Picture the
scene: Three twentysomething basketball addicts – Seth Berger, Jay Gilbert and
Tom Austin – hoping to turn a business-school research project into a successful
business, scope the scene at the SuperShow, a major international trade show
for the sports-apparel industry. Surrounded by the latest and hottest Nike,
Reebok and Adidas sportswear, the trio's only reaction is that they would not
wear a single thread of the apparel being showcased.
How's that for
trash talk?
It's that type
of attitude, coupled with an extreme respect for and love of the game of
basketball and a keen understanding of their target market, that has led to the
evolution of AND 1, the
young guns' basketball apparel company that is muscling its way to the top of
its market.
In 1993, Berger, a Wharton Business School graduate, along with
schoolmate Tom Austin and Jay Gilbert (a Stanford alum and childhood friend of
Berger), attempted to start a business around his grad school project. His idea
was to develop a database of basketball enthusiasts who both play the game and
purchase apparel and shoes to do so, then sell the database to athletic apparel
and footwear companies who could use those names for direct mail purposes
and/or super-targeted marketing.
But when the idea received a lukewarm reception at the SuperShow, the
threesome decided to rework their strategy. One thing Berger, Gilbert and
Austin took from the trade show was the knowledge that none of them would play
in the clothes the big names showcased. They simply didn't convey the right
attitude for them. This, on top of the fact that the three love – no, make that
adore – the game of basketball led to the founding of Rosemont, Pa.-based AND
1, a sportswear company dedicated to the hard-core basketball player.
AND 1’s original product line consisted
of trash-talk T-shirts designed to appeal to the attitudes of young street
"ballers," as basketball players are called in street-play lingo. The
gear, which was designed to appeal to hard-core "11- to 17-year-old kids
who will play come hell or high water," was emblazoned with slogans like "Your game's as ugly as your girl," and
"Respect the game, leave the court."
To get the brash new line into
production, the guys went to local T-shirt makers and screen printers,
literally picking them out of the Yellow Pages on the first go-round. While
they could have used outside funding to get the original line off the ground
and onto the courts, they went only to a handful of friends and family members
to supplement their own start-up funds. As Berger is fond of saying, "AND
1 was basically financed on student loans and credit cards."
Berger and Gilbert took to road tripping
throughout the East Coast trying to get the shirts into stores. After a string
of rejections, a Foot Locker in New York City took a chance on the shirts. The
customer response to the shirts was excellent, opening the floodgates to the
company's retail popularity.
"In our industry, there are leaders and followers. It only takes one retailer to be successful
in selling a company's gear – at least on the test level – to get other
retailers interested in the brand," explains Errin Cecil-Smith, AND 1's
director of public relations, of the positive effects of the Foot Locker sale.
"It's the domino effect, basically. Once AND 1 started selling well and
Foot Locker came back to order more T's, the guys were able to talk about our
successful sell-through percentages and interest other retailers in carrying
the brand. A test is easy to get: it's staying in and growing with the retailer
that is tricky."
A Cinderella Team
While the
academic credentials of the founders are obviously impressive, it can almost be
argued that the team's – and they are a team, despite any good-natured trash
talk that circulates around staff meetings – dedication to the game of
basketball and serious ballers, is responsible for building the company into a
$60 million success story. That commitment has translated into a branding and
marketing strategy that centers around a trash talkin' attitude and a faceless,
raceless physically superior mascot known as "the Player." Both ideas
have roots in the founders' days as pick-up gamers on city courts. Only the
players with the strongest skills had the right to talk trash, and the Player
represents those ballers.
"In terms
of marketing, our message is first and foremost targeted to the hard-core baller,"
says Gilbert, "We make what he needs: shirts, shoes, shorts. The end. Our
message is all about performance. If you can't play, don't wear our
stuff."
Thus, AND 1 – a
basketball term used when a fouled player makes a basket and gets another shot because
he was fouled – is about basketball and only basketball. AND 1 shoes and
apparel are not intended for kids interested in making a fashion statement, say
the company's owners, but rather those who have real talent for and love of
basketball.
Building on its early T-shirt success,
AND 1 has since expanded its product line to include shoes and shorts.
How, you might ask, do three young guys
with a love for basketball know how to develop products that kids will want and
purchase? "We do extensive testing of products and marketing," says
Cecil-Smith. "We have some market research and are actually going to
invest in more this coming fiscal year, but the most important testing is done
in our offices, which are full of ball players and ball lovers who know what
kids will wear when they ball."
Sounds easy
enough, but marketing a new company in an industry dominated by the Michael
Jordan-endorsed likes of Nike is not an easy task. Call it trash talk if you'd
like, but AND 1 is confident in its role as a niche brand and in its product.
"AND 1 is a
niche brand, and, more importantly, a single-sport brand," asserts
Gilbert. "We can concentrate on just one sport, while our competitors are
multi-sport and have to pay equal attention to their soccer and tennis customers
as to their basketball customers."
Entering the
shoe business was tough, Gilbert admits. However, with a 400 percent growth
rate in shoe sales from the first quarter 1997 to first quarter 1998, AND 1 is
finding its way to a seat reserved for the top athletic shoe companies. Gilbert
says that AND 1 is just one of a handful of companies that have launched a new
athletic shoe brand in the last couple of years, and just about the only one to
see great growth since launching. "Building a good basketball shoe takes
an entirely different skill set, so we had to find the best people and the best
manufacturing partners to help us," he explains. He offers that the
company's first shoe program was full of problems, but asserts "we don't
make the same mistakes twice."
