Supplier update: Dainese and AGV continue to grow in the U.S.

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Dainese continued to gain market share in 2010, but unlike 2009 — when it did so through flat sales (remember “the new up”?) — it recorded a 30 percent sales increase for its best year ever. The reason for the spike was not only a 13 percent increase in its dealer count, but also a new, more dealer-friendly sales program, a new D-Store in Chicago (the first in the U.S. to be owned by a dealer), and new racing sponsorships with the likes of Nicky Hayden and Ben Bostrom.

And let’s not forget Dainese’s sister brand, AGV. Even though its sales are counted separately from Dainese’s, AGV’s future looks brighter than ever due to Dainese’s recent decision to sell the helmets dealer-direct in addition to selling through sole distributor Parts Unlimited.

To get details on these changes, and for look at the upcoming sales season, Dealernews recently visited Dainese headquarters in Costa Mesa, Calif., to have a sit-down talk with the company’s top officials, who had just hosted the consumer press to an event introducing its 2011 lineup of products and racers.

OPPORTUNITIES AVAILABLE
The good news for dealers? Dainese is still looking for new retailers, especially those willing to open a D-Store selling exclusively Dainese and AGV products. Target cities are Los Angeles, Miami, New York City and Seattle.

“Seattle is a very good option for a D-Store because it’s a rich city,” says Roberto Sadowsky, Dainese USA’s vice president of operations. “And a lot of Canadians commute to Seattle for their shopping because the average prices in the U.S. are lower.”

This past November a former Michigan powersports dealer opened a D-Store in the Chicagoland neighborhood of Schaumburg. The store sells not only motorcycle gear, but also Dainese’s cycling and ski apparel. The new retailer expands on corporate-owned D-Stores in San Francisco and Orange County, Calif. (the latter doubles as corporate headquarters). Worldwide there are about 20 D-Stores, 70 percent of which are corporate-owned.

Of course, most new Dainese dealers in the U.S. simply begin carrying the brand in their store. In 2010, Dainese signed up 20 such retailers, bringing its active dealer count to 180, which includes 100 Cycle Gear locations. New dealers must order $5,000 in product at setup, and then continue to order that amount annually to remain a dealer. “Dainese is a product that needs presence in the store, and therefore we’d rather work with fewer but bigger dealers,” Sadowsky says.

Dainese views Cycle Gear as one dealer, so its 100 locations may stock only a few items and can do so because the company stocks deeply. “Even though a smaller Cycle Gear has two or three Dainese products, they always have availability,” Sadowsky says. “It’s not like a small independent dealership that buys a size run and then doesn’t have anything else.”

Another option is the D-Corner, a Dainese store within a store created with corporate-supplied displays and merchandising materials. The order amount required to have a corner varies based on the structure of the individual D-Corner. As part of its Dealer Expo booth, Dainese is recreating a D-Corner to demonstrate to dealers. “Our focus is to try to increase the visibility of the brand in the store,” Sadowsky says. “Dainese has a very strong brand identity and needs to be seen in a different way in the stores.”

Sadowsky also hopes to communicate to customers the brand’s accessibility. “It’s a high-end product,” he says, “but not everything is expensive at Dainese. This is a false myth.”

Dainese will be promoting at Indy a new sales program implemented last summer offering tiered pricing for margins according to volume. In addition, dealers can now return products.

To provide better service, Dainese has converted from outsourcing to a third-party warehouse to operating its own. “So for small purchases it’s easier now,” Sadowsky says. The warehouse isn’t very big and stocks only items that are either fast-moving or more popular in the U.S. than overseas.

The vast majority of dealer orders are still fulfilled by a huge automated warehouse in Italy, with Dainese USA doing the invoicing. Dainese has contracted with UPS to guarantee door-to-door service from Italy to anywhere in the U.S. within five days. The new sales program lowered the minimum order for the Italian warehouse from $500 to $250. The California warehouse fulfills smaller orders.

Dealer-direct AGV sales are fulfilled similarly (note, however, that the sales programs for the two brands are separate). Dainese decided last year to start selling AGV helmets directly to dealers, concentrating on the models Parts Unlimited doesn’t carry or promote.

“Of course, a distributor tends to buy only what they are selling very well,” says Sadowsky, adding that AGV’s new line of motocross helmets is a good example. “We have a very old history in motocross, but no recent history, so they tend not to concentrate on that. The opposite is the Valentino helmets. They sell by themselves.”

Dainese also feels it can better market some lines because only it knows its overall strategy and plans for the future. Sadowsky’s staff will focus first on dealers carrying Dainese but not AGV. The dealer-direct program is offering the same products and pricing as Parts Unlimited, with the exception of a few graphics made especially for the distributor.

