retailers maintain flat to increased business to earn best terms -- often requiring they take on more SKUs and a broader product mix than a retailer might wish to carry from that particular vendor. Retailers told SNEWS that while they suspect manufacturers are doing this to prevent cherry-picking of lines, this kind of business approach is not only short-sighted, it is the kind of strategy that created the overstock scenario many retailers found themselves in when the market collapsed in late 2008. And, it is this approach to force-feeding a retailer that is the primary reason why so many preseason orders were cancelled this spring, leaving manufacturers stuck with spring/summer inventory that had landed, but wasn't selling.

Additional preseason trade shows, regional shows, rep shows and moving the dates on what is currently considered our national show, Outdoor Retailer, are of no help and do nothing, really, to address the overall issue of a broken selling cycle, retailers said. The earlier the shows move, they said, the earlier still the manufacturers continue to push their reps to get in to see key retailers, and round and round the merry-go-round goes.

Retailers acknowledged, somewhat wistfully, that the days of heading to an August or January national trade show for the inaugural "show and tell" of new product, followed by the buying decisions either at the show or a month later, are long gone. There are too many brands with expanding product lines and production spread all over the globe for that to ever work again. In fact, some argued, we have too many brands to begin with now…but that's a topic for another day.

So, from a retailer's perspective, what are the solutions?
1. Stop all the show madness -- pre-shows, manufacturer preview shows, regional show additions and trade show date dancing. Less is more here.

2. Reps are welcome (begged for and wanted a number of retailers told us) in the stores November through December and June through July as long as they are there to drive sales by supporting the sales staff and working the floor, not give a line presentation. If manufacturers are creating a scenario where reps feel they need to be in the stores giving line presentations -- sometimes lasting multiple days -- then the manufacturers need to shift the order and production timelines to eliminate this.

3. Manufacturers need to realize that retailers are going to order less in preseasons, and as a result, require more with fill-ins. For retailers, it is about turns, not about how much has been preseasoned. Core products should never be out of stock.

It is VERY important, however, that everyone reading this, realizes, as SNEWS does, that the above is but one view of a very complex situation -- it is how retailers are looking at the supply chain problems. Next up, SNEWS will take a look at the distribution challenges through the eyes of the rep.

Our goal with this series of editorials is to engage the industry in healthy discussion. Perhaps open a few eyes to seeing things through a new lens, and, hopefully, help us all arrive at a series of ideas and action items that will, in the long term, lead to a healthier and more profitable industry for us all. --Michael Hodgson

Did you hear?...Economy negatively affecting vacation plans but silver lining for outdoor

According to a recent BIGresearch American Pulse Survey, conducted in April 2009, just under 59 percent of Americans say the economy has affected their vacation plans this summer. Many are making changes to their travel behaviors this summer, the survey indicated. Most frequently cited as a cost-cutting measure was reducing the number of days spent in a hotel (30.5 percent), while cutting back on the quality of a hotel registered just over 20 percent. Just over 27 percent said that the solution to save money on travel was to look for a local getaway that did not require long drives or air travel.

The survey question asked, "As a way of coping with the current economic environment, are you making any of the following changes to your vacation travel behaviors?" The survey had 4,023 respondents.

BIGresearch's blog provides a bit more insight and reason for optimism for the outdoor community. One response stated, "My husband and I are trying to regain money we lost in the stock market, so we definitely will not be going on vacation. We plan to take a few days for hiking in the Smokies where we live." Another stated, "The only vacation plan I have will be a picnic at the local park!" Yet another responded, "We are hoping to plan a camping trip to the UP of MI sometime, but that is as far as we are going to get unless the economy picks up."

Retail - SNEWS Mini-Survey provides look at how retailers are adjusting to the new economic climate

The SNEWS® Mini-Survey that ended March 26, 2009 asked, “What are you doing differently to help your retail business survive the current economy?” It was refreshing to read that more than seven of 10 (71 percent) of our respondents indicated they were emphasizing more customer service and follow-up. Not surprisingly, more than two-thirds or 68 percent responded that they were “keeping their inventories leaner” while 53 percent indicated they were carrying fewer SKUs in their stores.

As a bit of a wake-up call to suppliers and manufacturers, nearly half of respondents or 47 percent stated they were cutting out “marginal suppliers.” It was also interesting to note that 44 percent were relying on holding special in-store events with the goal of attracting new customers.

What did surprise us a bit in the results is that only 29 percent of our retail respondents indicated they were seeking to negotiate rent decreases or moving to cheaper space. Several reports in our ongoing economic series, which can be found by clicking here, point out that renegotiating leases is a valuable retail survival tool during this economic downturn, and we do know from conversations with some retailers who have done this that savings have been substantial.

And as for seeking to match prices with competitors, including big box, we were pleasantly surprised to see only 17 percent of our survey respondents indicated this was one of their strategies. Indeed price competition is a course of action that retail experts have also noted is not the way to win the war.

Our new survey question, “Have you found social networking sites to be beneficial to your business?” is now live and awaiting your feedback. We look forward to hearing if you use these sites as a part of your business and, if so, which ones.

To make your vote count, simply go to the SNEWS Reader Poll section in the right navigation bar of every web page in SNEWS or, click here.
--SNEWS® Editors

HUGE LANDS PACKAGE CLEARS CONGRESS, AWAITS OBAMA’S SIGNATURE

Bend, Ore., – the House of Representatives voted today to pass the Omnibus Public Land Management Act. The final vote in the House was 285-140. The bill passed the Senate 77-21 last week. The lands package now goes to President Obama for his signature, possibly as early as next Monday.

The legislation protects two million acres of Wilderness and 1000 miles of rivers, and prohibits new oil and gas development on 1.2 million acres in Wyoming. It also legislatively affirms the 26-million-acre National Landscape Conservation System.

“This is a major conservation victory that preserves wild places throughout the US forever,” said John Sterling, Executive Director of The Conservation Alliance.

Every conservation provision included in the legislation started at the local level where grassroots organizations led the charge to build public support to protect a special landscape or waterway. The Conservation Alliance supported the local organizations that led the efforts behind 12 of the 16 Wilderness provisions included in the package. The Alliance also funded the groups leading the efforts behind protecting the Snake River Headwaters, and closing the Wyoming Range to new oil and gas development.

In total, The Conservation Alliance contributed more than $700,000 to ten different organizations whose good work eventually wound up in the package. The Alliance also worked in close partnership with Outdoor Industry Association to demonstrate that the outdoor industry stood uniformly behind the provisions in this package.

“This is a big victory, and we did everything within the limits of our lean staff capacity and financial resources to ensure it crossed the finish line,” said Sterling.

Click here http://conservationalliance.com/UserFiles/File/OPLMA08.pdf to view a summary of the conservation provisions in the bill.

About the Conservation Alliance:
The Conservation Alliance is an organization of outdoor businesses whose collective contributions support grassroots environmental organizations and their efforts to protect wild places where outdoor enthusiasts recreate. Alliance funds have played a key role in protecting rivers, trails, wildlands and climbing areas.

Membership in the Alliance is open to companies representing all aspects of the outdoor industry, including manufacturers, retailers, publishers, mills and sales representatives. The result is a diverse group of businesses whose livelihood depends on protecting our natural environment.

Since its inception in 1989, the Alliance has contributed more than $7.4 million to grassroots environmental groups. Alliance funding has helped save over 40 million acres of wildlands; 26 dams have either been stopped or removed; and the group helped preserve access to more than 17,000 miles of waterways and several climbing areas. For complete information on the Conservation Alliance, see www.conservationalliance.com

Industry Watch: Keeping an eye on layoffs, bankruptcies and closings… Who’s next?

2/9/09
Precor
Amer confirms in its 4Q financial report that Precor had two rounds of layoffs in Q4 resulting in 41 positions being terminated. Click here to read SNEWS coverage.

2/11/09
Nike
Nike announces reorganization plans that could result in up to 1,400 employees losing jobs by end of year. Click here to read SNEWS coverage. And click here to read blog posting on news.

2/11/09
REI
Based on a significant business slowdown in the final months of 2008 and continued projected weakness in 2009, REI announced the elimination of 61 full-time jobs, which represents less than 2 percent of its full-time workforce. Click here to read SNEWS coverage.

2/20/09
Gymcor.com
Kelley Acevedo and his staff at GymCor.com stopped returning calls and emails, and, it appears, have emptied their offices and slipped away. Click here to read SNEWS coverage.

