The 2004 profiles of leading industry figures INDUSTRY players
It’s hard to believe, but this is the 5th class of inductees into our annual Industry Players gallery of profiles. Our original thought, way back when, was to feature some of the companies and individuals who propel the promotional wearables marketplace forward. We came to understand that, while companies matter, it is the people themselves who are the real Players.
Players are those people who are the real leaders, whether or not they carry the title or the authority. They make things happen. We try to draw our selections for these profiles from various disciplines – wholesalers, suppliers, manufacturers, mills, distributors – so that our readers may read about the variety of routes there are to success in this business.
For 2004, we once again have great, and successful tales to tell – Dave Berg and Tim Klouda of Premiumwear, Lee Scharf of Summit West Apparel Group, and Gene and Peter Geiger of Geiger have all made significant contributions to the promotional products industry and are, truly, Players.
Alpha Shirt Company/Linsalata Capital Partners
ProForma Promotional Products
The Vernon Company
John Grue, Chesterfield Mfg.
Advertising Specialty Institute, The ASI Show
Bob Davis, PPAI Chairman
Derrick Milne, Trimark Sportswear Group
Vince Tyra, Broder Bros.
Marty Lott, SanMar
Donald Berryman, American Identity
Ira Neaman, Vantage
Mike Rhodes, Bodek and Rhodes
Art Gibel, Hanes Printables/Outer Banks
Josh Peyser, Weatherproof/MV Sport
Wing Hughes, Forrester-Smith
At Premiumwear, the binding trait is innovation
Dave Berg and Tim Klouda took different routes to end up in promotional apparel, but the two executives bring strengths that propel new ideas.
By Jeff Rundles
Promotions, and apparel, are in Dave Berg’s genes. It just took him a few years to decide to marry the two in the actual person.
See, years ago, back in the late 1960s when Berg, now president and CEO of Premiumwear, was just toying with the idea of being a teenager, his father started a trend. The elder Berg had spent an entire career as a vice president of various areas at Munsingwear, a retail line famous for underwear and the Penguin golf shirt, and he hit on an idea that would, eventually, have some meaning in his son’s life.
“He was the first guy to look at golf balls and put a logo on them,” says Berg. “The idea was to buy a Penguin golf shirt for father’s day and get a sleeve of Penguin golf balls. He did about 10,000 dozen (golf balls).”
Little did little Berg know then that Munsingwear would soon end up being his whole professional life, and that eventually the whole world of promotions and logos would be the centerpiece of his sales.
But to really get going in the promotional end of the business, and to round out his company, Berg had to meet up with Tim Klouda.
Klouda, now the president of Premiumwear’s promotional products division, got to apparel and promotions through the whole world of premiums, where he developed a knack for new ideas. Eventually, he decided that bringing an apparel brand name, like Munsingwear, into the promotional arena would be a winner, and he proved to be right.
“It took us seven appointments (at Munsingwear) before we got someone to take us seriously,” says Klouda about his efforts to land the brand along with his former partner, Dennis Lenz.
Together, Berg and Klouda have married their respective strengths – apparel merchandizing on the one hand, promotional sales on the other – expanded their offerings, broadened their markets, and they are busy making Premiumwear not only a promotional wearables leader, but a leader in other areas, as well. While they bring different things to the table, both Berg and Klouda share the trait for innovation that is the keystone of Premiumwear.
Dave Berg, a native Minnesotan, was born in 1956 and set out to be a baseball player. He went to the University of Denver on a baseball scholarship but “blew up my arm,” and transferred to the University of Minnesota and got a real-world degree in business. While there, he thought maybe he wanted to be in advertising and maybe, like his father, who unfortunately passed away when Berg was in college, he wanted to be in apparel.
Advertising won out at first, with Berg landing a job selling local ad space in such national publications as Time, Sports Illustrated and U.S. News and World Report. But apparel beckoned and he just walked into Munsingwear and filled out a job application like anybody else, despite the obvious connection. They called him back for an interview and offered him a trainee’s job selling either men’s underwear and shirts or women’s underwear.
“I went safe and took men’s,” he says.
