Matthew ButeraFebruary 2016

AUSTRALIA/NEW ZEALAND MACRO ENVIRONMENTAL ANALYSISThis business report is an analysis of the key macro-environmental factors impacting our business and the trends shaping the future of the environment of adidas in Australia and New Zealand.

ContentsEXECUTIVE SUMMARY..............................................................................................................3

NEW ZEALAND..........................................................................................................................4

o SPORTS PARTICIPATION RATES....................................................................................4

o ECONOMIC ANALYSIS..................................................................................................6

o NEW ZEALAND POPULATION ANALYSIS.......................................................................7

o NEW ZEALAND E-COMMERCE ANALYSIS.....................................................................8

AUSTRALIA INDUSTRY DATA.....................................................................................................9

o SPORT PARTICIPATION IN AUSTRALIA........................................................................10

o HOW DOES THIS IMPACT ADIDAS?............................................................................12

o AUSTRALIAN ECONOMIC ANALYSIS...........................................................................13

o ONLINE SHOPPING IN AUSTRALIA..............................................................................15

o AUSTRALIAN POPULATION ANALYSIS........................................................................18

RECOMMENDATIONS.............................................................................................................23

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EXECUTIVE SUMMARYThe purpose of this report is to identify trends and make observations regarding factors that are relevant to our business. This report is made to be used as a guide to further enlighten various teams within our business with knowledge regarding the environments wherein they operate. Key findings in this report include:

The rise of non-organised physical activity is sweeping Australia and New Zealand while organised physical activity through amateur sports clubs has fallen sustainably, with the exception of soccer.

Australia and New Zealand’s economies are expected to operate at a steady pace in 2016, allowing for economic conditions conductive to good retail performance, punctuated by consumer confidence being expected to rise in 2016.

Key population growth areas in Australia:o Gold Coasto Geelongo Pertho Melbourne

Key population growth areas in NZ:o Auckland

Home to 31% of NZ population, fastest growing city/region in NZ.

Despite huge growth in online shopping (16.5% annual growth between 2011-2016), traditional bricks and mortar shopping is still by far and away the main vessel of retail sales.

According to NAB Business, it is estimated that Australians spent $19.1 billion on online retail in 2015. This is equal to 6.6% of spending at traditional bricks and mortar retailers as measured by the ABS.

It is recommended that:o Target individualized sports and non-organised sports activities by

investing in higher price point product for training categories beyond current range.

o Target women to drive and capitalise on trends through their spending power and unmatched responsiveness to trends and fashion.

o Look to capitalise on key growth areas such as Perth, Melbourne, Auckland and Brisbane. Specifically, explore feasibility regarding expansion in Perth with a BCS or OCS Store.

o

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NEW ZEALANDSPORTS PARTICIPATION RATESUndoubtedly, the trend that permeates the sportswear industry most in New Zealand is the rise of individual sports. 74% of all Kiwi adults take part in sports or physical activity in any week. The main motivator for people to take part in this activity is health and fitness (90.7%) and pure enjoyment (87.9%). (Sport NZ, 2015)

 Over the course of 12 months, Sport NZ stated that walking was the most popular activity engaged in by adults, accounting for 60% of all adults. However, walking proved to be more popular amongst women (72.2%) than men (46.8%). Swimming, cycling and equipment-based exercise round out the top four. All of these activities share the common theme of being an individual based activity, devoid of team-mates and coaches. Across both genders, walking, swimming and cycling featured in both top fours, indicating their gender neutrality.

 

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Reinforcing the notion that the shift from team-based to individual-based activity is occurring is the data from Sport NZ that shows sports club membership has fallen 2% while gym memberships increased by 3% in the same period (2007/8-2013/14).  

The biggest barriers to physical activity were seen to be primarily time, with cost a distant second. The time-barrier was most prevalent for those aged 25-49. Being the age where the most time would be devoted to one’s career or family, it is unsurprising for this demographic to cite time as their main barrier to physical activity. However, there is cause for optimism as seen through the 65.6% of adults who are interested in trying to do more sport or physical activity. (Sport NZ, 2015)

 A key observation to be made by Sport NZ is the group that experienced the biggest fall in sports participation, that being young adults (16-24 years old) which was down by 2%. This is a particular concern as it is this demographic with which adidas targets intensely. Overall, female sport participation has grown 2.1%. Women are more active as of recently in New Zealand, and according to the statistics, 1.245 million of them are walking. With adidas' innovations stemming from their footwear offering, the future bodes well for us if we are able to capitalize on the growing trends and position our brand as one that resonates with women and that women feel can provide them with the tools in order to achieve their unique, individual fitness goals and ambitions.  