2/24/09
Horny Toad / Nau
As part of restructuring following the Nau acquisition, Horny Toad confirmed that five employees lost positions at Horny Toad, and then in February two more, including Ian Yolles at Nau were let go in Portland.

2/24/09
Champion / Duofold
Hanesbrands has about 45,000 workers in more than 25 countries. Last month the company said 310 jobs will be cut when it closes its Barnwell, S.C., sock-knitting plant and moves production to El Salvador by the end of April. Hanesbrands has been cutting jobs and closing plants in an effort to streamline operations and move production to other countries since it spun off from Sara Lee Corp. in 2006.

2/25/09
FHI, Omni, Busy Body
On Feb. 23, the remaining 24 stores, i.e. the eastern branch of Fitness Holdings International's formerly dominating 120-store national chain, were going to start close-out sales, signaling the eventual demise of the stores. Although once at a peak of 120 stores, FHI at the time of the October filing said it ran 111 stores -- 67 Busy Body and 44 Omni. In late October, the court approved closing 20 stores, and then added four stores to the list in November and another 30 in December. Add those 54 to the current 32 and that leaves 25 stores, which are now only in California and Colorado. Presence in Arizona, Nevada and Washington has already been eliminated. Click here to read SNEWS coverage.

2/27/09
Body Masters
After three decades of manufacturing high-end commercial fitness equipment, Body Masters has shut down operations. Knight Companies, a firm that specializes in oilfield and fishing tools, has acquired Body Masters' bank note and is foreclosing on the manufacturing facility including most of the manufacturing equipment. Click here to read SNEWS coverage.

3/2/09
Marmot / ExOfficio
Four employees at Marmot, including industry veteran John Cooley, as well as four employees at ExOfficio were laid off. Click here to read SNEWS coverage.

3/2/09
Accell Fitness
Accell said production was cut back in Estonia and purchasing is now fully concentrated in Asia. Also, R&D and purchasing activities in Finland were terminated, and were centralized at the head office in the Netherlands. The sales offices and warehouses in Germany, Switzerland and Austria were closed and stock management was transferred to the local distributors. These markets are now managed centrally from the Netherlands. Because of redundancy, 25 jobs were cut. Apart from the head office in the Netherlands, Accell said the fitness division still has sales outlets, including warehouses, in Finland, the United Kingdom and North America.

3/2/09
Big 5
Big 5 said it reduced its employee headcount by 9 percent last year through attrition.

3/2/09
Hardbody Fitness
After 7 years running Hardbody Fitness specialty shop and All Sports sporting goods, owners David and Brenda Hayes announce they are shutting when December 2008 sales plummet. Click here to see a SNEWS report.

RETAIL - Six ways to successfully promote your store's eco-conscious product mix

Does your outdoor specialty store boast an array of eco-friendly products? If your merchandise mix does have green leanings, you could boost sales by making the consumers in your area aware of your specialty. Savvy green-oriented retailers are using everything from promotional mailers and catalogs to print advertising and street-side merchandising to get the word out about their eco-friendly product mix. Could any of these strategies work to strengthen your bottom line?

In the mail: Some outdoor specialty retailers have found that direct mail advertising suits them just fine. "We recently sent out a holiday mailer that featured a special section of eco-friendly and sustainable products," said Sharon Scott of The Summit Hut. At REI, a holiday catalog also spotlighted the chain's expanding mix of eco-conscious products with a specially designated two-page section. In addition, other sustainable items in the catalog were pointed out with a green icon. "We launched the ecoSensitive label in 2007 to help our customers make informed decisions on the products they purchase by designating REI brand products made from materials with a high percentage of renewable, recycled and/or organic fibers," said Bethany Nielson, a spokesperson at REI. Currently, the ecoSensitive line includes almost 70 styles of men's, women's and kids' apparel plus gear.

In the press: Advertising your specialty in local or regional newspapers and magazines can also effectively get the word out. "We do some advertising in the local newspaper, local alternative monthly, and quarterly coastal magazine," said Judson Moore, owner of Unfurl, a natural clothing boutique in Manzanita, Ore., that carries a large number of outdoor brands. "The niche magazines are a little bit expensive to advertise in, but we get the most for our money there." The ads run by Unfurl typically talk about the store's eco focus and list some of the relevant brands. Some warn, however, not to go overboard touting your green nature. "You don't want to over-claim and be perceived as greenwashing," said Beezer Molton, owner of Half-Moon Outfitters in North Charleston, S.C. -- a recent SNEWS/Backpacker Retailer of the Year award winner in the sustainable business category, click here to read story.

At retail: Many outdoor specialty retailers still believe the best way to reach customers is right in their own store. At REI, ecoSensitive products are identified with a distinct icon that is printed on the hangtag. At Peak Sports in Corvallis, Ore., owner Jeff Katz highlights eco-conscious products in-store by having the staff call out their favorite products once a month with an index card on which they write their thoughts about the item. "We also have a color coding system that shows what category the highlighted item falls under; for example, a green item has a green card," he said.

On the street: Some believe green merchandising should be taken outside for maximum effect. "Put something just outside your front door that draws people in," said Unfurl's Moore. "Even showing something like an antique chair with a cool old suitcase that has a green product in it really helps you get some of your store presence outside."

On the web: If you have a website, this could be an impactful (and extra green) way to promote your eco products. Online at REI.com, all ecoSensitive pieces are grouped together and easily accessible on one page. "This area is devoted entirely to educating our customers on the ecoSensitive products we sell," said Nielson, "and on the pros and cons of certain green materials used by many manufacturers."

Truly green: Put your money where your mouth is and make your business truly green by investing in things like alternative energies for your own store. This type of outreach will definitely draw attention to your business as a green-oriented one. "We were the first business in our town to buy blocks of wind power for our energy needs," said Peak Sports' Katz, who just received an award and recognition for this distinction. While this does not relate to product, it sure brought this retailer's consciousness into the public's awareness.--Erinn Morgan

SNEWS® Mini-Survey underscores the mood of fear for the future linked to the economy

The SNEWS® Mini Survey that ended Feb. 17, 2009 asked, “If the economy does not improve in the next six months, do you believe additional businesses are at risk of going under?”

An overwhelming 90 percent of the responses were affirmative, while only 3 percent of all respondents felt more businesses were at risk. Just 7 percent indicated they thought that “maybe” more businesses were at risk of going under.

Viva Las Vegas: Like Elvis, SIA has left the building

For the past 37 years, the SIA SnowSports Show was on a roll in Las Vegas. But in 2010, the show will cash in its chips and try its luck in Denver, Colo. Not surprisingly, the big question on everyone's mind -- right after the economy -- was whether SIA '09 would be a blowout farewell party or a sparsely attended funereal affair. As it turned out, the mood at the recently concluded show (held January 24-27 at the Mandalay Bay Convention Center) was mostly upbeat.

SIA's management projected 20,000 attendees (up from 17,350 reported in 2008), with the show covering 348,000 net square feet (compared to 357,000 square feet in 2008) and 445 exhibitors representing an estimated 800-plus brands exhibiting in 3,479 booths (compared with 421 exhibitors representing 1,000 brands reported in 2008). SIA told SNEWS® it will have audited attendance and exhibitor numbers to report Feb. 13.

On the first day of SIA '09, Anthony DeRocco, vice president of global product development at K2 Sports, remarked, "The show energy is good. It's tough to get a read on attendance, but our goal is to do business."

When asked about the move to Denver, DeRocco echoed the sentiments of many vendors when he responded, "I'm looking forward to a new venue to shake things up a bit. Change is good. Frankly, I'm really excited. The question is the draw of Denver for retailers."

Charles Lozner, brand director of K2 Outdoor, which includes Tubbs, Karhu, Madshus and Atlas, was also enthusiastic. "SIA feels busier year-over-year than Outdoor Retailer. We're getting a lot of walk-in traffic." He added, "I'm ecstatic about Denver. You have to take the show to where it makes sense. Also, Denver is welcoming SIA with open arms."

While there is no question that the U.S. economy was (and still is) in the toilet, Mother Nature and Jack Frost joined forces to help the snowsports industry by providing plenty of cold, wet/snowy weather in most parts of the country during December and early January. As a result, product sell-through was fairly strong, particularly on the hardgoods side (albeit at closeout and discount prices). But now that retailers have cleared out much of their current inventory, will they be able to secure the funds needed to invest in product for next season? Therein lies the true gamble.

