The roster of companies either owned or licensed by the multibillion-dollar Phillips-Van Heusen corporate umbrella reads like a Who's Who of fashion: Calvin Klein, Arrow, Tommy Hilfiger, Izod, Bass, Kenneth Cole, DKNY, Joseph Abboud, Geoffrey Beene and Timberland, among others. But beyond sporty looks, PVH has recently begun to amass a solid roster of sports alliances that, as evp-marketing Mike Kelly explains, is scoring high marks among fans and consumers.
By Barry Janoff, Executive Editor
(Posted September 16, 2010)
Phillips-Van Heusen knows much more about three-piece suits than it does about three-four defenses and more about checkered shirts and ties than checkered flags and tie games But the corporation that either owns or licenses some of the most successful fashion brands in the world has found a way to fashion successful sports sponsorship and marketing alliances.
Over the past few years, New York-based PVH, led by its iconic Izod brand, has signed a series of deals that moved it from sideline observer to active player. Among them have been Izod's title sponsorship deal with Indy Racing signed in 2010 (reported to be $10 million a year for five years), which expanded Izod's status as the official apparel provider of the IndyCar and Firestone Indy Lights Series; naming rights to the Izod Center (a five-year deal starting in 2007 valued at $1.4 million), which had been home to the NBA's Nets and NHL's New Jersey Devils (both now at the Prudential Center); and title sponsorship to Monmouth Park (NJ) Racetrack's signature event, the Izod Haskell Invitational. Izod will continue its relationship with the Nets when team moves to Barclay's Center in Brooklyn in 2012 when it opens the Izod Nets Team Store.
A major sports endeavor began in 2009 when Phillips-Van Heusen signed a deal with the Pro Football Hall of Fame in Canton, Ohio, to launch the Fan's Choice campaign, which gives people an unofficial voice in the nomination process. Although the 1.5 million votes received did not factor into the actual Hall of Fame vote conducted by the board of directors and members of the media, both sides selected Jerry Rice and Emmitt Smith as the top vote getters. And, if nothing else, the Fan's Choice effort did start people thinking about the Hall of Fame nominees in September, month's before the official inductees were named during Super Bowl week in February.
In the second year of the Phillips-Van Heusen Fan's Choice promotion, several significant marketing factors have been added to TV and print, including a strong tie-in with various ESPN divisions, in-store POP at more than 1,100 JCPenney locations nationwide, a robust social networking element on Facebook and elsewhere and the involvement of several members of the Hall of Fame, such as Rice, Harry Carson, Warren Moon, Roger Staubach and Steve Young, who returns as lead spokesman from the inaugural effort. The campaign will conclude on Feb. 5, 2011, when the PVH Fan's Choice Class of 2011 is unveiled on NFL Network, prior to the official Pro Football Hall of Fame Class of 2011 inductees are named in Dallas during the festivities surrounding Super Bowl XLV.
Mike Kelly, evp-marketing for Phillips-Van Heusen, spoke with NYSportsJournalism during the Fan's Choice Class of 2011 launch event at Gallagher's Steakhouse in New York, where company executives and Rice, Carson, Moon, Staubach and Young — attired in their official gold PVH Hall of Fame jackets, also were in attendance.
NYSportsJournalism: The Pro Football Hall of Fame has been in existence since 1963, so why are they now ramping up so much marketing activity?
Mike Kelly: The Hall of Fame hired George Veras, who comes from a marketing background — ABC, CBS, working with the NFL, the Olympics — to be CEO of Pro Football Hall of Fame Enterprises, their for-profit division created in 2006. The Hall had always been a non-profit entity, but they brought in George to see if there were ways to develop the brand through marketing, media awareness and sponsorship deals. The money goes to help develop and expand the Hall of Fame, and also assists the men who are enshrined in the Hall [who may be in need of financial support].
NYSJ: How did the alliance between Phillips-Van Heusen and the Hall of Fame happen?
MK: Phillips-Van Heusen owns many well-known brands, some of which are very involved with sports. Izod has title sponsorship rights with the Indy Racing League and an official apparel status with IRL and since 2007 has had naming rights for the Izod Center in New Jersey. What we do is look for brands that have great equity and assets but perhaps are underdeveloped, then get behind them and develop programs around them. George saw what we were doing with Indy and was very impressed. The Hall of Fame was in a similar position: It had a very rich history and rich story lines, but they weren't being developed.
