Investors are betting on Everlast. Its stock, which hovered below $4 for most of last year, skyrocketed in mid-December to more than $8-coincidentally around the time "Million Dollar Baby" was released for Oscar consideration-and closed March 4 at $13.12. All told, its shares are up 337% in the last 12 months.
Long known as the premier boxing-equipment supplier in the world, Everlast had been ramping up for some time to extend its image beyond the stereotypical boxing gloves, making a commitment to increase its apparel business four years ago with products such as warm-up suits and even jewelry. "There was a lot of brand awareness, but not enough product," said Everlast Exec VP Seth Horowitz, son of CEO George Horowitz. "We have more than quadrupled the retail product in the world. We knew what the strength of the brand name would be if we put it on quality products," Mr. Horowitz said.
But it took the exposure of an Oscar winning film to entrench the brand into the public consciousness-and that was before Mark Burnett, the producer with the golden touch, stepped into Everlast's ring.
"Boxing is suddenly all the rage," Footwear News gushed in a recent issue, "and we predict the sport will make the fashion and pop-culture breakthrough it's been flirting with for the past few seasons. ... We're ready to rumble-and we bet consumers will be, too."
Mike May, communications director for the Sporting Goods Manufacturers Association, said his group has been tracking Everlast's success. "I'm not sure we've ever had an example of product placement with an Oscar-winning movie followed by a prime-time TV show for any company," he said. "Combine that with the trend in recent years of boxing as a fitness regimen, and we think there's going to be a continued surge in popularity for Everlast."
The company's product placement in "The Contender" goes even further than its appearance on boxing gloves and Clint Eastwood's T-shirt in "Million Dollar Baby." The reality TV show features 16 boxers duking it out for a $1 million prize, with actor Sylvester Stallone of "Rocky" fame and former world champion boxer Sugar Ray Leonard counseling the pugilists.
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Everlast entered into a strategic alliance with Contender Partners, a joint venture between Mark Burnett Products and Dreamworks. It is a straight equity deal, something Mr. Burnett has been doing more and more. In exchange for Everlast serving as the exclusive provider of equipment and apparel, Mr. Burnett and Dreamworks were given an undisclosed percentage of options in Everlast. "In essence, they become shareholders in the company through options," Mr. Horowitz said.
The deal also ties in a third party-athletic retailer Foot Locker, which purchased a wide variety of Everlast products, from T-shirts, to sweatshirts to warm-ups, in exchange for logo placement on the show. All in-store products are marked with a hang-tag saying it can be seen on "The Contender."
For now, Mr. Horowitz said Everlast, which also serves as the presenting sponsor for HBO Latino's monthly boxing series, has no plans to do any traditional advertising. "We're always open to do a blend, but the future of advertising in our minds is in product placement and strategic partnerships," he said. "Product placement is the way to go."