"In terms of open-to-buy, SIA is not a large writing show," explained K2's DeRocco. "There's a lot of caution in the market, but lots of good snow globally. We're snow farmers. Sell-through is off, but it's an opportunity to grow market share."

As is usually the case at SIA, each day offered a smidgeon of craziness in the aisles. The highlight occurred on day two, when rock icon Gene Simmons of KISS -- yes, he's the one with a tongue that is proportionally as long as that of a tube-lipped nectar bat -- was escorted around the show by a couple of burly security guys and a compact harem of scantily clad women. His mission was to help launch the MoneyBag snowboard and ski accessory line, a partnership with Dussault Apparel. Apparently, Simmons set a few tongues wagging at the New York Times (page B12 in the Jan. 31, 2009, edition) when a reporter there discovered that Swiss ski maker Faction Collective S.A. used an image of Simmons on a pair of skis without first obtaining permission. Much to the company's surprise and horror, the rock relic spotted the skis while en route to an interview. Faction is now trying to license said image.

Key trends SNEWS identified during our time at SIA:

Consumer spending
By most accounts, snowsports consumers are still spending money, but they want value and are demanding full feature sets.

"People are still skiing," said Leslie Baker-Brown, Tecnica's director of marketing, ski division. "If it's in their DNA, they're not going to stop. Skiing makes people feel good, so we're cautiously optimistic." She added, "While consumers are cautiously shopping, and are looking for a good deal/value, we see that they are still willing to spend for a good product. And a good value does not necessarily mean low price."
Hardgoods
• Flat backcountry skis are strong sellers, and many vendors are expanding their offerings. For example, K2's new Adventure Series boasts gender-specific, flat-tailed skis with a slight bit of rocker on the tips, and all models are compatible with alpine, alpine touring and telemark bindings. This is part of a broader trend of greater consumer demand for adaptive skis that can be used in a variety of snow conditions. (This is also in keeping with the consumer trend at retail to spend on skis while trying to save on bindings.)
• Women's-specific skis and snowboards continue to be growth categories.• Snowboard and ski topsheets boasting unique artwork, color and design remain extremely popular. The same is also true of snowboard boots, such as Nike Snowboarding's Zoom Force 1 DK-YS model that is part of an ongoing series.
• The use of eco-friendly materials -- as well as environmentally responsible manufacturing processes -- is spreading beyond the apparel and accessories markets. For instance, vendors including Rossignol, Salomon and K2 are making a concerted effort to use less material, and fewer inks and solvents, in skis and snowboards.

Apparel
• Wearable electronics are now de rigueur.

• In ski apparel, jackets and pants that can be zipped together to form one garment are becoming more prevalent. Kjus and Helly Hansen both offer such options.
• As in hardgoods, unique artwork incorporated onto apparel (think artist collaborations) is very popular, though pricey. In the snowboard realm, large plaid patterns -- particularly black-and-white and pink-and-white combinations -- are readily apparent on outerwear, hats, and even boots.

Rental market
For consumers who are just getting into Alpine skiing or snowboarding and are reluctant to invest in the gear, and for those who enjoy visiting resorts but hate having to schlep lots of equipment, the rental market now offers a wide range of solutions.

According to Tecnica's Baker-Brown, "(The market) is growing, but not as much for boots as it is for skis. We think that going forward, given airline baggage fees (and other travel expenses), people will still bring their own boots because of the fit issue, but they will rent skis."

Kelly Davis, SIA's director of research, concurred, adding, "The rental market is an important segment of the snowsports market -- in fact, about 20 percent of skis and 5 percent of snowboards were sold into the rental market last season."--Judy Leand

Special Report - Part 2: On Your Mark -- Strategies for protecting trademarks from becoming generic terms

Protecting a brand trademark from becoming part of the common vernacular isn't an issue just for large corporations like Kleenex and Xerox. In Part 1 of our special report on Jan. 30, 2009, SNEWS® examined how outdoor industry companies navigate the turbulent waters of brand trademarks to protect them from becoming generic terms, also known as "genericide." Click here to read Special Report - Part 1: On Your Mark -- Protect trademarks from being slaughtered by 'genericide'. In today’s Part 2, we talk to trademark experts, as well as companies that have dealt with legal battles, about strategies for both supplies and retailers to employ to protect a brand and trademark.

When determining whether or not a trademark name is generic, courts ask a fundamental question: Can you trace the trademarked word to a specific source?

Swiss Army is a term synonymous with a multifunction tool, but can you trace the words "Swiss Army" to a particular company? For a long time, that was a big question. Since the 1890s, Victorinox (now Victorinox Swiss Army) and Wenger both produced red-handled multifunction tools for the Swiss government, and neither could claim the sole trademark, as you couldn't trace the product to one manufacturing source.

Do’s and Don’ts to keep your trademark in good shape

Do:
>> Use a trademark in distinct type – Capitalize the entire trademark or set it off from other words through bold or italicized typeface: MIDAS® not Midas.

>> Use a mark as a proper adjective – Associate the mark with the descriptive name of the product or service in all labeling and sales promotional pieces, feature or technical articles, published reports and news releases: MEDTRONIC® pacemakers.

>> Use a mark with notice of its status – If the mark is registered with the U.S. Patent and Trademark Office, use one of the following with each mark: ® or TM (trademark) or SM (service mark).

Don’t:

>> Use a mark as a noun – Wrong: LR Mate® keeps costs under control.

>> Use a mark as a verb – Wrong: Let’s go Rollerblading.

>> Change a mark’s form, such as adding hyphens – Wrong: Buffalo-Wild-Wings®.

>> Use a mark in a possessive form – When it comes to waterproofing technology, Event’s
popularity has really grown.

>> Use a mark to modify or describe any words other than the appropriate generic or descriptive name – Wrong: Trail runners stay hydrated when they use a Camelbak system. Right: The Camelbak Octane XC hydration pack is convenient for trail runners.

>> Abbreviate a mark – Wrong: GSI. Right: GSI Commerce.

>> Wrongly identify a mark as registered unless it is filed with the U.S. Patent and Trademark Office – Wrong: Indoor Studio Cycles® pedal as well as any indoor bikes.

Information courtesy of Intellectual Property Attorney Dean Karau (dkarau@fredlaw.com)

With no company holding possession of the trademark, other knife manufacturers perceived that the Swiss Army term was generic. In the early 1990s, the Arrow Trading Company began to import pocketknives made in China that had red handles emblazoned with the words "Swiss Army." In 1992, Victorinox sued Arrow for false advertising and unfair competition.

"This was hard-fought litigation that went on for 10 years," said David Weild, a lawyer with Edwards Angell Palmer & Dodge LLP, which represents Victorinox Swiss Army. In the end, the court determined that Victorinox and Wenger could be considered the source for Swiss Army knives, because the term had become synonymous with high-quality tools made by these particular manufacturers. In 2004, Victorinox and Wenger were granted trademarks for Swiss Army, and in 2005 Victorinox purchased Wenger, further establishing itself as a single source.

Yes, the legal wrangling over trademarks can be confusing, but it just goes to show the headaches that can occur when a trademark name is not solidly connected to a particular company. If a company might be faced with a decade of litigation, it makes sense to aggressively prevent generic use of a brand name.

Bending over backward
Some companies go to great lengths to prevent genericide, including behemoth companies like Xerox. But does such a large company really have to worry about losing its trademark? Well, yes.

The Xerox Corp. had watched its trademark name being used synonymously for "photocopying." The company successfully addressed it with an extensive public relations campaign asking consumers to "photocopy" rather than "Xerox" documents. The company won the battle…mostly. It lost the campaign for the use of the word in Russian, Bulgarian, Romanian and Portuguese, in which Xerox is now a genericized term. Even recently -- the battle never is over, you see -- the company addressed the situation again, placing an advertisement in the November 2007 issue of the ABA Journal of the American Bar Association. With lawyers reading the publication, it's certainly important to keep awareness high. The ad showed a zipper placed over the word Xerox on the page. Below that was the following copy: "If you use 'Xerox' the way you use 'zipper' our trademark could be left wide open."

Eye-catching, yes? And, then to explain it further, came this: "No one likes to leave their name open to misuse. Which is what happens when you use our name in a generic manner. Basically you're putting it in a compromising position, which could cause it to lose its trademark status. That's what happened to the name 'zipper' years ago. So when you use our name, please use it as an adjective to identify our products and services, such as 'Xerox copiers.' Never as a verb: 'to Xerox' in place of 'to copy,' or as a noun: 'Xeroxes' in place of 'copies.' Now that you're aware of all this, that should just about zip things up. Thanks."

