Topping it Off
The Team Insight Headwear Roundtable explores the different cap needs of a season like no other.
Sitting at the Virtual Table
VP-Sales–Sporting Goods, Cap America
National Sales Manager, OC Sports
Sales Lead, Pacific Headwear
Sales Manager–Team Division, Pukka
President/CEO, Richardson Sports
National Sales Manager, The Game
Moderated by Michael Jacobsen
Let’s start with the obvious question: How has the COVID-19 pandemic impacted your business?
Kelly Richardson, Richardson Cap: When COVID-19 hit and businesses and schools were forced to close in mid-March, the orders stopped. It was painfully obvious that baseball caps are not that important during a pandemic. But thankfully, we were able to stay open and continued producing the backlog of custom orders we had in-house. That kept our production departments and support teams busy for the next month and allowed us to retain most of our staff. Sales in April and May continued to be off substantially from the prior year. But business started picking up the first of June and has gradually increased each week since.
Ken Rood, Pacific Headwear: Like everyone else it’s had a significant impact on our business. We’ve taken a good look at how we can help our customers recover quicker by examining what they need from us and how we can help them better understand the market .
Brad Reagan, OC Sports: Team sports have been heavily impacted by this global pandemic. Outdoor Cap is no different and the effects are something we will feel for years to come. Baseball is our core business, Spring is our key season and March is our strongest month. The timing of the shutdowns, suspensions and stay-at-home ordinances essentially stopped the spring buying season. The one positive is that our diverse business model allows us to weather big storms like this much better than most.
Chad Kennedy, The Game: We were able to complete and deliver the majority of spring school business prior to the shutdown. Where we saw the biggest impact was in-season school orders as well as Little League and travel business. We have seen that come back in areas.
Nathan Hulvey, Pukka: The timing of the nationwide shutdowns and cancellations of sports occurred during our busiest time of the year, thus having a significant short-term impact. The loosening of restrictions during the summer months is providing some sense of hope for a return to normalcy for the fall business.
James Matson, Cap America: We saw a sharp decline in cap sales at the beginning; however, our ability to make and import masks enabled us to keep our doors open and to continue operating. We are finally starting to see a slow return to normalcy and we’re very optimistic.
What particular steps did you take to mitigate the impact over the past three months?
Matson: We initially started producing USA-made masks to donate to our local emergency personnel and health care workers. When we soon realized we would not be able to meet the demand we were seeing, we retooled some of our machines to increase our production and imported a few overseas options. We quickly added the masks to our product lines.
Hulvey: These last three months allowed us to shift our focus on product development for future selling seasons.
Kennedy: We pivoted to domestic production as much as possible and offered different promotions. We also amped up inventory levels to accommodate that shift in production
Reagan: Mid-March we had several employees, myself included, that began working from home. While at home our focus was on being nimble and helping our team dealers as much as we could. We shifted our focus from selling to educating and elevated our digital platform to help dealers prepare for a return to sports.
Rood: We decided to not back away from investing in our business and industry.
Richardson: Prior to March, we were in a growth mode with several large expansion projects in the works. Most of those projects were put on hold and we’ve spent the last few months working to improve operations and looking for ways to be more efficient.
What discussions did you have with your team dealers and how did you work together with them?
Rood: We’ve had many and continue to. Headwear is an easy and natural sell to new markets and can help regain lost revenue streams. We’ve partnered more than ever working alongside them on customer calls.
Matson: The timing of the pandemic, although tragic in every respect, allowed us down time to educate our team dealers on a new line of On Field Premium headwear. In mid-July we will be launching this new line and I feel as a company we could not be better educated or prepared to support the launch.
Richardson: We just tried to stay in contact with our team dealers and let them know we’re open and here if they need anything. We offered a few special discount programs with extended terms, but when there’s no demand it’s tough to sell anything.
Reagan: At the beginning it was hard to reach team dealers. Many were deemed non-essential and were either not coming into their stores or only coming in a few times a week for curbside pick-up. Our new catalog dropped in May and we have been educating team dealers via Zoom or other video conferencing technologies.
Kennedy: We have had multiple discussions with dealers on how we can help and work together. We have been aggressive with programs to help dealers get in front of coaches as part of the sports industry has begun to pick up. We will continue to do that to help drive sales and incentives to place orders.
Hulvey: Our biggest concern was the safety and well-being of each of the dealers and their employees. We wanted the dealers to know that we were there for them during this difficult time. If the dealers had specific requests we made sure to do everything in our power to help.
