Russell Brands

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Russell Brands, LLC
Type wholly owned subsidiary
Industry Sporting goods
Founded

1973 as Russell Corporation in Alexander City, Alabama

[1] [2]
Headquarters Bowling Green, KY, USA
Area served Worldwide
Products Clothing, athletic shoes,
sports equipment, accessories
Revenue $1.438 billion [3]
Employees 10,000 [3]
Parent Berkshire Hathaway
Website www.russell-brands.com

Russell Brands, LLC, headquartered in Bowling Green, KY, is a manufacturer of sports equipment, which markets its products under many brands and subsidiaries, including Russell Athletic (its flagship brand), Spalding, Huffy, and Brooks, amongst others.

Formerly a publicly traded company, Russell Brands has been a wholly owned subsidiary of Berkshire Hathaway since 2006.

Contents

[edit] History

[edit] The beginning: Russell Manufacturing Co.

Main article: Russell Athletic (brand)

[edit] Russell Corp. established

The original "Russell Manufacturing Company" company founded by Benjamin Russell became "Russell Corporation" in 1973, under the presidence of Eugene C. Gwaltney, who had taken over in 1968.[1][2]

By 1990 the company owned and operated 13 sewing plants outside of Alexander City and employed 15,000 workers. Since 1976 sales revenues had increased by 13 percent annually. With the acquisition of two subsidiaries, Quality Mills in North Carolina and Cloathbond Ltd. in Scotland, in 1988 and 1989 respectively, the company had become a global contender in the sportswear industry.

Under President and CEO John C. Adams, Russell Corporation had become the top manufacturer of athletic uniforms in the nation. In 1992 the company was awarded a five-year contract to serve as the exclusive producer and marketer of athletic uniforms for most MLB teams. The contract also stipulated that the company held the exclusive right to manufacture and market replicas of major league uniforms, T-shirts, and shorts. This put the company in an advantageous position in relation to its main rival, Champion, Inc., the supplier of uniforms to the NBA teams. In 1992 alone, Russell's international sales increased 40 percent over 1991. [2]

[edit] Major restructuring

Although sales and net income reached record levels in 1996, in part because of the impact of the Summer Olympics which were held in Atlanta that year, Russell's fortunes turned south in 1997 when both sales and net income fell. The decline was caused by intensifying competition as industry-wide over-capacity and price-cutting by rivals forced Russell to lower its own prices, all of which hurt the company's results. Particularly troubled was the Licensed Products Division, which Russell dissolved in 1997, dividing its operations among the other divisions. In 1997 Russell also ended its licensing deals with the professional football, basketball, and hockey leagues.

In early 1998, as the company's troubles continued, Adams retired; stepping in as chairman, president, and CEO was John "Jack" Ward. Within months of Ward's arrival, Russell announced a major restructuring. Over a three-year period, the company planned to eliminate about 4,000 jobs, or 23 percent of its workforce; close about 25 of its 90 plants, distribution centers, and other facilities; and move most of the final assembly of garments abroad, to Mexico, Honduras, and elsewhere in the Caribbean basin. The company expected to take charges of $100 to $125 million during the restructuring period. Russell hoped these efforts would result in annual savings of $50-$70 million. Part of these funds would then be used to bolster the marketing and advertising of Russell's brands, including tripling the advertising budget to $25 million per year. Russell also established a second headquarters in Atlanta in February 1999.

Restructuring charges led Russell to post a fiscal 1998 net loss of $10.4 million on revenues of $1.18 billion. Results for the first half of 1999 also showed a net loss of $12.9 million but the restructuring had resulted in a decrease in selling, general, and administration costs of 13 percent. Russell had also increased its offshore apparel assembly to 55 percent of total capacity, a substantial increase from the 17 percent mark before the restructuring was launched. Russell had far to go before it could be considered fully turned around, but it appeared that the company was well on its way. [2]

[edit] New millenium

The company completed its restructuring process in 2001. Nearly all of its retail outlets had been shuttered, over 6,000 jobs had been cut, and most of its manufacturing operations had moved overseas. In 2002 the company added the Bike Athletic Company and Spalding to their holding. Russell continued its acquisition spree in 2004 by purchasing American Athletic Inc. (AAI), Huffy Corp.'s sports division, and Brooks Sports. It also secured an extended contract to provide Spalding and Huffy branded products to the National Basketball Association.

The company faced challenges in 2005 due to rising costs and falling sales. During Hurricanes Rita and Katrina, over 40 containers of Russell products were lost or destroyed and nearly 70 percent of the ports it used for shipping were closed. Amid intense competition and faltering profits, the company launched a restructuring plan much like the effort of the late 1990s. Russell continued shifting its manufacturing base overseas and cut a total of 2,300 jobs.

Conglomerate Berkshire Hathaway Inc. acquired Russell Corporation for $600 million in early 2006. Berkshire, led by billionaire Warren Buffett, believed Russell would be a good fit with its Fruit of the Loom Inc. subsidiary.[2]

[edit] Brands

The Russell Corporation is made up by the following brands and their products: [4]

Brands Products Year of
Acquisition
Russell Athletic Clothing (uniforms for college and school teams) Former company
Brooks Athletic shoes, clothing 2004 [2]
Spalding Balls, accessories 2003 [5]
Jerzees T-shirts 1992
Bike Protections 2002 [2]
Dudley Softball balls and accessories 2003 [5]
AAI (American Athletic) Gymnastics' tables, bars, rings, horses 2004 [2]

[edit] Honduran sweatshop controversy & boycott

Members of United Students Against Sweatshops march outside of Russell Corporation's offices in Atlanta, GA.