How does this impact adidas?

The growth of non-organised physical activity and surge in gym memberships increasing coinciding with a decrease in sports club memberships provides us with an insight into a trend that is present across Australia and New Zealand. The rise of individualized activity means that adidas could and should look towards tailoring their product offering in order to suit the needs of these consumers and capitalize on these trends.

In the New Zealand apparel retail industry, womenswear is the dominant category, representing as much as % of all revenue compared to 29.4% for men and 14% for children according to Marketline. With the New Zealand apparel retail industry forecast to grow to a value of approximately $3.2 billion in 2019, it is clear that women will be at the forefront of this growth, driving it with their consumption and responsiveness to trends.

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(MarketLine, 2015)

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ECONOMIC ANALYSIS

Economically, New Zealand has experienced a steadying recovery since the GFC, punctuated by 3.5% GDP growth in 2014. With a slowdown hitting in 2015, Kiwi consumer confidence is lowering. These are key macro-economic indicators as they significantly impact on the ability and propensity of Kiwi's to spend their disposable income. Gym memberships and fitness apparel are non-essential elements of consumption; subsequently they are very quickly impacted when economic belt-tightening ensues.  

 As expected, those living higher socio-economic areas were more likely to engage in activity using man-made facilities, contrasting lower socio-economic areas in which inhabitants were more likely to use natural settings for their activities. With this in mind, it is important to note that with the Kiwi economy still growing, albeit at a slower pace than in the past. This indicates that with an increase in overall wealth, the population is more likely to train in gyms and fitness centres as their financial situation allows them to.  

 Heading into 2016, the New Zealand economy is in solid shape with reasonable momentum. Steady growth means unemployment is expecting to fall by late 2016. ANZ has made forecasts relating to key macro environmental indicators.

These forecasts indicate a stable future for the New Zealand economy. Through this steady progression, it would be expected that consumer confidence would also remain stable. Stability in consumer confidence is critical to the performance of the retail sector. Thomas A. Garrett ( 2004) writes that consumer sentiment can be used as a predictor for national-level retail sales performance. Using this logic, it would be expected that retail sales in New Zealand in 2016 should remain stable. Obviously, the modern world moves extremely quickly and the economy is volatile in nature, but these accredited forecasts from reliable sources are useful in preparing for the future.

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NEW ZEALAND POPULATION ANALYSIS

Home to 4.64 million people as of 2016, New Zealand is comprised of two key islands, North Island and South Island. North Island is the most densely populated, home to 3.5 million people, 75.43% of the total population. This is compared to the 1.076 million in South Island. Notably, the most critical corridor of growth in New Zealand is the city of Auckland. Home to 1.56 million people, Auckland is the fastest growing and is projected to continue to be by far and away the most rapidly growing city or region in the country. The population is expected to grow by 8.5%, significantly outgrowing Wellington (3.5%) and Canterbury/Christchurch (4.5%).

City/Region2016 populatiNew Zealand4.64 millionNorth Island3.5 millionSouth Island1.076 million(Statistics NZ, 2016)

The following image provides context to the sheer growth projected in Auckland over the long-term, and how it’s growth stands to outgrow entire populations of regions and cities in New Zealand. While not entirely relevant for present-day business decision making, this graph serves to quantify the pace at which Auckland is outgrowing the rest of the nation.

City/Region 2016 pop 2021 Pop ProjectCAGR to 20Auckland 1,569,900 1,692,165 1.7%Wellington 496,900 513,640 0.7%

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Projections have been calculated by using the National Infrastructure Unit population projections to 2031, combined with Statistics NZ most recent population estimates. The CAGR has been developed using NIU projections. National Infrastructure Unit, 2011)

NEW ZEALAND E-COMMERCE ANALYSIS

According to Euromonitor, New Zealand’s online apparel and footwear segment was worth $315.7 million NZD in 2015 compared to $260.1 million NZD in 2014. This shows a growth of 21.37% in the space of one year, indicating that the e-commerce industry in New Zealand, primarily the segment most relevant to our business is continuing to strengthen. By 2020, Euromonitor is expecting the value of apparel and footwear purchased online in New Zealand to total $576.2 million NZD. This would be an 82.5% growth from between 2015 and 2020. To provide context, Euromonitor states the value of the apparel and footwear segment of online retailing in Australia to be $2.092 billion in 2015, growing from $1.9 billion in 2014. This shows growth of 10.1% in the same period with an expected growth towards $2.8 billion in 2020, a 33.84% growth figure.

