Label gets benefit of sails pitch

Ross Munro now faces the challenge of turning the Canterbury brand around. Picture / Brett Phibbs

It took 20 years to build Line 7 into a respected clothing brand with America's Cup sponsorship deals boosting sales globally.

Now Auckland businessman Ross Munro has taken on the management of another kiwi brand - Canterbury.

The two brands share a long sporting association and the same challenges - reducing their dependence on sports licensing deals and becoming mainstream, global players.

Line 7 has been involved with successive New Zealand America's Cup campaigns since the late 1980s. But the relationship with Team New Zealand really began to reap rewards during the last two cup tournaments, when international exposure to the event reached new heights.

You would think, then, that New Zealand's loss of the cup would have dealt a serious blow to Line 7's marketing strategy.

Not so, says Munro.

"[Team New Zealand is] still highly regarded and considered to be one of the best teams in the world. And there's a real mystique that surrounds them, like the All Blacks," he said.

"People really buy into the values of the team and like to support them by buying the gear."

Although Team New Zealand still had plenty of momentum as a brand, Munro said that simply being a Kiwi company was a bonus.

"New Zealand's pretty sexy at the moment. Being a New Zealand brand helps us significantly when we sell around the world."

The loss of the cup to the Northern Hemisphere means Line 7 will have to re-think its marketing and sales approach in the lead-up to the next regatta.

"We'll have a look at Spain and Europe," said Munro, who believed internet sales would become even more important since the cup regatta was being held in Valencia.

Munro describes the scenario as "blue-skies territory", but Line 7 is no stranger to e-commerce. It sold "millions of dollars" worth of merchandise through its website during the last America's Cup campaign.

Munro bought the Line 7 brand in 1985 when the struggling parent company was in receivership.

The brand will forever be associated with sailing, but 95 per cent of Line 7's sales are now in the more general leisurewear segment.

And there is an extensive range for women.

"It took me a while to work out that women spend a lot more on clothes than men," said Munro, who has seen sales rise from $98,000 in his first year of business to about $80 million.

The determined expansion into leisurewear has been all about self-preservation and reducing exposure to lucrative - yet fickle - licensing deals with the likes of Team New Zealand.

"When we lost the cup, it wasn't the end of the world because we had grown a strong business."

The same challenge faces his new addition, Canterbury, which, with Nike, was outbid in its sponsorship pitch for the All Blacks in 1999 by sportswear giant adidas.

The deal with adidas was extended to 2011 two years ago and is understood to be worth about $20 million a year to the All Blacks.

Munro said the huge sums global sponsors were increasingly willing to put up to secure licensing rights meant New Zealand companies had to focus on building solid brands through clever retail and marketing strategies.

"You can't rely on licensing properties to drive your business. They're just too expensive."

Although there was concern that Canterbury would struggle to remain a credible rugby brand without the endorsement of the All Blacks, it still has a licensing deal with the Australian Wallabies, teams in the NPC rugby tournament and several other international teams.

"Canterbury's a great brand that got its business model wrong," said Munro, who planned to "re-energise" it using some of the back-end infrastructure that services Line 7.

With the Team New Zealand connection boosting brand awareness for Line 7, a dedicated retail operation underpins its success.

The strategy is two-tiered - retail-based sales and third-party sales.

Line 7 has a dozen stores in New Zealand and five in Sydney. It wants to expand to 20 stores, clustering them in major cities.

Canterbury also has retail stores throughout Australasia.

But for Line 7, third-party wholesaling is still the backbone of the brand, which is sold in hundreds of department stores and boutique shops.

Despite the appearance of several retail groups on the New Zealand Stock Exchange this year, Munro has no immediate plans to list Line 7.

"We've kept funding growth out of retained earnings. And the banks have been good to us."