Ready to reap the rewards of patience
The stars and planets aren’t yet aligned
perfectly for Sportif USA, but they’re
Executives of the Sparks-based company
project sales increases in 2004 and
2005 that will dramatically outpace the 3-
4 percent annual growth rate in the highly
competitive outdoor apparel industry.
That’s good news indeed for a company
that posted only its second operational
loss in its history last year after it struggled
with the hefty costs of shuttering a
Mexican plant and the post-Sept. 11 sales
Sales currently run just under $20 million
a year; the company expects 20 percent
growth next year.
Here’s how John Kirsch, president of
Sportif USA, sees the next couple of
The outdoor apparel industry grew
like crazy in the late 1990s. Cash-flush
consumers flocked to outdoor fashions
even if their idea of outdoor activity was
nothing more than a stroll from the
house to the SUV.
Attracted by high margins, big outfits
purchased many of the smallish outfits
that supplied the boom in outdoor apparel.
The margins, the big outfits learned,
were unsustainable during a downturn
unless they cheapened their brands. They
cheapened their brands anyway moving
once-prestigious brands, for instance,
into department stores or even discount
The family owners of Sportif USA
four brothers took over the business in
1991 after founder John G. Kirsch. died
in the crash of a light plane didn’t succumb
to the temptation of the high-multiple
offers they got for the company.
And now the 36-year-old Sportif is
ready to reap the fruits of its patience.
The outdoor apparel business is dominated
by about 4,000 specialty stores
nationwide, Tom Williamson, Sportif ‘s
sales manager explained last week.
(Keeping with the family theme,
Williamson is a brother-in-law to the
Owners of those stores, as well as
some of the buyers for chains such as REI
who are among Sportif ‘s biggest customers,
tend to change slowly. But the
recent erosion of once-prestige brands
leaves them open to a pitch from
Sportif ‘s independent sales force.
The pitch emphasizes the unrelenting
quality of the Sportif brand. Equally
important, the company gets its foot in
the door by offering high margins to
Those high margins, Kirsch said last
week, are the result of tight cost controls
throughout the company.
The company operates its own apparel
factory in Sri Lanka John’s brother Jeff
Kirsch oversees it and its 45-employee
headquarters and distribution operation
in Sparks is far less expensive than facilities
run by competitors in big-city locations.
The 41,000-square-foot facility on
Greg Street includes information technology
systems that Kirsch believes are
among the best in the apparel industry,
and the computer systems easily can be
scaled up to meet the demands of growth.
The systems manage a complex inventory.
Sportif offers some 400 styles of
clothing each year that’s just styles,
not colors or sizes.While about 70 percent
of its sales go to small and mediumsized
retailers, Sportif USA also mails
some 3 million catalogs. Direct sales to
consumers amount to 30 percent of its
(A smaller but locally important
part of the business comes from a warehouse
sales operation at the Greg Street
headquarters. Prices, Kirsch said, “start at
wholesale and go down from there.” Even
with minimal advertising, the warehouse
store draws a steady trickle of customers.)
A market that combines individual
consumers and small retailers requires
plenty of individualized attention, and the
Sparks headquarters includes a call center
that’s particularly busy handling customer
queries during the spring and summer.
Samples of Sportif products hang in the
back of the call center, available for a customer
service worker to take a look herself
at a piece of clothing that’s the subject
of a customer’s call.
That sort of attention to relationships
with individual customers is an important
value for Sportif, which emphasizes both
its family ownership and the extended
family represented by a workforce that
includes some employees with tenure of
more than two decades.
“People like to do business with people
they like to do business with,” Kirsch
Growing faster than its industry
means only one thing Sportif USA
will be grabbing market share but
Kirsch said the company believes it can
do so without falling into the brandcheapening
traps that befell some competitors.
A strong new fashion design team at
Sportif USA a team that walked out
of a competitor and directly into the
Sparks office is beginning to make a
mark in the industry as the group rolls
out its third season of clothing,
The designs focus on Sportif ‘s core
market active adults, 35 to 50, who
participate in outdoor sports but aren’t
extreme in their activity. About 70 percent
of them,Williamson said, are
women and a fair number of the
women also are buying men’s clothing for
the man in their life.
Sportif also expects to gain market
share as it widens its retail reach. Today,
Williamson said, the company sells to
only about 15 percent of the 4,000 outdoors
specialty stores nationwide.
The company got a big boost this
autumn when Galyan’s, a chain with 26
stores in 14 states, took on the Sportif
line of sportswear. Galyan’s added Sportif
in about half its stores this fall and plans
to carry Sportif in all its stores by spring.
The sales growth that Sportif USA
executives expect in the next couple of
years also may push the company into
The company holds an option to nearly
double its distribution and headquarters
space in Sparks.
Beyond that, Kirsch said, the company
toys with the idea of opening an East
Coast distribution center to reduce shipping
costs to its customers.
Although more of its sales come from
the West Coast each year, the East still
accounts for about 50 percent of Sportif ‘s
business. In part,Williamson said, this
may reflect the company’s roots as a private-
label supplier to firms such as L.L.
Bean, work that gave Sportif a good feel
for East Coast buyers.
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