Lingerie retailer Frederick’s of Hollywood is shedding … stores

by
Tom Huddleston, Jr.

@FortuneMagazine

February 19, 2015, 6:22 PM EST

Frederick’s of Hollywood, a purveyor of racy women’s lingerie for almost seven decades, is reportedly shedding one-third of its 93 stores.

The Los Angeles-based retailer has hired liquidators the Great American Group to help wind down operations for at least 31 of its stores, which will close in the coming months, The Wall Street Journal reported on Thursday.

Bill Soncini, Frederick’s COO, told WSJ that the number of store closings could increase slightly. The company will shutter its flagship store in Hollywood in April.

“We’re in the process of re-engineering the whole business,” Soncini told WSJ. “Landlords have been very, very agreeable of letting us out of some very unprofitable locations…. These stores should have been closed years ago.”

Buyers led by the Harbinger Group took the retailer private in 2013 as part of a deal that valued Frederick’s at roughly $11 million. Even then, the company had been struggling to compete with top-selling lingerie brands such as Victoria’s Secret, which led to a string of quarterly losses. WSJ notes that the going-private deal did not work out all that well for Harbinger, which recently said it wrote off more than $60 million on the transaction.

Now, Frederick’s is attempting to avoid its second bankruptcy in less than two decades. The company filed for Chapter 11 protection in 2000. It emerged from bankruptcy three years later and went public in 2006. As part of its exit from bankruptcy, Frederick’s outlined a turnaround plan that included revamping its website and opening or remodeling more than 20 stores.

What’s next for power parka purveyor Canada Goose

by
Tom Huddleston, Jr.

@FortuneMagazine

February 18, 2015, 1:46 PM EST

It’s hard to walk anywhere in New York this unusually cold winter without spotting someone donning a Canada Goose parka with its distinctive red-and-white Arctic Program logo and coyote-fur trimmed hood. And if the company has its way, Canada Goose apparel will be soon be ubiquitous in many more U.S. cities.

To support its U.S. plans, the Canadian company opened a Manhattan sales office in December, bringing it closer to the buyers at the high-end New York department stores like Saks Fifth Avenue that sell its $800 coats. Canada Goose expects the U.S., where it gets almost a quarter of its revenue, to eclipse Canada in 2015 and become its biggest market, barely a few years after the 58-year-old company got serious here.

Its rise has been meteoric, though not without bumps. While sales rose about 30% to $250 million last year and on pace to hit $300 million or so this year, its limited production capacity cost it some crucial sales at the height of the holiday season in December when retailers from Nordstrom JWN to Barneys to Macy’s M upscale Bloomingdale’s chain ran out almost entirely of Canada Goose inventory, with replenishment coming only until mid-January.

Though the company often has stock-outs, it is trying to remedy the issue by ramping up its manufacturing firepower. Last month, the company announced it had bought a 45,000 square-foot facility just outside Toronto, where it is based, that CEO Dani Reiss told Fortune would raise capacity by 50%, supplementing the capability of its existing Winnipeg production facility.

Reiss, the grandson of the founder and CEO since 2001, downplayed the idea that Canada Goose had lost out on sales, saying the brand’s staying power meant Canada Goose could make up those sales.

“Outerwear is no longer a commodity. Many people who are looking for a Canada Goose jacket are looking for a Canada Goose jacket, and they’re going to come back next year and still look for Canada Goose,” said Reiss. Nonetheless, he did allow that the stock-out came too quickly. “We prefer that they run out of product, but may be a bit later than they did.”

Though Canada Goose has been around since 1957, for years it remained small, niche brand used by U.S. Antarctic researchers and film crews in cold locales. It broke out in Europe, then in Canada. In the United States, it exploded in the public consciousness when Kate Upton donned a Canada Goose coat on a Sports Illustrated swimsuit cover two years ago. (The company refers to its brand ambassadors as Goose People.)

Canada Goose is riding an surge in the popularity of premium winter coats, long seen as functional but not necessarily needing to be fashionable. Its biggest, and bigger, competitor, Italy’s Moncler, has posted fast growth too, rising 16% in the first nine months of 2014. While no one tracks the luxury end of the U.S. outerwear industry, NPD Group says total sales in the segment 6% to $13 billion last year, with the high-end rising at a faster clip.

That kind of growth has drawn in other competitors too, meaning Canada Goose is at a critical juncture. Its rivals range from a small brand like Montreal’s Mackage, whose coats are as pricy and sold at many of the same luxury stores, to VF Corp’s VFC The North Face, whose men’s Himalayan parka goes for $599.