Since January 2009, Russell faces the largest collegiate boycott of an apparel company in history over violations of labor codes in its Honduras manufacturing facilities.[6][7][8] The boycott is coordinated by United Students Against Sweatshops in the United States and Canada, and supports the campaign by the Honduran garment workers' union SITRAJERZEESH.[9][10]

The Worker Rights Consortium has documented violations of the rights of workers by Russell in its factory Jerzees de Honduras. The report finds that Russell illegally fired nearly 2,000 in two of its factories, in retaliation for employees protesting working conditions and forming a union. The report also states death threats were allegedly made against some members of the union, though not by high-level company management.[11] In response, over eighty universities have canceled their contracts with Russell, including Duke University, Georgetown University, Columbia University, University of Michigan, University of Miami, University of Maryland, University of Washington, University of Houston, Penn State University, Rutgers University, University of Minnesota-Twin Cities, University of Wisconsin–Madison, Purdue University, Cornell University, University of Florida, and the University of Aberdeen in Scotland.[12][13][14][15][16]

On May 13, 2009, sixty-five Congressmembers wrote to Russell CEO John Holland expressing their concern over the labor violations.[17] On June 25, 2009, Russell became the first collegiate licensee to be placed on probation by the Fair Labor Association.[18]

At first, Russell said it was being unfairly targeted by the garment workers' union and student activists, and that the plant closure was due to the general down turn in the world economy.[19] Five schools announced they planned to continue doing business with Russell,[20][21] however at least one of those, the University of Florida, has since terminated its licensing deal with Russell.[22][23] The company had issued a statement noting that it had recognized the unionization of the Jerzees de Honduras plant on October 3, 2007. In later statements, the company admitted wrongdoing, although the violations are yet to be resolved.[24]

[edit] Sponsorships

Throughout its history, Russell Corporation has been involved in the manufacturing and selling of equipment for many professional, collegiate, and high school sports teams. Most notably of these are its stint of manufacturing uniforms for MLB (through its flagship brand, Russell Athletic, the production of official basketballs for the NBA (through its subsidiary Spalding), and the production of official footballs for the AFL (under the Sherrin Brand).

[edit] References

  1. ^ a b Russell Corporation History in Funding Universe website
  2. ^ a b c d e f g h Russell Corporation history in "Reference for Business" website
  3. ^ a b Russell Corp. profile in Manta.com website
  4. ^ Brands of the Russell Corporation
  5. ^ a b Russell is buying most of Spalding Sporting Goods unit, New York Times, 2003-04-18
  6. ^ "Michigan Is the Latest University to End a Licensing Deal With an Apparel Maker", New York Times, February 23, 2009 (retrieved July 30, 2009).
  7. ^ Bonior, David (2009-02-13). "Schools Score Points by Standing Up for Workers", Huffington Post. Retrieved on July 30, 2009.
  8. ^ "Labor pains: UA ends contract with Russell Athletics after labor report alleges abuses, Daily Wildcat, July 22, 2009 (retrieved July 31, 2009).
  9. ^ Dreier, Peter (2009-06-14). "Human Rights Activists Protest NBA-Linked Sweatshops". Huffington Post. Retrieved July 30, 2009.
  10. ^ "Congressional Letter, New Video, & 70 universities boycott Warren Buffett's Russell Athletic!". United Students Against Sweatshops. Retrieved July 31, 2009.
  11. ^ Russell Corporation's Rights Violations Threaten 1,800 Jobs in Honduras, Workers Rights Consortium, 2008-11-07, http://workersrights.org/RussellRightsViolations.asp, retrieved 2009-02-13 
  12. ^ Schools Score Points by Standing Up for Workers, Huffinton Post, 2009-02-13, http://www.huffingtonpost.com/david-bonior/schools-score-points-by-s_b_166823.html, retrieved 2009-02-13 
  13. ^ "Michigan joins list of schools scrapping deals with Russell". USA Today. February 25, 2009. http://www.usatoday.com/sports/college/2009-02-24-michigan-russell-liscensing_N.htm. Retrieved May 23, 2010. 
  14. ^ http://www.upi.com/Top_News/2009/02/25/Univ_of_Wash_drops_Russell_logo_license/UPI-19331235592173/
  15. ^ http://www.tampabay.com/news/education/college/article1007472.ece
  16. ^ http://reininrussell.blogspot.com/2009/01/who-already-cut-off-russell.html
  17. ^ "Letter from Congressmembers to Russell". Retrieved July 31, 2009.
  18. ^ "FLA Board Resolution", Fair Labor Association, June 25, 2009 (retrieved July 31, 2009).
  19. ^ http://www.dailycardinal.com/article/22040
  20. ^ http://www.ajc.com/services/content/printedition/2009/02/28/techrussell0228.html
  21. ^ http://www.wbko.com/news/headlines/40305312.html
  22. ^ "University of Florida cuts sportswear ties with Russell Athletic", St. Petersburg Times, June 5, 2009 (retrieved July 31, 2009).
  23. ^ "UF terminates licensing agreement with Russell Athletic Officials with UF and Russell would not make additional comments.", Gainesville Sun, May 29, 2009 (retrieved July 31, 2009).
  24. ^ "Russell Athletic open letter", July 15, 2009 (retrieved July 31, 2009).

[edit] External links

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