Basketball dreams on a budget
By Jonathan Birchall
Published: September 25 2006 18:12 | Last updated: September 25 2006 18:12
When Stephon Marbury steps on to the basketball court for the New York Knicks in their opening pre-season game this October, at least some of the focus will be not on his playing, but on his shoes.
Marbury, the fifth highest paid player in the National Basketball Association last season, has announced that this season he’ll be playing not in Nike’s Air Jordans, which sell for about $175, nor in Reebok’s Iverson Answer IXs which sell for $124.99, but in his own brand, Starbury One shoes – now on sale for just $14.98 (before tax).
Marbury’s cheaper sports shoes are the centrepiece of an unusual sports marketing alliance in which an athlete who was paid $16.5m last season is stressing not ultra-high performance, but affordability.
“You are giving a kid the opportunity to go and buy a pair of shoes, now he can buy it on his own... instead of his mother being responsible for something like that and having to spend $150,” says Mr Marbury in a video promoting the shoes running in the Manhattan branch of Steve & Barry’s, a low-cost sportswear chain.
The Starbury One is among a range of 50 Starbury products on sale at Steve & Barry’s University Sportswear, which built its name on low prices. After the Starbury shoes, the next most expensive item currently on sale in its cavernous stores is a down jacket selling for $9.98, with hooded sweatshirts and pants priced at $7.98.
“We run our business very tightly and efficiently,” says Barry Prevor, the retailer’s 43-year old chairman and co-founder. “There’s no extra costs anywhere.”
Mr Prevor and his co-founder Steve Shore opened their first store when they were college students at the University of Pennsylvania in Philadelphia. Taken aback by the high prices charged for college-branded clothing at the campus store, they set up a rival operation, going on to assemble a stack of clothing licences that now include 350 colleges as well as brands such as Ford, General Motors and Hershey.
The retailer opened its first shopping mall store in Detroit in 1998. It now operates 144 stores of 70,000 sq ft and expects to have 200 by the end of the year.
Mr Prevor says it is largely a coincidence that the Starbury shoe and the retailer’s launch of its first exclusive brand – which has attracted nationwide publicity – has come along as the retailer is making the transition from a regional chain, centred in the northeast, to a national operation.
Instead, he says the idea of the low-cost Starbury range came about a year ago from Marbury’s agency, The Agency Sports Management, with whom they had worked on other licensing agreements.
“It wasn’t necessarily a strategic thought to say ‘let’s go get an athlete relationship and get into this business,’ ” says Howard Shacter, who manages Steve & Barry’s licensing partnerships. “Like so many things that happen in an entrepreneurial company like ours, when an idea feels right in the gut, and it so closely matches what your brand is all about, then you go for it.”
But the retailer has displayed a distinctly strategic approach to exploiting its potential – the shoes were designed by Rocketfish Design Studio, a firm founded by two former Nike shoe designers. The marketing of the project has been handled by The Mastermind Group, a marketing firm set up by Erin Patton, who in the 1990s was the first brand manager of Nike’s hugely successful Air Jordan line.
Athletes have endorsed lower cost shoes before. The Starter Pro line, made by Nike and sold at Wal-Mart for around $40, is backed by Brett Favre, quarterback of the Green Bay Packers. In 2004, Payless, the largest US bargain shoe retail chain, launched the sports shoes endorsed by Shaquille O’Neal of the Miami Heat, also for less than $40.
But the Marbury deal has involved an unusual level of involvement by the athlete, not only with in-store appearances and other promotions, but in establishing the street credibility of a low-cost shoe with a status- and brand-conscious urban audience. The basketball star even went on a promotional tour in the month before the start of the season.
“I’ve worked with athletes most of my career, and I’ve never seen anything like it,” says Mr Schacter.
Mr Patton’s team began the marketing push over the summer, initially using basketball magazines and websites to put out the message that Marbury was involved in a shoe deal, and then getting high-school basketball athletes to try out the new shoes, without mentioning the price.
To back up the message of what he calls “authenticity”, the marketing team shot the video of Mr Marbury visiting his old haunts in Coney Island, talking to people on the street and playing ball at a local club with old friends.
“We wanted to ground the brand... creating his vision of growing up in a urban environment where it was difficult for his mother and other parents to keep pace with the exorbitant price of the shoes,” says Mr Patton.
Unlike most other sports deals, including Mr Marbury’s previous endorsement deal with American Sporting Goods’ And1 basketball shoes, the arrangement involves no up-front payment: Mr Marbury receives a share of the revenues based on performance – reinforcing his involvement in the project.
The retailer says demand for the shoes has exceeded its expectations. “Every pair we put out is sold the same day it gets to the shelf,” says Mr Shacter.
It plans to follow up with more own-brand merchandise and by expanding into broader ranges of clothing. As Steve & Barry’s continues its rapid expansion, funded so far by its bank loans and revenues, Mr Prevor says the firm is now discussing financing options that “would allow us to take the concept beyond a few hundred stores, and into the many thousands”.
Knicks fans will be hoping that the value-for-the-money strategy will help Mr Marbury’s on-court performance with their troubled team – which last season finshed bottom of its division, despite Mr Marbury’s personal contribution to making their team overall the highest-paid in the NBA.
HOW LOW CAN PRICES GO?
Steve & Barry’s alliance with Stephon Marbury has presented the Starbury Shoe as a socially concerned product – seeking to break the grip of the top name sports shoe brands on urban and black American culture.
But critics ask whether a shoe that costs $14.98 can be produced without the kind of labour rights abuses – such as unpaid overtime – that are widespread in the global clothing and footwear supply chains.
“There is a price for a product below which you can’t produce without violating the rights of the workers in the factory that makes it,” says Scott Nova, of the Workers Rights Consortium, a group backed by US colleges whose work includes investigating workplace complaints.
Barry Prevor says the price Steve & Barry’s pays sub-contracting factories, through its global sourcing affiliate 4004 Incorporated, “is fair and it is normal... I don’t know that we’re really paying any less than anyone else”. He also says that it is “a core principle that all our merchandise has to be purchased from manufacturers that are socially compliant”.
US college licence conditions require the retailer to be members of the Fair Labor Association, an anti-sweat shop industry initiative. But the retailer’s comparatively small size means it is not subject to the same demands as Nike, Adidas and other large companies, and FLA standards would not apply to its other branded clothing, or to production of the Starbury sneakers.
Mr Nova says Steve & Barry’s has a “mixed” record on its response to two investigations by the WRC of conditions at factories in Kenya. The company “needs to demonstrate” that it is taking steps to deal with the problems endemic in garment and shoe factories in China and elswhere. “If there’s a social component for the consumer, then there should be a social component at the production end too,” he says.
Copyright The Financial Times Limited 2006
Comments