So Canada Goose is now moving on to the next stage of its growth. It will launch a U.S. e-commerce site this year (it launched a Canadian site last year), and for the first time, foray outside of winter gear with a spring collection. The company is also looking into the possibility of a handful of flagship stores, though not firm plans are set.

Canada Goose, and its parkas with water-resistant shell and Canadian down, may be impossible to avoid in New York and a few other Northeastern cities (and surprisingly, Los Angeles, where 50-degree weather counts as Arctic conditions), but its products are far rarer on the streets of cities elsewhere in the country, including natural markets like Minneapolis, to name just one.

But the tricky part for Canada Goose to continue growing as is expected of a private-equity owned company (in December 2013, Bain Capital bought a majority stake for an estimated $250 million, though no IPO plans are on the horizon at this point), will be to avoid a backlash of the kind that can fell superhot brands, especially ones with such an easily identifiable logo. For Reiss, that means avoiding anything that could hurt Canada Goose’s hard-won reputation for quality.

“We have to continue to make amazing product,” Reiss said. “We have to stay away from licensing, stay away from diluting the brand, stay away from making crappy stuff and throwing our logo on it, because I think that kills anything. We’re not just a logo.”

Levi Strauss CEO on a ‘mission to get women back into jeans’

by
Tom Huddleston, Jr.

@FortuneMagazine

February 12, 2015, 6:39 PM EST

In 2012, Levi Strauss CEO Chip Bergh announced to his staff a company-wide goal: Grow revenues as well as profits, modestly and steadily, year in and year out. While the target may sound somewhat modest for the largest jean maker in the world, it was a financial ambition that the 161-year-old family-controlled business had failed to achieve consistently for decades.

“If we want to be a great company, that is what great companies do.” Bergh said in a story from the October 6th issue of Fortune. “No matter what. No excuses.”

After reporting fourth quarter and fiscal year 2014 results Thursday, Bergh says he has no need to come up with any excuses. For the second year in a row, he hit his goal. Full-year revenues increased 2% to $4.8 billion. And while net income was down this year to $106 million, adjusted EBIT — the company’s preferred measure to track profitability — was $504 million last year compared to $467 million in 2013. In the Americas in the fourth quarter, revenues were up 8% to $894 million — largely based on Black Friday sales. The company also grew revenue in both Europe and Asia for the first time in three years.

Despite hitting his overall target, Bergh acknowledges there is much work to be done to make Levi the iconic brand and financially sound company he’d like it to be. The CEO’s vision is to make Levi the undisputed Goliath of denim it once was, but a fragmented denim market that is experiencing only modest growth is making that goal challenging to achieve.

A big part of Bergh’s strategy moving into 2015 is to make the Levi brand more relevant for women. After missing key trends in the past like colored denim and stretchier fabrics, the company is laser-focused on enhancing its offerings for female customers. “I don’t know how many times we’ve done this,” Bergh said on an earnings call Thursday referring to efforts to revamp Levi’s offerings for female customers. Yet Bergh is confident after marketing testing and research that the company’s latest offering for women, set to hit stores in the latter part of 2015, will be on target. The latest line might even help offset rapid growth domestic athletic apparel market bolstered by women trading in their favorite pair of jeans for yoga pants.

“I am very optimistic that we’ve nailed this,” Bergh said after the call in an interview with Fortune. “We are not afraid of yoga pants. I am on a mission to get women back into jeans.”

Bergh’s goal for 2015 is also to cut the company’s products for women by about half to “make shopping easier.” Although sales from women represent roughly 20% of annual revenue, the company makes 65 different fit blocks for three different women’s lines. That’s more than double the fit blocks they have for men.

“We do have quite a bit of complexity in the women’s market and it makes it tough to shop,” he said. “It is hard to figure the whole thing out.”

The data Levi gathered through November indicated that denim sales are still soft, particularly on the women’s side. Yet Bergh is still optimistic about what he predicts will lead to an upswing in the next six to 12 months. Denim has seen a pickup in runway shows and high-fashion lines recently, says Bergh, and quite often that translates to higher sales in the marketplace.

Despite the acknowledgment how high fashion can have a huge impact on retail sales, Bergh didn’t mention that New York Fashion Week just started this week. Despite the omission, Fortune can predict what garment he’s hopeful will frequently be coming down the runway.