The significant disparity in growth figures between two culturally and geographically proximal countries can largely be attributed to the 2010 starting points of each market. In 2010, internet retailing in Australia was valued at $5.78 billion AUD while the same industry in New Zealand was valued at $672 million NZD by Euromonitor. Such a chasm between starting points would suggest that the market in New Zealand is in a much more fertile growth phase as compared to the growth phase being experienced in the Australian market.

As of July 2015, $1.3 billion NZD of the $4.6 billion NZD spent by New Zealander’s in the online retail landscape was spent in foreign online retailers.(NIELSEN) This is a similar ratio to the Australian market, where 28% of online consumption was to international retailers, whereas New Zealand was slightly higher at 34.8%. This further heightens the relevance of the seemingly unavoidable, incoming GST that is expected to be placed upon international online purchases. Currently, any online international purchase under $400 does not incur such a fee. This has resulted in the NZ government losing approximately $120 million NZD per year in revenue according to reports (Radio NZ, 2015). Enforcing of a new tax relating to all online purchases is bound to have some form of an impact on the level of online retail consumption in New Zealand, but the degree of the impact is not expected to be momentous according to industry experts such as Internet NZ CEO, Jordan Carter.

The use of an omni-channel approach by adidas has positioned the company excellently as an early adopter, allowing it to be responsive to all the needs of

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the customer. This is best observed through the use of tablets in store with access to e-commerce channels, allowing for more opportunities and touch points to engage with consumers. Nielsen has identified new retail habits that revolve around the omni-channel touch points that adidas employ.

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(Nielsen, (Nielsen, 2015)

AUSTRALIA INDUSTRY DATA SPORT PARTICIPATION IN AUSTRALIA

Sport is in the Australian DNA, as a sports brand it is our duty to ensure that athletes, whether they be professional or amateur are well equipped and enthusiastic about sports. According to the ABS, in 2013-2014 the percentage of the population that participated in sport at least once in the year prior to the interview has fallen from 65% to 60%. Ages 15-17 recorded the highest participation rate for sport (74%) compared to the unsurprisingly most inactive age group of 65 years and older (47%). The most active state in the country is the ACT with 73% compared to 54% in Queensland.  The most popular activity is walking, with 19% of people aged over 15 having walked for physical activity at least once in the previous year. Training in the gym was the next most popular activity, with 17% of the sample engaging in that activity. This is evidenced by the Australian Government’s “Future of Australian Sport” report from 2013 that details the surge of non-organised physical activity.  

This depicts a trend towards individual centric fitness activity as seen in New Zealand and as the report states about the modern average trainer; “They are more concerned with beating a personal time fitness target rather than a competitor.”  IBISWorld further validates this viewpoint as they mention how despite the number of professional sporting teams increasing in Australia, falling amateur sports participation has seen amateur sports clubs decline. IBISWorld shed further light on this, stating that over the past five years, community-run, amateur clubs have fallen as a share of sports and recreation clubs revenue in Australia. The fall in the number of amateur sports clubs sharply contrasts the increase of the number fitness centres and the increase in the revenues of these centres across Australia. 

ASGA provide a comprehensive list of sports and their participation rates between 2005 to 2014, with only 24% of the top 25 sports participated in experiencing growth between 2011 and 2014. The most significant and relevant gainers were basketball (14.5% increase in participation between 2011 and 2014) and indoor soccer (12.7% growth between 2011 and 2014). The most relevant losers were seen in Tennis (fall of 25% between 2011 and 2014) and walking (16.8% fall between 2011 and 2014). It is worth noting that

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only basketball has shown a consistent trend of sustainable growth over the time period, whereas the growth in indoor soccer as well as the declines in walking and tennis has not been consistent or shown a trend over the same period.  To further consolidate the position of strength being held by gyms and fitness centres across Australia, IBISWorld is expecting the industry to maintain growth from 2016 through to 2021, albeit at a slower rate. They add “the gyms and fitness centre industry is approaching saturation and is expected to encounter diminishing returns over the next five years.” Key drivers of the industry are forecasted to continue their growth, these drivers include health consciousness, which is expected to grow in 2016 and obesity levels. Obesity levels have been growing for the past decade, boding well for gyms and fitness centres as obese and overweight individuals are encouraged to get active and potentially make use of their local gym.

