From Power Tie to Power Swoosh

NIKE SHOOTS FOR A NEW GREEN BY OPENING ITS CLOSET TO CORPORATE FOURSOMES.

It’s every apparel marketer’s dream to see his logo on the shirtsleeves and chests of teeming masses of consumers. But there’s a certain prestige – not to mention a potentially lucrative side business – that comes from offering corporate promotional apparel, too.

Acceptance among corporate incentive programs carries more weight than being the badge of honor for a pack of giggling teenagers. And although the sales returns certainly aren’t anywhere near as great, corporate apparel programs can supply a steadier flow of income than the hyper-competitive and fad-driven consumer market. That’s why brands from Ralph Lauren to Old Navy offer corporate lines – and why sports apparel giant Nike set its sights on the market this year.

Once the absolute darling of the sports apparel industry, Beaverton, OR-based Nike’s popularity began to decline in the late `90s. While the company and its trademarked “swoosh” logo remain one of the most recognized – and ubiquitous – brands in the world, Nike’s stranglehold on the consumer market has slipped. Retail outlets are giving less space to the company’s sneakers to appease shoppers passing on high-ticket athletic shoes in favor of less-expensive sneakers. Younger shoppers are buying into start-up brands like And1. Footwear retailers are also losing market share to closeout chains and off-price stores. In fiscal 2000, ended May 31, Nike apparel revenues in the U.S. decreased 11 percent to $1.2 billion, while overall revenues inched up two percent to $9 billion.

Thus, after decades of keeping its Swoosh to itself, Nike this year decided to open its closet to corporate America with a first-ever promotional apparel initiative. Teaming with products distributor Ha-Lo Industries, Niles, IL, the company’s stand-alone Nike Golf division began offering a line of corporate-focused products for both men and women. (The two-year deal with Ha-Lo is for the U.S. market only.)

A TIGER IN THE BOARDROOM According to the Sporting Goods Manufacturers Association (SGMA), sports apparel generated $40.5 billion at retail and $20.1 billion at wholesale in 1999. Approximately $829 million of the total was generated by golf apparel sales in 1999 – a very conservative number, due to the fact that the SGMA only counts merchandise bought exclusively for playing golf, and not the millions of shirts that have turned yesterday’s white-collar worker into the Casual Executive.

The days of checkered golf pants and neon shirts are over, and golf apparel has migrated from the links into the mainstream. “For years, golf has had an influence on the workplace,” says Jeff Rundell, editor of Wearables Business (a sister title to PROMO). “Today, people are selecting golf shirts with the office first in mind. And golf apparel companies are now billing themselves as selling `lifestyle’ [apparel] rather than athletic apparel.”

Nike thinks the move fits like a driving glove, and views golf as the gateway to corporate sales. “This was a natural progression for us,” says corporate sales representative Justin Morris. “Golf has become very popular. And many companies are setting up golf outings as incentive trips and special events.”

In addition, corporate sales don’t require the same media expenditures as consumer efforts. “We’ve been in this market for just a few months, and we’re not doing much marketing right now,” says Nike Golf marketing director Mike Kelly. “But when you see Tiger Woods wearing our brand on TV every week, [marketing] doesn’t get much better than that.”

Nike’s marketing partner can almost taste the dollar signs. “Nike has been such a great brand and they’re so good on the retail end, why not tap into corporate apparel?” says Ha-Lo vp-national accounts Jon Sloan. “Golf is so popular, and corporate dress codes are so relaxed these days, [that] golf is what will give Nike the biggest bang for its buck.”

While both Nike and Ha-Lo remain mum on sales over the first six months of the venture, orders have ranged “from one to 1,000,” says Sloan. “Companies can use it for their own personal use, or through giveaways.”

The product catalog features both the Nike Golf and Ha-Lo logos on the cover, and leverages Nike’s endorsement stable with glossy photos of such PGA stars as Woods, Nick Price, and Kelli Kuehne wearing the clothes. Prices are relatively modest, with men’s polo shirts ranging from $48 to $62, windbreaker shirts at $35, vests at $45, and caps at $18. The ladies inventory includes women’s polo shirts and vests priced from $38 to $50.

The inventory is handled through Nike’s warehouses in Dallas, where the brand’s handlers oversee most art direction and distribution. The company has decorators officially approved for work done outside the Dallas facilities, Sloan says.

While Ha-Lo handles some distribution for such other apparel manufacturers as Champion, Patagonia, Cutter & Buck, and Russell, Nike is far and away the company’s largest client on the corporate-sponsorship front. “We aren’t working with any other clients on the scale of Nike,” says Sloan.

For now, there are no plans to broaden the corporate line to other products or other sports from the Nike stable. “Yes, this program will get bigger,” says Nike Golf’s Morris. “Whether that expands to Nike, Inc. is another question. We’re running our own ship, and this program is very different from the typical retail or grassroots effort.”

Maybe an old dog can learn new tricks.

While Nike is a corporate-sales neophyte, Redmond, WA-based Eddie Bauer has been around the block a few times, having first entered the market in 1996. The company now sells through both a targeted brochure and eddiebauer.com.

“It’s become an important business,” says divisional vp-new business development Don Perinchief, declining to reveal specific sales numbers. “At one point in time, we were driven to market one logo, but there’s been such continued growth in corporate casual attire today that we’ve broadened our offerings.” A select group of products are featured in the corporate catalog, but the company also offers clients “custom solutions” that can be selected from virtually the entire Eddie Bauer inventory.

“We service a broad range of clients, from Fortune 500 companies to a small business running its own garden shop,” says Perinchief. The merchandise is used to solve a range of corporate needs, from staff uniforms at trade shows to the official attire at companies with a more-relaxed atmosphere in the office.

That could even give Dilbert some corporate spirit.