NYSJ: Was the talk always about developing a fan-based program for marketing the Hall of Fame?
MK: Actually, George initially approached us to see if we would sponsor the Legends Invitational Golf Tournament, which takes place every November and features men who are in the Pro Football Hall of Fame. It's three days of golf in California at Pebble Beach, Spanish Bay and Spyglass Hill. He knew we weren't going to say no to talking about that. [Laughs]. But when we did sit down we told him that doing [just] the tournament wasn't our style. But we said to him, "What's your agenda? Let's talk about that." So the more we understood what he was looking for, the more we both looked for ways in which we could help each other. It involved a lot of work, because whenever something doesn't exist and you have to start something from scratch, develop it, it takes a lot of time and money.
NYSJ: Was there an advantage for PVH going in because, from a public standpoint, people know about the Pro Football Hall of Fame and many can even tell you that it's in Canton, Ohio?
MK: That did help and it wasn't as if the Hall of Fame itself needed brand awareness. But if you look at the potential of all the stories, the players, the annual induction ceremony and other endeavors with which the Hall is involved, there is a tremendous opportunity to bring the Hall of Fame to the public year round. Before, the public may have heard about the Hall of Fame in August during induction ceremonies and the Hall of Fame game, which opens the NFL pre-season. And then again perhaps during Super Bowl week when the official inductee class for that year is announced. But George saw opportunities for more, and when we looked at it we agreed with him. The way football developed from this small town in Ohio and grew into this massive industry that is the NFL is a great story. And when you look at the athletes in the Hall of Fame, there are so many stories that are so underdeveloped. And it so often is a story that revolves around December, January and February. So there is still so much to it.
NYSJ: In 2009, when the first PVH-Hall of Fame Fan's Choice program was unveiled, and this year, the kickoff tied in with the opening of the NFL season in September. Did you find from the first year that public awareness and involvement was sustained throughout the event?
MK: We saw that starting the dialogue in September at the start of the NFL season did work, and here we are this year talking about it again. Part of the challenge has been to show the fans that they can be involved and that there is a place for them to express their opinions. Otherwise, why would they want to get involved. The potential we see is to reach anyone who is a football fan. So you are looking at more than 180 million fans who follow football to some degree and who want to be connected to the NFL in as many ways as they can. But when we looked at it, we saw that there really wasn't a lot of talk about the Hall of Fame. Why? Mostly because the fans weren't asked to talk about it. It's that simple. They are talking about every other detail about the game, the players, the way the NFL conducts business. This gives them a voice and a forum to talk about the Hall of Fame that has some skin on it.
NYSJ: How did the first Fan's Choice campaign compare to PVH's expectations?
MK: We received more than 1.5 million votes. But to be honest, I shot my mouth off and told the board that it wouldn't surprise me if we saw 15-20 million votes. And they remind me about that. [Laughs.] But the reason I had that figure was that I saw similar programs and the votes they were getting for the NFL Pro Bowl, the MLB All-Star Game, I really felt that the size of the NFL fan base would support the numbers [I projected]. But we learned a lot, and that gave us the opportunity to expand on the Fan's Choice program for 2010.
NYSJ: What were some of the biggest challenges you faced in launching Fan's Choice?
MK: Fan awareness was vital and getting the word out for a start-up program. But first we had to learn whether or not the men in the Hall of Fame and those who were nominated for induction would accept the idea. It's their sport and it's their Hall of Fame. So we had to find out if they would be supportive. We had to find out if there would be media backlash, in particular from among the members of the media who are part of the selection process [one member from each city with an NFL team, two from New York].
NYSJ: How did members of the Hall of Fame board of directors respond to the Fan's Choice proposal?
MK: There was no resistance at all from the Hall of Fame, from the board of directors. When it was presented to them, they did stress that they wanted their process to remain behind closed doors, that in no way would their selection and election process be made public. That certainly was not a problem. That was never intended to be part of our process. What I have is that this can be complicated territory. There are politics involved. You don't want to affect the outcome or a player's chances for getting into the Hall. No one involved wanted to do any damage.
NYSJ: What were some of the successes that came out of the first event that you brought to or added upon for the 2010 campaign?
MK: Our corporation is a fashion company. We have the No. 1 dress shirt brand in the country, and have had that distinction for many years. We have used fashion print to get our message out for years as a way of speaking to guys. But we went out and did some research. When we talked to men and asked them what they cared about, they told us sports, their family, issues of health. They didn't care as much about fashion. And when we dug into the issue of sports, we found that that football was at the top of the list. So one of the great steps for the brand was to introduce ourselves into the game and get some skin on it and to have a place inside the conversation of football.
