Jay Sachetti joined Jeff O’Brien, partner at Husch Blackwell and Dyanne Ross-Hanson, president of Exit Planning Strategies talked about the market for mergers and acquisitions, exit planning opportunities for companies that don’t end up for sale and how companies can maximize their eventual sale price during an early October panel at the first Upsize on Tap event at Summit Brewing Co. in St. Paul.
When the state Legislature passed a law requiring employers to provide paid leave and safe time for employees, Justin Bieganek started hearing differing details from friends, colleagues and peers.
When Upsize visited with St. Paul-based Podiumwear Custom Sports Apparel in 2016, the company was making customized apparel for cross-country skiing and cycling, sports in which its owners, Reid and Jessica Lutter, participated.
The company still works with Minnesota’s own Jessie Diggins, who in 2020 won the cross-country skiing World Cup title. That market is still growing, albeit incrementally. Cycling remains strong as well, as clubs in 30 states wear the company’s apparel.
But shortly after that article ran, the company got into the comparably limitless worldwide market of soccer, launching the line with the huge St. Paul Blackhawks youth program.
“That’s largely driven our growth the last three years,” says Reid, the company’s CEO and founder.
And that’s likely to continue, he says, as compared with the shorter seasons and more limited reach for skiing and cycling, soccer is played across the country, year-round.
“When the weather gets nasty outside, they take it inside,” he says.
Jessica, Reid’s wife and Podiumwear’s marketing director, and their children all played Blackhawks and, as their kids’ teams ordered the same old uniforms from the same old stores, they recognized that market was “ripe for disruption,” Reid says.
“Podiumwear’s job is to make custom easy. It’s to make ordering uniforms fun and to design a beautiful product that you’re going to be proud of,” he says. “They were still doing it the old way where you go to a sports store and you try something on and then they slap a big huge vinyl thing on the back that when you sweat in Minnesota summers is awful and then it starts peeling off at the end of the summer. We were like, ‘we can do this better.’”
Better, for Podiumwear, can take a bit longer. The company spends time talking with team representatives who may have a specific idea for what they’d like to see in a uniform or may have nothing more than a quick sketch on a napkin.
“We want to make this custom process your own,” Reid says. “It doesn’t mean we can’t make a ton of uniforms and make them really fast. What it means is we’re not going to rush that design process.”
Custom comes with some challenges, not the least of which is that people aren’t used to it, so they can find it intimidating. Podiumwear wants to make it fun because, especially for kids, it’s part of shaping the lessons, memories and experiences that come with playing sports.
“We know how to make it easy for them and kind of take away the stress,” he says. “When they get their new uniform, they’re like a superhero who just pulled on their outfit. Superman just opened his cape and got his brand-new kit. That’s what we see whenever we introduce a new soccer jersey.”
In the end, he says, the team ends up with something more meaningful to its players than Adidas stripes accompanied by a little logo. “We really want it to be fun for customers so they are excited about wearing a design that represents their team identity,” Reid adds.
That new line has produced about a dozen clients so far, but the Lutters expect that could grow quite a bit in the years to come, as the sport continues to gain popularity in the U.S. The company just inked a deal with Soccer Youth All-American Series, a nationwide series of camps, where kids will wear Podiumwear gear, getting the product in front of many more eyes.
Reid acknowledges that there’s more competition in the soccer market from well-known brands like Nike, Adidas and Under Armour, but he adds that when it comes to smaller leagues, those companies don’t excel at providing custom products. “That’s not really what they care about,” he says. “They care about helping FC Barcelona look good or Manchester City. Our job is to go to the clubs that are providing the vast majority of the soccer playing in the U.S. and say ‘Hey, we can make you look like those guys.’”
So, it’s been a few years of solid, steady growth for Podiumwear. It’s come with some lessons learned and some others confirmed. For example, in the company’s early days, Reid and Jessica stuck with sports they knew well.
They had each played some soccer, and in order to maintain that firsthand expertise in the sports in which they produce active wear, they hired some more experienced representatives to help understand “what’s real? What does a 14-year-old kid need in their soccer jersey?”
But also, as they’ve matured as leaders, Reid acknowledges that they’ve become more flexible in terms of the product lines they’re open to pursuing.
“It was a really pivotal moment when we realized we don’t have to be pigeonholed by only the sports we did,” he says. “Because, in essence, we’re not selling a uniform, we’re selling our company and the experience those people get with this company.”
While they’ve entered this vast new soccer market, Podiumwear still has no intentions of outsourcing manufacturing. The company purchased a building in the Midway area of St. Paul about four years ago that allowed it to expand its production area from 4,000-square-feet to 14,000-square-feet. It might not have been large enough; they’re already getting short of space for storage.
Sales have increased from $1.4 million to more than $2 million the last couple years.
Reid also has learned he needs to be flexible. That was never truer than in the second quarter of 2020 as COVID-19 hit.
The company had a strong first quarter, but the pandemic ground business to a halt, at least initially. But, quickly, in order to both keep the business moving and employees working, the company shifted toward making masks. First Podiumwear introduced a medical-grade version made from a fabric very different than what the company makes its sports apparel from. But then the company added a second more customized one- or two-layer mask, as well.
Podiumwear typically sells its uniforms through a coach or team organizer, but the company introduced a direct-to-consumer five-pack that, along with a Paycheck Protection Program loan, kept business steady enough to avoid layoffs. Word of mouth is typically the company’s best marketing tool for its sports apparel and that proved true for masks, as well.
Word spread and customers passed along to other customers “You want a comfortable mask that you can play soccer in, go to Podiumwear,” Jessica says.
Mask sales have fallen off in recent months, as they can now be found everywhere, but initially, as guidance about their efficacy started coming out, they were harder to find.
“That’s what carried us through last year,” Reid says. Many of the sports teams the company made uniforms for are comfortable wearing them during play, he adds.
“Our biggest client was the University of Minnesota marching band. We did hundreds of masks for them so they could perform in a mask. And we’re still seeing those kinds of clients.”