Berg says he took a substantial pay cut – like 75% – to take the job, a fact that puzzled his new employers. The new employer told him it would be three to four years before he would get his own territory where he could make some real money, “but I told them I wanted to be in the apparel business.
“Three months later they gave me a territory – in northern Minnesota,” he notes. “Then they moved me into the city (Minneapolis) without the major department stores (as customers), and then two years later they gave me the largest volume territory the company had – Minneapolis/St. Paul with all the big stores. Dayton Hudson, Donaldson’s, Powers. I got the big gem from the company.”
The meteoric rise never seemed to cease for Berg at Munsingwear – in 1989, after “selling tons of underwear and pajamas,” he got the job running the underwear division, and then he quickly became VP and General Manager of furnishing – underwear, sleepwear and hosiery. After six months Berg got the west coast for sportswear, then added the south, and then they just made him National Sales manager for the country. Then the company added licensing to his responsibilities – the use of the name overseas – then he became Executive Vice President of Sales and Marketing, overseeing almost everything, including customer service.
Then an interesting thing happened. Berg says in the early 1990s he was becoming a big proponent of going into special markets at the urging of a boyhood friend who was a member of the Loving family, as in the industry wholesaler based in Minnesota LA Loving, now Trimark Sportswear Group.
“I knew (the Lovings), and they gave me the whole ABCs on the promotional products business and said we should be selling to wholesalers like them,” says Berg.
At precisely the same moment, Tim Klouda, then a stranger to Berg, was pitching pretty much the same concept to Berg’s boss.
Tim Klouda never really set out to be in the apparel business, he was just one of those guys who follow opportunity to its successful route and that ended up being in the rag trade.
Born in 1952 and also a Minnesota native, Klouda also got his business degree at the University of Minnesota, in 1975, and immediately got a job selling bar and restaurant equipment and supplies, “a straight commission job.
“It was a tough business,” Klouda remembers. “We were the last people in after the remodel, and they were always over budget but they needed supplies. We ate a lot of free meals.”
After three years, Klouda says he learned he didn’t want to be in the restaurant business – even though he did very well, doubling his income each successive year – so he got a job selling weed-eaters, gas barbeque grills and Thermoserve insulated mugs to retail stores. At the time, actress Farrah Fawcett was hot, and his employers got the rights to put her image on the coffee mugs, and Klouda got into selling agricultural companies the custom mugs as premiums.
“The first order I ever got was for 10,000 sets of four mugs for International Multi-Foods,” says Klouda. “It was for a protein additive to feed livestock. If the dealer committed to so much tonnage, they got a free set of mugs. And I thought, ‘Hey, this premium incentive business is pretty cool.'”
Klouda started investigating the premium business – going to some of the early shows in the 1970s – and first got into financial incentives, those giveaways that banks had to capture deposit business.
“They were all regulated by the government,” he says, “so the only way they could retain customers was to give away incentives – a toaster, a TV, a coffee mug.”
At one of the show, Klouda met a guy from a headwear company, Nomad, and he got the right to sell embroidered and screenprinted hats to the same people he was selling coffee mugs.
“I took the (Nomad) line to Honeywell,” says Klouda. “If a dealer bought a package of six thermostats, they got a free logoed cap. The program was so successful we ended up doing 25,000 caps in six months. That was my first taste of wearables.”
It must have tasted good. Klouda, believing in premium incentives, in 1984 went out on his own with a friend, forming a rep company. In addition to Nomad caps, he and his partner started repping a line of outerwear from Wiman Apparel, a firm set up by the Fingerhut catalog empire, offering four items – a fake shearling jacket, one men’s and one ladies; a snug suit, a quilted one piece item for keeping warm with matching booties; and, a “Michelin Man” puffy nylon jacket with polyester fiber fill.
“We started selling the jackets to feed and seed agricultural companies in the upper Midwest as premiums,” says Klouda. “Very little outerwear was being sold with street appeal. We put a line together and said, ‘Here a jacket the guy’s will wear into town on Saturday night with Smith Feed & Seed on it. Prior to that it was all workwear.