Lululemon’s founder quits the yoga gear maker’s board

by
Tom Huddleston, Jr.

@FortuneMagazine

February 2, 2015, 10:19 AM EST

Lululemon Athletica founder Chip Wilson said Monday he will step down from the retailer’s board of directors, a move that ends an at times difficult relationship between the yoga apparel maker and its former chief executive.

Wilson, who founded Lululemon LULU in 1998 in Vancouver, said he had achieved the goals he had set since he came back to the retailer in 2013 — to help it mitigate an issue it had with yoga pants that were too sheer.

“After careful thought, I believe that now is the right time to step away from the board,” Wilson said in a statement. He intends to focus more on his work with a new business called Kit & Ace, a luxury brand founded by Wilson’s wife and son.

Wilson, who served as Lululemon CEO from 1998 to 2005, built the brand to meet the needs of women as they were increasingly participating in sports, specifically yoga. Retail expansion soon followed, and Lululemon, known initially as a yoga company, has since expanded its product slate to also focus on items meant for running and biking, as well as move to sell more gear to men.

But the company and its founder have both faced challenges. Lululemon in 2013 was forced to pull some of its popular pants after a mistake by a supplier left the pants somewhat see-through. That issue led to the ouster of former Chief Executive Christine Day, as well as the return of Wilson. Some analysts contend that the brand has still not fully recovered from that debacle. Lululemon is also seeing greater competition in the yoga category, as Gap GPS and others tackle the market.

Wilson himself was at times a controversial figure. He had generated some negative press when he said that the company’s pants weren’t meant to work for all body types. That comment was broadly derided as insensitive and out of touch.

Last year, Wilson called for a shakeup of the company’s board, saying it had focused too much on short-term results. He later reached a deal to refrain from waging or supporting a hostile takeover of the business until 2016. Under the terms of that deal, Wilson also sold half of his 27.7% stake.

“Trying to affect a fundamental shift in direction is hard and I had to raise a strong voice to make myself heard while taking decisive action to implement change,” Wilson said on Monday. “I am happy to say that I now believe the company has returned to the core values that made it great — product, brand and culture — and is back on track.”

Fast-fashion apparel giant H&M opening more stores as profit soars

by
Tom Huddleston, Jr.

@FortuneMagazine

January 28, 2015, 9:07 AM EST

Hennes & Mauritz AB, more commonly known as H&M, has announced plans to open 400 new stores in 2015, a move that comes after the Swedish retailer reported profit leapt 17% for the latest year. Here are the most important points from the retailer’s latest earnings report.

What you need to know: H&M, a major powerhouse in the world of retail, is accelerating store opening plans in 2015 and intends to open an additional 400 stores on top of the 3,511 locations it already operates. In 2014, H&M opened 379 new stores. The new store openings for this year will mostly occur in China and the U.S., although H&M said it will debut in several new markets this year, including South Africa, India, and Peru.

The U.S. is the company’s second-largest sales market after Germany, and an important growth market. H&M opened 51 stores in the U.S. last year — that’s more than any other market outside China, where 86 stores were added. Sales in the U.S. leapt 26%, among the better-performing markets for the year ending on Nov. 30, although H&M’s sales grew broadly across all major markets.

H&M is a fast-fashion purveyor that turns around trend designs quickly, taking away business from teen-focused retailers and other rivals that take a longer time to respond. Sales growth in the U.S. has far outpaced those reported by Gap GPS , for example, while teen retailers such as Abercrombie & Fitch ANF have seen their businesses suffer a bruising decline as tastes have changed in favor of H&M and rival Forever 21.

The big number: Profit for the full year after taxes totaled 19.98 billion Swedish kroner ($2.4 billion in U.S. currency), up 17% from a year ago. H&M gave an early indication that sales growth will continue to remain strong early in 2015, with sales up 15% in December and expected to rise 14% in January.

What you might have missed: H&M also unveiled a plan to launch a new beauty concept with an initial debut in about 900 stores and online beginning this fall. The new concept will comprise of a range of make-up, body care, and hair care items, and will replace H&M’s current own-brand cosmetics line. H&M didn’t say much about the line, or why it was changing its strategy in beauty, although the move is the latest step by the apparel chain to diversify its product range.