Despite this clear trend of a reduction in structured, team-based sports and an increase in individualized fitness activity, Soccer has sustained its growth and continues to defy the odds in the landscape of Australian sports participation. Recently, the Football Federation of Australia national audit has found that community football clubs saw an increase of 7% to reach 499,361 players in 2,155 clubs in every state and territory. Ominously, Roy Morgan Research indicates that the most popular team sport amongst Australia’s children aged 6-13 is Soccer, accounting for 1.2 million young players across the country, dwarfing Australian rules, Basketball and Cricket.  Capturing the minds of Australia’s youth is critical to the long-term success and sustainable participation rates for each sport. Combined with the recent successes of the Socceroos and the Matildas, it is clear that soccer is enjoying a period of unmatched growth and is undoubtedly the most popular sport by participation in this country and will continue to be for the foreseeable future. 

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(IBISWorld,

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HOW DOES THIS IMPACT ADIDAS?These findings notably impact adidas. The impact stems from the fact that the two key trends revolve around sports that are deeply engrained within adidas’ product offering. Through the surge in participation in soccer and the rise in individualized sports such as walking and running, adidas is at the forefront of the trends sweeping the Australian sportswear market.

The surge in individualized activity is best evidenced by the statistics showing the consistent increases in the number of gyms operating as well as the revenues of gyms in Australia. Since the turn of the century, the number of fitness centres has grown by 24% with their incomes experiencing a 131% increase over the same time period. (Australian Sports Commission, 2013)

Despite these clear trends, it should be noted that ultimately sports participation is falling in total in Australia, yet consumption of active wear is climbing. This is shown through IBISWorld’s report in which it explains how Fitness and Athletic clothing stores in Australia experienced an annual growth rate of 8.8% between 2011 and 2016. With women accounting for 46.9% of clothing retailing and 49% of footwear sales in Australia, it becomes clear where the war will be won. Women are the drivers of fashion and the drivers of trends.

This gives rise to arguably the biggest trend permeating the sportswear market, the trend of stylish active wear. Till 2012, of the 63.8% of women who had participated in physical activity, approximately 80% of them were engaging in non-organised physical activity. In the same survey, 87.6% of the respondents answered they engaged in either walking, training in the gym or running. These statistics are deafening. The trend of individualized sports is sweeping Australian women. Despite the involvement with City2Surf, there is still an opportunity for adidas to further solidify itself in the Australian market by working to align itself with running and walking amongst the Australian populace.

To further align itself with the growing popularity of soccer amongst the youth in Australia, adidas must work to engrain itself in the grassroots of Australian soccer. At this point in time, Nike is positioned strongly within the football demographic of young adults. This can be partly attributed to Nike aligning itself with grassroots football programs such as its sponsorship of Futsal Oz and the V-League in Victoria as well as its sponsorship of the A-League and the Socceroos.

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AUSTRALIAN ECONOMIC ANALYSISIn 2014, Australia’s GDP totaled $1.525 trillion, positioning it as the 12th largest economy in the world. In 2015-16, real household discretionary income is expected to rise. This is critical to a business where the products manufactured and sold are non-essential items. Another economic indicator that is critical to determine how adidas will perform is the consumer sentiment index. In 2015-16, consumer sentiment index is expected to rise.

The beginning of 2016 has seen a global economic downturn punctuated by poor performing share markets and subsequently, consumer sentiment has taken a hit. This is a global occurrence and the pinch is being felt across international markets.

In 2015, the Australian savings rate was at 9%. The savings rate refers to the percentage of disposable income that an individual devotes to their nest egg for retirement. For context, in the early 2000’s and before the GFC, the saving rate was around 4%. Australians are increasingly cautious since the GFC and that is evidenced in the responsible spending we’ve seen since the GFC. The image provided highlights the sharp change in consumer mentalities towards saving following the GFC, and how that mentality has remained with consumers ever since.

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(Trading Economics, 2015)

ABS, 2014

Interest rates are currently very low, boding for a year in which the RBA and Australian government are trying to force growth through expenditure.

Industry experts are expecting a “stable and modest” 2016 for the Australian economy. This is namely to be attributed to solid unemployment figures which are expected to hover around 6% throughout the year. As mentioned, due to our product offering being in a non-essential category, these macro-economic indicators maintaining their stability are critical to our brand’s performance. Consequently, caution should always be paid to global economic developments as they are one of the most pertinent external factors concerning our business.