Cecil-Smith explains the challenges the company faced going head-to-head
with top shoe competitors: "We chose to enter the shoe business at a
dreadful time: Kids were sick of paying $150 for basketball shoes, the strength
of celebrity endorsers was/is ebbing, and the market was cluttered by tons of
brands competing for the same kid and the same dollars." Fortunately, she
explains, AND 1 doesn't pay much attention to conventional shoe wisdom.
"The market was severely depressed when we introduced our first shoe, but
because that was the case, retailer expectations were kept low. When we
exceeded those expectations and proved that this little 'apparel' company could
actually design, produce and ship a shoe on time, we surprised a lot of
retailers."
Cecil-Smith likens the
company's experience to the David and Goliath parable, explaining, "Our
timing was also serendipitous, in that retailers were feeling strangled by
relying so heavily on just one or two mega-brands, and were casting around for
alternatives, both to give them a little more breathing room and offer the
consumer something different. So what
looked like the worst possible time to enter the market turned out to be the
best for the brand."
In the two years since the company introduced its shoe line, they claim
to have designed significantly better-looking and more technical shoes, staying
true to their mantra of "better product at a better price," and
retailers have lined up behind the brand. In fact, Cecil-Smith predicts
"the Spring '99 season (beginning with the delivery of The Lottery shoe in
February) will be AND 1's strongest season ever, and we have become the
number-two basketball shoe vendor (second only to Nike) in two major national
retail chains."
AND 1's better-price claim is affirmed by the retail price tags. In the
shoe department, AND 1's Lottery shoe retails for $80, its Crossover Mid sells
for $75, and the Primetime shoe goes for $70. Compare that to Nike's $150 Air
Jordan or $130 Air Penny; Reebok's $124.99 Answer or Adidas' $100 KB8.
AND 1 may not
have bagged the newly retired superstar spokesperson Michael Jordan, but it
does have its own team of professional basketball players and Division 1
college teams on its promotional roster. Twelve NBA players, including Larry
Hughes of the Philadelphia '76ers, Raef LaFrentz of the Denver Nuggets and
Shammond Williams of the Atlanta Hawks, wear AND 1 shoes while on court. Hughes
has even branded himself with a 12-inch tattoo of the Player on his right arm.
(According to Gilbert, Hughes had the tattoo before he was signed on to endorse
AND 1.)
Additionally,
AND 1 outfits 33 Division 1 college basketball teams, including Ball State
University, Boston University, George Washington University, Temple University
and Texas Tech.
AND 1's founding
fathers' love of basketball has not clouded their view of the reality that most
high school basketball players do not go on to play ball at the college or
professional levels. Therefore, AND 1's charitable contributions have been
targeted toward organizations that have an educational focus.
"We
recognize that more than 98 percent of all high school ballers will never get
an athletic scholarship to college and most certainly not go on to play
professionally," says founder Seth Berger. "Which is why we put an
emphasis on education in our charitable giving programs. We want to make it
clear to these kids that an education will take them further than their balling
skills, in most cases."
In 1997, AND 1
made donations to the Easter Seals Society for its annual Shoot Out youth
fundraising program, the Philadelphia Futures young scholars program to support
mentoring and provide financial incentives for children to attend school, and
the White Williams Scholars program to support high-achieving, low-income
Philadelphia public school students.
In addition to
its philanthropic endeavors, AND 1's Web site serves as a resource for the
serious baller. It contains a list of the top five courts in the United States
for pick-up basketball, as determined by Chris Ballard in his book "Hoop
Nation: A Guide to America's Best Pickup Basketball"; a trash-talk
competition, the winner of which receives a new pair of AND 1 Shook 'em Mids
and gets his trash talk posted on the AND 1 Web site; and a bulletin board to
facilitate chat about basketball-related issues. Additionally, in the works is
an online calendar of AND 1-sponsored events, clinics and tournaments.
AND 1 gear is
now available at more than 2,500 retail locations nationwide and can be found
at specialty athletic retailers such as Footaction, The Finish Line, Foot
Locker, Champs, East Bay, Sneaker Stadium and Just for Feet.
The company's
future goals are straightforward. In the short-term, AND 1 plans to "continue
to sign great ball players and offer better product than any other basketball
company," says Gilbert. AND 1's long-term plans involve increasing the
company's international distribution. The company will continue to focus
strictly on the serious basketball player and will not expand its line to
include apparel for other sports, Gilbert maintains.
Although AND 1's
financials speak directly to the company's success, Gilbert says one of the
best examples of AND 1's reach is the frequency with which the company sees and
hears from kids who have the Player tattooed on themselves.
"That tells
us that the brand has been adopted by these kids as the brand for
ballplayers," Gilbert says. "They think of themselves as the Player.
That is what brand loyalty is all about for AND 1."
Company
Snapshot:
Name: AND 1
Location:
Rosemont, Pa.
Founders: Seth
Berger, Jay Gilbert, Tom Austin
Founded: 1993
URL: http://www.and1.com/
Industry: sports
apparel
Employees: 60
in-house, plus an independent sales force of approx. 25
Revenue: $60
million
Copyright © 2000 by Virtual
Advisor, Inc. All rights reserved.