David Beckerman was much more than a high school basketball
coach. In fact, being a coach was
probably the least stressful task on his daily schedule. Beckerman, or “Coach B”, was the Chairman and
CEO of Starter Corporation, a sports apparel firm that tragically filed for
bankruptcy in April, 1999 (Lubbock Online, Starter Corp files for bankruptcy,
1999).
I interviewed Coach B to gather his thoughts regarding the
Starter Corporation and our Week 7 topic, “Communicating through Financials.” Due to the sensitive nature of the topic and
Coach B’s busy schedule, this interview was brief; however Coach B makes some
comments that provide deeper meaning to out readings. (I took snippets from his
responses to highlight parts of our discussion that were meaningful to our
curriculum)
Me: Coach, could you please
describe the events and/or factors that preceded Starter’s bankruptcy in 1999?
Coach B: Well, Casey that is a loaded question. It was a perfect storm of events that took
place in our market and with our key clients.
The lockouts of the 1990’s did not help – the NBA and MLB were major
clients of ours and we depended on their business. There was also increased competition – we pioneered
a sports market that proved to be lucrative and companies like Nike and Adidas
soon wanted a piece of the pie. If I had
the chance to go back in time I would do some things differently, but some
events were unavoidable.
Me: Please describe
how the challenges Starter faced affected the financial health of the company.
Coach B: I started in
the 1970’s selling t-shirts out of the back of my trunk and Starter developed
into a business generating over $300 million a year. Strong sales numbers drove our business. When our sales numbers lagged our business
began to struggle. There are things you
can do to get your business going and we tightened the belt and reenergized our
marketing efforts.
My Commentary:
In my opinion, Coach B’s brilliance has always been his
engaging personality and marketing genius.
Coach B is a salesman at heart and it was no surprise that net sales was
a number that he mentioned in the interview.
I can imagine that Coach B was a charismatic executive who thrived in
the communication arena: whether it
included varying his language to strategically use ambiguity (Eisenberg, 1984)
or closing a deal with the commissioner of the NBA for a non-exclusive
licensing deal (NYT: Business Day, Market Place, March 1994). Starter Corporation went public in 1993
(Conntact.com Starter Corp. n.d.) and Coach B spoke briefly about the added
responsibility he had to investors.
Starter’s fall took place before the Enron scandal and I wonder what
added responsibilities Coach B would have post 2002 due to the ‘Enron effect’
(Allen, 2002).
Lubbock Online (1999).
Starter corp. files for bankruptcy.
Retrieved from http://lubbockonline.com/stories/042099/bus_LS0462.shtml.
Eisenberg, E. (1984) Ambiguity As Strategy In Organizational Communication, Communication
Monographs, 51, pp.227-242 (full
article)
New York Times (1994).
Business Day, Market Place.
Retrieved from http://www.nytimes.com/1994/03/01/business/market-place-after-starter-s-stumble-some- see-a-buy-but-others-are-cautious.html?src=pm.
Conntact.com. Starter
Corp. Retrieved from http://www.conntact.com/archive_index/archive_pages/2837_Business_New_Haven.html
Allen, C. (2002) Building Mountains in a Flat Landscape: Investor Relations in the
post-Enron Era, Corporate Communications:
An International Journal, Volume 7 (2), pp. 206-211 (full article)
Nice post, Casey. When the people affected by lockouts are discussed, I rarely hear the sports apparel industry mentioned, but clearly in can be a casualty as well. After some quick Googling I see Starter is still around. Is Mr. Beckerman still involved? How did it resurrect itself?
ReplyDeleteCourtney - Starter is still around but no longer as an independent company. When Starter filed for Chapter 11 in 1999 that was the end of their life as an independent company, and consequently that was also the end of Coach B's involvement with the company. I remember an article in the paper describing the scene that took place when Coach B had to tell his employees that Starter was going bankrupt and he would have the shut the James St. (New Haven) location down. He was heartbroken and many New Haven residents (some from my neighborhood) lost their jobs. Please excuse my use of Wikipedia, but from the looks of it Starter has been under the ownership of a series of holding companys, and now Nike (Wikipedia, Starting Clothing Line, n.d.). Currently, Starter is sold exclusively in Walmart.
DeleteI think this is an interesting development that teaches us a bit about alliances, networks, and finance. Starter was unable to maintain its business as an independent company because of decreased revenue that resulted from competitive market forces and unfortunate events (like the lockout). Other companies saw this as an opportunity to cash in since Starter still had a recognizable name with a large base of customers. There is certainly value in a name, one that was brilliantly built by Coach B.
References
Wikipedia, Starter Clothing Line retrieved from http://en.wikipedia.org/wiki/Starter_Clothing_Line.
Nice post-up on the low block, Casey!
ReplyDeleteSorry to heard about Coach B's situation; Starter and Champion were mainstays when I was playing sports. Under Armour seems to be the 800-lb. Gorilla in the apparel industry, now right? To echo Courtney's question, what's Coach B up to now?
One thing I took away from this interview is how so many successful people started with their own idea, developed it, sold the product/service from the beginning, soup to nuts. There may have been very little or lots that could have been done to combat the forces creating the lockouts. But having the experience of believing in an idea and pursuing it, that can provide even more motivation to do it again, or find that next person to mentor/partner on the next big idea.
Very interesting article (and I don't understand Al's sports reference at all up there). I wonder if part of Starter's failure was an inability to change? Those jackets were all the rage for a short period of time, but the jacket didn't seem to adjust as style trends shifted. Athletes can be very particular about their attire - and what that attire says about them. I think the fact that Starter is now sold at Wal-Mart where previously it was sold at sporting goods stores speaks volumes about the target demographic for this line of apparel. I find it interesting that Nike now owns them...neat little factoid!
ReplyDelete