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ONLINE SHOPPING IN AUSTRALIA

IBISWorld values the total online shopping revenue of Australia in 2015 to be $15.6 billion. This is a figure that isn’t absolutely definitive, but can be used as a very good guide to understand the growth of this industry in Australia. Since 2011, the annual growth of the online shopping industry has been 16.5%, with growth from 2016 to 2021 expected to slow to 8.9%, with a projected total revenue of $23.8 billion in 2020.

The segment of the online shopping industry that is most relevant to adidas would be the online sporting apparel industry. In 2015, IBISWorld valued this segment at $70.8 million, showing annual growth of 22.6% between 2010 and 2015, outperforming online shopping sales. Expectedly, the growth is forecast to slow to 10.3% between 2015 and 2020 towards a total industry revenue projection of $115.6 million.

Of this segment, the following table details the geographic segmentation of this sub-industry throughout Australia and compares the percentage of revenue generated in each state with the percentage of total population each state represents.

State % of RevenueNSW 33.2%VIC 23.6%QLD 19.3%WA 11.5%SA 6.8%

The eastern seaboard states, which account for the greatest share of the population, make up the majority of online sportswear sales. New South Wales, Victoria and Queensland account for over 79% of industry revenue, and 77% of the population. The best performers in the Australian market are NSW, WA and ACT, all of which are over-represented in their percentage of revenue versus percentage of population. This indicates a higher average per capita spend on online sports clothing and footwear, which is hardly surprising considering these three states feature in the top four of the ranking of Australia’s states by GSP per capita.

Euromonitor discuss further that sportswear in Australia has been largely distributed by apparel and footwear specialist retailers in the past, however „the sport luxe trend has driven growth of sportswear through other channels such as internet retailing. In fact, the percentage of sales through internet retailing increased from 9% in 2009 to 13% in 2014, with a number of new players and business models emerging during this time, including Stylerunner and Sport Luxe.“

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Despite all of the discussion regarding the booming growth of online retail, the fact remains that it is a very distant second to traditional bricks and mortar retailing. According to NAB Business, it is estimated that Australians spent $19.1 billion on online retail in 2015. This is equal to 6.6% of spending at traditional bricks and mortar retailers as measured by the ABS. Once more, these figures are to be used as a guide to provide greater quality insight into the state of the retail industry in Australia.

The following table courtesy of E-Marketer depicts Australian retail e-commerce sales as a percentage of total retail sales in select countries. These statistics provide useful perspective on the level of domination traditional bricks and mortar retailers have over their modern counterparts despite the skyrocketing growth of e-commerce.

E-Marketer also provides us with another useful graphic, this time detailing the slowing growth of the global e-commerce industry. This is to be expected as it is simply another example of the law of diminishing returns. The significant growth of the industry cannot be sustained and will eventually slow down as detailed above.

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Furthermore, Roy Morgan Research comments that an estimated 72% of our online consumption (approximately $27 billion AUD) stays in Australia. The only main categories that still involve Australians buying a majority of goods from foreign retailers are books and e-books, men’s clothing, jewelry and video games and consoles.

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AUSTRALIAN POPULATION ANALYSIS

The Australian population is currently 23.9 million people. Ever-growing, the Australian populace is extremely diverse in every aspect of demographics. Australia’s population growth rate has slowed to a rate last seen nearly 10 years ago, according to the ABS. For the year ending 31 March 2015, Australia’s population grew by 1.4%. Approaching 2020, the Australian population is expected to reach 26 million people.

Analysis of the Australian population will be conducted on a state-by-state basis. All of the statistics provided have been provided by the relevant state government statistic agencies, census data and population forecast data from various private demographic firms. These projections are not guarantees, but detailed guidelines to be used to guide and aid business decisions.