“You’d have thought we re-invented the wheel,” Klouda recalls. “Literally, we were an overnight success because of that.”
The rep firm became the owner of the manufacturing, the lines expanded, and in 1988 Klouda and his partner sold the company to K-Products, staying on under contract for two more years. Getting a new partner in 1991, Dennis Lenz, who came from Wiman Apparel, the two set up Klouda-Lenz with the express idea of taking apparel lines into the promotional products business. First, they brought in California Outerwear, and then started bringing leather goods from Burk’s Bay, taking the items from the manufacturers straight to PPDs. Then in 1993, Klouda says he saw in the newspaper that Munsingwear was emerging from bankruptcy, and he began the process of getting that appointment with management.
Are you nuts?
Klouda-Lenz began repping the Munsingwear line to the PPD marketplace, but it wasn’t easy at first.
“I was with the CFO and told him we needed several hundred thousands of dollars in inventory,” Klouda remembers, “and he said, ‘Where are the orders?’ I said, ‘Trust me, the orders will come.’ He said, ‘Do you think we’re nuts?’ We had to prove ourselves.”
But it definitely proved out.
They started with five Munsingwear knit shirts, two piques and three jerseys, and went up against the industry stalwart for knits.
“Outer Banks at the time dominated the polo shirt market in ASI,” says Klouda. “My thought was that anybody not in ASI wouldn’t know Outer Banks. I thought corporate managers would embrace Munsingwear – and they did, overwhelmingly.”
The promotional business quickly took off for Munsingwear, so much so that by 1995 the firm had decided to leave the retail business altogether and go into promotional exclusively.
“We got out of a $40 million business going south and got into a $15 million going north,” says Dave Berg. “In 1994 I was on my way to doing $2 million (in promotional business) and I gave the board a plan to do $11 million in 1995.” Did they make it? “We crushed it,” he says proudly.
The company sold the name Munsingwear and licensed it back for the promotional marketplace, and set off on a totally new course.
In the ensuing years, Klouda-Lenz was acquired by the company, the name was changed to Premiumwear, and several other lines have been added to the Munsingwear base – Page and Tuttle, Field and Stream, Jockey, and several styles from Anvil. (Munsingwear had always been a public company, trading on the New York Stock Exchange, and about the time that it changed its name it was acquired by New England Business Service, also a public company. Premiumwear is still a wholly owned NEBS subsidiary.)
All this has paid off, of course. Premiumwear was listed 21st on the latest ASI rankings of the Top 40 Suppliers in the promotional business, with a reported $53 million in industry sales for 2002.
Pump up the volume
When Premiumwear, nee Munsingwear, first got into the promotional marketplace, it did so by going through the traditional route – wholesalers. Beginning with Stardust, then SanMar, and eventually a whole host of the big names in the business, business grew exponentially.
“We needed to really pump up the volume to get inventory up,” says Klouda, “and the wholesalers had a big pen. The wholesaler model offered a lot of opportunities.”
Times change, however, and in the last two years Premiumwear has decided to take a more direct route to PPDs, setting up its own distribution center – complete with full embroidery and screenprinting capabilities – in Clarksville, Tenn. and eschewing distribution through wholesalers (the company maintains a relationship with Chicago-base S&S Activewear). It’s a new model of innovation designed to take the company to new heights.
“Gone are the days of wholesalers buying a lot of inventory,” says Klouda. “In today’s world, there’s a lot a great product. The branded apparel business has become very crowded. So you have to set yourself apart with service – ease and speed. You have to be very easy to do business with and very fast.
“It’s really Fed Ex’s fault,” he adds. “They said, ‘When it absolutely, positively has to be there overnight.’ That’s when this at-once mentality came about. In the 1980s, we used to ship decorated orders in four weeks. Now its four days.”
Adds Berg about the company’s decision to go direct to PPDs with a new model that includes doing the product decoration: “I look at product as a given,” he says. “When you have hundreds of competitors, service is huge in the value equation. We’re unique. We have product from A to Z, T-shirts to leather; I can’t think of a category we don’t have. It’s all branded with multiple lifestyle brands. And it’s all decorated under one roof. At wholesalers, they have the brands, but not the rest. At other competitors, they decorate, but don’t have the range of brands.”
