Caviro S.L., the European manufacturer of Buff headwear, announced recently in a press release that it has opened its first sales offices in Petaluma, Calif., to expand the Buff presence in the United States. That announcement left the SNEWS team a tad confused. After all, wasn't there already a Buff sales office operating in the United States?
Indeed, Buff USA (www.buffusa.com), a separate company, has marketed and distributed Buff products for six Western U.S. states (California, Oregon, Washington, Nevada, Utah and Arizona) since August 2000. Under a new proposal, Buff USA would maintain control of those states, while Caviro will have the rights to sell the rest of the country.
That agreement -- which has been on the table for months -- remains unsigned, according to Julian Peppit of Buff USA and David Camps, managing director of Caviro S.L.
While the two companies expect to reach an agreement, the whole situation raised eyebrows among the SNEWS team. First, we wondered why the Caviro press release never mentions Buff USA at all. Nor does the release recognize that Buff USA has been the sole reason Buff has any name recognition or presence in the U.S. market. Perhaps more confusing is the fact that the release states, "Buff already enjoys widespread brand name recognition due to its exposure on CBS's Survivor television series." Yet, it was only because of Buff USA and its PR representatives that Buff enjoys the commercial success Survivor exposure has brought.
We asked Camps why the release did not mention Buff USA and he said, "Since we are dealing with several regional distributors, we thought it wasn't the right time to mention any of the current or potential distributors, particularly because it was a press release of Caviro and its mission in the U.S."
SNEWS also wondered why Caviro didn't just tap Buff USA to handle the entire U.S. market. "The U.S. is a big market, and it is difficult to be handled by a single distributor," said Camps.
He added that Caviro may use several distributors in the United States to place Buff products in several markets, such as outdoors, cycling, motorcycle, winter sports and windsurfing. This will include specialty retailers as well as larger accounts, including sporting goods retailers and mass retailers.
Camps said that Caviro would like Buff USA to continue working in the West because the company is doing a good job, adding that, "since Caviro is a shareholder of Buff USA, there wasn't any reason to cancel the agreement that was in place." According to Peppit, Caviro owns 19 percent of Buff USA.
Camps added that "from a strategic standpoint, as the owners of the brand, we (Caviro) think it is a good idea to have some kind of direct implication in the development of the brand in the U.S. market, because of the size of the market."
Sources told SNEWS that at one time Caviro had offered Buff USA the opportunity to do marketing and distribution for all of the United States, Canada and Mexico. This would have been done under a new company. Buff USA turned down the deal.
In the meantime, Caviro continues to ramp up operations in the new Petaluma office, which is run by Shirley Choi Brunetti who has more than 11 years of experience working for sports companies. Among her jobs, she has served as director of sales and marketing for Bell Sports and served as a consultant for CamelBak hydration systems. Brunetti says her main job is to raise the profile of the brand nationally, and she is working to set up teams of athletes to promote products. She says it is important to demonstrate that Buff products are used by core users.
SNEWSView: This remains an awkward situation. While Buff USA and Caviro say they hold no animosity for each other, the fact remains that a months-old distribution agreement remains unsigned.
It may be an issue of control. Buff USA has concerns that it may lose its ability to make decisions about the way it markets Buff products in the United States.
While Caviro has the right to call the shots, it must recognize that Buff USA has been a good caretaker of the brand. Most notably, Buff USA secured lucrative business through the television show Survivor, which sells $800,000 of product a year through the Survivor website. Peppit said that Buff USA will surpass $1 million in sales this year, and rather than living high off the hog, Buff USA will only claim $20,000 in profit because it continues to pour money back into the company.
On the other hand, Buff USA can benefit from the marketing and public relations support that Caviro will provide. Everyone can benefit as Caviro raises national awareness of the product.
Plus, Buff USA has security in the fact that it not only owns the rights to the Survivor business, but also owns the rights to a very popular product demonstration done by Peppit. Caviro also allows Buff USA the right to market and create customized products for groups throughout the U.S.
The issues between Caviro and Buff USA may be resolved without harm to the brand or either company, but we absolutely believe Caviro should have communicated more effectively through its press release. The release they sent out not only confuses the market by failing to recognize Buff's previous presence in the U.S., but neglects the hard work put in by Buff USA to establish the brand. Buff absolutely would not be the success story it is in the U.S.market were it not for Peppit and company and we trust that Caviro will show a lot more respect to the company that built its brand here in the future.