Eventually Parts Unlimited will benefit from Dainese’s dealer-direct marketing, Sadowsky says. Once dealers start showing a strong interest in certain models, Parts will likely begin to stock them. Dealers then will take advantage of the big distributor’s faster and easier ordering program. “We don’t have the structure to have a dealer who buys one or two helmets a month,” Sadowsky notes.

Dainese instituted an AGV MAP policy last summer: straight MSRP. “Fortunately the dealers reacted in a very positive way,” Sadowsky says. “We had to shut down some dealers, but they just corrected the prices, and we shut them on again.” He says most of the enforcement has been dealers policing themselves, and that Dainese has been thanked by several retailers, especially online dealers who don’t like to discount.

NEW RACERS, NEW PRODUCTS
In regard to marketing, Dainese’s heritage is road racing, and that’s exactly where the company has been focusing its efforts in the U.S.

The biggest news is the signing of Nicky Hayden, who as a MotoGP teammate of Valentino Rossi is yet another tie between Ducati and Dainese, which manufactures the OEM’s technical apparel and is partnering with it for overseas promotions such as Europe’s Ducati Riding Experience and a plan to merge motorcycling and opera.

Honda rider Marco Simoncelli is a third Dainese representative in MotoGP.

In AMA racing, Dainese has a three-year relationship with the Michael Jordan Motorsports and the National Guard. The company is sponsoring Ben Bostrom, Geoff May and Blake Young, and will sponsor 2010 AMA champion Martin Cardenas in his first year in Superbike.

Dainese continues to support its “head-to-toe representatives”: Steve Rapp, James Rispoli and Chris Ulrich. A new entry for 2011 is Elena Myers.

In World Superbike, the two top riders, Max Biaggi and Leon Haslam, will represent the brand. Beginning this year, Dainese will have a racing service for World Superbike like the one it has for MotoGP.

The goal, Sadowsky says, is to use the racers’ names and images “outside the races” — that is to say, in advertising and POP materials. “With all these names we have to make possible that everybody sees the names, so cardboards, banners, and all this kind of communication … [to show] that behind the brand there is research and development, and a lot of riders that test, ride and use our gear. This is our main goal: POP, corners and a better and stronger cooperation with our riders.”

Dainese also continues to sponsor two riding schools — Kevin Schwantz’s and Jason Pridmore’s STAR Motorcycle Riding School — both of which are training more and more soldiers as the military tries to decrease the number of accidents and fatalities. “They are doing great job, and we’re proud to be a part of that,” Sadowsky says. “And it’s a potential customer for the future.” Dainese provides the gear, and its logo is on the schools’ trailers and marketing materials. At some training sessions, Dainese employees host a safety clinic about the gear.

As mentioned earlier, the D-Store in Costa Mesa hosted the media in January to show off its 2011 lineup.

The big news for AGV is new off-road helmets. After returning to the market in early 2010 with the MT-X helmet, the brand expands with two new models: the AX-8 and the AX-8 Dual. Developed with input from Travis Pastrana and Davi Millsaps, the AX-8 has a lightweight shell made of carbon fiber, Kevlar and fiberglass. Its 2XS-3XL size run is made from three shell sizes. AGV says the helmet weighs an average of 1,350 grams (2.98 lbs.) and is DOT- and ECE2205-certified. Retail pricing is $349.95 for solids, $379.95 for graphics and $399.95 for special graphics. The AX-8 Dual is based on the AX-8 shell and has all its characteristics plus a shield that gradually opens and closes. Other additions are removable open/shut chin vents and an open/shut intake on top. Solid colors retail for $399.95.

In the spring, AGV will introduce the TP199: the Pastrana replica helmet. The T-2 Sergeant and T-2 Warrior military-styled helmets will go on sale in March.

Turning to Dainese, new for 2011 is the Avro one-piece suit retailing for $1,599. The company’s best-selling one-piece suit, the perforated Laguna Seca Pro retailing for $1,199, gets a new color: blue.

New Dainese perforated leather jackets include the Rebel ($769), the Alien ($699) and the Cage ($429).

New textile jackets are the Air-Frame (both men’s and women’s versions retailing for $259) and the Air-Flux (men’s and women’s version retailing for $199).

New boots include the Axial Pro In ($499), which is the same boot used by Rossi and sponsored racers in the U.S. Other boots are the Torque Pro ($399) and TRQ Race-In ($299).

Looking toward the more distant future, Dainese is in talks with the famous Ace Cafe London to manufacturer for it a line of private-labeled leathers.

Finally, remember the D-Air leather racing suit with an airbag system that inflates on contact with the ground (or whatever else a rider may crash into)? After years of testing and developing the suit with its racers, Dainese is now producing the first 300 custom-sized suits for European consumers. The retail price is 2,700 euros (roughly $3,600). The company has limited the production number because it wants to test a customer service system in which inflated suits are mailed to the R&D department, which resets them for free.

Next up will be D-Air Street leather and textile race coats and jackets that will hit the European market in 2012. Now word yet on U.S. plans.