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The following transcript is generated from Third Bridge Primers, providing fundamental information on privately held companies from unique human insights, enabling investors to quickly understand a company in early-stage research.
Each Primer interview is moderated by a Third Bridge analyst and covers standardised questions with a former company executive who has had P&L responsibilities.
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Former Senior Executive at Augusta Sportswear with over 10 years' experience in the apparel space
- Company Overview
- Market Growth & Drivers
- Competitive Landscape
- Company Performance & Growth Potential
SP: It’s a really, really wide range. They will service the individual athlete, which would be a direct-to-consumer. You and I could go on to their website, you could go on to Amazon and buy something, buy an athletic t-shirt or a jersey and it would ship to you. Then there’s also a different channel which would be a business-to-business in which Augusta would sell to another distributor such as an S&S, even a SanMar, which would then distribute again. It goes all the way from that direct-to consumer to business-to- business. Obviously, the business-to-business is better margin, so long as you can ship in bulk or potentially even ship direct from factory to that third-party supplier.
SP: It’s a very good point, a very good question, and you’re absolutely correct. That will, over time, shrink. Where it will go, it will go into what we would call a league business because think about it, it’s extra waste in the process. Why wouldn’t Augusta just get really good at decorating quickly and shipping to the team, to the coach, to the athletic director? Why do we need a dealer in the middle just to collect extra margin? You also can’t upset your dealer network on day one. You’re talking hundreds of different reps all over the country that have been doing this, that’s their livelihood and rumours travel fast, so that’s the delicate balance of how can you go direct to the player or the coach or AD, gain more margin and essentially cut out the dealers? That’s the solve, but it hasn’t been solved in the marketplace just yet.
SP: It’s going to be product breadth for both Augusta and Badger. They are the size that they are due to the enormous amount of different products, different sizes and different colours that they offer. It’s by far the single most valuable piece, or differentiator, I should say.
TB: What about the pricing model? How do Augusta and Badger differentiate themselves there?
SP: The pricing model I don’t think is a differentiator. I would say the service model is a differentiator, being able to service quickly, the front-end piece, let’s call it the product builder, by which I mean that interface with the consumer or whoever orders the products, the coach, the dealer or the athletic director.
[Badger is] very similar to Augusta in all of those categories. I think Badger is right at USD 250 to get free shipment, and I think that’s very close to what Augusta is as well.
TB: Does Badger then work within solely the United States as well, or do they have more market regions?
SP: Primarily the US.
TB: Is there one specific thing that you would say differentiates them or are they very much the same?
SP: Very neck and neck.
SP: A big part of it is the sport’s growth in general. Let’s call it player membership, player adoption, something like that.
TB: Is there another factor besides the player membership that has helped Augusta grow?
SP: Sublimation we talked about. I would generalise that as decoration technique.
TB: Is it largely the same key factors as the market overall?
SP: Yes. For Augusta specifically, I would say investment in key categories, categories meaning product categories, so making those calculated decisions to say, “We’re going to buy into this because we believe hockey is going to increase by this percent.” Having that inventory, those decisions have to be made well in advance, so I think Augusta has done a good job there.
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