H&M last year debuted a sport-focused line, and also expanded the amount of shoes it sold in some of its stores. Sportswear, which has been an increasingly popular apparel trend that has boosted results for Nike NKE and Under Armour UA in the U.S., has lured H&M, Forever 21, and other rivals that haven’t traditionally focused on that category. For example, H&M’s U.S. online store lists 124 items for women under sportswear, selling a range of clothes meant for the gym or even to be worn more casually, and not necessarily for athletic purposes. That’s a dominant trend in retail today, as yoga pants take the place of jeans for everyday wear (in one of many examples).

Athletic apparel: Outperforming the competition in 2014

by
Tom Huddleston, Jr.

@FortuneMagazine

December 25, 2014, 7:08 AM EST

Growing demand for activewear, the sporty fashion for both the gym and the streets, has lifted sales for makers of the clothing and the retailers that sell it.

Athletic gear, you might say, is running laps around the competition – doing even better than the overall retail industry, which is humming along as shoppers feel more comfortable about opening their wallets because of the improving economy.

“Activewear is booming, with sales growth exceeding that of the apparel market as a whole,” said NPD analyst Marshal Cohen. “Consumers are drawn to its comfort and versatility, and the fact that it still makes a fashion statement.”

The proof is in the industry’s sales results. Nike’s NKE North America sales leapt 14% for the six-month period ending November 30 from the prior year’s level with the help stronger footwear and apparel sales. Smaller rival Under Armour’s UA sales in the region leapt 29% for the first nine months of 2014. Sales are also climbing at major companies including Lululemon Athletica LULU and Foot Locker FL .

What’s driving this trend? Well, for one thing, activewear is suddenly chic. Nike earlier this year showcased its new gear on top supermodels like Karlie Kloss, while Gisele Bundchen has appeared in Under Armour ads. Their willingness to sign on as ambassadors highlights just how fashionable athletic gear has become.

Americans are taking notes. They are wearing yoga pants, running gear and basketball shoes not just to-and-from the gym, but also around town. Athletic gear is comfortable after all, and analysts say the attention manufacturers are making to fabrics and new colors and styles have helped to broaden the category’s appeal.

And there’s a lot of opportunity for these athletic apparel makers to grow even more. Lululemon, for example, wants to expand beyond its female yoga-loving roots to reach more men. In the next few years, the company hopes its men’s business will grow to $1 billion in annual sales.

Meanwhile, Nike and Under Armour, whose customers are mostly men, want to do a better job of tackling the women’s market. Nike is hoping sales of sports bras, tights and other women’s gear can add $2 billion to annual sales by 2017. Under Armour has said its $500-million women’s business can one day be as big if not bigger than its men’s business. Today, sales of the company’s men’s line is more than double in size.

The industry’s opportunities aren’t just limited to achieving more balanced sales between the genders. There is international expansion. And for Under Armour, the running shoes industry is particularly alluring.

While athletic clothing sales are mostly taking off, the stock market is still picking winners and losers in the field. Shares of Nike, Under Armour and Foot Locker have each notched gains of 20% or more so far this year, far exceeding the broader market’s performance. Stock-market losers include Luluemon, Finish Line FINL , and Adidas .

All of the poorer performing companies are facing their own challenges. Lululemon ran afoul with yoga pants that were a little too see-through. Finish Line’s margins have been pressured by big discounts for its slow-selling basketball gear. And at Adidas, slumping sales of golf and a weak performance by its Reebok unit have hurt results in the United States.

Broadly speaking, running, basketball and yoga gear are selling exceptionally well. But other pockets like golf and hunting are slumping.

Despite those exceptions, the athletic-gear industry is still looking pretty solid overall. Business continue to improve, even for the weaker players. Finish Line’s sales rose 8.6% in the latest quarter, for example, while Lululemon’s gained 10% and Adidas global revenue grew 9%. Mass retailers are paying close attention and will likely stock their shelves with more athletic gear in 2015.

“Retailers and manufacturers across the board know that activewear is active, and they all want a piece of the action,” Cohen said.

American Apparel fires Dov Charney, names new CEO

by
Tom Huddleston, Jr.

@FortuneMagazine

December 16, 2014, 5:02 PM EST

American Apparel has fired CEO Dov Charney six months after suspending him for alleged misconduct.

The clothing retailer said on Tuesday that it had appointed Paula Schneider, a veteran fashion executive, as his replacement. Schneider has previously worked at clothing group Warnaco and women’s apparel company Big Strike, will take the reins of the struggling clothing retailer on January 5, 2015.

