FIVE QUESTIONS WITH...Doug Fonte
FOR IMMEDIATE RELEASE
Contact: Liza Horan
330 Third Ave.
New York,
212-682-6829
liza@tenniswire.org
08/27/07 -
"Five Questions With..." is a series featuring exclusive interviews with important industry people. You will learn something with each edition.
By Liza Horan, Editor
Doug Fonte's more than 15 years of experience in the tennis industry spans a stint as president of Penn Racquet Sports and his current position as president of Prince Sports, Inc. Fonte, who was drawn out of a semi-retirement to join Prince, also serves on the Executive Committee of the Tennis Industry Association's Board of Directors.
Q. You were president of Penn from 1985 to 1991, and spent time as a 'corporate turnaround guy' in the marine, automotive, carpet and appliance industries. Considering the management buyout that Prince underwent in 2005 and the ensuing progress in the marketplace, is your job done there?
A. I have been a turnaround and start-up specialist in my career, but I can't take responsibility for the turnaround. The general turnaround was made after management took over (2003), led by (CEO) George Napier. George had been hired by the Benetton family to run Benetton Sports Systems, which was Prince, Nordica, Killer Loop and Rollerblade.
Prince management, led by George, sought investors that were willing to back management's play to buy Prince from Benetton. Those investors only wanted to be involved through the turnaround process. As of July 31 (2007), Prince management and new investors own the company.
Once management could operate the company like a sports goods company, and we developed this new technology—O3 technology really has been the excelerator—we took off from there.
Q. How big of a role does new technology play these days? It seems the marketing wars of yore have been replaced by big-budget research.
A. You have to have great technology to jump ahead. The biggest improvements in tennis racquet sales through the years have been when there has been a brand new technology, not a paint job or design detail, but real game-improving technology. The Prince oversized head and longbody, the Wilson wide beam, and now the Prince O3 all created spikes.
We are committed to engineering and technology that improves the player's experience on court and we've made sizable increases in our R&D department budget. It's up 50% since management's takeover and it will continue to grow in the next few years. When we say "improve the player experience," we mean it. That sounds like a neat marketing slogan, and why not--but it's based on real solid engineering, not marketing fantasy. We've seen the results and have been able to ride that wave of O3 technology.
Q. 03 technology took four to five years in the making. How did the concept come about?
A. That was developed by our R&D facility in Italy. They were working on how to avoid drilling holes in a racquet, which weakens the frame, and yet still be able to string the racquet. O3 engineering improved the structure, gave it a much larger sweetspot and really increased speed because it's lighter and more aerodynamic, with air passing through the frame instead of around it. You can feel the 24% increase in speed and the 54% larger sweetspot. Every other racquet manufacturer drills holes in frames. Our low racquet breakage percentage is substantially lower because of O3 technology.
Pro and highly rated amateur players are less concerned with the size of the sweetspot. They want the feel of the more traditional racquets, but they do like the increased aerodynamics of O3 technology, so we created the Speedport Tuning system. The Bryan brothers use the STS hole inserts that are placed in the ports to give a more traditional feel. But many players prefer the STS port inserts for its playabilty benefits. Racquet customizing is just another O3 technology benefit.
We've also made huge investments in the growth of the game, junior tennis, our Prince PPI junior academy program, and all grassroots efforts--like supporting teaching pros--just as we invest in marketing and R&D, and those have been equally as important to our growth.
Q. What has O3 technology meant to Prince?
A. We've continued to gain marketshare. When the first three O3 technology racquets came out (2005), we launched them at the premium end of the spectrum, around $250. The size of that market then was 5%, but O3 technology tripled the size of that segment to 15%. We have continued to dominate the premium market and we are making great strides in the $150-200 market which represents 50% of all racquet sales.
The market hasn't grown at that same rate, so O3 products have enabled us to take share from competitors.
We've licensed 03 technology to other sporting goods manufacturers—for hockey sticks, fishing rods, lacrosse sticks, field hockey sticks--anything where we can lighten the weight, improve the aerodynamics and flexibility, and increase the strength.
Off of our O3 launching pad, we're growing in all product categories. The visible Precision Tube Technology in our footwear, which adds cushioning, stability and energy rebound, has substantially increased our market share in tennis footwear. The Aerotech fabric story in our new apparel lines is a significant step forward for Prince. Aeroshield has antibacterial and UV protection and Aerovent provides moisture management and cooling. The Aerofit fabrics move and stretch with the body.
We've refocused our efforts on apparel and footwear. We, to be frank, believe that within the next two to three years that our apparel and footwear business might be as big or bigger than our racquet business, which will continue to grow.
Q. Since the infamous Sports Illustrated cover in 1994, which questioned if tennis was dead, the fractionated parts of the industry started coming together. The goal was to work together to 'save' this sport and bring it back to the previous glory days of high participation and market success. Have you seen this happen in other industries, and what's your take based on your experience in and out of tennis, and as a TIA board member?
A. The answer to that is 'yes.' The marine manufacturers, the ski manufacturers, and others have worked together to grow their market base.
When Kurt Kamperman left the TIA and became CEO of Community Tennis at the USTA, a stronger bond was forged between the industry and the USTA. Since then, together they have supported Tennis Welcome Centers, Cardio Tennis and more, both financially and in other ways. Jim Baugh also made a contribution during his time as President of the TIA.
The commitment to growth of Kurt and his USTA staff have made a huge difference. The TIA--manufacturers, retailers, pro organizations, tennis media and court equipment contractors--have certainly had an impact. Tennis has grown over the last few years. In fact, SGMA (Sporting Goods Manufacturers Association) research data indicated it was the only traditional sport that had grown at all in 2005 to 2006.
When Alan Schwartz came in as president of the USTA and set a goal to have 30 million players by 2010, that boosted an effort to grow the game that's lasted through the next presidencies. And, currently, Jane Brown Grimes is certainly committed to it. Tennis is growing and that's just good for all of us.
