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Canadian clothing maker spins gold

For one small Canadian sportswear company, Olympic gold is not only on the medal stand, but in retail stores as well. By CNBC’s Mike Hegedus.
/ Source: CNBC

When the opening ceremonies kicked off the 19th Winter Olympiad in Salt Lake City, they also started a run on Olympic fashion merchandise. For one small Canadian company the gold is not only on the medal stand, but at retail as well.

THERE MAY BE no better example of what the Olympics can do for a business than the story of Roots of Canada: a small footwear company started by two kids from Detroit that has grown into a good-sized sportswear company making waves on the world stage.

And there are few bigger stages than the opening ceremonies at the Olympics.

For most of the world, the opening ceremonies of the 2002 Winter Games were a grand spectacle, highlighted by the parade of athletes. But for this middle-sized sportswear company based outside Toronto, it was more like winning the trifecta — as the U.S., Canadian and British Olympic teams all came marching in wearing their Roots.

“We were just amazed at the business you could do in this two-week period,” said company co-founder Michael Budman. “I think that was the seed of everything.”

Budman and a boyhood buddy from the suburbs of Detroit have grown from a single store with a single product — the negative heel shoe — in 1973 to over 200 stores: 140 in Canada, 7 in the U.S. and 80 in the Far East. Today, the company’s fleece pullovers, hats and other garb are for sale to armchair Olympians around the world.

It’s what’s called these days: a “lifestyle” brand.

“We really believe in the word roots, and we believe in the brand roots,” said Budman. “We don’t have a pre-fabricated idea here: this is our life, and we’ve been living it for 28, 29 years.”

BOBSLED BREAKTHROUGH

The closely held company was doing just fine through the 70’s and 80’s on a slow growth curve that suited all concerned. But then came 1988, and a phenomenon called the Jamaican bobsled team.

“It really goes back to 1988 when the Jamacian bobsled team arrived in Toronto with literally no jackets,” said Budman.

So, on a lark, Roots made them some. And the rest, as they say, is retail history.

That success lead to Roots outfitting the entire Canadian team at the 1998 games in Nagano — which, as it turned out, was better than the runways of Paris.

“Everything came together,” said Budman. “The outfits came together, the team came together — it was the most successful Olympic team in Canadian history. And our competitors in Nagano couldn’t have looked worse if they tried.”

That lead the American athletes to ask the U.S. Olympic Committee to please have Roots outfit them this year.

“Our athletes really liked the Canadian athletes’ gear done by Roots,” U.S. Olympic Committee spokesman Mike Moran said.

The USOC went to Roots when a tentative deal with Tommy Hilfiger soured, and the move to the Canadian company has produced the first retail market for U.S. Olympic team gear.

Foreign manufacturers, such as Adidas, have produced American uniforms in the past, and Moran said the deal with Roots will extend to the uniforms U.S. athletes will wear in the opening parade in Athens in 2004.

40-PIECE OUTFIT

Which is a nice piece of business — when you consider that each athlete gets 40 pieces of clothing.

“For the U.S., it’s 47 — slightly more,” said Budman.

Then there’s the promotional lift of having your clothing line shown off at the opening ceremonies — which drew record television ratings this year.

“I can tell you this: sales have been phenonmenal at retail already,” said Budman.

Just how good the Olympics have been to Roots may be best represented by a popular backward-style, beret-like hat called a “poor boy” that was unveiled at Nagano in 1998. Sales are still strong.

What makes the styles so popular? For one thing, Roots listened carefully to their customers, according to Emily Cook, a member of the American women’s freestyle skiing team.

“The athletes were able to give thier input on what they were looking for, comfort, colors, stuff like that,” she said. “They really used the athlete’s input.’

The opening parade uniform includes a cotton-knit sweater in the lighter blue with red and white accents; a patriot blue wool jacket with leather trim, wool pants and a fleece beret hat with red lettering.

Every athlete receives the awards-podium uniform — just in case, says Roots designer Adrian Aitcheson. It’s a Patriot Blue leather jacket and fleece pants — and it’s not sold in Roots stores. But Aitcheson is confident the design will be seen by a wide audeince.

“Of course, we are talking about Americans. They’ll be on the silver medal podium, right next to the Canadians,” he says with a laugh.

The Associated Press contributed to this report.