By Hunter Francis and John Weaver

Lacrosse is booming! Just look at all the new sticks, heads, gloves and pads. Not to mention all the new places on-line and real stores to buy the stuff now. With all this growth, everyone in the lax biz is getting rich and doing great. The game is in the best financial shape it's ever been in. Right?

Not really. As of the middle of August, three of the game's most recognizable retailers are in major financial and structural change, and a notable upstart declared bankruptcy. If all the signals of growth are on the rise, why aren't these businesses following suit? What's happening and why? And how will it affect the game and its players, if at all?

It's a classic short story of supply and demand and it takes place on a retail shelf in a lacrosse store near you. You're in the story. You are "the demand" and the manufacturers are "the supply". That's "the retailer" lying on the floor between you. Here's why.

A lacrosse store proprietor is pressured by the market or "demand" to stock at least a little of everything each manufacturer offers. A little however, means a lot! Let's take Warrior lacrosse heads for example. The retailer is compelled to stock some of each head. This means he needs the space for Evo Pro, Revo Pro, Razor Pro, Evolution, Revolution, Razor, Savage, Finalizer, Penetrator, Nemisis, Abyss, Snatch, Big Nasty, and probably 5 more.

This is no longer an easy or inexpensive task. To make matters worse and sticking with Warrior, for no other reason than they already hate us, let's look at the more complicated and expensive area of lacrosse gloves. The Mac Daddy ($350!), Superstars I and II ($165), RPM, RPM Pro, Mercury, Mercury Prostar II, Hypno, and Adrenaline are all available in 6 to 8 colors and 2 to 3 sizes. If the retailer doesn't have a little of each, the customer base will migrate to find someone who does. The same is true for the on-line and catalog retailers. This is now not only expensive, but also risky. Too risky for most. Perhaps as the start of a new trend, a diversified, and thusly, more risk averse, sporting goods company (but not a big boxer like Dick's) purchased Commonwealth Lacrosse, outside Boston, not long ago.

Like the fabled Coca-Cola and Pepsi wars, lacrosse manufacturers are firmly gripped in an age-old battle for shelf space. Dominating shelf space and literally elbowing the competition off the shelf is the unavoidable top priority of the manufacturing companies. Just like the food and beverage industries, dominating shelf space is directly tied to diversity of product the retailer seems obligated to procure and provide its customers.

The amount of equipment made each year is tied to the retailers "booking orders". These are absolute minimums that the retailer will purchase. As the level of the order increases, so also increases the retailer's purchase discount and their ability to compete. Booking orders are due in July or August. The manufacturer then adds together all the booking orders of their respective retailers, probably adds 10% or so for warehoused back stock, and then places their orders in the overseas markets. The equipment is produced in places like China, Korea, The Philippines, and Vietnam. In these countries the manufacturing equipment is developed at a fair price, the resources are plentiful and the labor is cheap. Everything is produced, and shipped back mostly through San Diego. To supply the entire sport for one year could probably fit on one ship- maybe 30 containers or so. But much more is produced than will ever sell leaving manufacturers vulnerable but literally ensuring failure for a few retailers or a bad year for all if losses are well dispersed. And the inherent drive for shelf space through product diversity and availability ensures that each year it will get worse. If rumors of the impending entry of Nike and perhaps Reebok to the lax equipment game are true, it could get far worse before it gets better and the landscape could be entirely different when all the dust settles.

The sport IS growing at a healthy pace - some say double digits each year. There may be 1,000,000 active lacrosse players, world-wide. To people whom have been around the sport 20 years or so, this number is huge. But compared to football's 18 million and baseball's 40 million lacrosse is still tiny and rumors of its new world dominance are greatly exaggerated in new business plans across the nation.

Look at the retail ads in the back of print publications and see who is advertising, and where they hail from. One would think we're in the midst of a gold rush. So, why are there so many retail stores today? Manufacturers "open" or extend credit to new stores because they fill a service hole in the national patchwork of lacrosse markets. Are too many retailers being opened? For every store that an STX or Brine opens, another 2 or 3 are turned down or told to wait. Many retailers, like our friends at Stylin' Strings do not carry all of the manufacturers' products because of this. The larger, more established retailers, like our partner Lax World, know the math and lobby the manufacturers for slower growth (ie. fewer new openings), but remember the booking order dynamic and the critical battle for shelf space and you can imagine that the manufacturers find themselves maintaining a delicate balance of life in lax retail. That may sound "God-like" but we mere mortals still rule with our purchasing dollars. Demand will reward the smart and the correct, while it punishes the incorrect and banishes the foolhardy. How much Under Armour is in your closet? How many one-piece women's sticks have you seen on actual lacrosse fields? Nuff said. And in each retail case, the size and enthusiasm of the local lacrosse market - the actual number of active players in a community, county, or state, will determine the success of these new retailers.

