ANA Annual Meeting 2012

Ethical Sports Brand Luta to Launch Next Week in U.S.

Founder: 'Business or Charity? I Want People to Be Confused'

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A look at Luta's U.K. site
A look at Luta's U.K. site

It's time to blur the lines between businesses and social movements. That was the message from Luke Dowdney, CEO-founder of Luta, billed as the world's first ethical sports brand.

Mr. Dowdney, a boxer in his youth, founded Luta Pela Paz, Portuguese for "Fight for Peace," after spending time in Rio de Janeiro's favelas. He told the audience about how he walked around a corner one day to find himself face-to-face with a teenager holding an M-16. Mr. Dowdney felt compelled to do something to address the gun violence he saw plaguing the area, noting that seven of 10 gun-related deaths occur in areas outside of conflict zones. In order to give teens another option and to steer them away from gangs, he opened a boxing gym that has evolved into a sports brand that will give 50% of its profit to the cause of helping kids stay away from gangs and violence.

But make no mistake: It is a real business, he stressed.

"I believe we can solve some of the world's social issues if we find a place in the middle between business and social movement," Mr. Dowdney said, a tattoo reading "Luta Pela Paz" peeking out from the sleeve of his gray T-shirt, during his presentation at the Association of National Advertisers' Masters of Marketing conference.

Luta Pela Paz now operates boxing academies in Rio de Janeiro, as well as East London and plans to expand to another 120 communities around the world in the coming years through a partnership with the Ikea Foundation. So far, Mr. Dowdney, an athletic-looking Brit, says 7,000 youths have participated in the program.

But as Fight for Peace has become a global charity, its expenses have grown, reaching some $3.5 million. That prompted Mr. Dowdney to branch out further, launching a performance-clothing and street -wear brand, Luta.

Though half of the brand's profits are earmarked for the charity, there's also a compelling business case. Nearly 22 million consumers in the United States said they have participated in boxing and most are 18 to 24 years old. There are 30,000 registered martial arts academies in the country. The Ultimate Fighting Championship, which now reaches 99 million homes in the United States, has also consolidated what Mr. Dowdney says was a very fragmented sports category.

The sportswear market is also a multibillion-dollar market, dominated by the likes of Adidas, Nike , Puma and Reebok. But there's a dearth of fighting-specific clothing, Mr. Dowdney said. Add to that the explosion of a brand like Toms shoes, which donates one pair of shoes for each pair purchased, and Mr. Dowdney believes he's landed on a business idea that will resonate with consumers.

"Is it a charity, a business? I want people to be confused," Mr. Dowdney said. "That's how we'll deal with some of the social problems we have."

The brand's website and Facebook page are slated to launch in the United States next week, selling a range of both technical and fashionable clothing. Shirts feature laser-bonded seams to minimize chafing and irritation, while shorts feature four-way stretch panels.

"People who practice sports regularly and care about social issues, I want them," said Mr. Dowdney of his target customer, claiming there are 37 million so-called urban leaders in the United States who qualify.

Luta has been working with Rapp, New York, on its online and marketing strategies. Mr. Dowdney told Ad Age that marketing plans for the U.S. launch are still in the works, though he's looking to low-cost, big-impact marketing, like social media and stunts. The U.S. website launching next week, for example, will encourage consumers to tweet with the hashtag #realstrength.

Early indications are that Mr. Dowdney's plan to merge a for-profit company with a for-good charity is succeeding. In the United Kingdom, a survey of consumers found that 93% of consumers were drawn to the brand's technical attributes, while 86% knew about the charity arm of Luta and 100% said it influenced their purchase. "And that 's exactly where I want it to be," he said. Mr. Dowdney noted that the model of , say, donating a dollar for every T-shirt sold to charity makes the beneficiary of the funding "feel like a victim getting a handout."

"I believe we're the world's first ethical sports brand," said Mr. Dowdney, who still works in a favela every day. "If you have a noble heritage … it will be able to take your business into places you didn't think you'd be able to get to."

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