Toronto-based clothing company Roots might be known as the outfitter of various Olympic teams, but it's working to expand its profile to include its other consumer apparel offerings
Roots is arguably most synonymous - perhaps more than any other brand - with the Olympic Games. That was especially true during last year's Athens Summer Olympics, when the athletic sportswear company provided the team uniforms for the US, Canada, the UK, and Barbados.
The exposure the trendy lifestyle brand received during the opening ceremonies alone - two minutes of screen time - was the equivalent of buying $6.9 million worth of TV ads on NBC, which broadcasts the Games, says Eric Wright, VP of research and development at sports marketing firm Joyce Julius & Associates in Ann Arbor, MI.
Roots' clothing - mostly hats and pullovers worn by the US squad - also garnered a mention by NBC announcer Bob Costas. On top of that, 50 print articles in North America mentioned Roots before the Games even started, generating $2.5 million worth of equivalent advertising. And during the Olympics, The New York Times and The Washington Post, among others, featured write-ups on the company.
But Roots knows all too well it can't rely on the Olympics forever. In March, it made front page headlines in Canada when the country's Olympic Committee ended its long-standing relationship with the brand so synonymous with Olympics clothing. Roots lost the Olympic clothing bid to Hudson's Bay Co. (HBC), a 335-year-old retailer considered one of the stodgiest brands in Canada.
HBC spent a whopping $100 million to win the right to outfit the Canadian Olympic team. Roots cofounder Michael Budman admits HBC likely saw the PR Roots generated from its affiliation with the Games "and believes the Olympics will save its business."
HBC's two retail divisions, discount chain Zellers and department store The Bay, have performed so poorly that analysts have been quoted in the media as saying that about the only thing keeping the company's stock price up is speculation of a takeover by US retailer Target.
So the loss of a lucrative Olympics contract poses a major PR challenge for Roots, as outside of Olympic fever, Americans rarely hear about the company. Roots operates just seven stores in the US (compared with 130 in Canada), a number that hasn't changed since 2002 despite executives' plans to expand to 300 stores.
And beyond the Olympics, few retailers carry the line. "Roots is very much an Olympic brand in the US," says Maureen Atkinson, senior partner of retail consultancy JC Williams Group in Toronto. "That's their big challenge - communicating the brand outside the Olympics."
Eye toward expansion
Despite these challenges, the Toronto-based private company rings up annual sales of about $300 million, according to analyst estimates, although that figure balloons during Olympic years. Budman believes the outdoorsy lifestyle the brand represents, in products ranging from leather handbags to luggage, can attract Americans year round. "Roots is more than an Olympic brand. We want to expand that brand and its attributes to North American and Asian markets," says Budman. "The name 'Roots' is a very powerful brand, and under-distributed in America."
As such, the company faces challenges to grow its outdoorsy, environmentally friendly brand. Budman runs Roots as a small, entrepreneurial, creative-driven shop (the corporate head office of 150 people doesn't include a single VP). In fact, Roots' first chief creative officer, Ernie Sulpizio, who had worked for The Gap and Hugo Boss, didn't last long at the company.
"He is one of the VPs that recently went bye-bye," says Budman. "[Cofounder] Don [Green] and I are the two creative directors of the company and we don't need anybody between us and the design team."
The communications team consists of just two executives, as well - Robert Sarner, director of communications, and Raymond Perkins, director of PR. Roots works with Bounce Publicity, a Toronto firm that looks to place Roots clothing in the editorial pages of Canadian magazines. Amy Coppa, partner at Bounce, says its work positions Roots as a "lifestyle, rather than a piece of clothing."
Sarner handles all media inquiries worldwide and is also the company's public affairs specialist. Initially, Roots manufactured all of its clothing in Canada, which helped build the brand as not only genuinely Canadian but also one of good quality. As it has grown, Roots has gone offshore to make clothing, which has resulted in occasional storefront protests.
"I have to ensure our products overseas are being made ethically because we have seen the damage when companies aren't careful," says Sarner. In fact, Sarner publishes an online brochure talking about why Roots makes some of its products overseas (the brochure gets right to the point, asking, "Does Roots use so-called 'sweatshops' to make its products?" The answer details Roots' code of conduct and membership with Business for Social Responsibility). Sarner says the brochure is also distributed to the company's sales staff.
Ironically, one of Canada's most exportable brands is the creation of two Americans. Budman and Green, boyhood friends who grew up in Detroit, spent summers together at a camp in Ontario's Algonquin Park. In 1973, they paid homage to their love of the Canadian outdoors by opening a shoe store in Toronto, which sold the negative heel shoe, so named because the heel sat lower than the forefoot. That was followed by wildly popular Roots sweatshirts so ruggedly Canadian they even featured a logo of a beaver.
But the Olympics really put the company on the fashion map. At the 1998 Nagano, Japan, Winter Games, Roots outfitted Canada's Olympic snowboard team, and the team's "poor-boy" hats flew off store shelves. The same year, US athletes were ridiculed for wearing cowboy hats. Not surprisingly, the US Olympic Committee came knocking, and Roots was hired to outfit the American team for the 2002 Winter Games in Salt Lake City.
Americans went crazy over the navy berets, and Roots sold well over a million of them. "Of course, we wanted our clothes to be successful, but in our wildest dreams we never imaged it would be that successful," says Budman.
Roots aims to build on its Olympic success. Earlier this year, the company hired The Cherokee Group, a Van Nuys, CA-based brand management company, to cultivate a partnership with a US retailer. Roots is hoping to see success similar to the deal Cherokee engineered between clothing designer Mossimo and retailer Target.
That doesn't mean Roots isn't going to leverage its Olympic partnership with the US. The US team will be the only one wearing Roots at the 2006 Winter Games in Torino, Italy, a fact that Budman hopes will help its growth strategy south of the Canadian border. "What we created for them in 2006 is unbelievable," says Budman. "The US is getting all our time and energy." In Canada, Roots will continue to support such amateur athletes as Ross Rebagliati, the first-ever Olympic snowboarding champion.
Leveraging celebrity endorsement
While Olympic athletes wearing Roots' clothing has driven much of its sales, the company is looking at other potential influencers. Perkins handles celebrity relations, event planning, and sponsorship opportunities, one of the primary ways the company promotes its brand as being favored by trendsetters. In the US, for instance, Roots sponsors the Aspen Comedy Festival. Such stars as Robin Williams, Arnold Schwarzenegger, and Ben Affleck have been photographed wearing Roots clothing. And Budman rarely turns down a chance to mingle with the famous.
For example, when Sean "P. Diddy" Combs was in Toronto this spring to promote his Sean John clothing line, Budman mingled with the hip-hop mogul at a launch party. "I had a good meeting with him," says Budman, "gave him some Roots stuff."
Atkinson says celebrity endorsements could figure prominently in its US expansion. "Roots has the ability to get a hot, emerging movie star or famous personality to wear its product at the right time and be seen," she says. "I still remember when Prince William was photographed wearing the Roots Olympic hat [in 1998]. That photo was splashed on the front cover of every newspaper. You can't buy that kind of advertising."
It's exactly the kind of marketing Roots could use to expand the brand in the US beyond its Olympic, well, roots.
Director of communications Robert Sarner
PR director Raymond Perkins
PR agency Bounce Publicity