Racket brand regroups and looks to rebound
Prince took its eye off the ball.
The racket sports company acknowledges it didn’t pay close enough attention to its core tennis customers.
“Prince kind of lost its way, focusing too much on its technology,” said Mike Ballardie, who took over as CEO of Prince Global Sports this year. “It’s a great technology, but it isn’t for everybody.”
|Prince Global Sports CEO Mike Ballardie: “Prince kind of lost its way” with its tech focus.
Its strategy includes expanding its product line and bringing back some old favorites, being more active in social media, and continuing to help develop the next batch of top tennis players.
Ballardie cited a number of factors that pushed Prince into bankruptcy last May, when the company had $55.2 million in assets and more than $77 million in liabilities.
“It really was the perfect storm,” said Ballardie, a 10-year Prince executive who previously led Eastern Hemisphere operations. “A number of things collided. One thing was we were too insular with our technology.”
In the mid-2000s, Prince introduced its O3 technology, which features oversized string holes, known as “O-Ports,” on the side of rackets. The O-Ports improve aerodynamics and, in turn, racket speed. By the end of the decade, Prince sold only O-Port rackets. Ballardie said tennis players who preferred more traditional rackets were forced to turn to other manufacturers.
The downturn in the economy also slammed Prince. “Prince is, and has always been, a premium brand,” Ballardie said. “Our products are in the upper echelons of the market. Our performance-line rackets, which is what we sell in pro specialty shops, were priced at $250 to more than $300 over the last four or five years. We saw a decrease in the number of rackets being sold across the whole market but an increase in the number of re-strings. People were reconditioning their rackets rather than buying new ones.”
A new competitor, French racket-maker Babolat, also played a role in Prince’s struggles, with its push into the United States.
Prince was forced into filing for bankruptcy court protection, Ballardie said, after the company’s former majority owners — affiliates of the private equity firm Nautic Partners of Providence, R.I. — withdrew support. Authentic Brands Group, a New York brand development and licensing company, became the majority owner of Prince prior to the May 1 bankruptcy filing after it acquired a majority of Prince’s debt. ABG swapped its $65 million in debt obligations for equity in the reorganized company.
Last summer, Waitt Co. of Omaha, Neb., signed a 40-year license deal to operate the Prince brand.
Under a complex organization chart, Prince Global Sports is now part of a new entity established by Waitt called Athletic Brands Holding Co. Prince is responsible for tennis and squash product lines, which include rackets, string and the company’s growing tennis shoes business. Prince’s tennis unit generated $59 million in sales in 2011, accounting for 83 percent of the company’s $71 million in revenue, according to bankruptcy court records. Another business unit, Active Brands Co., is handling the Ektelon racquetball and Viking paddle tennis brands previously part of Prince.
Scott Piergrossi, vice president of creative at the Brand Institute in Miami, said a bankruptcy filing by a company doesn’t have to tarnish a brand.
“Customers typically don’t care about the financial health of a company, as long as those issues don’t negatively affect the product quality, brand message or experience,” Piergrossi said. “When Hostess Brands emerges from bankruptcy this summer, I bet the market welcomes back the iconic Twinkies brand with open arms.”
Piergrossi said companies looking to rebuild a brand after a bankruptcy should consider a series of questions: what marketplace need your product fulfills, why your customers were once passionate about your brand, and where you may have misstepped. “Once you’ve answered these tough questions,” he said, “you will likely find that your brand doesn’t need a massive overhaul.”
Once second in racket share behind Wilson, Prince has dropped to fourth place, losing 10 market share points in the last few years, Ballardie said. Prince declined to provide specific figures, but according to sporting goods industry sources, Babolat is the market leader with a percentage market share in the mid-30s. Wilson is next at about 30 percent, while Head has about 17 percent and Prince about 15 percent.
Ballardie said Prince’s comeback plan includes a revamped product line that includes a mix of O-Port and traditional rackets. The company has started meeting with distributors and retailers to show off the new line. It plans to introduce the line to consumers in the fall to coincide with the U.S. Open. “The goal is to bring back the consumers we’ve alienated,” Ballardie said.
The line will feature models in the $150-to-$200 price range. Also making a return are the popular Prince Graphite rackets used by players Andre Agassi and Michael Chang and the Prince Precision Response, which Patrick Rafter used to win U.S. Open titles in 1997 and 1998.
David Ferrer, No. 5 in the ATP world rankings, is among Prince’s current endorsers.
Increased social media activity is part of Prince’s plan, using social media to share information about Prince players and company news. The company also recently provided its teaching pros with vouchers to hand out to clients for $50 off a new racket as another way to reconnect with consumers. To date, Ballardie said, 25 percent of the vouchers have been redeemed.
Ballardie said despite the company’s financial woes, Prince remains committed to supporting programs to grow the sport and funding its academy programs that develop promising young players.
“We don’t have the biggest volume [of junior players], but we certainly have a really good group of quality [juniors]. We want a broad base of kids playing with Prince at a young age. Instead of investing million of dollars just buying players at the top, we are trying to grow those players from a young age.”
John George writes for the Philadelphia Business Journal, an affiliated publication.