American Apparel APP says it has terminated Charney, who was removed from the CEO role in June after the company alleged he had misused corporate money and violation of sexual harassment policies. Over the years, Charney has faced repeated accusations of sexually harassing employees and of discriminating against less attractive staff on the grounds that they undermined the corporate aesthetic.

Charney had been serving as a consultant to the company in recent months, but American Apparel said on Tuesday that he has been terminated for cause.

Charney, who founded American Apparel 25 years ago, was initially replaced by interim CEO John Luttrell, who also served as the company’s chief financial officer. But, Luttrell was removed from both roles in September, when turnaround expert Scott Brubaker of restructuring firm Alvarez & Marsal took over as the new interim CEO. Brubaker will continue in that role until Schneider takes over in early January.

David Danziger, co-chairman of American Apparel’s board, said in a statement that the retailer “needs a permanent CEO who can bring stability and strong leadership in this time of transition, and we believe Ms. Schneider fits the bill perfectly.”

Once one of the trendier, youth-focused retailers in the industry, American Apparel has seen its sales fall off in recent years. The company’s same-store sales declined 7% last quarter and it reported another net loss.

In a statement, Schneider said “My goal is to make American Apparel a better company, while staying true to its core values of quality and creativity and preserving its sweatshop-free, Made in USA manufacturing philosophy.”

Wet Seal could be latest teen apparel bankruptcy as losses mount

by
Tom Huddleston, Jr.

@FortuneMagazine

December 11, 2014, 6:51 PM EST

It’s been a tough month for teen apparel retailers following recent bankruptcy filings by Deb Shops and Delia’s.

Those two chains could soon be joined by Wet Seal, another clothing store familiar to a generation of teen girls who frequented suburban shopping malls. The Foothill Ranch, Calif.-based Wet Seal said this week that it could also file for Chapter 11 bankruptcy protection if it cannot immediately address liquidity concerns made all the more apparent in the wake of yet another disappointing quarterly earnings report.

The company’s third-quarter losses more than doubled, to about $36 million or 43 cents a share, Wet Seal wtsl said on Wednesday. The company now has $19.1 million in cash and cash equivalents against $21.3 million in controvertible debt while its inventory declined by 26%, to $31.6 million, year-over-year.

In Wet Seal’s earnings release on Wednesday, the company reported that it has enlisted the help of investment bank Houlihan Lokey and FTI Consulting to advise on strategic options going forward, including a potential bankruptcy filing.

In the earnings release, Wet Seal CEO Ed Thomas admitted that Wet Seal’s third-quarter numbers represented the low-end of the company’s forecasts. “A key priority is to address our immediate liquidity needs in the very near term in order for us to have the time and resources to be able to implement our operating strategies,” Thomas said in a statement. Thomas pledged a commitment to growing the company’s e-commerce business while tweaking the stores’ merchandise with a greater emphasis on fashion to “recapture our target customer.”

Thomas rejoined the company in September as CEO, a role he vacated three years earlier. The company’s shares have lost nearly all of their value over the past year amid mounting losses.

Wet Seal’s potentially dire news comes less than a week after New York-based Delia’s filed for bankruptcy after failing to find a buyer for its struggling business. The parent of Deb Shops, which is based in Philadelphia, said earlier this month that it would begin selling off inventory and shuttering some of its nearly 300 locations as part of the retailer’s own Chapter 11 filing.

Downward dog? Lululemon offers a disappointing holiday outlook

by
Tom Huddleston, Jr.

@FortuneMagazine

December 11, 2014, 8:41 AM EST

Lululemon Athletica’s third-quarter net income dropped nearly 9% as the athletic-gear maker reported weaker gross profit margins. Sales growth for the period wasn’t as strong as the company had projected. Here’s what else you need to know about the company’s earnings report.

What you need to know: Lululemon’s results were a mixed bag, with a few key red flags that should raise some concerns. For example, gross margin slid to 50.3% from 53.9% a year ago, coming after a similar year-over-year decline that was reported for the second quarter. That’s problematic for Lululemon LULU , which often commands lofty price points for its yoga and running gear.

Lululemon also trimmed its full-year sales target as it issued a fourth-quarter view that missed Wall Street’s expectations. That could be due to some tough competition during the critical holiday season, though Lululemon said some of the sales outlook was affected by West Coast port delays, a lower Canadian dollar and some delayed store openings.

