Emerald Raising $400 Million and OR Goes Digital.

On June 10 Emerald, the publicly traded company that runs trade shows including Surf Expo and Outdoor Retailer and owns Shop Eat Surf announced they were going to issue $400 million in convertible preferred stock.

Like every company in our industry, Emerald is impacted by the pandemic, and is seeing already existing trends in its trade show business accelerated.  I discussed that in April in this article and won’t repeat everything here.  I’m going to quote parts of the filing and press release describing the deal and comment on each quote.

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Speaking of Things That Might Change:  Trade Shows and Emerald Expositions

When we do get through the virus and at least some of the economic disruption, I’m wondering what the trade show environment might look like.  It had already been changing and it seems pretty clear those changes are going to accelerate.

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Thoughts from Outdoor Retailer/Snow Show

The first thing you think when you walk into the show is what an incredibly great idea it was to consolidate The Snow Show with Outdoor Retailer.  The second thing you think is, “What took them so long?”  I imagine the answer to that is quite a soap opera.

The next thing I thought was whether I’d gone to the dog show by mistake.  I like dogs, but the sheer number was rather remarkable this year.

For the two days I was there, it was a vibrant and active show.  Not so sure about the third day, given the number of attendees who were on the Friday morning flight back to Seattle with me, but that’s what happens at trade show; the last day is typically slower.

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Emerald Exposition’s Results, SIA and the Trade Show Environment

Emerald and SIA are kind of, for now anyway, joined at the hip due to their ownership/continued involvement in the Snow Show.  They are both trying to respond to profound changes in the active outdoor market that are changing their business models.  I thought I might kill the proverbial two birds with one stone and see how they’re both doing and speculate on where that interrelationship might go.

Emerald went public on April 28, 2017 at $17.00 a share.  It reached a high of $24.45 on November 29, 2017 and since then has fallen to $12.34 as of 10:17 AM Pacific Time on May 24, 2019.  That’s a decline of 27.4 percent from it’s offering price and 49.5% from its high.

Emerald currently operates “…more than 55 trade shows as well as numerous other face-to-face events.”

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Trade Shows in General, Denver, SIA, ShopTalk, and Other Random Musings

There is a certain level of irony in my having left the Outdoor Retailer/Snow Show in Denver last Friday as the temperature was approaching 60 degrees and come home to Seattle where, today- so far (still coming down hard)- there’s three plus inches of snow on the ground and the temperature isn’t projected to get over freezing.  Hope it continues in the mountains as it slacks off here.

Trade shows- whatever shall we do with them.  It’s not just our industry that’s wondering.  Emerald Expositions, the owner of Outdoor Retailer, Surf Expo, Interbike, and the Snow Show as well as shows in multiple other industries has to be wondering.

Emerald went public (symbol EEX) on April 28, 2017 and closed the day at a price of $19.50.  As I write this on February 7, the price is $14.25.  Emerald’s strategy, as described in their SEC filings, is to consolidate the highly fragmented tradeshow industry.  It’s a good strategy as long as they can find trade shows worthy of being consolidated in an industry experiencing high uncertainty and change.

What do we go to the show for now?  One successful retailer said to me, “Jeff, where else will I find new brands?”  As long as the small, really new brands are actually at the show, he’s right.  From that point of view, I suppose bigger is better and more efficient.  Wonder where the bike show will land.

Face time with people you don’t see that often to solve problems and build relationships is the other reason I can think of.  I also like seeing friends I don’t see often enough.

As I’ve said before, SIA’s timing of the sale of the trade show to Emerald Expositions was absolutely prescient.  They would never get now the price they got then.  But now what do they do?

I guess SIA has north of $17 million in the bank and have to figure out how to use it to the benefit of the industry.  They’ve cut membership fees since they are no longer subsidizing a trade show.  We certainly need an advocate that represents the brands and retailers in the winter sports business.  SIA members who exhibit are getting a $2.00 per square foot discount off standard show rates.   I haven’t been to the on snow in years but think it’s valuable. Reliable research (I stress reliable) is valuable and necessary as well.  There might be a role for SIA teaching it’s members how to make good use of it.  My experience, as well as what I’ve heard, is that many member companies are resistant to using it.  Once that might have been okay, if kind of hard to understand.  Now, I don’t really think you have a choice.