The Xerox ad brings up an important issue in preserving a trademark. A company -- and, of course, its retailers -- is not only required to protect its trademark, but it must not contribute to its use as a generic term.

Be careful what you say
"The reason a term becomes generic is due to the tension between marketing and trademark law," said Dean Karau, an intellectual property lawyer with the Fredrickson & Byron firm in Minneapolis, Minn. "Trademark law respects and gives right to distinctive terms that can help the public distinguish the source of products. Marketing oftentimes wants to be descriptive. And when you use a trademark descriptively, the public becomes conditioned to use it in the same way. That's when it morphs from a trademark to a generic term."

To understand this better, simply look at the company Google and what has happened to its name. For a modern success story, it's also a prime example of a company that might be putting its trademark in jeopardy. Unless you've been stranded on an island for the past few years, you know that Google has quickly morphed into a generic term for "search" on the Internet. In 2006, Google allowed Pontiac to run a TV ad with a voiceover that said, "Don't take our word for it, Google 'Pontiac' to find out."

When Google allowed its trademark to be used as a verb, it effectively endorsed the notion that its trademark was a generic term for performing an Internet search. You'd think the Google lawyers would have known better. Complicating matters, in 2006 the Oxford English Dictionary actually included Google as a verb.

Now, we know what you're thinking: Google is a big company that has such command of the search engine market that no competitor could challenge its trademark. Sure, that's the case now, but things change, especially when it comes to the high-tech world.

"Where they have to be worried is, as the search engine field levels out and they get serious competitors, they may have problems," said Karau. Google does have the advantage because it was the first highly recognized search engine and ruled the market early.

"Google became the leader so quickly, even though it is being used as a verb and noun -- every wrong way you can use it -- people still know exactly (what brand) you're talking about," said Karau.

W.L. Gore, GU and other outdoor trademarks such as CamelBak have had a similar advantage. These brands launched product categories, and they have gained some advantage by becoming synonymous with waterproof apparel, energy gels and hydration systems.

"If a customer is in a retail store and sees a selection of eight varieties of energy gels, they'll likely go with GU because the brand is safe and familiar," said Holly Bennett, senior marketing manager at energy-gel maker GU.

But Steve Shuster, global brand manager of W.L. Gore, warned that consumers can quickly shift their loyalty. "I could be aware of a lot of different brands, but if I don't understand the essence of the brand I can be moved off that," he said. And this really gets to the heart of genericide. When consumers no longer equate a trademark with a certain manufacturer's product with distinguishable traits or quality, then words, like Xerox or Thermos did, become nothing more than common lingo.

"We want to create a unique identity so consumers go into a store insisting on the Gore-Tex brand," said Shuster. "Having that leadership position is advantageous, but we need to make sure it's understood that not all products are created equally."

If you doubt the potential damage of genericide, just browse the drugstore aisles for "aspirin" -- yeah that was once a trademark name too. We swear. Google it and check for yourself. --Marcus Woolf

Missed Part 1? Click here to read that Jan. 30, 2009 installment.

HERA Foundation Announces the Passing of Founder Sean Patrick

CARBONDALE, COLO. HERA Foundation founder Sean Patrick, 57, died of complications related to ovarian cancer on January 20, 2009. She was a remarkable person who touched many lives in profound ways. Ms. Patrick was diagnosed with ovarian cancer in 1997 and established the HERA Foundation (health, empowerment, research, awareness) in 2002. Under her guidance, the non-profit has made great strides in raising funds for ovarian cancer research and awareness. She received Climbing Magazine’s Golden Piton award in 2005 in recognition of her outstanding community service. In 2004, Ms Patrick was featured in a one-hour special on the Jane Pauley show, sharing her inspiring journey facing ovarian cancer.

A recognized leader in the cancer community, Ms. Patrick sat on numerous boards for cancer related organizations, including the Blanton Davis Board, M.D. Anderson Cancer Center. She was also a member of the Ovarian Cancer National Alliance’s public education committee and the SPORE External Advisory Committee at M.D. Anderson Cancer Center.

Born April 5, 1951 in Peekskill, N.Y., she was awarded a Bachelor of Science degree in fine arts from Skidmore College, Saratoga, N.Y. in 1973. Upon completion of college, she was selected for an art fellowship in Florence, Italy. In 1988, Ms. Patrick founded the Impact Group, a strategic marketing and design firm based in Western Colorado. She was an avid rock climber, skier, cyclist and scuba diver. Beyond HERA, Ms. Patrick adopted a selfless attitude in everything she did, and dedicated her life to helping others overcome life’s challenges. Her community work and volunteer service over four decades inspired young men and women in many communities. Below is her personal statement. It is a testament of her passion. She will be greatly missed.

Sean Patrick, Founder HERA Foundation & Climb4Life Event Series The years since Sean Patrickʼs diagnosis with ovarian cancer have been a melting pot of emotion. Though now sheʼs at the point where she can say, “Cancer does not mean life is over; you can survive and thrive, do new things and learn new skills.”

For Sean, a self-proclaimed type-A overachiever, this has meant learning not to sweat the small stuff. “Life happens and the only thing you have control of is your attitude,” she says. “You can deal with it with a bad attitude or a good one…and life is just more fun with a good attitude.”

In 1990 this longtime resident of Carbondale, Colorado and avid skier, mountain biker and hiker, learned to rock climb - - a sport that encompasses all that she loves in life: problem solving, taking calculated risks and physical and mental challenges. Seven years later, at age 46, she reached an advanced level in climbing, 5.12a. At the same time, she faced the greatest test of her life: a diagnosis of ovarian cancer. The cancer diagnosis came as a shock since she had no family history of ovarian, breast or colon cancer.

During her recovery from surgery she decided to use her passion for the outdoors and resolve the lack of awareness, information, and funding for ovarian cancer. Creating the HERA (Health, Empowerment, Research and Advocacy) Foundation and the Climb for Life, her goal was to empower women to take control of their health, empower scientists to find new directions in ovarian cancer research and to empower communities to provide support.

Having met the Johns Hopkins Director of Gynecology/Pathology, Johns Hopkins approached her to get involved with creating an ovarian cancer website. Taking it a step further, she worked to create the HERA Foundation’s Web site, www.herafoundation.org, which receives 40,000 unique visitors monthly from 97 countries and has been translated into Chinese and Spanish.

Sean and the HERA Foundation have touched the lives of countless women around the world – some scared others frustrated, but all in need of support during a time more stressful than most of us can imagine. In the whirlwind that has become her life as an advocate for women Sean passes on the valuable lesson sheʼs learned:

”We all have the power within us to change the world in a positive way. It just takes one idea, one individual, one scientist, one company or one community to make a difference in the world. Thatʼs the power of one.”

On this date that brings a great loss, Sean held great hope that with the new administration there will be a much-needed change in our health care system. A memorial service for Ms. Patrick is planned for April 2009; details to follow at www.herafoundation.org. To continue her legacy, please make donations to the HERA Foundation, www.herafoundation.org.

About the HERA Foundation
The HERA Foundation is a registered 501 (c) 3, whose mission is to stop the loss of mothers, daughters, wives, sisters, partners and girlfriends from ovarian cancer by empowering women to take control of their health, empowering the medical community to find new directions in ovarian cancer research and empowering communities to provide support. For more information, visit www.herafoundation.org.

Industry Watch: Keeping an eye on layoffs, bankruptcies and closings… Who’s next?

Among mainstream stores and suppliers, lists grow longer each day it seems of shutterings, bankruptcies, layoffs and rumors of demise. From Mervyns and Home Depot, to Circuit City and Starbucks, we read daily about the financial and human toll the economy is taking on businesses.

The same sadly holds true for our industries. We hear reports and rumors daily about a manufacturer or store that is or will be laying off more employees or reducing stores -- or filing for bankruptcy protection. To survive, those decisions could be a necessary evil, but it could be argued that some companies are in this situation only because they were not as smart about growth as they could have been – and may not have or are not now taking the appropriate steps to survive the slowdown. Remember the dot-com era? One website (www.fu_____company.com – you fill in the blanks since there was one word that not even SNEWS® is willing to publish) tracked the dot-com industry’s unfolding drama of companies collapsing and workers losing everything – click here to find what is left of that website. Ironically, like the dot-com’s it covered, it too hasn’t survived – perhaps that’s a good sign – and can’t even sell its URL.