(Infrastructure Australia, 2015)

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NEW SOUTH WALES NSW boasts the title as Australia’s most populated State with a population of 7.6 million people. Capital city Sydney is home to 4.84 million Australians. With ethnic communities from over 100 countries, NSW is a microcosm of broader Australian society. In NSW, the highest growing populations by area are:

Riverstone-Marsden Park which have grown 29,387 (12.1%), located 48km north-west of the Sydney CBD (2013-2014)

Cobbitty-Leppington, located 55km south of the Sydney CBD which grew by 27,930 people (18.1%) (2013-2014)

Population growth projections for suburbs where an adidas store is located: Region 2016 populati2021 population projeSydney 4.98 million 5.4 millionSydney City 211,695 237,625Sutherland Shir220,250 243,200Ryde 114,996 122,354

Key regional citiesRegion Population in 201Population prjection for 202 % changeNewcastle 164,400 173,350 5.40%Wollongong 208,565 217,132 4.10%(NSW Government: Planning and Environment, 2015)

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VICTORIA 

Victoria is the second biggest state in Australia by population, with 5.9 million people living within the borders. This is expected to reach 6.6 million people by 2021. Melbourne is home to 4.4 million people. In 2015, approximately 870,000 people travel to or are present within the borders of the Melbourne city municipality, which ranges from South Yarra to Carlton. In this municipality are three adidas stores. For the year ending March 2015, Victoria recorded the highest growth rate of all states and territories at 1.7%.At the moment, this area is home to 124,000 people and by 2021 is expected to be home to over 150,000 people. The largest growth suburb in Victoria is South Morang, with an 8.3% population growth in 2013-2014, 23km north east from Melbourne’s CBD. South Morang neighbours Bundoora, home to an adidas factory outlet.  

Notable Victorian city population projection figures: 1 (Department of Environment, Land, Water and Planning, 2015), (Infrastructure Australia, 2015)

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QUEENSLAND 

Queensland has a population of 4.7 million people. Brisbane has a population of 2.2 million people. By 2021, the population of the State is expected to be 5.5 million. Queensland houses some important cities with sizeable populations such as Cairns, Gold Coast and Brisbane. 

The population of Cairns is expected to grow at a steady rate of 1.9% between 2011 and 2036. By 2021, it is expected Cairns’ population will have grown from 150,992 in 2011 to 186,575.

In Brisbane, adidas has a strong, vested presence with 5 stores. In 2011, Greater Brisbane had a population of 2.1 million people with projections for that to reach 1.24 million by 2021.  

Finally, the Gold Coast. Home to 2 adidas stores, the Gold Coast has been deemed the largest growing city through to 2021, with an expected average growth rate of 2.2% from 546,067 towards a population of 677,929 people.  

(Government of Queensland, 14), (Infrastructure Australia, 2015)

City/Region 2011 Population 2021 Population projectionQueensland 4.47 million 5.5 millionGreater Brisbane 2.1 million 2.65 million

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WESTERN AUSTRALIA 

WA has a population of 2.5 million people, with capital city Perth home to 78% of WA’s population, housing 2.02 million people.  In 2013-2014, Perth was the highest growing city in Australia, welcoming 48,400 new residents which comprised an approximate 2.5% increase.  

In Perth, the city of Armadale, located approximately 28km south east of the Perth CBD has shown strong signs of population growth, primarily seen through the suburbs of Piara Waters and Forrestdale. With an estimated population of 13,500 in 2013, to then growing by 2400 people (21.8%) indicates significant growth.  

City/Regio2011 Populati2021 Population projecPerth 1.83 million 2.53 millionArmadale 65,395 106,357 (Western Australian Planning Commission, 2015), (Infrastructure Australia, 2015)

SOUTH AUSTRALIA  

South Australia has a population of 1.71 million and is expected to increase to 1.79 million by 2021. Adidas’ own retail presence in SA comes from Marion, a suburb in Adelaide which has a population of 88,292. In comparison to other states, Adelaide’s growth is not as rapid.

City/Regio2011 populati2021 population projecAdelaide 1.2 million 1.34 millionData courtesy of: (Government of SA, 2014)

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RECOMMENDATIONS

o Look to capitalise on key growth areas such as Perth, Melbourne, Auckland and Brisbane. Specifically, explore feasibility regarding expansion in Perth with a BCS or OCS Store.

o Target individualized sports and non-organised sports activities by investing in higher price point product for training categories beyond current range. An example could be Pure Boost X and providing customers with a true, high-end product made specifically for training.

o Attached is a table detailing the men’s training footwear categories from three key rivals, with the average price of the products and the number of different products offered.

oBrand Average price Number of optionsNike $170.76 13Asics $165 16New Balance $140.40 5adidas $104.42 7

o Target women to drive and capitalise on trends through their spending power and unmatched responsiveness to trends and fashion.

o We should maintain the current focus of offering an omni-channel offering to customers, with an increased focus on providing exceptional customer in-store experiences through the use of HomeCourt and Neighbourhood concept stores and by increasing the product training available to floor staff.

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