Category Archives: Brooks

Running Shoe Market Forecast Projects Solid Growth

(BRK.A), (BRK.B)

Sports footwear makers, which include Berkshire Hathaway’s Brooks, are projected to have solid growth over the next five years.

A new report “Global Sports Footwear Market 2017-2021,” is projecting that the global sports footwear market will grow at a compound annual growth rate (CAGR) of 2.71% during the period 2017-2021.

According to the report, one driver in the market is high operating margin of sports footwear. Sports footwear is usually priced higher than regular shoes. This is because their manufacturing process involves different technicalities that enhance performance at sports. Vendors focus on introducing innovative features in their products that are used for running, tennis, basketball, football, soccer, and other sports. Manufacturers also earn high operating margin from premium-priced sports footwear. This is because the manufacturing cost of these products is low, whereas they are sold at higher prices.

Further, the report states that one challenge in the market is increasing cost of raw materials. Rising fluctuations in the profit margins of the manufacturers of sports footwear are due to the increasing prices of raw material and intense competition among the vendors. This makes executing a proper pricing strategy challenging for vendors. Ethylene vinyl acetate (EVA), an elastomeric polymer, is the raw material used in the production of soles of sports footwear. Increase in the price of this material has a directly proportional impact on the prices of sports footwear. This further leads vendors to increase the prices of their products.

© 2017 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Brooks Running Company Heads to China and Brazil

(BRK.A), (BRK.B)

Berkshire Hathaway’s Brooks Running Company is expanding its global footprint in July 2017 with entry into China and Brazil, two of the largest running markets in the world. Entry into China and Brazil is a significant opportunity for Brooks to introduce its innovative products and run happy spirit to the many people who run in the two countries.

“Brooks is 100% focused on the run, and it’s important that our brand is part of the running community across the globe,” said Brooks CEO Jim Weber. “Following success in Europe, Japan and Canada, entry into China and Brazil represents the next step in our global expansion strategy. I’m excited about the opportunity to inspire more people around the world to run and be active.”

Brooks will enter China on July 1 via online and brick-and-mortar distribution. At launch, Brooks’ products will be available online through T-Mall and Amazon as well as in-store at key sporting goods retailers in major markets such as Beijing, Shanghai and Guangzhou. In addition to the company’s industry-leading footwear and accessories, runners in China will be able to experience Brooks Run Signature at select retail locations.

Brooks Run Signature is an innovative fitting method that utilizes cutting-edge technology to assess the way a runner’s body wants to run and recommends the right shoe to fit their run.

In 2018, Brooks will continue to expand its presence in China, adding apparel and sports bras to its product assortment.

In partnership with Centauro, the premier sporting goods retailer in Brazil, Brooks will enter the Brazilian market this July. With Brazil home to the largest running population in Latin America, presence in the country will help Brooks create a brand foothold in the region. Runners in Brazil will be able to experience the company’s entire footwear line including the all-new Glycerin 15, an award-winning shoe in the company’s Cushion category.

Global expansion remains a key priority for Brooks. In the near term, the company plans to strengthen its existing presence in Germany, Italy, France and the United Kingdom. In 2018 and beyond, Brooks will explore opportunities to enter new countries with dedicated runner populations.

© 2017 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.