Starting today, in a less morbid fashion we hope, SNEWS is tracking the economic impacts, both large and small, as outdoor and fitness industry companies work to navigate through today’s marketplace of minefields. In the chart below, you will find a company name, the date of some “action,” a brief summary of the situation – layoffs, closings, bankruptcy filings – and then a link to the appropriate SNEWS news with more information and details. It is certainly sobering to see an account of the impacts on our industries in one list, rather than scattered here and there among headlines and archives as individual articles. We will keep you posted as we update the list when new reports of turmoil roll in. Feel free to drop us a note at snewsbox@snewsnet.com if you know of companies or individuals who have been impacted and should be added to our list – or of ones we have missed. As always details and dates are appreciated. Naturally, we keep the sources of our reports confidential, if requested, and we fact-check every tip.

Check out our current SNEWS Reader Poll – a new ongoing feature since our website redesign launched in January – that ask, “If the economy does not improve in the next six months, do you believe additional businesses are at risk of going under?” The poll was posted Jan. 26 and will remain active until Feb. 9. Simply click here to voice your opinion. To view the regularly updated survey results as well as past Reader Polls and their results, click here or, simply log in at www.snewsnet.com and scroll down the right navigation bar until you arrive at the colorful survey graphic.

And, if you have not yet seen our blog posting on the subject of layoffs, click here to read…and to chime in should you desire.

Global environmental standard bluesign now on speedy growth track

A year ago, bluesign's CEO Peter Waeber held a press conference at the ispo trade show in Munich, Germany, with a smattering of curious journalists in the room who had never heard of his company.

bluesign, he patiently explained while flanked by representatives from MEC and two suppliers, is a Swiss company dedicated to addressing health and safety atrocities throughout the entire textile manufacturing and selling chain. He has been establishing its plan and making industry contacts at bluesign since 2000, a demonstration of his trademark Swiss patience, thoroughness and, in this case, confidence.

"It's a slow process," he told SNEWS® at that time. Waeber knew bluesign's time was coming.

"I have a vision and a mission," he said. "We had a vision to bring something easier to the market…. I know we can do it in a better way; however, it's not easy to motivate the chemical industry."

Time is now
Twelve months later, bluesign's time has come. Companies are being motivated, difficult or not. bluesign has more than quadrupled its membership, albeit still only 10 brands; had a 50-percent stake in the company acquired in July 2008 by Swiss SGS (www.sgs.com), a 200-year-old inspection, verification, testing and certification company; and the "bluefinder," a database for its members of processes and chemicals, will be relaunched by March 2009.

But with no time to rest, Waeber trots the globe to push membership and support. He prowled the aisles at Outdoor Retailer Winter Market in January 2009, moving from meeting to meeting, and he received a Top 25 honor as a 2009 SNEWS Power Player (Click here to see his interview and photo in a Jan. 19, 2009, SNEWS story.) Always understated, Waeber paused a moment at the show to show an edge of a smile about the award, but quickly moved on to his next meeting -- and to continue work on bluesign's future that could change the world's environment.

"We have a lot of projects," he told SNEWS. "The companies that are now members realize and they also know sustainability isn't happening overnight.

"But it's happening," he said. "We can talk and talk and talk, but now we have to take action. I'm not pessimistic at all."

All action, not just talk
bluesign (www.bluesign.com), which Waeber spells using a lower case "b," tackles the problem of environmentally unfriendly manufacturing at its root, from air emission and waste water to chemical processes and components, using systems only a long-time textile scientist like Waeber -- but one with an environmental passion -- could create. Waeber is also a chemist and outdoor enthusiast who has studied economics. He has worked at various textile mills and, before starting bluesign, was the technical director and a member of the board at Schoeller Textil AG, also in Switzerland, where the concept was born.

Said Jeff Crook, product manager at MEC, who participated in the conference at ispo a year ago, "They're focused on solutions."

"The foundation of the system is economically sustainable," Crook said. "It has to be economically sustainable for everybody in the production chain."

Another participant, Roger Yeh, president of Everest Textile of Taiwan, put it more simply, "I trust Peter."
How it works
According to the company, the bluesign standard's five principles are:
>> resource productivity
>> consumer safety>> air emission
>> water emission
>> occupational health and safety

This "gives suppliers, manufacturers, retailers, brands and consumers the good feeling of having done everything possible for the environment, health and safety," a company statement said.

There are various components -- all rather precise albeit a bit complicated -- designed to link closely the manufacturing and selling chain, create buy-in from all sides, and give each a tool to find out more to operate in an environmentally friendlier way while also being more transparent and gaining more knowledge about others in the chain.

First, there are three levels of participants:
>> Supporters are companies from the chemical and machine industry.
>> Partners are mills, manufacturers and converters.
>> Members (also known as users) are brands and retailers.

The most recent members are REI, which announced its membership on Jan. 20 and Deuter on Jan. 31. Others include Patagonia and MEC, both of which were the first, joining in May 2007; The North Face, Vaude, Helly Hansen, Hagloefs, Eileen Fisher and Boardroom/Eco Apparel.

Then, there are three systems provided by bluesign for information and transparency:
>> bluetool, a source of information for the chemical industry.
>> bluefinder, the guide for manufacturers to source better materials and mills.
>> blueguide, still in development, a tool for all member brands and retailers to help them choose better environmental sources.

Only a year away from celebrating its 10th anniversary, bluesign has goals, big goals, for the year, including 100 percent growth and opening a hub in Hong Kong. Waeber and his small team will collect a lot of frequent flyer miles to get there since partners, supporters and members don't just sign papers to join. bluesign, with a vision that reads "one world -- one standard," must in fact do lengthy inspections and analysis on-site at each potential partner and supporter, a process which can take up to a year, he said. When completed, the applicants get a thick report with recommendations for changes and a list of bad components or methods (black), a list of mediocre ones (gray) and a list of good ones (blue). Being a bluesign participant doesn't necessarily mean your company is perfect since the fact-finding systems (finder or guide) show what part of a supplier is good and what is not so good, literally grading the firm like a report card.

"It's a process," he said.

There is no way around this kind of detail because, as Waeber told SNEWS, "It would get around if it were bull."

With most of the world calling these types of practices "green," Waeber went with blue. He said blue is a more holistic color -- think of the blue sky and the blue sea, he said."

Green washing is not what we are all about," Waeber said. "We want to bring solutions on the table."

--Therese IknoianSNEWS® View: Certainly, bluesign is a business since companies pay for the report cards and screening, but in the end the process is obsessively detailed and will give all segments of the supply chain better information when they make choices. Although addressing the textile chain, such an organization -- if not different divisions of bluesign in the future -- could certainly address other segments, from hardgoods such as stoves to the likes of fitness equipment -- the manufacturing to pour steel and form plastics can't be great for our environment. With the forward-thinking and long-term thinking, bluesign could be paving the way for a more environmentally sound planet for our children and their children. --SNEWS® Editors

State of Green Business 2009: Green is Growing, But Not Fast Enough

OAKLAND, Calif. -- The second annual State of Green Business Report, created by Joel Makower and the editors of GreenBiz.com, looks at hard data behind 20 indicators to find out just how well companies are doing on addressing environmental issues.

Green business activity has continued to grow, even during a down economy, but the aggregate environmental progress being made is marginal, according to a new report, titled "State of Green Business 2009," the second annual report of its kind published by GreenBiz.com.

The State of Green Business shows that companies are making progress on only a handful of the 20 measures of performance investigated. In some areas, such as in the case of climate change, company commitments and achievements are failing to stem the overall rise of carbon emissions.

"This year's update is a mixed bag of encouraging and discouraging news," says Joel Makower, executive editor of GreenBiz.com and the report's principal author. "But on balance, despite a growing chorus of corporate commitments and actions, we're less optimistic that these activities, in aggregate, are addressing planetary problems at sufficient scale and speed.

"The report found many reasons for optimism, according to the authors. Green building is on the rise, spurring new technologies that save energy and money while creating more healthful workplaces. There is a green race taking place in the automobile industry, with every major manufacturer planning to introduce electric vehicles. The leading consumer product makers and retailers are starting to rigorously assess the environmental impact of their products using sophisticated metrics, sending signals up the supply chain that tomorrow's products will need to hew to higher levels of environmental responsibility.

