Over the last couple years, Everlast has licensed its brand to companies throughout the world. But I never expected to see that the 100-year-old boxing, now dubbed fighting, brand was going to license its name in the US.
That announcement came Thursday morning, as the company announced a deal with Sears Holdings. Everlast would now be primarily sold in Sears and Kmart.
My initial reaction was one of shock. How could a premium brand like Everlast ever go to the value store model? Why did their executives essentially give up?
So I talked with Everlast CEO Neil Morton and president Adam Geisler and I actually see their point of view.
Morton described the difficult entry point that the higher-end sporting goods retailers like Dick’s and The Sports Authority have become. Floor space there is dominated by demands by Nike , Adidas and Under Armour .
That’s what facilitated the Everlast move. By selling to Sears, they get both the department store play and the mass retailer in Kmart. Of course, the sporting goods retailers aren’t going to want the Everlast brand much after this, but it doesn’t seem like the brand was getting much traction anyway outside of the equipment space because they don’t crossover into the fashion space like Nike, Adidas and Under Armour do.
Geisler mentioned Sears commitment to other sports brands specifically its recent partnership with Edwin Watts Golf Shops to build stores within their stores. That’s almost what the sporting goods retailers have become for the Big Three.
“I look at this as an aggressive move,” Morton said. “We’re kind of poking our finger at the bigger brands and we’re betting that through this deal, the Everlast will be on more people than ever before.”
Licensing deals potentially allow brands to grow faster because there’s less risk from a financial standpoint to the brand. And Sears as a licensee isn’t a bad partner – it’s not like they’re going to go out of business like Steve & Barry’s.
Morton and Geisler wouldn’t confirm any financial details of the deal.
Questions? Comments? SportsBiz@cnbc.com