Kurgo: Creating a Retail Category
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In 1996, Bob Magnuson was an independent sales rep in the sporting goods industry. That year, NHL hockey player Adam Oates, who came to the Boston Bruins from the St. Louis Blues in 1992, and Magnuson's brother Eric—who had played hockey at Rensselaer Polytechnic Institute with Oates—came up the concept of an apparel company that celebrated the tradition and heritage of hockey with both vintage apparel and retro activewear. While retro jerseys are popular today, they were revolutionary at the time. It didn't take much convincing for Eric, the company's finance executive, to bring Bob on board as president, and his other brother, Chris, as vice president. In 1997, Old Time Sports, now headquartered in Salisbury, debuted.
At first, the company acquired very limited NHL licensing rights. "Initially, it was just a license to sell a short-sleeve tee shirt," Magnuson says. Since then, Old Time Sports has added "every apparel category available, and they are one of only two licensees in the industry (Reebok is the other) with all those rights," he adds. The company also has Canadian rights, and during the 2004-2005 NHL lockout, partnered with Mint Green in Montréal, a firm that also distributes Puma in Canada, to distribute the brand via a sub-licensing agreement. In addition, Old Time recently received licensing rights in Japan and Europe. Old Time Sports is also in talks with the NFL to obtain some licensing rights in the future.
Old Time Sports has experienced a steady growth rate, with a remarkable 25 percent year-over-year growth since 2009 and a doubling of its staff to 50—all during a time when many other companies were struggling. Sales have gone from $6 million in 2007 to $10 million in 2011, with a 27 percent increase anticipated for fiscal 2012 to $14 million. Much of the success of the Company is due to the Magnuson brothers unwavering commitment to the family business and their genuine love of the sport.
After perfecting the wholesale side of the business for more than a decade, Old Time Sports opened its first retail store at the Northshore Mall in Peabody in 2011. "We wanted to have our own store for a long time," says Magnuson. After experiencing a few good years of financial stability, "we finally had the opportunity and went for it. So far, it's been extremely well received, and it has helped us get the name recognition we've been looking for. It has also helped us improve the wholesale side of the business by understanding the challenges our retailers face."
Still early on in its growth, the store accounts for about 2 percent of the company's annual revenue. The retail concept has led to plans to open additional Old Time stores during the next two years in both malls and key NHL arenas. In addition, the brothers Magnuson are pushing hard on a new ecommerce initiative.
While Bob, Eric, and Chris have worked hard to grow their business, Magnuson credits Salem Five with helping to ease the way with a myriad of commercial banking products, including online banking, equipment loans, an SBA 504 mortgage, and a participation loan with BDC Financial.
"We've been with Salem Five for more than 10 years now, and most of that time we've been a growing company in need of specialized financing," he relates. "Kenny Ellis, senior loan officer at Salem Five, understood the business and our needs and was always able to provide financial solutions that we'd never considered, like state programs, SBA, and asset based-financers. Salem Five and our dedicated team, of Kenny, Luisa Coppola, and Bob Eastman have always helped us through the challenges that come with a growing company. Salem Five stood by us and loaned us money when the NHL cancelled the entire 2004-05 season. In fact, because the NHL was 90 percent of our business, the bank actually helped us force diversification, rather than saying, 'we can't help you.' Salem Five is definitely a bank that can provide the services and products of a larger institution, but at the same time gives us the attention every company deserves from its bankers. Ken and Luisa have listened to our needs and have worked with us to accomplish the unimaginable: a $14 million dollar—and growing—family-owned company that sells hockey apparel to puck enthusiasts around the country. For that, we are truly grateful."
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