The report marks the second year of the GreenBiz Index, a set of 20 indicators of U.S. business environmental progress. They include macroeconomic measures, such as carbon emissions, toxic releases, packaging materials, and paper use per unit of gross domestic product, as well as the fuel efficiency of corporate vehicle fleets, construction of green office space, investments in cleantech, and the financial costs of companies' environmental impacts.

Among the findings:
• Greenhouse gas emissions in the United States rose in 2007 by 1.4 percent in absolute terms over 2006, but shrank 0.6 percent in intensity -- that is, when measured as a percentage of gross domestic product (GDP). That's the smallest annual decrease since 2002, when intensity improved 0.4 percent.
• U.S. patents for clean-energy technologies -- wind, fuel cells, hydroelectric, tidal, and geothermal -- in 2008 were at their highest level in seven years.
• Americans are continuing their love affair with the car, and appear unwilling to give up their vehicles for the solo commute to work. Since a high of 77.8 percent in 2003, the number of solo commuters has inched down slowly to 76.1 percent in 2007.
• American industry has been doing more with less energy for decades. The amount of energy required -- in the form of electricity and fuel -- per dollar of GDP has dropped more than 75 percent since 1950.• The growth of certified green buildings, which for years had been growing from 10 to 90 percent, slowed dramatically in 2008.
• Generation of non-hydro renewable energy -- including solar, wind, and biomass -- grew nearly 7 percent in 2007 from the year before, outpacing the 2.3 percent annual growth in all electricity generation during the same period.
• The packaging intensity of the economy -- the aluminum, plastics, cardboard, and other materials used per dollar of GDP -- continued to decline slightly, as it has for the past several years.
• Over the past decade, the amount of paper used per dollar of GDP dropped by 27 percent and the amount of paper recycled rose -- also by 27 percent.
• Over the past 18 years, disposal and release of chemicals by U.S. companies decreased by 1.77 billion pounds, or 59 percent.

The report also includes the top 10 green business trends of 2007. They include the rise of energy efficiency in commercial buildings; the emergence of water as "the new carbon"'; the growth of college curricula on environmental management; growing company efforts to push environmental thinking to the rank and file; the failings of green marketing to captivate consumers; and the increased use by companies of such green design principles as green chemistry and biomimicry

Americans Believe Green Investing is Poised for a 'Golden Age': Survey

NEW YORK, N.Y. -- Heightened support from the Obama Administration and the new Congress on environmental issues, strong green elements in the proposed stimulus and anticipated regulatory changes are fueling optimism for green investment, according to Allianz Global Investors.

That's the assessment of results from the latest survey of American investors for the asset management firm, which says Amercians see a "golden age" coming for green investing.

In addition to expecting broad policy change from Washington, D.C., investors are increasingly perceiving firms that seek to address environmental issues as strong investment opportunities, the company said.

"The need for pollution control, clean water and energy efficiency is not going away," Brian Gaffney, managing director and CEO of Allianz Global Investors Distributors, said in a statement. "Investors perceive there is real opportunity here and they want to capitalize on it."

Gaffney said investors' positive outlook on the environmental technology sector reflects their perception of the area as a long-term opportunity. "Investors understand that robust demand for innovation and solutions will fuel growth, and consequently profits, for years to come," he said.

The survey found:

• 78 percent of investors believe that the Obama Administration in its first year will produce more policy promoting business investment in the environment than the Bush Administration produced during its entire tenure
• 74 percent believe that the new Congress will more strongly support policy promoting business investment in environmental technology
• 97 percent believe that exploring alternative fuel sources remains important despite declining gas prices
• 91 percent believe that resolving environmental problems will be a major issue for years• 69 percent consider it important to look at investing in companies that capitalize on addressing those problems.
• 78 percent say environmental technology has the potential to be the "next great American industry," and 64 percent considered the sector to be the "most desirable" investment opportunity among 10 categories surveyed
• 72 percent contend that plunging stock prices have had no effect on their inclination to invest in environmental stocks• 48 percent say they are "at least somewhat likely" to invest in environmental companies this year
• 22 percent in 2008 made investments in firms capitalizing in environmental trends compared to the 17 percent who reported doing so in 2007

The survey also found that 52 percent believe the Dow Jones Industrial Average will be higher a year from now than it is today. And 58 percent of the respondents said they think Europe is ahead of the U.S. in trying to tackle the problems — an aspect that could spur investors' interests in American firms engaged in environmental issues.

The survey polled 1,264 adults from December 12 to 19, 2008. GfK Roper Public Affairs & Media, a division of GfK Custom Research North America, conducted the survey over the Internet for Allianz Global Investors.

Participants were required to be at least 25 years old and have primary or shared responsibility for investment decisions in households with financial assets of at least $100,000. The survey conducted December 14-20, 2007 tallied responses from 1,003 completed interviews.

New Tool Devised to Measure Corporate Water Footprint

THETFORD CENTER, Vt. -- The nonprofit Center for Sustainable Innovation has come up with a resource that enables companies to measure their water footprint.

The tool called the "Corporate Water Gauge" is valuable, its creators say, because it takes into account corporate water consumption as well as the impact of usage on water supplies, the population sharing them, the geographic location, topography and watershed boundaries.

The tool is the result of a three-year research and development effort to "make triple bottom line measurement and reporting a reality," said CSI's Executive Director Mark W. McElroy.

"Given the increasing urgency of conserving and carefully managing rapidly declining freshwater resources on Earth, this is a management tool whose time has come."

Businesses can use the resource to assess water consumption and its environmental and social effects at a single facility, at all corporate sites or any subset of them, according to the center. The tool uses "sustainability quotients" to take measurements. More details are available here.

The Center for Sustainable Innovation, founded in 2004, works to develop advanced approaches for measuring and reporting the social and environmental sustainability performance of organizations. The center also devises tools and methods to enable triple bottom line management.

Special Report - Part 1: On Your Mark -- Protect trademarks from being slaughtered by 'genericide'

Protecting a brand trademark from becoming part of the common vernacular isn't an issue just for large corporations like Kleenex and Xerox. In the first installment of a special two-part report, SNEWS® examines how outdoor industry companies also must navigate the turbulent waters of brand trademarks to protect them from becoming generic terms, also known as "genericide." In Part 2, available next week, we offer feedback from trademark experts about strategies that companies can take to protect their marks.

When The Today Show's bright lights shine down on your product, it can be a blessing and a curse. The folks at GU, an energy gel brand, were no doubt thrilled when host Natalie Morales interviewed nutritionist Madely Fernstrom on foods for runners and talk turned to energy gels. The media exposure can spark huge sales. But then, Fernstrom swept her hand over gel packets from several companies and said, "The endurance athlete needs to have these little gu's," implying that GU is a generic term for all energy gels. This is where the blessing can become a curse.

When a brand name is used as a generic term, this contributes to "genericide." With genericide, a product name loses its trademark rights because it's no longer identified with a specific company. Well-known brand names such as Thermos and Scotch Tape lost their exclusive trademark status when they became part of our everyday lingo.

Did You Know?...
Band-Aid protected its trademark by adding the word "Brand" to its jingle. "I am stuck on Band-Aid Brand, 'cause Band-Aid's stuck on me."

Cellophane lost its trademark status in 1936. Think that's old? Linoleum lost its trademark in 1878.

Aspirin was a term trademarked by the German company Bayer in 1899. After World War I, Bayer lost many of its assets and was unable to prevent similar products from entering the market. Bayer’s patent expired in 1917, and in 1921 a court ruled that aspirin had become generic.

Most of us are guilty of contributing to genericide -- exchanging "thermos" for "vacuum-sealed container" or "google" rather than "use a search engine." Each time a brand name is used as a generic term, violators are doing possible harm to its trademark status.

Of course, genericide does not happen easily. A competitor of GU or Google would have to prove in court that those brand names had lost their unique identity. While these companies have not yet faced a challenge to their trademarks, outdoor companies are not immune to generecide, and plenty of brands get thrown around as common terms.

Just think about Gore-Tex. The vast majority of salespeople in outdoor specialty stores have seen customers walk into the shop and say, "Do you have Gore-Tex jackets?" Ten years ago -- but to a lesser extent today -- shoppers thought Gore-Tex was an apparel brand rather than a waterproof/breathable membrane that is used by many brands. And there's a danger in that. If the general public does not understand the true nature of a brand, and is not able to connect a trademark name with a particular company, the trademark is at risk. To its credit, W.L. Gore & Associates has worked diligently and succeeded in protecting its Gore-Tex brand. But others have not been so fortunate.

