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The Honolulu Advertiser
Posted on: Monday, October 21, 2002

Athletic-wear giant reborn

 •  Athletic teamwear makes comeback

By Dana Knight
The Indianapolis Star

INDIANAPOLIS — Eddie White's job is to make sure that players in the National Football League have jerseys, so he travels the country schmoozing coaches and players. Like any good marketing guy, White can't go more than a minute without cracking a joke.

Larry Hubbard cleans silk screens in Group Athletica's plant in Indianapolis. Logo Athletic was rescued from bankruptcy by Reebok and renamed Group Athletica. The company produces uniforms for every National Football League team and soon will be doing the same for National Basketball Association franchises.

Gannett News Service

Blake Lundberg is responsible for the day-to-day operations of the multimillion-dollar organization that White touts. Lundberg's a stoic math major who tracks the numbers of jerseys sold, shorts shipped and T-shirts in production.

A little more than a year ago, these businessmen ran a bankrupt company called Logo Athletic, saddled with $100 million in debt. Today, the company has been retooled by athletic retail giant Reebok International Ltd. into its sole licensed apparel subsidiary — Group Athletica.

"We went from running our own company to a $3 billion world," said Lundberg, vice president and general manager of the Indianapolis-based operation. "We wouldn't be here at all without Reebok."

The revamped company is already reaping the benefits of its new connection. Reebok holds exclusive rights to manufacture apparel for all 32 NFL teams and 19 National Basketball Association teams. And the Canton, Mass., company recently signed a deal which, by the 2004-05 season, will give it exclusive rights to the remaining 10 NBA teams.

Beyond its direct ties to professional sports teams, Group Athletica also distributes to thousands of retailers nationwide.

With such markets for its goods, Group Athletica expects to emblazon logos and stitch embroidered insignia on millions of pieces of merchandise this year.

Reebok came to the rescue at a time of turmoil in the licensed apparel industry, which relied on the fashion whims of fickle teens.

"Ten years ago, that's all people wore," said White, vice president of team properties for Reebok. "Then it took a hit."

By November 2000, licensed apparel had officially lost its cool. In four years, the industry watched sales nose-dive 20 percent — from $14.72 billion in 1996 to $11.76 billion in 2000, according to the Sporting Goods Manufacturers Association.

The weakening licensed apparel segment was prompting companies in the industry to throw in the towel. That included the demise of Logo competitors, such as Starter and Pro Player. Still, the market was saturated with competitors.

"We couldn't do it anymore," said Thomas Shine, who founded Logo in 1971. "We found ourselves competing with the big boys."

Among the big boys was Reebok, which had just secured Logo's NFL license. That was the last straw. Logo Athletic filed for bankruptcy in November 2000.

"This company couldn't have gotten any closer to being out of business than it was," Shine said.

Despite its bankruptcy, Logo Athletic retained a sparkling reputation in the industry, said Larry Weindruch, spokesman for the National Sporting Goods Association. And Reebok didn't see a company that had failed — but one that could help it succeed.

That's why Reebok swooped down in February 2001 and snatched Logo Athletic out of bankruptcy for $13.8 million, believing that Logo could help fulfill the 10-year exclusive licensing deal Reebok had just signed with the NFL.

"It's almost like Reebok went out and bought the best free agent on the block," White said.

Paul Fireman, Reebok's chief executive officer, conceded as much: "In order to support this new license, we purchased Logo Athletic. As a result of this purchase, we've strengthened our NFL licensed apparel organization by acquiring a highly skilled and trained employee base that understands the dynamics of this segment."

Reebok has invested $3 million to expand Logo's operations and increase the work force to 970 from 825. Top executives have shifted positions, but no jobs were lost.

"It was a great deal for the employees, lots of jobs and great for the sales," said Bruce Jacobson, an interim executive at Logo at the time of the sale.

Keeping the former Logo executives on board has paid off for Reebok, making clients such as the NFL happy.

"We're fortunate to keep them in the NFL family," said NFL spokesman Brian McCarthy.

Inside the Logo building, workers produce every NFL jersey in the nation. They also make sweaters for the Golden State Warriors coaches, practice shorts for the Utah Jazz and sweatshirts donned by the New York Knicks during post-game interviews.