Getting value from SIA no longer means the kind of cost-effective trade show we had when SIA ran the show for the benefit of its members.  How does that old song go?  “You don’t know what you’ve got ‘till it’s gone.”  Not to carry the analogy too far, but we’ve kind of “paved paradise, put up a parking lot,” trade show wise.

Consolidating SIA with OR was long overdue.  We save money going to one show instead of two and we all figured out long ago that snow sports are part of the outdoor industry.  Maybe that makes up for the fact that it’s getting more expensive to go to the show.  Emerald Expositions, remember, is a for profit public company so what did we expect would happen since we don’t really have an alternative?

Last spring, I didn’t even get the usual invoice from SIA.  But I’m so well trained after so many years that not getting that invoice caused me anxiety.  I renewed on the web site, then found out that free entry to the show was over.

What will I do this spring?  Not quite sure.  Neither are some other people given the conversations I had at the show.  SIA is supposed to be working on some new initiatives and I will look forward to seeing what those are.

SIA and its members are figuring out what the mutually beneficial value proposition is.  That wasn’t necessary when you had to join to exhibit at a show you really didn’t have a choice but to be at.

Meanwhile, at the show:

Burton wasn’t exhibiting, but this isn’t the first year that’s happened.  Wonder if they had a show room/place for a party like in past years.

Mervin (Gnu/Libtech) wasn’t there either.  Years ago, I made the argument that their competitive positioning and distribution didn’t require them to be there as long as they announced it in advance and made it clear it was a positive, marketing strategy, step.  They didn’t do that.

I might argue that Never Summer could do the same, but as a Denver company, the cost is way lower for them to attend the show.  I love brands who’ve been careful to maintain the same strategy and distribution philosophy forever.  As long as it’s one that working.

Speaking of companies that have had the same (in my judgment correct) positioning strategy forever, Arbor won REI’s brand of the year award.  It was announced at the show and founder Bob Carlson made an excellent speech.  Wasn’t there- I read it.  I thought the most important thing he said (besides “thank you”) was that Arbor had always considered itself as part of the outdoor industry.  That ethos has always guided the brand and continues to allow it to move beyond its action sports roots.  Also makes it a hell of a fit with REI.

Bob was my first consulting client back in 1995.  I must have done a great job.

Hey- was I the only one who thought the show was full of dogs?  Just curious.  Retailers with emotional support animals maybe?

The Ride Snowboard booth was really small, where it historically hasn’t been.  Good for them.  I imagine they gave up nothing except the opportunity to waste some money.

Sector 9 longboards were there in a booth labeled “reconstruction.”  The exceptionally good news was that co-founder Steve Lake is back running the brand.  Some fool gave Steve, and everybody else in the booth, hammers.  They were all wearing red highway construction vests and hard hats as an acknowledgement that the brand had some rebuilding to do.

As long as Lake is careful with the hammer, I think they can pull it off.

Igloo, the cooler company, was showing the soon to be introduced Recool cooler.  It’s “…comprised of 100% biodegradable materials and is made in the USA from molded pulp.  The product was created to provide consumers an economical and environmentally conscious alternative to single-use Styrofoam coolers.”

You’d recognize the material if you saw it, though of course it’s reinforced with a binder to make it hold up.  It won’t last for centuries like Styrofoam (mostly in a landfill), but it will get you through your trip and at $9.99 seems like a great idea.