Consider what happened to Thermos. In a 1947 court case (King Seeley v. Alladin Indus. Inc.), King Seeley actually lost its exclusive right to use the term "Thermos" because it had become a generic term for vacuum-sealed bottles.

A British company, A.G. Gutman, registered the Thermos trademark in 1907, and that year the patent was acquired by the American Thermos Bottle Company in Brooklyn, N.Y. By 1910, the company was touting in its catalogs that Thermos had become a household word. In 1958, Alladin Industries announced that it would begin marketing its own vacuum bottles using the word "thermos." Alladin and King Seeley (which had acquired American Thermos) went to court over the issue, and in 1962 a judge ruled that thermos was indeed a generic term. King Seeley was allowed to retain its Thermos trademark, but it lost exclusive rights to the term. The judge said to avoid confusion in the market Alladin could not use the word unless it was coupled with the Alladin trademark. While Thermos has remained a strong brand, the court decision no doubt hurt its efforts to own the market for vacuum-sealed bottles.

Protecting the mark
As W.L. Gore watched its Gore-Tex brand become synonymous with waterproof/breathable apparel, it established a strategy to further differentiate itself in the market and educate retailers and consumers about how it was different from other technologies. In 1990, W.L. Gore launched its "Guaranteed to Keep You Dry" program in which it certified that products containing Gore-Tex performed properly.

"This was important in our history of making sure we didn't have what's called a 'naked trademark,' which is something that's out there but doesn't stand for anything," said Steve Shuster, global brand manager of W.L. Gore. "A key strategy in building value or equity in a trademark was not just supplying the fabric, but making sure the end item would meet or exceed consumer expectations. I think this is a key part of our strategy that helped distinguish the trademark and the brand Gore-Tex.

"GU also devotes much time to teaching consumers about its product, so that they'll understand that GU is a specific brand within the energy gel category. "We're out in the field quite a bit at marathon and triathlon expos, and we talk to people continuously," said Holly Bennett, senior marketing manager. "At a lot of events, you see people who think all gels are GU or that it's a generic product. We set up tastings, and right off the bat, they notice the difference. And we do a lot of explaining about the ingredients and how the brand was created."

Shuster recommended that a company should make sure that everyone who comes into contact with a brand -- from the manufacturer's employees to retailers to consumers -- understands the trademark brand.

Despite best efforts, companies cannot completely prevent the public from using a brand name as a sort of shorthand. Folks simply find it easier to say the word CamelBak rather than an awkward phrase like hydration system, or say Xerox rather than photocopy. No company can completely control this behavior. But the outdoor industry -- specifically retailers -- should be careful to not confuse people further. A member of the SNEWS® team once walked into an outdoor store and saw a round rack of apparel topped with a sign that read "Gore Tex Jackets." Never mind that the rack held jackets made with non-Gore waterproofing technologies. W.L. Gore is of course constantly addressing such challenges.

"In the last three to five years, we have invested heavily in a retail team that spends time at point of sale, not only training and educating, but making sure that signage and supporting POS is consistent with the brand and who we are," said Shuster.

W.L. Gore also educates its employees on proper use of the company's trademark. "We spend a considerable amount of time with our associates ensuring that they understand the value of the Gore-Tex trademark and brand, and that we need to use it correctly. And then we work with our (manufacturer) partners to make sure we distinguish the mark." One strategy is to place Gore-Tex hangtags on apparel and footwear to explain that it is one component of the product.

While companies must educate people and draw distinctions from competitors, a couple of other major issues come into play in determining whether or not a trademark is generic.

• Uniqueness – The trademark must be unique or fanciful enough that consumers don't confuse it with similar products by other companies. For example, the Kodak brand name is so unusual that even when you use Kodak as a generic term or adjective, as in, "Hey, this is a Kodak moment," you still know that Kodak refers to a specific brand of film from a certain company. But, you'd have a much tougher time retaining a trademark for Joe's Bar, which could refer to a hundred watering holes. A major piece of trademark law, the Lanham Act of 1946, stated "any common descriptive word of any article" cannot be registered as a trademark name.
  
• Company diligence – A company must diligently work to prevent its trademark from being hijacked into common usage. Methods include communicating with those who use it generically, such as media, to tell them to stop the practice. Retailers too should be aware of what to do or not -- and be diligent -- when they use trademarked company names.

2008 Outdoor Sales Gain 5% Despite December Decline

Outdoor sales for the entire year in all three core outdoor store channels (chain, internet, specialty)* totaled $5.2B, a 5% gain over 2007, according to the most recent edition of The Outdoor Industry Association (OIA) Outdoor Topline Report, produced for OIA by the Leisure Trends Group. For the entire year, internet stores and chain stores grew a healthy 18% and 7% respectively, while specialty stores were down 2% in dollars.

December Decline
According to The OIA Outdoor Topline Report, December retail sales for all core outdoor stores (chain, internet, specialty)* fell 1% in dollars ($1,078,598,888) compared to December 2007 ($1,094,277,086). All declines came from specialty stores, which lost 10% in dollar sales for the month. Positively, chain and internet stores both saw dollar sales increase; chains grew 7% and internet retailers were up 13%.

Christmas was tough for retailers across the country, as retail sales fell by record amounts and retailers big and small shuttered doors coast to coast. According to the U.S. Commerce Department, total retail sales fell 2.7% in December, more than double the anticipated decline of 1.2%. Although the outdoor industry felt the effects of a tough Christmas season along with the rest of the country, results were better than most industries, a cause for cautious optimism heading into 2009.

Specialty Bright Spots
Although overall sales were down slightly for specialty in 2008, many categories emerged as clear winners in a tough year. Winter boots, fueled entirely by women’s styles, were up 11% in full-year dollar sales. Woman-specific sportswear categories such as dresses, skirts and sports bras were also good sellers. Other footwear and apparel categories with strong growth included softshell tops, casual shoes, trail running shoes and multisport shoes.

The hands-on hydration category, which consists mainly of water bottles, was on fire in 2008, refusing to slow down after huge growth in 2007. With environmental and health concerns continuing to shape the category and fuel product innovation, this growth is expected to continue in 2009.

A renewed interest in economical, close-to-home vacations helped fuel sales of camping-related items in specialty stores this year. Sales of items such as tents (+2%), sleeping bags (+3%), camp stoves(+4%) , climbing gear (+3%), water purification (+11%), mattresses (+2%) and miscellaneous camp accessories (tent accessories +28%, sleeping bag accessories +7%, pack accessories +4%) all benefitted, each outpacing 2007 dollar sales.

Online Skyrockets
Online sales totaled $973M in 2008, grew 18% and fueled a significant amount of buzz in the outdoor industry. Black Monday was on December 1 this year, and the dollar sales that would have been in November gave a boost to December sales, contributing to the 13% dollar growth for the channel as a whole. Combining November and December together to include the entire holiday season, 2008 came out 7% ahead of 2007 in dollar sales. In December, Internet sales were up in all four major categories. Equipment was up 18% in dollar sales, equipment accessories were up 10%, apparel was up 8%. Footwear was up 40% in dollars on the strength of winter boots. Winter boots grew 73% in dollars from last December.

Chain Sales Strong
All Chain dollar sales were up 7% both in December and for the entire year while average retail prices saw nearly across-the-board declines for both periods. In December, retail prices for the entire channel declined 4% and nearly every category saw prices drop. Smaller and lower price-point items such as equipment accessories and apparel accessories saw especially strong growth, but every major category increased dollar sales in December as consumers took advantage of good deals and sales. Holiday sales and cold weather may well have been the catalysts for the growth in dollar sales in December. Combining November and December to include the entire holiday season, all chain dollar sales dropped 1% compared to the same period in 2007.

Outdoor Retailer Winter Market light on traffic, big on smiles

Exhibitors were prepped for the worst, fearing, as many told SNEWS® in the weeks leading up to Outdoor Retailer Winter Market, that given the state of the economy, the show might resemble the infamous foray into Anaheim, Calif., where you could toss a bowling ball down the aisles and not hit a single retailer. And, indeed, when the show opened on Jan. 22, there was a hush over the floor. Traffic was light -- not bowling alley light -- but light enough to have many exhibitors worried. By noon, fears abated for many as retailers began to pour in and fill the main aisles.