NYSJ: Was another challenge finding a way to align PVH with the NFL?
MK: As everybody knows, it's not easy to find a place in the NFL. It's very expensive, you have to find a business model that works. And while we sell a lot of shirts, it's not like the margin is there. it's what the financial model allows you. That's why you don't see a lot of apparel companies involved in big sports contracts or on TV. So it's not an easy thing to afford. We were able to find a model and to find a way in which we could get involved in a meaningful way.
NYSJ: How involved is the NFL in this effort?
MK: They were very involved from the very beginning. They were very supportive in helping us to find a way to discuss whether the fans' votes should count [toward the official Hall of Fame balloting], how long should the process take, what PVH's relationship with the NFL would be moving forward and how the players and the images of the players among fans would be handled?
NYSJ: Jerry Rice and Emmitt Smith not only were among those officially elected to the Hall of Fame, but they received the top votes in the Fan's Choice balloting. Now, Rice and other Hall of Fame players such as Steve Young, Harry Carson, Warren Moon and Roger Staubach are involved with the 2010 Fan's Choice campaign. How was the campaign presented to them and why did they decide to support the effort?
MK: These players represent the NFL and we always have been very aware of that. So in presenting the Fans Choice program to the NFL, I think we over-delivered the way in which the players would be treated and how they would be honored and handled when dealing with fans. And the NFL was very happy with how we delivered that [in the first year]. There also were other issues image use, rights to NFL marks, connecting with the teams and working with them to engage their fan clubs. All of those issues took some working out.
"I won't put a number on the number of votes we project. Do we expect to see growth? Absolutely, because we've seen growth in every other area."
NYSJ: This year the effort has expanded to include a great deal of involvement from ESPN. How did that come about?
MK: We had a Web site last year but it wasn't connected to a company like ESPN.There were times when we ran ads on ESPN.com, took a roadblock of the home page, and our site crashed due to the among of traffic and voting that it generated. It was a Catch-22 because we wanted to drive traffic to our site but the site wasn't able to handle it. So it was a learning process to see where the most Web traffic was generated, where the and in particular where the football traffic is. So this year we really needed to build a vertical relationship with ESPN. Last year we had Steve Young as our spokesperson, but there were lots of places we were blocked out from using Steve because he has a role with ESPN. There were conflicts with his contract or a conflict with ESPN. So that has been resolved.
NYSJ: Do you see working with ESPN as a way to get your company more closely associated with sports?
MK: We were building a greater synergy, not only here but taking title with Indy Racing and the Indy 500, the title sponsorship of the Haskell Invitational at Monmouth Park, and other deals with our Tommy Hilfiger brand, which we bought earlier this year. So slowly but surely we are building stronger relationships with ESPN, which includes increased spending. We want to look to the future with them, to see how we can align in developing projects.
NYSJ: Have you been able to see this translate back to brand awareness and or a bump in sales?
MK: Brand connection, yes. Does it translate into sales? Sales figures corporate-wide and among our brands are very good right now. But we haven't been able as yet to show a direct correlation between our Hall of Fame alliance and sales figures. But what we are doing is learning the marketing and finding the best ways to measure input and results. We are only in our second year of doing this to be able to show measurement. Also, last year we entered into the program and didn't necessarily have the inventory behind it to support a larger sales addition. It was a case of putting the cart before the horse. So this year we have the inventory behind it to handle the increase in sales. We have greater presence in the store with J.C. Penney to support the vote and the concept of the vote. So now, if consumers see us on ESPN's Monday Night Football, they can be reminded again in-store, which wasn't necessarily the case last year. You need those dots to connect and somehow put it back to sales. Are we in it to sell a billion shirts because of this? Not necessarily. This is great branding. It's building brand awareness among consumers, which is something we want to remain with people for a long time.
NYSJ: Can you tell that the marketing is connecting with football fans?
MK: Let me tell you this, We've run some beautiful ads for hundreds of items, and I've been running ads for Van Heusen for 10, 12 years. And I've never received a letter for an ad that I've run in GQ, Esquire. I've never received a letter that read, "Amazing ad, Mike." But when it comes motor sports and football and other sports in which our brands are in sports marketing, I could show you stacks of letters we from fans who write, "I saw what you are doing. I get what you are doing. I support what you are doing." And best of all they write, "I plan to go out and buy your products." It's unreal.