Having conquered the promotional products apparel marketplace, and then becoming successful at re-investing itself through a more direct business model, you’d think that Premiumwear was satisfied. Not these guys.
There’s always the golf market. When you think about it, it makes sense.
Munsingwear pretty much invented the knit golf shirt back in the 1950s, and was one of the first to use a logo – the Penguin – on apparel. Berg says he has photographs on his office wall “of every President since Eisenhower wearing a Penguin shirt.” Indeed, Munsingwear was the very first apparel company to show at the PGA Show, way back in 1955. But they got out of that business when they relinquished retail.
Fast forward to the formation of the Page & Tuttle line in the late 1990s, and the company re-emerges as a force in the green grass, or golf retail, world with the new brand. In a short period of time, Page & Tuttle has established itself as one of the hottest selling apparel brands in golf, and Berg says that is because of the business model they learned in the promotional industry.
“We brought a business model to the golf business that it hadn’t seen,” he says. “For whatever reason, when apparel lines get successful they get snobby. In golf, they would tell the customers to order seven months in advance and ‘you might get 80% of your order.’ I just hate that. The pro (at the golf shop) didn’t know if his spring was going to be hot or cold, wet or dry, so he buys the usual and sees it all end up on the sale table in the fall along with all of his profits.
“We decided to offer the pro a buy-what-you-need-when-you-need-it system,” notes Berg. “If you want eight shirts, get eight shirts, and we’ll have it in your hands, embroidered, in a week. Our increases are staggering.”
Funny he would say that. After what Berg and Klouda have accomplished in their lives, you’d think it would take a lot to be “staggering.”
Jeff Rundles is Editor of Wearables Business.
A family story drives the Geiger business family, as well
At 126 years and counting, the name Geiger has a rich business history and a full forecast of sunny times ahead.
By Rock Neelly
In the promotional products industry, the Geiger name elicits quite a reaction. Most people in this field register the name with high regard and respect. And, of course, this is not to mention longevity: Geiger has been in the promotional products business since before it was officially created as an industry just over 100 years ago.
But in the printing industry, the name Geiger means something else: The Farmer’s Almanac!
So how did this name come to mean so much to so many?
It is a family story, yes, but perhaps more accurately, a story of family culture that lends itself to the business family, as well. Geiger is the promotional products industry’s ninth-largest distributor (based on ASI statistics for the 2002 sales year), with nearly $125 million in sales, but that, of course, is only a small part of the story. Often the best place to get answers is to start at the top. At Geiger, that means brothers Gene and Peter Geiger.
Gene Geiger is President of Geiger. He joined the firm in 1973 after graduating from Notre Dame and has held the title since 1978. Peter is Executive Vice President and has been at the company since 1978, returning to the family business after getting his degree from Villanova. When the brothers took the helm in the 1970s, the company, known as Geiger Brothers until recently, boasted sales in the range of $8 million a year, a figure that in the ensuing decades has grown exponentially. The corporation now has nearly 375 employees and swells to nearly 500 with the addition of seasonal help. And, there are also just short of 400 sales representatives selling for the firm.
“Family culture is behind our success,” Gene offers. “At Geiger, we are in it for the long, long haul. Our company embraces our internal staff, and we consider our sales people (who are mostly independent contractors) our primary customers whom we must keep satisfied. Even our vendors are treated with the same respect as part of the Geiger family.”
Peter agrees, “From the start, our family company has been about good taste and good ethics. The Geiger Way is all about respect: for our employees, for our sales force, for our vendors, and for our clients.”
“Our father, Raymond Geiger was our company’s best salesman, our chief promoter and our leader,” remembers Gene. “During my first 15 years as president, you have to understand that he often had strong ideas on our company direction, and I learned a great deal from him. It was a team environment. Even today, we have four people in senior management. Peter is an equal shareholder to me, and his voice is equal, and in certain matters, can override my opinion. We all listen and heed each other’s areas of expertise.”