Finally, back on the subject of the future of trade shows, how many of you have heard of ShopTalk?  It’s not active outdoor focused but appears to have something to offer retailers in any industry.  “ShopTalk,” the web site says, “is where the entire retail ecosystem comes together to create the future of retail based on the latest trends, technologies and business models, including changes in consumer expectations.  You’ll learn in both small groups and large, including sessions, roundtables, dinners and one-to-one meetings. We’ll ensure that your voice is heard and that you get to hear other important perspectives. You’ll connect with your peers as well as potential new partners and engage with a large and diverse audience. We enable much of this with an industry-leading agenda and speaker lineup as well as with networking and collaboration programs powered by technology that brings thousands of you together for tens of thousands of personalized interactions.”

Many retailer issues are not industry specific.  In any event, there can be a lot of value in talking with people who don’t share your perspective.  Take a look at the web site.  Perhaps this is part of the answer to how trade shows should evolve.

Okay, I assume that’s enough random musings.  See you at the next trade show, wherever that is and whatever it looks like.













Trade Shows and Scooters

I’m back from the first combined Outdoor Retailer/Snow Show trade show in Denver.  The most impactful thing I brought back from the show was the flu.  You guys who had dinner with me Thursday night- let me know if you got it.

You know, last year I came home from Denver with what turned out to be pneumonia.  Two years before that I was hospitalized in Denver with a staph infection in my knee.  I don’t know- maybe I’d like to see us back in Vegas.  I never got sick there.

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Agenda Was Kind of Slow Last Week

In the past, I’ve been more than willing to criticize trade shows, suggest changes, and express our mutual uncertainty as to what the role of trade shows should be and how they should perform that role.  Even recognizing that the winter Long Beach Agenda typically has lower attendance than summer, I was surprised at the low attendance and the brands that did not attend.  I also heard from more than the usual number of brands that attended only because they got free booth space.

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As the Trade Show Proposition Changes, Would You Want to Own More of Them? Emerald Expositions’ Quarterly Results

As you probably know, Emerald Expositions (EE) is the owner and manager of Surf Expo, Outdoor Retailer, and now what was formerly SIA’s Snow Show.  Overall, they operate over 50 shows as well as other events.  They’ve grown by acquisition, and expect to continue to do so.  Their shows are in many industries and include the International Drone Conference and Exposition (kind of cool!), the National Pavement Expo (who knew there was one?), American Craft Retailers’ Expo, and the Digital Dealer Conference and Expo (no idea what they do there).  These, along with the Snow Show, are among their most recent acquisitions.

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One More Comment on Trade Shows, A Perspective On the “Outdoor” Industry, and Articles on Retail.

Trade Shows

Trade shows were created to bring buyers and sellers, that is brands and retailers, together to do business.  Everything else that goes on at trade shows, beneficial as it may be, has been secondary to that goal.

But there are fewer smaller retailers and fewer retailers overall.  The consensus is that the number will continue to drop (see the articles referenced at the end of this).  Larger retailers have less reason to attend, as their most important suppliers reach them outside of the trade show venue.  Meanwhile, changes in logistics, technology and the supply chain have introduced some chaos into the formerly more or less reliable buy sell cycle around which we scheduled shows.

To me, this means there’s less value in attending traditional shows.  The return on investment is harder to justify for buyers and sellers.  Meanwhile, brands and retailers are generally competitors at a greater or lesser level.  Are they perhaps a bit more cautious in how they work together and share?

What’s the result?  Neither buyers or sellers need to send as many people to trade show for as long.  Smaller booths, shorter shows, fewer attendees.  Consolidation of shows.  I haven’t had any retailer or brand tell me that putting OR together with SIA is a bad idea.  If you are one who thinks it is, I’d love to hear why.  Ultimately, I expect fewer shows though, as is always the case in consolidation, everybody will struggle to survive hoping it’s the other guy who goes away.

There will be more focus on consumers.  It’s the best way to cover overhead.  There will be some smaller, focused, curated shows.  Interestingly, it feels like there will be room for big shows and for small shows.  As usual, the ones caught in the middle will have the most trouble.  I wonder if there might somehow be some local, “popup” shows.

The fundamental reason trade shows were created has declined in importance.  A lot.  That’s the thought I want you to have top of mind as you consider the show landscape.  Given the change, how has what you get out of the shows changed?