The big number: Net revenue jumped 10% to $419.4 million for the latest quarter, though profit for the period slipped to 42 cents a share from 45 cents a year ago. The net income results were better than Lululemon had projected, while the sales growth wasn’t as strong as the company had hoped for. Total comparable sales, which include sales at stores and direct-to-consumer sales, rose 3% during the quarter ended November 2. Analysts had projected a 2.1% increase, according to a survey conducted by Consensus Metrix.

What you might have missed: While Lululemon has reported a double-digit increase in sales for all three quarters of this year, almost all of that growth came from new store openings, not from a stronger performance at existing locations. Athletic gear makers are broadly benefiting from increased spending on athletic apparel — gear that is used for trips to the gym, and also worn more casually as day-to-day attire. But Lululemon is also asking its customers to spend more for its items, and that premium-price strategy comes at a time when other retailers like H&M and Forever 21 have added more athletic-inspired apparel to their collections.

Lululemon has a few key opportunities for growth. The retailer sells far more gear to women, and is thus focused on expanding its men’s business, which could potentially reach $1 billion in annual revenue in the next few years.

For online sports retailer Fanatics, the holidays are its Super Bowl

by
Tom Huddleston, Jr.

@FortuneMagazine

December 3, 2014, 5:51 PM EST

If you’ve ever bought a sports jersey, baseball cap or college team gear online, you’ve probably done so through Fanatics. The e-commerce retailer partners with more than 150 professional and college teams.

Fanatics is a little-known company that helps drive the sports merchandising industry with its online store and by operating the Web sites and filling orders for sports partners. The holidays are its Super Bowl, World Series and Final Four all rolled in one.

In the fall, many of the most popular sports are in action like the NFL, college football, baseball’s World Series as well as the start of the NBA and NHL seasons. Throw in the busy holiday shopping season, and you’ve got a recipe for huge sales.

“This is a bit of a perfect storm where we have all the major holidays,” said Doug Mack, CEO of Fanatics.” The world of sports is exciting right now.”

On a typical day, Fanatics ships around 70,000 orders. On a day like Cyber Monday, the first Monday after Thanksgiving, that number swells to as much as 700,000.

This year is going well. On Cyber Monday, for example, sales were up 20% from the previous year, according to a spokesman.

“We’ll do more than half of our business in this quarter alone,” Mack said.

Fanatics declined to divulge any details about its revenue. But Internet Retailer, which e-commerce sales, ranked Fanatics No. 42 on the list of top online U.S. retailers with sales of $990 million in 2013. It’s also the top-ranked sports retailer on the list, while Nike ranked No. 64 and Dick’s Sporting Goods came in at No. 72. Fanatics would say that it expects to ship more than 30 million orders this year.

The site is a sort of Amazon of sports merchandise. It stocks over one million items along with powering the Web sites of all the major sports leagues, a number of television broadcasters like NBC Sports and individual collegiate and professional teams including the Seattle Seahawks, the Yankees and the Boston Celtics.

Like on the athletic field, competition in sports merchandise can be fierce. Fanatics competes against fellow retailers like Amazon, Nike, Adidas and Dicks Sporting Goods, sports gear stores like Lids, and the sports memorabilia giant Steiner.

Fanatics, based in Jacksonville, Fl., has five warehouses across the country for handling orders. To cope with the holiday rush, it hires around 5,000 temp workers on top of its full-time staff of about 1,600.

As with many retailers, sales by Fanatics via mobile devices is growing quickly. Orders from people using smartphones, for example, have doubled from last year to exceed those from desktop computers, according to the company.

The website serves as a barometer of what fans are interested in most on any given day, Mack said. Teams playing in the World Cup or World Series inevitably get a boost in orders. But sales can dip for players who get injured or who are not playing well.

Earlier this year, it was the “summer of Jeter,” Mack said. Jeter, the Yankees star, retired after a storied baseball career, which could only mean one thing for Fanatics: His products were top-sellers from April through the summer.

But when trouble emerges, like with the dual NFL scandals involving Ray Rice and Adrian Peterson for domestic violence, Fanatics steps back and takes the lead from the leagues. Mack explained that products featuring those two athletes were quickly pulled from sale.

“We’re definitely in line with how the league wants to handle disciplinary action,” Mack said.

And for the fairly new CEO, the transition to Fanatics has been a smooth one, he told Fortune. He started at the company in April after heading online home decor site One Kings Lane for four years. In all, he’s spent 17 years in e-commerce.

Mack’s focus going forward? He prefers to focus on the opportunities, not the challenges.

“Our team is doing a good job, and I’m feeling more in opportunity mode than in challenge [mode],” he said.

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