There has to be a historical precedence for this wonderful philosophy. Success breeds success – that we all know. How did the “Geiger Way” start?
The company was founded in 1878 (the same year that Thomas Edison produced the first light bulb with practical applications) in Newark, N.J. Brothers Andrew and Jacob Geiger hung out their shop’s sign a little more than a decade after the Civil War, selling novelties and printed calendars and other printed executive gifts. Jacob’s sons, once grown, also joined the firm, and Frank A. Geiger and his brother Charles bought the company from their father and uncle in 1907. Frank A. served as the president of the Advertising Specialty Association for the 1924-25 term, and later, in 1935, rejoined the association board as treasurer, holding sway over Depression-era finances and well into World War II in his 10-year term.
Francis (Frank O.) Geiger and Raymond Geiger, sons of Frank A., joined the firm in the early 1930s, and were a perfect fit to move the company forward, both as a manufacturer and a promotional company.
“It was fascinating,” says Peter Geiger, editor of The Farmer’s Almanac since 1995, “that my uncle, Frank, was totally focused on all things imprinted from the day of his start with the company, while my father, Ray, was completely immersed in all the items we manufactured – calendars, diaries, and, of course, The Farmer’s Almanac. They were a perfect team.”
That Uncle Ray took over as editor of The Farmer’s Almanac in 1934, when it was a relatively small book. It had been published since 1818, and its owners sought someone with a philosophical bent to buy it, and Raymond, with a degree from Notre Dame in philosophy, was the ideal choice. In 1935, Ray’s first version of the almanac came out, and the company printed only 86,000 copies nationally.
“It was perhaps the first or second promotional item ever given by businesses,” Pete says proudly. “Businesses would buy The Farmer’s Almanac and give them away to their good customers. The retail version of the book wasn’t available until decades later.”
And Ray Geiger was a determined man. With the start of World War II, he joined the service and was stationed in the South Pacific. He corresponded with his sister during the war years, and together, they published the Almanac, never missing an edition during the world war.
After his safe return, Ray focused his energies on The Farmer’s Almanac in earnest. The yearly periodical grew in the 1950s until the print runs were exceeding 6.5 million copies a year by Geiger Bros.’ centennial year, 1978. (Keeping with its promotional-products roots, the Almanac is published in two versions: a retail edition for the general public on newsstands, and, a promotional edition designed to be distributed by Geiger customers to their customers as a service and a promotion.)
By now, Ray was also involved in leading the promotional industry, following in the footsteps of his father. Both Ray and his father are now enshrined in the PPAI Hall of Fame.
The firm moved to Lewiston, Maine in 1955 as Ray and Frank O. continued to grow the company’s reputation in promotions, but also developed a huge following with his almanac’s advice on weather, garden planting, astronomical phenomena, and its yearly collection of maxims and advice. Ray served as editor of the almanac for 60 years!
Peter took over as editor from his father in 1995, and upon the day of his interview with Wearables Business, he had already been contacted for numerous interviews regarding the prospects of an early end to winter as Groundhog Day approached. He has also had fielded a phone call from an interested father who was booking a church for his daughter’s wedding.
“Unfortunately,” Peter laughed sheepishly, “all the Saturdays when the church was available were showing rain.”
Peter has appeared upon CNN, The Today Show and conducts many interviews for radio and television. So how about it, Pete, what is the weather going to be like in 2004?
“We see a wet year ahead,” he admits. “It will be a late spring in the East with snows into April.”
And how about the business climate?
“That’s a better prediction,” Peter says. “I think that business is going to rebound nicely. At Geiger, we experienced some of the same difficulties as did the rest of the industry, but we have put technology and people in place in the last year to help us process business more efficiently to the benefit of our clients.”
Gene is also ready for sunnier times.
“I still have fun at this job, but there have times over the last three years that were not fun,” he acknowledges. “It was the worst spell during my working life. Perhaps the promotional bubble grew too large, but it was definitely challenging to manage the change.
“On the other hand,” Gene counters, “the down time gives us hope, and hope springs eternal. Geiger is on the upswing now. And our company family has made that happen.
