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Starter star rises again, but not in licensed goods

Starter star rises again, but not in licensed goods

ANDY BERNSTEIN

Published

The Starter billboard on the outfield wall of Shea Stadium is not an overlooked leftover from Bankruptcy Court proceedings, but instead a beacon for a revitalized brand that has quickly become a top-selling apparel label at Kmart, Wal-Mart and other discount retailers, backed by an annual sports marketing budget of more than $10 million.

Starter — or more accurately, the companies that control the Starter trademark — bought stadium advertising from the Mets, White Sox and half a dozen other Major League Baseball teams this past season. The brand is close to signing additional deals with nine to 12 NBA teams, several colleges and a NASCAR Busch Grand National Series race car, said Michael Lewis, CEO of the Starter brand's marketing agency, Elite Sports Properties.

By next year, he said, Starter will be the third- or fourth-largest active apparel brand in the United States, a ranking that would translate to more than $400 million in sales.

No longer affiliated with Starter Corp., which went out of business in April of last year, the Starter brand is now controlled by investors who bought the trademark for $21 million during Bankruptcy Court proceedings in July 1999.

If its return to the marketplace has fallen below the sports industry's radar screen, it's because all the professional leagues have declined to relicense Starter, once the No. 1 producer of team licensed products. Instead, Starter relaunched in July as a basic apparel brand sold exclusively through mass merchants. In that environment, Starter easily ranks as the most recognized athletic name on store shelves barren of top-flight brands.

"Licensing is not our No. 1 thrust anymore," said Lewis, remembered throughout the licensed product industry as the brilliant and recalcitrant founder of Apex One, a short-lived but hard-hitting brand that helped make team products a fashion craze in the early 1990s. "Starter is now in active athletic branded apparel."

Rather than being a licensee of the pro leagues, the new incarnation of Starter is as a licensor itself, granting rights to its distinctive S and Star logo to about 30 apparel and accessories companies who then sell Starter brand products to discount chains.

Lewis said the venture is already profitable, and experts concur that at least in the short term, the new Starter strategy is a cash cow.

"Any new entry into the mass market from the upstairs is going to have a nice run," said Jeff Sofka, vice president and general manager of SFX Entertainment Inc.'s licensing arm. He compared Starter to B.U.M. Equipment and Mossimo, two struggling fashion brands that recently found new lives through discount chains. "It would have been impossible for a relaunched Starter to effectively compete in the upstairs market in the licensed product business. There was, however, a lack of credible sports brands in apparel and footwear in the mass market."

Starter's aggressive sports marketing push is an attempt to keep its credibility alive.

"We need to pound away that Starter is the core team athletic brand," Lewis said.

The brand is not completely done with team licensed products. The new Starter is mounting a modest return by securing narrowly defined licensing deals with Collegiate Licensing Co. and most of its top schools — a move backed by a sponsorship of a Busch race car that will feature the Starter mark and logos of more than a dozen universities. A small assortment of Starter collegiate merchandise has already hit stores, with more to follow during the Christmas shopping season.

Lewis said some college basketball teams may even be wearing Starter-branded uniforms by next season, but any return to team licensed products is aimed primarily at driving sales of the basic Starter-branded goods.

"Licensed for us is an authenticator," he said. "There's an ironic twist in that we're using [team] licensed products the same way Nike does." He was referring to Nike Inc.'s pursuit of team-outfitting deals for the main purpose of getting brand exposure to drive overall company sales — an approach that some say ultimately led to the demise of licensing specialists like Starter and Pro Player Inc., which could not keep up with the large marketing fees Nike was willing to pay the leagues.

Logo Athletic, now the largest producer of team licensed apparel after the collapse of Starter and Pro Player, was originally the lead investor in the group that bought the Starter trademark. But the company sold its interests to a group including Franco Apparel and Outer Stuff Ltd.

It was Logo Athletic CEO Tom Shine who tapped Lewis to devise the Starter brand's marketing plan.

That Lewis would ever be working for Logo Athletic to market Starter indicates just how much the licensed product industry has been turned upside down by bankruptcies and consolidation.

Once a fierce rival of both Logo and Starter, Lewis' Apex One burst onto NFL sidelines in the early 1990s with colorful jackets that helped vault the sports licensed industry into a $10 billion business. But undercapitalized and poorly managed, Apex One quickly crashed and burned, shutting its doors in 1995 soon after Converse Inc. bought the company.

That left Lewis out of a job and facing a multimillion-dollar lawsuit by Converse arising out of the sale, which he eventually lost.

He resurfaced quietly several years later as the founder of Elite Sports Properties, a marketing agency that quickly became one of the top sponsorship consulting firms in motorsports.

No longer sporting his trademark ponytail but as brazen as ever, Lewis said the pro leagues made a mistake by denying his initial requests to license Starter again.

"The leagues have put their heads in the sand relative to Starter," he said. "They've missed the boat completely."

Officials at the pro leagues said they have no interest in licensing the brand for a variety of reasons, ranging from an overall reduction in their licensee base to fears that if Starter team-logoed products showed up in discount chains, it would eat into the sales of higher-priced goods sold through department stores and sporting goods shops.

"The bottom line is that Starter still has the perception of being a very strong brand in the licensed business," said Howard Smith, vice president of licensing at Major League Baseball. "If I relicense them, it makes Logo or Puma in the mid-tier obsolete, because there is a more powerful, well-known brand in the mass market."

To that Lewis countered: "I don't think not doing business with Starter because it is too good is the right approach."

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