New Era, the privately owned family business out of Buffalo, made 40 million hats in 2012. The company has taken advantage of its Major League Baseball license over the past 15 years, benefiting from people wearing hats every day as a lifestyle choice. With its new investment in becoming the exclusive headgear company of the NFL and with other projects such as a new batting practice cap that will hit the field and stores this year, it seemed like the perfect time to catch up with the company’s president, Pete Augustine.
Darren Rovell: The company took a little bit of a risk in that the NFL hat market wasn’t that well established when you agreed to pay for the NFL rights. Did you hit your numbers in Year 1?
Pete Augustine: Actually, before we shipped one cap on April 1, we had already beaten the expectations of our first-year numbers.
Wow. What were the goals going in?
Well, you can always try to shake it up, but the key in order to get the true fan is to develop things that have staying power. When you have something like a black Raiders hat, you really don’t have to overthink it. Right now, what we know is, the NFL is more of a fan business than a lifestyle business that we get in other sports.
You look in the crowd during an NFL game, and you look on the field, and that hat hasn’t really been an essential part of game day. Have things changed?
We think so. The numbers on the business before us suggested there wasn’t much of a business. But we saw that as an opportunity. When we were talking with the NFL, they told us that most players threw their caps into the stands after every game and we were pretty sure the guys weren’t going to throw our caps out. To me that just goes to show you how much indifference they had for the old product [Reebok was the licensee for the past decade]. With the NFL opportunity came the fact that there was a bit of an education. But eventually we definitely started to see momentum on the field. There were a lot of guys who weren’t sure a fitted cap was them, [who were] wearing it by the end of the season. Going into the season we felt like if 15 players per game wore a hat on the sidelines we’d be happy. And I think we’re at double that.
I’ve seen a lot of the guys wearing the knit hats and obviously fans have caught on, too.
The knit story is bananas. It will be a 1 million program for us and it’s primarily fueled by the NFL. What surprises us is that none of the on-field hat products before we came in had any performance fabric in it. We obviously brought performance to baseball five years ago and now we’re adding it to football. So when you look at the hats on rainy days, you can see the water beading off the hat. It really works.
Any issues with the players?
We’re happy that a guy like Tom Brady [who has his own deal with Under Armour] is wearing our product. He used to black out the Reebok logo on the hat, and Reebok was apparently fine with that. We made sure coming in that the NFL supported us here.
You are coming out with a new batting practice hat for Major League Baseball teams, as previewed here on this site by Uni Watch’s Paul Lukas. What’s the idea behind that?
Well, we’ve always had good stories behind our product, but it is very important to keep it fresh. We also think it’s important to continue innovating with performance product. This is a lighter-weight product with a new fabric and we’re calling it Diamond Era. It looks like it has more of a performance weave to it. It will soft launch on Opening Day and it won’t just be used for batting practice. We’re really getting away from the BP model because we don’t want to pigeonhole in just that. Some teams might want to wear it more frequently than others.
You have 14 stores, which is an interesting strategy in the e-commerce world we live in. I was surprised to hear the goal is to get to 100 worldwide. Why are you guys doing this?
We look at it as an opportunity to tell a bigger brand story. We’ll put more in mall-based stores this year, but it really gives us a chance to celebrate movie launches and broaden out our product testing.
I get the whole Yankees hats in different colors. That makes sense to me. What doesn’t make sense to me? Hats that are completely black or completely white with the raised logos that I always see people buying and wearing. What is the story behind that?
What has been surprising to us is that it’s been adopted as being authentic. Those caps are now an everyday item that people who carry our product in stores have to have on their shelf. I thought it would go in and out of style, but it really hasn’t in the five years it has been on the market.
You’ve also gotten my attention by doing the crazy hats. The snakeskin or Swarovski hats that sell for hundreds of dollars and come in a box. Why do you guys do that?
We like to do things in different ways. We like to stand out. I mean, no one in our space is doing that.
Who takes the chance with high priced items like that -- New Era or the retailer?
It isn’t really a big risk for either of us. We’re making a couple hundred of each, not 10,000.
You caught my attention last year with the "New Era by You," a hat personalization program on your website that lets you design your own hats like Nike has with NikeID. How has that gone?
We’re just getting started on that, but it has been well-received in Year 1. In the first week we were live there were 70,000 designs made. Now we’re going to incorporate it more into our stores where you’ll get a more tailored experience there.