1996 Ad

Discount Store News, March 6, 1995 by Richard Halverson

Even though the Olympic Games are about sports, just a handful of the licensees for Olympic merchandise are for sporting equipment and related hard lines merchandise. But they are wasting no time getting their licensed products onto shelves. Companies such as Bausch & Lomb, Dudley, Spalding, Swiss Army, Winner, Molton and Yonex want to catch Olympic gold.

Bausch & Lomb, for example, has set this spring to ship the two sizes of its Wayfarer model sunglasses. That's more than a year before the Games begin.

The idea of also producing a pair of Olympic binoculars remains on hold, said Dave Archer, director of Olympics coordination. The sunglasses will feature both the Olympic torch and rings logos.

Spalding, the major vendor on the short list of sporting goods licensees, expects to ship its first product, Dudley brand softballs, by the end of February, said Jim Robinson, director of sales and marketing. Other products, including bats, baseballs and bat bags, will follow by May and June.

The biggest dividend for Dudley is increased channels of distribution in the mass market, Robinson said, including new placement for the brand in Target, Venture, Caldor and Ames, in addition to existing sales to Wal-Mart and Kmart.

Spalding will also produce licensed volleyballs, tennis balls and golf balls.

Dudley will increase prices only slightly on licensed products, Robinson said. Its first product, a leather softball that now retails for $4.96, is already at the upper price end of the category and it would be difficult to go much higher.

In its Olympic products, Dudley plans to target youths, ages 8 to 18, since they are more likely to buy products bearing the Olympic rings and torch.

Dudley is now trying to puzzle out its 68-page contract with the Atlanta Committee on Olympic Products to see whether it would permit such actions as promoting an Olympic-licensed softball with a non-Olympic bat.

Robinson declined to disclose the royalty percentage his company must pay. The royalties fall in the upper third of the range of royalty percentages, an ACOG spokeswoman said.

One licensee is paying a royalty fee of 12.5% and all must guarantee a minimum payment to ACOG.

Swiss Army knives has licensed six skus, ranging from $22 to $40, and features its Classic and Executive models emblazoned with the Olympic torch. The company is holding the line on prices, said Linda McCaslin, a company spokeswoman, and the products are ready to ship now.

Winner has licensed three models of its locking devices, The Club, The Truck Club and The Bike Club, said Tom McCartney, a company spokesman. Winner expects to have the products ready to ship by May.

Winner has yet to set pricing on the Olympic models, which will feature Olympic symbols both on The Club and its packaging, McCartney said.

Winner is negotiating with Kmart, Target and Wal-Mart to get The Club placed in the special Olympic boutiques they have established.

So far, however, their Olympic shops feature only apparel and merchandise such as key chains and mugs.

Molten, U.S.A., the North American distributor for adidas soccer balls, has licensed two Olympic balls, soccer and basketball, under its Molten brand name, said Mike Krieger, Eastern sales manager.

Although adidas is the official ball for Olympic soccer teams, adidas is not licensing the ball for retail sales.

Molten has already gotten placement in The Sports Authority and Herman's, Krieger said. It hopes to land Wal-Mart--if it can get the price down.

"Prices on Olympic balls are quite inflated, actually," Krieger said.

A plain rubber basketball or synthetic leather soccer ball from Molten retails for about $10, he said, while an Olympic-licensed ball will sell for about $5 more. In addition to royalties in the 11% to 12% range, Molten is incurring extra production expenses, Krieger said. Each of the 32 panels on its soccer ball bears an Olympics graphic. The rubber basketball bears three graphics that must be matched in production.

Because production lasts anywhere from four to five months, Molten won't start shipping until August, he said.

Molten also has no projections on incremental sales, according to Krieger. But it is attempting to get Olympic sponsors, such as Budweiser, Coca-Cola and McDonald's, to order Olympic-licensed balls with their names on them as well.

McDonald's is planning an international promotional program and Molten hopes to sell as many as 500,000 balls for it, Krieger said.

Yonex, based in Torrance, Calif., is the only other Olympic licensee of sporting goods and will produce badminton replacement racquets in the $8.99 to $18.99 range for the mass market, as well as nylon shuttlecocks at about $9 for a tube of six. For Olympic licensing, Yonex won't bother with opening price rackets in the $3 to $4 range that come in backyard sets, said Tom Yamaguchi, vice president, marketing.

Yonex will absorb the Olympic licensing fee and hold the line on prices, he said.

So far, Yonex has no plans to ask retailers to include its badminton equipment in their Olympic shops, Yamaguchi said. Instead, Yonex has developed its own Olympic display, intended for either peg board or flat wall presentation.