Sept. 6, 2004 – IFW is changing into Fairchild Sports
By Joe Delmont
Editor
It’s becoming an increasingly familiar story: Big outside money looks for investment opportunity, discovers powersports industry and enters the field by buying or starting its own company.
In the case of Fairchild Sports, and Intersport Fashions West of Tustin, Calif.,the story has played out over the last couple of years. Briefly, IFW the top-line apparel producer, was founded in 1979 by John Wyckoff and was later sold to Denis LaBonge and Rick Miller. In 1999, IFW was acquired by Eurobike, the large international apparel company based in Dusseldorf, Germany. But Eurobike’s financials led to its being purchased by the Fairchild Corp. of Dulles, Va., late last year when Fairchild was looking for investment opportunities outside the sagging aerospace industry.
Which brings us to the present. LaBonge and Miller are gone, IFW has been renamed Fairchild Sports, set up in Fairchild’s $240 million global sports group, and is moving aggressively to expanding its marketshare in powersports.
Fairchild posted sales of $91.9 million last year, for the three-month period ended June 30, 2004. The company sold its fastner
business in December 2002 to Alcoa for
$657 million in cash. That move set up Fairchild to look for acquisitions. It subsequently purchased Eurobike which included Hein Gericke, PoloExpress and IFW.
The brands handled by Fairchild Sports include the German Hein Gericke line, the FirstGear line developed by IFW, and European products such as Oxtar boots, Schuberth and Vemar helmets and Held gloves.
Elizabeth Rakestraw heads the IFW operation, and industry veteran Pete Pendelton leads the sales effort. Rakestraw and Pendelton talked recently with Powersports Business about current and future changes at the apparel company.
As Rakestraw points out, Fairchild liked the IFW business model and its related success or it wouldn’t be putting time and money into the operation. There are four distinct segments of the IFW business, as she sees it:
n Dealer direct is a small portion of the business, but the company is working to build and promote these brands.
n Private label work for OEMs, including Harley-Davidson. There’s room for growth here, she says.
n Tucker Rocky’s relationship with IFW and its FirstGear line has been a strong one for years and this will continue under the new ownership.
n House brands will be grouped into one so-called “value stream” to minimize overlap and reduce any direct competition between them.
“To a certain extent,” says Rakestraw, “they will be considered as separate business units, but sharing resources.”
Three business — house brands, deal direct and OEM — are about equal in terms of revenues. A fourth small business producing specialty items such as women’s handbags, generates about 10% of revenues.
looking at powersports
How did Fairchild decide on the Eurobike purchase? “They did quite a bit of research on a number of markets,” says Rakestraw, “and the opportunity for continued growth in market potential is very high in terms of business return.”
It didn’t hurt that Fairchild’s president and COO, Eric Steiner, is an avid rider. “For him it was an added bonus — a good business opportunity and something that he loves,” she said.
The Fairchild team isn’t experienced in the motorcycle industry, but it brings skills from other areas that can be applied here, says Rakestraw.
It has quite a bit of distribution experience through its Banner aerospace business. Banner distributes aerospace electronics worldwide through a network of distribution centers ranging from California to Europe and the Far East.
Clothing is another matter. But Rakestraw is quick to point out that she’s an apparel person at heart: She studied at the Fashion Institute in San Francisco before entering the business world.
“I understand garment construction design,” she says. “Do I understand all the technical aspects of armor? No, but I’m learning.”
“Construction of anything is the same, whether it’s aerospace or clothing. It involves procurement, streamlining the production processes, and getting to market as quickly as possible. It’s a huge advantage to be in aerospace.”
Pendelton, who joined IFW in January, agrees. “It was refreshing to hear someone say, ‘Let’s look at this in a different way.’ Changes can be made. Does a once a year collection make sense? Do nine-month lead times make sense? If you blend industry experience and a fresh aerospace perspective, you can win.”
Adds Rakestraw: “IFW has been functioning basically under a good model. The key is, ‘How do we take it to the next level?’ without destroying what we have.”
The other big challenge, outside of the IFW operation, is making Fairchild Sports a true global operation.
Looking out five years, Rakestraw is optimistic: “Fairchild has less than a year under its belt. Frankly, we’re still learning about the numerous opportunities in the industry. We believe that if we focus on improving our services, systems and processes, the best course for the long term will become very apparent in a short time.”
Adds Pendelton: “This is not a venture capital investment trying to roll up a bunch of industry guys and make a lot of changes. (Fairchild) is taking a refreshing look, but isn’t attacking the industry’s traditions.”
Fairchild Sports plans to host a coming out party in October to introduce the new management and, possibly, some new product. psb