The Outdoor Industry

Boardsport Source is a good magazine.  It’s generally thoughtful, and helps me know what’s going on in Europe.  I was looking at “The Great Outdoors SS18 Retail Buyer’s Guide” in the July issue.  I can’t find the picture on line, but in the Camping Gear section of the magazine, there was a picture of a campfire.  Nothing unusual about the fire.  But it was on some kind of curved metal grate or holder just for the fire.  Stuck into the ground next to it was a black metal pole with a couple of adjustable rods coming off it.

One of those rods held a large metal pot with a lid that was cooking something over the fire.  The other, higher up on the pole and not over the fire, held a tray with what appeared to be a coffee pot and mug as well as a plate with food on it.

So, I used to do some serious back packing.  A week to two weeks out in the back country over mountain passes carrying everything we needed on our backs.  Sometimes we caught some fish.  My “friends” let me clean them so I would be the one the bear was attracted to.

When you do that kind of camping, you are always concerned with the weight of your pack.  First, you are concerned that it is too heavy.  Later in the hike, as the food goes away and if the fish aren’t biting, you worry it’s too light.

I want you to know that none the equipment I described around the fire ever made it into any back-country camper’s pack.  Not for a minute did we consider trying, as the article says, to “bring your kitchen outdoors.”  Comfort was measured ounce by ounce, as you strove obsessively to minimize the weight of what you had to carry.  Or to put it in somebody else’s pack.

I’m not against drive up camping and having your comforts.  Certainly, rigorous backpacking isn’t for everybody.  But the picture and description of the gear made me think about the “outdoor” target market.  For the reasons I’ve described this kind of equipment specifically excludes serious backcountry campers.  Unless they have it flown in by helicopter I suppose.

The elite athletes in skateboarding, snowboarding and surfing always used more or less the same equipment the typical participant used, though of course they did things with it that most of us were never going to try.

Suddenly, in this particular case at least, that doesn’t seem to be the case.  I don’t quite know what to make of it.  Is the “outdoor” market defined as anybody who’s not “indoors?”  Is there a “core” to be connected to?  Does that matter?  Do the customers, whoever they are, care about the product or do they just take product for granted and focus on an associated experience?

What does it mean to be a brand in the “outdoor” market and how do you identify your customers?  If you think it’s everybody who’s not indoors, it’s nobody.  I guess it helps a little if you say, “active outdoors,” but it hardly solves the problem.

Perhaps, as we’ve become more and dependent on the public and private equity markets for financing, you have to define your brand’s potential in a way that at least appears to place it in a market where there’s enough growth opportunity- even if that’s destructive of the brand in the longer term.

Read These

This first article, “Over Storing America,” gives some insight into how retail got to be so overbuilt that perhaps you hadn’t thought about.

The second, called “Retail Shift,” was sent to me by a friend.  Thanks friend.  The article says:

“the market make-up has been shifting and continues to shift from a fairly homogeneous composition of primarily baby boomers into a significantly splintered compilation consisting of Gen X, milliennials, Gen Z and the boomers. Multiple sub-segments exist within each of these large segments that have their own defining characteristics. This complex segmentation is compounded by the fact that the vast majority of retail platforms today have erroneously been founded and built on the strategic premise that large homogeneous groups of people generally desire the same things.”

Both are worthy of a read.


Agenda’s Got a Consumer Agenda

As usual, the Agenda trade show, Long Beach version, was held July 13 and 14.  What was unusual was that it was followed, on Saturday the 15th, in the same space with the same brands attending, by its first consumer show.  Having no intention of spending three whole days in the Long Beach Convention Center, I arrived late Thursday afternoon.   I walked the show Friday and spent four or five hours in the consumer show Saturday.

We are all aware of the long, ongoing conversation about the changing role of trade shows, their relevance, and role.  The consensus, as far as I can determine, is 1) we need some, 2) face time is important, 3) we’re not completely sure how to improve them and 4) there are too many of them.  I applauded the combination of the SIA show with Outdoor Retailer.  Step in the right direction.

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