“Our family culture is what still keeps me here,” Gene adds. “Being involved with the people at Geiger. I love being around people who are smart. The fun part of my job is being surrounded by bright, good, hard-working people who are really wonderful at what they do.
“As I get a little older, I have become a little more comfortable with who I am and the role I play,” he muses. “It is fun, and I am proud to represent a company that carries a reputation of respect. It is good to be a front man for a company filled with really good people.”
Gene contemplates the future for a moment. “I don’t see a time in the promotional products industry when what individual humans bring to bear is not the key. People are the most important criteria. I don’t see technology overriding relationships as the primary force in driving the business. Yes, at Geiger we have and will add to the weaponry to smooth processing client needs, but that is not the story. Brains, creativity, effort, and commitment are what is important in the attraction and retention of customers.
“Within the family culture of Geiger,” he concludes, “we hope everyone associated with us feels a sense of connection to the whole. We want to be transparent in our sense that we are ethical. We aren’t perfect, but we are moral and ethical the vast majority of the time. We want people to know we regard them as important and valuable. If we succeed in that, we will succeed in all.”
With such a philosophy, the forecast for Geiger should be filled with sunny days.
Rock Neelly is a veteran of the promotional products business, having served years with apparel suppliers. His articles on a variety of promotional wearables topics began appearing in these pages last year.
What’s next for Lee Scharf
Experienced Summit West Apparel Group President/COO Scharf has some new lines up his sleeve.
By Brian Anderson
Few people know more about selling T-shirts than Lee Scharf.
Much of this career apparel industry man’s experience relates directly to being a key figure in growing the T-shirt into the powerhouse of a promotional product that it is today.
He helped make the Hanes Beefy-T the standard in Southern California back in the late 1970s/early ’80s, and is a big part of why Gildan became the leading T-shirt manufacturer in the imprinted sportswear market.
Scharf considers himself a corporate person as well as an entrepreneur, and his history of executive positions with mills, mixed in with stints at a variety of start-ups, certainly bears this out. He says he owes a lot to his mentors: Keith Alm and Frank Armstrong at Hanes; Mike Lemberg at J-M Enterprises; Joe Kaufenberg at Kaufenberg Enterprises; Harold Robinson at F.L. Robinson; Walker Box at Bassett-Walker; “and to the many wholesalers who believed in me and my products and took a chance.”
He has held management positions with Hanes, Bassett-Walker (Lee Printwear), Tultex, and Gildan, and is currently the President/COO of Long Beach, Calif.-based Summit West Apparel Group. Summit West is a 7-month-old marketing and sales group with manufacturing alliances in the USA, Mexico, Guatemala and China with a product line strategically designed for the wholesale, decorator, promotional products distributor, retail, and private label distribution channels. It begins with Scharf getting back into the blank T-shirt fray with a high-end Summit West tee.
And, to keep the excitement level at a fever pitch, Summit West just launched a line of apparel inspired by and named after auto racing legend Mario Andretti.
Scharf has contempt for the “same old, same old,” and does his best to present products to the industry that are not the same old thing.
“Very few wholesalers are offering anything exciting. How many basic T-shirts and golf shirts can you sell or buy?” Scharf says. “Anyone who has any training or knowledge of retail will tell you that the buyer wants to see something new and different. The same holds true in the promotional apparel industries.
“Currently the majority of wholesalers are worried more about turns than supplying the marketplace with new and exciting products,” he adds “The promotional products distributor, screenprinter, and embroiderer are way ahead of the wholesaler, but their hands are tied.”
An answer to this is Summit West’s new Andretti line, which has been debuting at a variety of imprinted sportswear and retail-oriented trade shows since January. Scharf took advantage of the Summit West office’s close proximity to the Long Beach Convention Center during the recent Imprinted Sportswear Show in Long Beach to host a cocktail party where its new collections, featuring the Andretti line, were unveiled to invited guests of the trade show.
