RealTime IT News

Collegiate Pacific: Sporting the Net

With a variety of Net companies disintegrating, the clicks-and-mortar strategy is definitely becoming more attractive. In fact, there is a recent book on the subject called -- you guessed it - "Clicks and Mortar." The co-author is David Pottruck, who is the co-CEO of Schwab, a company that has been able to take full-advantage of clicks-and-mortar.

Another company trying to bridge a clicks-and-mortar strategy is Collegiate Pacific . Basically, the company is a traditional mail-order marketer of sports equipment. Although the customers are not end-consumers, but institutional customers, such as schools, YMCAs and even country clubs. In all, Collegiate Pacific has more than 2,500 products.

In just a few years, the company has made tremendous progress. Originally, the company was a reverse merger, but has recently met the requirements to be listed on the American Stock Exchange.

Financially, the company is sound. The balance sheet is without debt. There is also an innovative financing component. The company recently issued warrants, which may ultimately result in an infusion of $41 million in cash. Adam Blumenfeld, President of Collegiate Pacific Stated, "If the warrants were to be exercised or converted, the resulting $41 million cash infusion would position the Company with one of the strongest balance sheets in the industry - primed to take advantage of acquisitions target in this fragmented space."

Moreover, sales have grown from $0 to $10.1 million in less than 30 months, with the company anticipating 50%+ sales increases and stable- to-expanding margins in the coming years.

Collegiate Pacific has more than 22,000 accounts. And the company has been adding about 1,000 accounts every month. For example, one of these accounts is within the B2G space (business-to-government): General Service Administration, which supplies sports equipment to military locations (purchases exceed $600 million per year).

But, of course, there is a huge B2B opportunity for Collegiate Pacific. The marketplace for institutional sporting goods is about $20 billion.

The big issue confronting the company is whether it should build its own technology or outsource it. So far, the company has done the latter. The company entered a major agreement with Fogdog.com , a leading online sports site that is backed by Nike. Collegiate Pacific will be the exclusive provider to Fogdog's School and Recreation Express Ship store for the next 6 months, and a prominent supplier thereafter.

Actually, it appears that Collegiate Pacific will become a critical back-end fulfiller for the online sporting market. The company has a 2-Day "Rapid Response" delivery program, which no other company has in its industry (most competitors take 4-6 weeks). According to Mr. Blumenfeld, "The company is exploring a variety of relationships to take advantage of our unmatched delivery systems, broad product line, and the proprietary nature of many of our products. Simply put, we can manufacture and deliver certain items to the school markets more reliably than anyone in the business. That's what 300+ cumulative years in management expertise offers. We think these skills will continue to attract a variety of B2B exchanges and others looking to target institutions domestically, and abroad."