"Fortunately, we scheduled a lot of appointments. The first day of the show was noticeably down -- borderline eerie," Mike Hosey, president of Highgear USA, told us. "But the second day was much better. There is a cautious mood overall. Lots of businesses are being prudent; they want to be smart.

"On the whole, most exhibitors on the main floor, as well as numerous retailers our editorial team spoke with over the first three days of the show used words like positive vibe, substantive meetings, engaging, energetic and focused to describe the show mood. For many, it appears the lighter traffic eliminated the dodging through crowded aisles, and allowed retailers and exhibitors to enjoy more quality time.

"It's been a quality show," said Tommy Knoll, president of C.A.M.P. USA. "Outdoor Retailer shows are one data-point among many that we pay close attention to so as to be able to accurately access the market mood. Retailers and vendors who do not show up are not investing in networking and discovering market trends, and as a result, they are less able to build community either here or at home.

"Roody Rassmussen, president of Petzl America, told us on Saturday, "It's certainly a little softer crowd, but at the same time our appointments and booth have been full."

"In general, the show vibe was great. The retailers that are here are interested in sharing ideas and developing further synergies and leveraging partnerships," said Steve Bendzak, general manager for ExOfficio. "Our emphasis is at-once business, reiterating our spring promotions and reminding our retailers what further we can do to help them sell through."

Not surprisingly, those companies on the periphery or off the main floor, such as in the ballroom, did not enjoy the hoped for traffic as retailers appeared to, for the most part, stay focused on bigger and primary brands mostly located on the main floor. In some respects, the traffic mirrored what is being reported in retail forecasting both in SNEWS and mainstream media. In this economy, consumers -- and by extension, retailers -- are sticking to basics, buying what is needed, and spending less time and money investigating or trying out new products or brands.

Or, as Jay Steere, vice president of global product management for Timberland, put it, "At present, the economy is driving consumers to value propositions. The days of opulence are over."Doug Faude, owner of Molehill Mountain Equipment, said this was the "worst OR show ever" for him. Usually, he has the first two days booked with appointments, he told us, with retailers dropping in to fill up open slots for the rest of the show, picking up catalogs, etc., and that was not the case this show. "People are staying closer to home, but I don't think the economy is as bad as the media portrays it. People may be postponing that $400 Gore-Tex jacket, but they're still buying quality product for their kids," said Faude. He made a point of telling us that sales for his company in '07 were down 25 percent, while sales in '08 were up 30 percent.

Despite the mostly positive show vibe, cost-cutting measures by retailers and manufacturers alike were evident anywhere one looked. Smaller booths. Less staffing in booths. Retailers bringing only one or two buyers, or in the case of several retailers we spoke with, only the owner came leaving the rest of the team at home. Many retailers came only for two days, including the larger chain stores.

Kenji Haroutunian, Outdoor Retailer show director, told SNEWS that after reviewing unaudited numbers, it appears as if retail attendance was down approximately 6.25 percent compared to Winter Market 2007. Overall attendance, with exhibitors making up the largest percentage of decline, was down approximately 10 percent with numbers of exhibiting companies at 765 in 2008 compared to 815 in 2007. It is important to remember, here, that percentage numbers are only estimates and that Outdoor Retailer show management will not have audited numbers for several weeks.

--Michael Hodgson

SNEWS® View: Frankly, we don't know what else Outdoor Retailer show management could have or should have done to improve attendance or ensure traffic flowed from the main floors to the outlying booths and ballroom folks. In a broader look at all trade shows, Outdoor Retailer Winter Market is actually less affected than most others, which perhaps bodes well for the outdoor industry as being somewhat insulated from deeper economic and market impacts. SHOT show was down about 6 percent, Action Sports Retailer was well off its numbers, and the upcoming MAGIC and WSA shows are projected to be off between 20 percent and 30 percent, and the list goes on.

So traffic was down. What else did anyone expect in this market? Sure, some exhibitors and a few retailers were feeling less than enamored with the show -- but to be fair, that happens even with a much larger attendance in more prosperous times. If anyone wants a job that guarantees someone will be very upset with you, become president of the United States or a trade show director. And if you are going to blame the show for the bad economy, you're pointing your angst in the wrong direction.

While the traffic was lighter than perhaps desired, our takeaway was that overall the smiles were far wider than expected and the vibe was more positive than we might have dreamed. There was a feeling of hope in the halls that we have not seen for some time. That's what happens when good people gather together in one place, under one roof, breathing the same air and collaborating toward solutions that might improve business for us all. That's what we felt happening at Winter Market. If you were there…you likely felt it too.

Did you hear?...Research says sporting goods up for a retail battle, consumers becoming practical

A recent research briefing noted that retail is up for a "big battle" at sporting goods in 2009, while many consumers are looking to become more practical in their spending habits.

Although focused mostly on sporting goods and mass, BIGresearch found that Wal-Mart barely edged out Dick's for the top spot and both are increasing their customer share. Dick's, however, has more followers among male shoppers. Click here to see a BIG Retail Ratings Report.

In its monthly "Consumer Intentions & Actions Survey," BIGresearch (www.bigresearch.com) found that Home Depot and Lowe's continue to hammer in the home improvement category (and we at SNEWS® know that both have toyed with stepping outside the home category into sporting goods and exercise equipment).

More than one of every two shoppers (57.3 percent, per the research) said they've become more practical and realistic in shopping and spending, up from 49.8 percent in December and up from 41.2 percent a year ago. Most are also saying they are more budget-conscious (53.4 percent up from 39 percent).

For the future, research revealed that more say they will spend less in the next 90 days than will spend more. Sporting goods' prognosis is flat over a month ago after showing down over a year ago. But that's not unusual: Per BIG, all categories are showing a down prognosis over a year ago. Showing "up" over a month ago were women's dress, shoes, home improvement, and lawn and garden.

What's hot? BIG's research showed physical exercise was on the list as "hot" -- right along with Jennifer Aniston and iPhones.

REI Adds bluesign Standard to its Product Sustainability Strategy

Recreational Equipment, Inc. (REI), a national retail cooperative providing quality outdoor gear and clothing, today announced its membership with bluesign technologies ag allowing the company to use the bluesign® independent standard as part of its product design and sourcing process.

Founded in 2000 in Switzerland, bluesign is an approach to product sustainability that considers textile environment, health and safety issues from the ground-up, addressing the use of toxic-free ingredients, efficient production and resources, and informed product and process design. Since its development, the standard has been adopted by a number of worldwide textile manufacturers and apparel companies. Certified mills that comply with the standard are more efficient and have less environmental impact, while their operations comply with worker health and safety standards.

REI considers the bluesign standard as the strongest global solution available to proactively address textile environmental, health and safety strategy. Further, utilizing the standard is an important step in managing the substances used to create products the co-op sells under its branded labels.

With this announcement, the design teams for REI branded apparel and cycling brands will begin to use the bluesign standard to help make more informed textile supply chain choices. For example, designers will utilize the standard in making yarn, fabric and dye decisions and in the selection of mills and production factories. This approach will provide greater supply chain transparency in support of REI’s goal of reducing the environmental impact of its products.

REI has a number of efforts in place to reduce its environmental footprint and increase its product stewardship involvement. For example, the co-op is currently working with other outdoor brands and retailers to help drive positive, lasting change within the industry. The co-op was a founding member of the Outdoor Industry Association’s (OIA) Eco-Working Group, an industry organization establishing a common framework to measure, report and ultimately improve on the environmental impact of outdoor gear and clothing. Today, the group includes more than 100 brands, manufacturers and others working toward a mutually agreeable definition of what “green” means for products and apparel. bluesign’s methodology covers a significant portion of the material impacts that the OIA Eco-Working Group is considering.

For more information about REI’s stewardship efforts or to access REI’s annual stewardship report, visit http://www.rei.com/stewardship.

About REI
REI’s in-house team designs and develops award-winning gear and apparel for camping, hiking, cycling, urban lifestyle, travel, and general outdoor recreation. The brands REI and Novara are private labels and sold exclusively through the co-op’s retail stores, online at www.rei.comand through its catalogs. REI is a national outdoor retail co-op dedicated to inspiring, educating and outfitting its members and the community for a lifetime of outdoor adventure and stewardship. Founded in 1938 by a group of Pacific Northwest mountaineers seeking quality equipment, REI is committed to promoting environmental stewardship and increasing access to outdoor recreation through volunteerism, gear donations and financial contributions.