“The Andretti line came about with my interest in cars and racing. It was a perfect match,” Scharf says. “The collection is street-smart fashion for all race enthusiasts. The line consists of high-end retail, mid-tier, and a line specifically designed for major wholesalers who may be selling to accounts servicing NASCAR, Indy car, Motocross and all automotive channels of distribution.”
Scharf has had an ongoing business relationship with the Andretti “Team Green” racing camp, with roots selling Andretti souvenir T-shirts at events like the Long Beach Grand Prix.
“I consider Mario, Michael and Marco an American racing dynasty,” Scharf says.
There is some added automotive grease in Scharf’s new firm, as well. The management team at Summit West includes Vice President Joel Kerr, whose background is with Texaco/Valvoline and the automotive/race industries. Summit West is currently in negotiations with Team Green to be a sponsor of four cars for the Indy Racing League season, including “the Greatest Spectacle in Racing,” the Indianapolis 500. You may see either the Summit West logo, or logos from Summit West’s individual brands showing up on both the cars and the driver uniforms, Scharf says.
Meeting a need
While Scharf’s Summit West Sportswear start-up four years ago as a wholesale distributor to the imprinted sportswear market didn’t live up to expectations, the new incarnation, Summit West Apparel Group, got started because Scharf says he recognized a “need” not being met, not a “niche.”
“We are creating real competitive advantages, not just making incremental adjustments,” he says. “Due to the latest state-of-the-art technologies, we are able to offer the customer the same price for made-in-the-U.S.A. as offshore. I don’t know many mills that can do that.” Any Summit West product can be made in the U.S.A. if the customer so desires – “it just depends on the order,” Scharf adds.
Summit West’s other divisions include: Fleece Concepts – a custom fleece line; Teenie Weenie – a juniors/ladies resort boutique collection; and, the Green Spun Line – an environmentally friendly collection made with all recycled cotton yarns.
Fleece Concepts can manufacture to a customer’s specs with low minimums and fast turnaround times in fabric weights ranging from 7 ounce to 11 ounce. “The customer is now in the driver’s seat and no longer has to settle for what’s in the marketplace,” Scharf says.
The Teenie Weenie women’s line is sold at retail or blank with contemporary designs and unique fabrics like dyed boucle, low loop and waffle fabrics.
The Green Spun Line is perfect for embroidery and any environmentally sensitive clients, the entrepreneur says.
Lee Scharf was born in the Midwest, but his family moved to Los Angeles when he was in grade school. “My father thought there were more opportunities in California than in a small Northern Indiana town,” Scharf says.
He still calls Southern California home, now living in an area called the South Bay. The majority of his free time is spent doing things in or around the ocean. “I also have a passion for automobiles, car shows, hot rods, collecting and racing,” he says.
His beginnings in the apparel industry trace back to a job with the New York department store chain Orbachs, but it was his stint with Hanes that really made him a player in the blank T-shirt business.
“I had worked my way up to Western Regional Sales Manager. My territory accounted for 69% of the Printables division,” Scharf says.
“In those days the market was changing. A 50/50 T-shirt was dominating in the Midwest, while we were pioneering a 100% cotton Beefy-T. All the major surf companies were growing in Southern California, and they all wanted 100% cotton with a high neck crew.
“The marketplace was not saturated yet by large wholesalers with satellite locations,” he says. “Our product offerings were very lean. Big excitement to us was adding a new color to our product line.
“We also controlled Hawaii. Hawaii was very important to us from a sales and geographic standpoint,” he adds, referring to T-shirt-buying tourists that flocked to Hawaii. “If you had product in Hawaii, it would go all over the world.” At that point, a lot of the big mills had not expanded beyond the U.S.
The rise of Gildan
From Hanes, Scharf went on to positions with other mills Bassett-Walker and Tultex before embarking on a journey that would lead to the emergence of market leader Gildan.
“I developed a business plan and my mission was to make the ‘Best T-shirt at the Best Price.’ I shopped the plan/concept all through the United States and everyone laughed at me. All of this was taking place right before NAFTA. I went to Mexico with my plan and found them 15-20 years behind the U.S.A. At some of the plants I toured, they were actually drying fabric outside in the sun,” Scharf says incredulously.
