Russell Athletic using athletic heritage to re-brand

Russell sweats have been a part of every kid's sports and school PE experience, but after that the salt-and-pepper relationship between athletics and Russell dwindles a bit. That's something the 101-year-old company is seeking to change.

Russell sweats have been a part of every kid's sports and school PE experience, it seems, but after that the salt-and-pepper relationship between athletics or fitness and Russell dwindles a bit.

That's something the 101-year-old company is seeking to change -- no minced words there -- in an active acquisition hunt for trendier companies that fit its image and in growing its new business that goes beyond its old model of just selling the basic sweats it makes. Now, Alabama-based Russell Corp. (NYSE: RML) is starting to roll out its plans -- some four years in the making -- to change its face to a branded marketing company. That includes a new advertising campaign announced last week titled, "Are You Russell Material?"

"We have a wonderful story to tell," said Carol Mabe, vice president for strategic development. "There are very few brands in America that have the athletic heritage we have."

Mabe herself started in this new position about two years ago, coming from the position of president and CEO of Russell Athletic. Her mission in the new role was to focus on long-term growth for the corporation. But it's all happened in the last few months quicker than anticipated.

On the acquisitions hunt

Last August, Russell acquired women's running and fitness brand Moving Comfort as that company was struggling to overcome growing pains. In early January, Russell finalized a deal to take over the trademark of bankrupt outdoor specialty brand Jagged Edge. In late January, the company swooped in again -- this time to acquire bankrupt Bike Athletic.

Mabe has a right to be a little tired. In a perfect world, she said, such acquisitions would happen about every six months -- certainly not three in six months.

"It's about timing and opportunity," she said.

Moving Comfort was a bit of a match-made deal with a mutual acquaintance saying the two brands needed to talk. Plus, the authenticity of Moving Comfort in the women's arena was a perfect match for Russell's growth plan that included a desire to move into the women's market. Then came Jagged Edge, which jibed perfectly with another of the corporation's primary plans to move into the outdoor and outdoor-lifestyle areas. Bike? Well, it's a 130-year-old company, Mabe said, and "somebody else would have bought it" if Russell hadn't since Bike Athletic was going for a steal of a price.

But buying them doesn't mean the giant wants to change them. The goal is to "stabilize" them in the first year, then assure a good growth rate and be there to help with all the logistics, operations and sourcing issues it is good at.

"We look at them as brands," she said. "We want to maintain and to preserve what the brand means. You don't want to mess that up."

The common thread is of course that all three were very small, niche companies that were either bankrupt or at least struggling a bit with growth. But Mabe pointed out the company won't hesitate to go after a larger catch, pointing out that it was common knowledge it went after Rawlings last fall.

Growth forecast, advertising unveiled

Where does all this go? Russell has said that a solid one-third of its earnings growth in the next few years will come from acquisitions. Right now, the company is looking five to 12 years ahead. Even in its fourth quarter last year, the company already grew while also reducing its debt and inventory levels.

Intended to help that growth, of course, is its just-unveiled communications and advertising campaign called "Are You Russell Material?" The campaign will launch later this month and is a multi-tiered campaign that includes traditional advertising, sponsorships, promotions and public relations -- all of which will continue to reinforce its history, its heritage and its authenticity, while trying to create an emotional connection with target consumers.

"You have to stay true to your heritage," Mabe said, "and we are about athletics."

SNEWS View: "Athletics," as we can see by the latest three acquisitions, is now defined in the modern sense that includes women, fitness, running, outdoor and other recreational pursuits rather than the jock-stereotype of team sports. Capitalizing on this is all good stuff for the brand and its growth. OK, so we all wore Russell sweats as kids, but did they mean anything? Nope. They just meant the sweat material -- usually devoid of much fashion sense -- that you pulled on for practice. Taking the emotions that go into the pursuit and the person that wears them and now tying those to a brand has been shown to be a successful way to reach and to grow a market. Russell has money to spend from its heritage as a manufacturer, and we fully expect to see it prowling quietly, and then leaping on another well-planned target quite soon.


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