NYSJ: So are NFL fans getting why Phillips-Van Heusen is involved with their sport?
MK: Yes. And so are fans of motor sports. Again, it's connecting the dots. But it also has to work on the corporate side. But you also have to convince the corporation. You have to say, "If we are going to involve ourselves in sports, you can't just stick your toe in. You have to build an organization around it, you have to hire people with skills, you have to spend the money. It takes time and effort.
NYSJ: So if you start with the 1.5 million people who voted last year, what numbers are you projecting for this year's Fan's Choice response?
MK: We'd be thrilled if we go to five or ten million. But I won't put a number on it. Do we expect to see growth? Absolutely, because we've seen growth in every other area. We have more marketing. The alliance has expanded with ESPN. We are giving fans more opportunities to vote and rewarding them with autographed items, a trip to the Legends Golf Tournament and even the opportunity to announce the Fan's Choice winners on TV. This year we have the men in the Hall of Fame endorsing it, guys like Jerry Rice, Roger Staubach, Harry Carson and Warren Moon, where last year the only Hall of Fame member we worked with was Steve Young. So the clout within the NFL community has become stronger. And I definitely can see that translating into more fans paying more attention to what we are saying.
NYSJ: What do you see for the long-term regarding the Pro Football Hall of Fame?
MK: What I'm looking for this year, which is something we did not get the traction on last year, is fans speaking to fans. So on the Web site we have a section called "Smack Talk" where fans can debate issues, a new section on FaceBook where fans can engage each other, much more social media than we had before. Fans want to vote. Right now the Hall of Fame voting is not in their hands. But if fans continue to tell other fans and if we continue to build the numbers, and we take it to the [Hall of Fame] board of directors and the NFL, they at some point have to take it seriously.
NYSJ: The Izod Center in New Jersey was home to the NBA's Nets and NHL's Devils, but the Devils have permanently moved to the Prudential Center in Newark and the Nets are there temporarily until Barclays Center is built. What do you see for the future of the venue?
MK: We are still committed to the venue. We are hosting college basketball and other sports and big entertainment events. We are right near the New Meadowlands Stadium, home to the NFL's Giants and Jets, where the Super Bowl will be in 2014. We also have a vision to bring an Indy Race event to the New Meadowlands Stadium. So it's a valuable property and there is plenty of exposure. And we are in a way moving with the Nets to Brooklyn, where we are going to build the Izod Nets Team Store in Barclays Center. So we still will have a strong connection to the team and its fans.
NYSJ: What else is coming for this year, 2011 and beyond for PVH and sports?
MK: Indy Racing growth is off the charts. It's unbelievable. Anyone involved with motor sports knows that Indy Racing was way down compared to where it was in the 1990s. Now there is reunification, there is a new CEO [Randy Bernard, who took over in February], and there are huge indicators that it is back up: Verizon moving a great deal of money into the sport, HP is stepping up, Mattel, others. I can't have a bad meeting these days around Indy Racing. The momentum is unbelievable. And 2011 is the centennial race of the Indy 500, and wait until you see what the plans are. ESPN is involved, all of the key marketing partners. It's pretty exciting.
"Are we in this to sell a billion shirts because of this? Not necessarily. This is great branding. It's building brand awareness among consumers."
NYSJ: What other pitches are you hearing regarding potential sports deals?
MK: I have to say I'm getting about 100 pitches a day. One hundred a day! We're looking at a few things. Izod is about a $1 billion brand, but only about 3% of its business is done overseas. So we're looking to do business in China. And in Europe we're expanding Izod in the spring of 2012. So we're looking at big sports events there. I was at the last two legs of the Tour de France, for example.
NYSJ: Coming off the huge success of the FIFA World Cup, do you see any deals for PVH in soccer?
MK: Soccer is big internationally and in the U.S. But soccer is tough for us. Our model is different. What we are learning is that our business model doesn't allow us to take a single product, let's say a shoe, and introduce that product the way Nike or adidas can, with a global campaign around it, attach a $40 million endorsement to it, spend another $100 million to market it and then aim over the next three or four years for $1 billion in sales. Our model is to look around sports for under-developed properties and attach our name to it. The Hall of Fame and Indy Racing are perfect examples, where there are rich assets and rich story lines that have the potential for huge development.
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