What is your outlook for headwear sales in Fall 2020?
Kennedy: While continuing to be positive that we will get back to normal, realistically Fall sports could still be limited in some pockets of the country, which will hinder overall sales.
Reagan: Asof Mid-June we are seeing a nice rebound, definitely a step in the right direction from March, April and May. Many Spring/Summer leagues were cancelled, leaving a lot of demand for Fall Ball. The impact of this virus is changing by the day and we stand here optimistic for the fall season.
Hulvey: The biggest concern right now is the unknown of how things will look when schools reopen. The Fall 2020 outlook is somewhat optimistic based on signs that schools will reopen and sporting activities will resume with safety precautions in place.
Richardson: If schools can open in the Fall and they start playing sports again, we think the team headwear business will be good in the fourth quarter. If schools delay opening and don’t play fall sports, it will be a tough quarter for everyone. The rest of our business will depend on how quickly businesses bounce back and when large events can take place.
Rood: Were very optimistic for sure. We believe school/community spirit will thrive in a big way. The business may not be the traditional business, but no doubt there will be many headwear opportunities.
How has the impact of the pandemic changed your product development?
Reagan: The biggest shift for us is our PPE platform. We began selling sublimated facemasks, face shields and button hats earlier this month. Now our focus is on the health and safety of the market we service.
Kennedy: We have not made changes from a product development standpoint. While the pandemic could continue to effect sales the remainder of the year, we know that they will eventually come back. With that we have continued to develop at the same rate as always to ensure we are fully equipped.
Hulvey: Our history with our supply chain partners has allowed us to continue our normal product development calendar without any interruptions.
Richardson: We had already finished our new product development for 2020 when the pandemic hit and we have several new styles to offer. We are now working on new product additions for 2021.
Matson: We added masks and an option in our overseas programs to add a snap on the side of the caps to relieve the wearer’s ears from the stress of wearing a mask all day. As for our normal product line of headwear, we’re moving ahead as usual. We were in the middle of launching a new product line when the pandemic hit and our team worked very hard to continue with that project while also pivoting to produce and sell masks.
Rood: It hasn’t changed it at all. We just launched a catalog in June with six new styles and three new appliques and we plan to launch another in October.
What do you think the demands will be for product for the fall season?
Rood: We believe a full recovery will take some time; however, we see demand being high in new channels and organizations using headwear as brand billboards and fundraisers — and baseball hopefully having a Fall season.
Hulvey: There is no doubt the demand will be less than it was in previous years, but we are fairly optimistic for an active fall season based on increasing requests for fall product catalogs.
Matson: We hope that demand will normalize, maybe not to 2019 levels at first. But as the country reopens we anticipate that teams will once again take to the diamond. It’s definitely a fluid situation.
Kennedy: Football being played will play a major factor in demand for the fall season. But with the anticipation that football and other fall sports are played, we will see a demand for quicker turnaround and stock items.
Reagan: Using current gauges the demand is on par with previous years, with the chance of a slight uptick. I absolutely think people who normally play only spring ball will shift to fall. I also think several parents who signed up for spring will bow out for fall and not put their kids at risk.
Is stock product going to be more in demand since there may not be time for customization?
Richardson: Yes, we’ve seen the demand for stock styles with domestic decoration grow over the last few months and believe that will continue through the rest of 2020.
Reagan: 100 percent yes. We have shifted our focus to our stock MLB replica headwear and seven-day domestic decoration. The decisions being made whether to play or not are rapid and team dealers will require a rapid response.
Rood: Stock is always key. Of course speed is critical as well and we believe we have the perfect blend,. There is still a significant opportunity for custom as well and we are ready for both segments.
Kennedy: We have seen that for immediate needs and we’re well-stocked to handle that demand for Winter 2020 and Spring 2021.
Hulvey: The demand for stock products was high when things started reopening, but long term we do not believe there will be an increase in demand.
Matson: We believe stock product will be more in demand. Quick turnaround times will be essential.
What are the fashion trends in headwear?
Richardson: The trend in team headwear continues to be about lightweight, performance fabrics with stretch or adjustable fit. Direct embroidery is still the main choice for decoration, but new heat applied technical applications are getting popular. For us, our mesh back styles are still the number one-selling cap style across all markets and channels.
Matson: As in past years it’s still deep inventory in multiple color combinations along with the most advanced technical materials available.