We don't know so much about Texas Lacrosse - who owned it, its capitalization and sales numbers, and so on. But its demise at the end of June certainly surprised everyone in the game. We do know "TexLax" had three stores- one in Houston, another in Dallas, and a third in Austin, serving maybe 20,000 active Texan players. TexLax was one of 2 stores servicing Houston. By the best and most reliable accounts Houston today has 2,250 active lacrosse players. No matter what leasing deal one can drive, a marketplace this small can not profitably support a lacrosse store- let alone two. The company was held in high regard among web buyers. Competitive pricing, good enough service, plenty of stock and shipping deals must have kept the goods flowing. While all the detractors we've discussed must have been at play here, one has to also wonder if there was ever a sustainable Texas retail scenario and Texas is certainly one of the big "boom" states.

Dr. Laxx was in similar territory in one of lacrosse's biggest hotbed cities. Opened maybe 20 months ago in Baltimore bedroom community Bel Air, this retailer focused on the 5,000 child laxers in Hartford County, MD. To achieve a sales number of $500,000, this company needed to extract $100 from every player in the county. A new stick a year for every kid? This is not feasible.

Rumors of the death, or pending death, of Bacharach Rasin buzzed through the crowd at the MLL Championship in Boston. It shocked the mostly Baltimore crowd at the Ocean City Tournament. The news is eye opening, to say the least. This was a 100 year old company, the first lacrosse retailer, the first lacrosse web site, and so forth. In 1965, the Bacharach Rasin Company owned lacrosse. Who would have thought this company would fail during the sport's biggest growth period ever? While Bacharach had unique management related problems, the company suffered doubly from the deluge of retailers and products, even in the heart of Baltimore's lacrosse country.

Bacharach was entrenched in the game, as was their debt. With their pending collapse, the manufacturers are certain to feel a real sting. Word on the street pegs the company's indebtedness to the manufacturers in the "many hundreds of thousands". Add to this all the incidental and fringe businesses - the bankers, embroiders, screen printers, etc., and lacrosse is in for its biggest black eye to date. We can only assume these write offs will be passed to the customers, and as soon as this upcoming year.

Now back to the main character - us. We are the players and the parents of players and are we not enigmatic and dichotic? The short and long history of lacrosse players suggests not only the best, but also the very best. Most "laxers" had the best upbringings, the best secondary schools, the best colleges, the best coaches, and the best family support. While this is changing as the sport grows, it hasn't changed yet. Twenty years ago lacrosse was played by the children of America's privileged class. There were lax scholarship recipients whose family and parents were flat out wealthy. Everything associated with the sport reeked of money - and lots of it.

Yet back then, and even more present (ok, overwhelming) today, is the shrill and grinding chorus of whines for something "cheap" or "free". Initiate a sale and the retailers are flooded. Offer a discount program and prepare to sell out. While these actions are absolute and provide results they ensure no guarantee of success. Rather, what appears to be happening is they offer just the opposite- certain doom. If there are 100 retailers and 100 products and every retailer has one product on super sale as a loss leader, and every one of us looks for the bargain, somebody's going out of business.

And they did.

Lacrosse is growing at an unprecedented rate... finally. A market correction is finally upon us too. Hopefully the manufacturers will see the signs, trim their lines a bit, reduce the level of stuff, and their appetite for shelf space. Hopefully, retailers will take a collective stand against the "cheap, free, what do I get?" mentality and drive their businesses to profit and financial stability. And consumers will have to engage in a cultural shift from "what do I get with that?" to simply "thank you".

Not to knock Sports Authority, but we don't want to go there to get our sticks re-strung.


Photos from e-lax staff and retail advertisements

8/29/05

In the interests of full disclosure, E-Lacrosse is a retailer of lacrosse products in partnership with Lax World. Both E-Lacrosse and Lax World welcome any customers orphaned by recent closings and always appreciate your business. You can visit E-Lacrosse here or Lax World here.