Sprint to the finish Featured

8:00pm EDT March 26, 2007
Some people at ASICS America Corp. thought Seiho Gohashi was a little crazy when he arrived at the company in 2005.

Gohashi, a lifelong employee of ASICS Corp. of Japan, the $1.4 billion worldwide sporting goods manufacturer, came to ASICS America and set a high bar for the sports apparel company’s U.S. unit. Just one month after he arrived as the company’s chairman and CEO, he challenged it to accomplish $500 million in sales and $50 million in profit in five years, a plan he dubbed 555.

While the plan’s name was catchy, the targets seemed like pie-in-the-sky to most at ASICS America. The incredulity was rooted in the track record that the company had established in the United States. The company had demonstrated sluggish performance since it started doing business here in 1977, plodding along with sales leveling off around the $200 million mark for several years in a market where demand for athletic footwear had been growing at a steady clip. Now, a company man who had never worked in the United States planned to grow it at what seemed like an unrealistic pace.

To Gohashi, the goal was ambitious but reachable, while for the rank and file at ASICS America, it seemed like a pipedream. Nonetheless, Gohashi has made believers out of the doubters by sprinting quickly toward the finish line he’s established for the company, bringing the goal closer than even he first thought was possible.

He got the company out of the blocks with blinding speed. After just his first six months at ASICS America, sales had increased by 30 percent.

At $440 million in sales for 2006, ASICS America is surging to win the 555 event. Gohashi says he expects to meet his goal of $500 million in sales and $50 million in profit in 2009.

Here’s how Gohashi has put ASICS America on track to meet the ambitious goal.

Study the numbers
Gohashi spent two months studying the market to figure out how to boost the company’s performance before he arrived at ASICS America. He discovered that part of the problem was that the company was running in too many different directions. ASICS America was spending too much of its effort trying to sell various types of athletic shoes in categories where giants such as adidas, Nike and Reebok dominated. Instead of trying to increase the company’s sales across its product lines, Gohashi decided to concentrate most of its efforts on running shoes — the company’s strongest product with the most growth potential. “We were dabbling, trying to figure out a direction,” says Gohashi “Our main category is running. We’re not going to compete against Nike or adidas in basketball or soccer.”

Gohashi says he selected the running shoe market because it continues to grow, fueled by health- and lifestyle-conscious consumers who are looking for running shoes to serve multiple purposes. “The running market is still increasing,” says Gohashi. “There’s no decline in sales in the running markets, so we’ve selected a market that has been strong for several years and is trending to be strong for the next several years.”

With a new direction, it was important for employees to understand how the company was progressing toward its goals. So ASICS America shares its financial results with all of its employees each quarter, something Gohashi says is important because it validates the company’s strategy and demonstrates to employees the value of their efforts and the progress the company is making. “Since our financials have been so positive over the last few years, we believe it’s helpful to share that with our sales reps and employees,” Gohashi says. “It proves to them what they are doing on a daily basis is positively changing the bottom line.” Gohashi also uses the results to persuade retailers that ASICS America is gaining market share. “The financials are also tools that our reps use when talking to retailers to prove to them that consumers are buying ASICS and they will want to be prepared by ordering more of our product to sell,” Gohashi says.

Work with the team
While Gohashi independently laid out the goals for the company before he arrived, he made sure that he took in information from his team members to get their input as to how they were going to accomplish those goals. “I sat down with the heads of each department and asked what would make them more effective, help increase sales and help them meet the 555 plan,” says Gohashi.

What he found was that some departments were understaffed, relying on some support functions to be provided by the headquarters in Japan, which was cumbersome and inefficient.

Gohashi ramped up staffing in departments that were shorthanded and persuaded headquarters to give him more independent control over the U.S. operations, something relatively easy for him to do as a long-term employee of ASICS. “Allowing departments to staff up takes away some of the responsibility that we relied on the parent company to help us with, making the U.S. office more effective,” says Gohashi.

Gohashi continues to meet with his team regularly, reviewing what they need to stay on track with the 555 plan. Gohashi says that because the overall revenue numbers don’t reflect what the individual departments need, he has to stay in close touch with each to make sure it has the resources it needs. “Since our growth has come so quickly, each department is struggling with how to react to the growth — the demand for more product, more marketing, more promotions, more categories, and so forth,” says Gohashi.

By talking to his team, he also found that not enough money was being spent on marketing and promotions.

Before Gohashi arrived, most of ASICS America’s advertising had been in magazines such as Runners World and Running Times, publications that reached the company’s target audience but missed a segment of the consumer audience interested in healthier life-styles, not necessarily strictly in running. Only about a quarter of those who buy running shoes purchase them for running.

To reach into the nonrunner group, Gohashi expanded the brand’s advertising, boosting its ad budget by 22 percent and moving it into magazines with wider circulation that reached bigger target audiences. “We’re not just talking to the running geek, which we were with Runner’s World or Running Times,” says Gohashi. “We still maintain magazine advertising, but now it’s going to a broader audience in publications like Oprah or Cooking Light, so it’s out to a broader consumer in hope that sales will increase when more people know about the brand instead of just runners.”

While he attempted to widen the marketplace to reach buyers beyond the runners segment, Gohashi didn’t desert ASICS America’s core market, where it had built its reputation for running shoes. Gohashi says that to reinforce its stature among runners and build its overall visibility, ASICS America struck a sponsorship deal with the New York City Marathon, where about 37,000 runners compete, and half wear ASICS brand shoes.

Study your brand
Gohashi stays close to customers by going directly to where they can be found.

“In Japan, we say the customer is a god,” says Gohashi. “I go out to retail shops and see what’s going on there. It’s just a casual visit as a consumer. I look at the competitors’ products, the atmosphere of the shops and also how the consumer reacts to our products. If I pick up some ideas, of course I discuss them with my staff.”

It was on one of those visits where Gohashi realized that the company’s point-of-purchase materials weren’t a match for its competitors, an experience that spurred him to have better signage for store displays and shelves created.

To gather information from outlets he can’t visit personally, Gohashi reviews a monthly report that sales reps post on a database. He says that helps him spot trends and problems that might otherwise go unnoticed.

Protecting the brand he’s worked so hard to help build has also been a major concern for Gohashi.

Because success attracts imitators, ASICS America began to find that products were showing up in the marketplace that it thought were a little too similar to its own distinctive stripe design used on its products for years. “We’ve had what we call the tiger stripes since 1979,” Gohashi says. “Now that we’re starting to grow as a company, both in the U.S. and globally, we have to protect that. So we have to be very aggressive with any kinds of knockoffs or counterfeits using our design. There are many fakes on the market.”

To counter imitators and discourage future attempts at knockoffs, Gohashi initiated a campaign of legal actions last year against manufacturers, marketers and retailers involved with products that it deemed were infringing on its designs. Suits were filed against the likes of Skechers, Target and Payless ShoeSource.

He says it’s difficult to gauge how much effect the effort has had on either quelling imitators or protecting its own sales by keeping counterfeit products out of the market, but he says that any company has to do whatever it can to protect its brand. “We’re making a statement — we’re definitely going through with the lawsuits — but it’s also a statement because we are releasing that information publicly,” says Gohashi. “The brand is the most important asset for us, and we have to protect our brand.”

HOW TO REACH: ASICS America Corp., www.asicsamerica.com