Olympic licence turns into gold

By DITA DE BONI

A gamble on the popularity of the Sydney Olympics has paid off handsomely for Auckland apparel company Gulf Star Products.

When the company first sought three years ago for permission to use the "running man" Olympic logo on a range of jackets, fleeces and other casual wear, managing director Ross Munro was sceptical about his chances against 17,000 applicants for the coveted licences.

He was "pleasantly surprised" that the company made the final cut of around 60 merchandising companies, hoping that the investment in licensing fees and royalties would pay off. Olympic-branded apparel sales to tourist shops, specialist stores and the Games Village in Sydney have finally achieved lift-off after a slow start.

Supplying corporate sponsors has been an equally successful offshoot of the licensing agreement.

Gulf Star has delivered $2 million worth of Olympic polos and jackets to IBM this month - just one client in a cast of several Sydney-bound corporate groups. But with long lead times for production, money can be lost by overestimating or underestimating demand.

"With the Olympics, it's hard to pick just how popular the event, and consequently the merchandising, is going to be.

"The event takes place in a relatively short window of time and there are no second chances."

Instead, the company says it has had "fantastic success" with the range of licensed merchandise, and is destined to reach targeted sales of $20 million on the back of the one event.

"It was a hard sell at first, even outside NSW in the beginning," says Mr Munro. "Now we are experiencing huge demand."

The company is, by now, well versed in the triumphs and tribulations of producing licensed goods. It was the worldwide apparel licensee for Team NZ and AC2000, as well as sponsor of Young Australia and Paul Cayard's America One.

Gulf Star's marine-inspired casual gear received a huge fillip from the America's Cup, allowing it to further promote its Line 7 brand into international markets. Exports have since grown to 30 per cent of all production, with that figure expected to rise to 70 per cent in the next two years.

The company's turnover is between $35 million and $40 million a year.

But Mr Munro is adamant he does not want Gulf Star to be known as a licensed-product company. He is looking at an international profile similar to that of companies such as Nautica and Abercrombie & Fitch: clean-looking, marine-themed casual wear, with a global brand that leverages off New Zealand's international yachting success and targeting "middle to upper socios."

The accounting and marketing graduate and former Ceramco cadet says there will be more heartache before the company breaks into the international big time.

But, he says, having been approached to be a supplier to nte the Winter Olympics in Salt Lake City and the Athens 2004 Games, not to mention the next America's Cup regatta, means a "fantastic future" for the company.

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