SBJ/November 10 - 16, 2003/Forty Under 40
Published November 10, 2003
David Baxter is too young to remember much about the 1960s, but as president of Reebok's sports licensed division, he can certainly appreciate that era. Especially since his company is making millions off the white-hot, retro fashion trend in sports apparel.
Consider that Reebok's net income increased 19 percent in the company's third quarter to $63 million, due in part to the company's licensed merchandise deals with the NBA and the NFL. The company's basketball business grew 22 percent, while its total U.S. apparel sales increased by 37 percent as the retro fashion craze drove sales. The company did not disclose its NFL sales figures.
Baxter implemented much of the strategy that has boosted sales. He joined Reebok in March 2001 when the Canton, Mass.-based industry giant acquired Logo Athletic, which had filed for bankruptcy protection in 2000. Baxter was president of Logo.
Reebok had signed long-term licensed merchandise deals with the NFL and NBA, giving Baxter a direct hand in shaping the company's sports merchandise market.
This year Baxter helped Reebok sign another deal with the NBA, a five-year exclusive agreement to develop and market licensed sports apparel in Asia. In addition, Reebok has signed an apparel and shoe deal with Yao Ming, giving the company another opportunity to tap into the potentially profitable China market.
Add the deals up and they make for a far more profitable business for Reebok than in the late 1990s, when the apparel market was slumping. Now Reebok sees the NBA and NFL as business partners as it works with each league to design, develop and more effectively market the business in order to retain the recent sales volumes.
"The relationships with the leagues has changed dramatically than with the earlier models," Baxter said. "Today we work very closely with the leagues, teams and retailers. It's a partnership that will drive the business and continue to bring new initiatives to the market."
The sporting goods business has been a way of life for Baxter far beyond his career with Reebok. The 37-year-old Baxter grew up in the Chicago area, where his father was chief financial officer of Wilson Sporting Goods. Baxter began his own career in the sporting goods industry working for Hibbett Sporting Goods while he was in college.
A talented three-sport athlete in high school, Baxter attended the University of South Alabama majoring in marketing and finance. He was a miler on the track team and trained at the U.S. Olympic Training Center in Colorado Springs, Colo., in 1985.
The combination of business experience and practical knowledge has helped Baxter develop Reebok's marketing strategies to leverage their league deals.
"When we purchased Logo, he had to put a team together and strategize how to go to market, and he was a key person in putting that together," said Jay Margolis, Reebok chief operating officer and Baxter's boss. "David had to have an open and creative mind to find new ways to do that, and after two years, he has done a good job of rolling the business forward. He is challenging, opinionated and smart."
In 2004, the stakes get higher for Reebok when the company becomes the exclusive apparel licensee for all NBA teams as the league's agreement with Nike ends.
So far, business has been strong for Reebok, but it will be up to Baxter to continue to capitalize on the double-digit growth.
"We've invested a lot of money and resources to improve our long-term growth," Baxter said. "Retailers have bought into the validity of our program compared to the past when everyone was going through the motions."