Hulvey: We continue to see trends heading in more of a Lifestyle direction — comfortable lightweight fabrics with stretch and sun protection.
Kennedy: Again it goes to perforation, but also a multitude of options in performance fabrics — in weight, breathability and/or UV protection.
Reagan: For on-field headwear it is still all about customization and perforation. Our customers expect to be able to make a cap their own and get it quickly.
Rood: Fashion trends are key, but we like to blend them with performance for a great-looking, on-trend hat.
Are online team stores a big part of the cap business now? How do you see dealers approaching this?
Rood: Online stores are critical to maximizing headwear sales. Hats connect both on-field, sidelines and fanwear to each other, so it’s key to online store success. Hats are arguably the best fanwear branding item and fanwear is essential to online stores.
Reagan: We work very closely with several of the top online store platforms across our industry. Headwear is a staple, but not in the same capacity as something like a T-shirt or hoodie. Headwear has always been an intimate purchase where a player wants to try it on before they purchase. For that reason we focus on comfort and sizing above all else.
Kennedy: Initially caps were not thought of as much when team stores began to really take off. Now dealers are seeing the opportunities that caps provide. Not only are the low minimums easier to reach, but it also gives a better price point then a lot of apparel items.
Hulvey: Online stores continue to grow in popularity, allowing dealers to focus on managing multiple layers within their businesses.
Matson: We believe that online stores will become the dealer’s best tool moving forward in a post-COVID-19 world. The ability to communicate with your team dealer and book complete uniforms through an easy-to-use online interface has always been on the horizon for this up-and-coming technology.
Richardson: We see more and more team headwear business coming from online stores and expect this to grow as they improve the user experience and how to deal with minimum quantity requirements. Technology and online access to products and information will continue to be important for the team market.
There may be a demand for quicker turnaround with late ordering this year? If so, how is your company addressing this?
Reagan: Speed is key. It doesn’t matter if you order online, call in or email an order, our team is fully staffed and focused on getting orders out on time.
Kennedy: We were in process of expanding embroidery capabilities even prior to the shutdown. With thinking that later ordering could be possible this year we have continued that expansion in not only embroidery capabilities, but SKUs and inventory levels as well.
Rood: We are expecting this to be the case and are prepared for it. We have brought in a deep inventory styles in both of our facilities in Oregon and Virginia. We have ramped up customer care teams and art teams are ready to turn proofs quicker than ever.
Matson: We have always offered three-day production after sample approval on all embroidered orders. We’re continuing to improve our efficiencies on all other decoration techniques like screenprinting and patches. And being located in mid-America ensures a quick ship.
Richardson: We know speed-to-market is very important in the custom headwear business and we’re working hard to reduce our lead times for all types of customized caps. Since the pandemic hit our lead times on most of our domestic decoration have decreased. We’re planning to open a decoration facility in Texas later this year that will also help us reduce lead times.
Hulvey: We offer custom headwear in as little as two weeks with our Custom Express Program. If they need them quicker, we also have a Domestic Stock program where you can get caps in as few as two or three days.
Finally, where is the cap market headed post-pandemic in terms of looks, technology, demand?
Reagan: Digital, digital, digital. When the dust settles we will all be more reliant on technology as it pertains to convenience. OC is building a digital platform for website, cap customization and online vendor profiles that will enable our team dealers to free up time for themselves due to the order simplicity we provide.
Richardson: We anticipate our total business will be back to 2019 levels by the end of the year. We see the popularity of mesh back styles staying strong at least through 2021 and believe technology will be key to growing the custom headwear market.
Kennedy: Customization will continue to be at the forefront with innovative new performance fabrics and headwear applications. Technology such as Build A Caps and user-friendly ordering software are going to be very important. Ease-of-ordering and speed-to-market are an area of extreme focus for us as we look ahead.
Hulvey: Technology will play a huge part in the future and online design tools and hat builders will be the focus. One-on-one Zoom design meetings have already replaced a lot of the in-person showings.
Matson: Although this pandemic will have historic consequences and permanent cultural changes, life will resume and sports will again become a cornerstone of our society. A true antimicrobial fabric will gain traction and we believe it’s just a matter of time before manufacturing can bring it to market at an acceptable cost.
Rood: Looks and technology are always evolving and key innovations are needed quickly. New designs, features and fabric technology that’s relevant and what our customers want are being developed as we speak. We are very bullish on demand as we believe there’s no better way to share your brand, your beliefs, or your team than your hat.