Due to the opportunity afforded by NAFTA, Scharf then started shopping his plan to Canada. “In Canada I met up with Greg Chamandy (Gildan’s current Chairman of the Board and CEO), who at that time was president of a company called Harley. They liked my business plan and we struck up a business relationship. At that time, Harley was mostly involved in children’s apparel. The T-shirts that were marketed in Canada before I came along were very thin, low end, souvenir type – good for only one wash.
Harley became Gildan in the early 1990s – being re-named “after two people we bought a manufacturing company from – Gil and Dan,” Scharf says.
Gildan was certainly not an overnight success, Scharf says because no one understood what they were trying to do. “It took two years before any sizable orders would come in,” Scharf says. “Every major wholesaler except one, J-M Business Enterprises in Seattle, passed on Gildan at first. Next to come on board were Bodek and Rhodes and F.L. Robinson.”
Other wholesale distributors followed, and the quality T-shirt at a lower price than the bigger mills strategy proved a big winner. “We went from $50 million to $100 million in sales in one season, which is unbelievable,” Scharf says.
“Gildan was created because of a need I saw in the marketplace,” he adds. “I was basically disenchanted with the typical manufacturing-driven mills. In the apparel industry you have manufacturing-driven companies and marketing-driven companies, as well as companies that are a combination of both. A majority of the manufacturing-driven companies are no longer with us. A lot of companies do not emphasize enough marketing, which is essential in developing a ‘Brand.’ Branding is more than graphic design. It’s a company’s ideology; the image consumers buy and the investors rally behind.”
On to new labels
Scharf eventually left Gildan and started his own mill in Mexico called Royal Avalon, a label which for a time was a market leader in black tees and did a lot of business through Wal-Mart before eventually going under in the face of competition from the big mills.
“I wanted to improve on what I had already created at Gildan. It’s easy to say that you are going to make the best T-shirt at the best price, but it’s not that easy to follow through on it,” Scharf says. “In order to be successful, quality and value must be emphasized. Total quality means meeting the customer’s expectations 100 percent of the time. It means asking the customers what they want, setting the corporate standards and working toward those goals. Finally, it means closing the gap between what the customer expects and what the company can deliver. On the value side, it means always working diligently to improve manufacturing and products without affecting prices.”
Scharf’s latest foray into the T-shirt business is with a high-end, retail-like style that is a little more expensive than the industry standards, but is made of 100% ring-spun combed cotton and is almost a size bigger.
“Once again, I saw a need in the marketplace for a ‘high end’ T-shirt. I truly believe our T-shirt is the best T-shirt in North America and possibly the world,” Scharf says, likening it to the Cadillac or Rolls Royce of tees.
In developing this tee, Scharf said they listened to numerous focus groups, having the true consumer tell them what they liked and disliked. Things they didn’t like: Buying the T-shirt one to two sizes larger because of shrinkage; softness gone after washing; grabbing or bunching under arms or across the back; scratchy neck labels; and the T-shirt needs to be heavier.
“We listened and made improvements to all their major complaints. The Summit West T-shirt is a 6.8-oz. ringspun combed cotton. I only know of one other mill that makes combed cotton. It’s luxurious, soft and roomy.
“I feel the current T-shirt spec is outdated. I use a generous retail streetwear spec. I do not believe in European or performance fit for this channel of distribution, with the aging Baby Boomers and more people being as active as ever – bicycling, skateboarding, gardening, or just hanging out on the sofa. I feel this is the best T-shirt in the marketplace,” Scharf says.
In closing, some advice for the reader:
“Sell, sell, and sell. Sales and marketing are the keys to any businesses survival. Even the best products or services will go unpurchased if no one knows they or you exist. Get to know the customer’s company, the people involved and the industry as a whole. Change is scary for most of us. Don’t let fear interfere with your success. Timing is also very important. I was one of the first people to license the Starter brand. The first year I took it out to sell I was unable to make an impact. Discouraged, I got out of the license. The second year, Starter set a record in over $125 million in sales.”
Brian Anderson is Senior Managing Editor of Wearables Business.
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