Specialist
Former Senior Executive at Holloway
Agenda
- Operating environment for low-tier sports apparel manufacturers and distributors
- Competitive dynamics among Augusta, Badger and others
- Execution headwinds related to consolidating Holloway, High Five and Augusta brands
- Russell Athletic partnership growth potential
- Outlook for 2019, focusing on margin expansion opportunities and return to sales growth
Questions
1.
To open the discussion, what’s your industry-wide overview and thoughts on the current operating environment for Augusta Sportswear? Which key trends or drivers should we pay attention to?
2.
What are your thoughts on the competitive landscape, maybe looking at Augusta Sportswear’s positioning vs Badger or others?
3.
Why do you think Badger is outperforming and taking market share amongst some of the non-branded?
4.
You say non-branded is on the decline and branded is on an incline, do you believe this would still be the case if we enter some sort of economic downturn or recessionary environment moving forward?
5.
How price sensitive are the customers of these brands? Presumably in an economic downturn, some people would shift down to the lower-level option?
6.
What’s the main decision criteria for a customer when deciding on a name such as Augusta vs competitors? How would you force rank Augusta vs those competitors in that criteria?
7.
You mentioned how the branded players are starting to widen their price scope a little and come down towards that lower tier. Is the benefit or the attractiveness of a non-branded still maintained if instead of 25-30% difference, that gets compressed a bit more?
8.
What’s the impact you’re seeing in terms of consolidation on the industry and some of those broader dynamics? Do you expect additional M&A moving forward – how could that potentially play out?
9.
How do you see Augusta currently positioned – is there anything you’d draw out at the front?
10.
Does Augusta have any issues in its inventory planning and allocation?
11.
Could you walk us through Augusta’s different brand offerings or segments? I know they were consolidated – how do you think about the relative positioning of outdoor, team uniform, off-field, etc, with regard to competitiveness, growth outlook, etc, moving forward?
12.
What does Augusta need to do in terms of fixing the issue of correctly forecasting? How confident are you in its ability to fix some of those issues and plan accordingly?
13.
Are customers mixing and matching across brands? To what extent are you seeing success from the sales force being able to upsell some of the higher-priced products as opposed to the Augusta on the low end?
14.
The move should simplify the customer experience; to what extent have we actually seen that play out for customers of these different companies?
15.
How do you think about the depth of Augusta’s products? Maybe the complexities of over 22 sports, 1,600 styles, is there any need for SKU rationalisation moving forward?
16.
What do you make of the company’s partnership with Russell Athletic to bring their uniforms for the team sports channel?
17.
Taking a look at the company’s cost structure, the cost side of things here, do you see any opportunities to cut costs on the horizon? If so, from where and how much could potentially be saved?
18.
Do you see any potential for a vendor consolidation or any overhead that could be stripped out of the business?
19.
Over the next 1-5 years out, what’s your outlook for the industry and for Augusta?
20.
What’s the potential worst case or downside scenario for Augusta, especially if the Founder Group or SanMar don’t acquire it?
21.
Do you have some brief closing remarks to tie today’s discussion together for us?
