Rawlings’ football helmets are getting sacked far short of their goal.
Five years after Rawlings Sporting Goods jumped back into the football helmet business, the company is cutting short its gridiron comeback.
Rawlings, a Town and Country-based maker of baseball gloves, softball bats and other sporting goods, confirmed that it is ending production of its football helmets and football shoulder pads this year. Rawlings announced the launch in 2010 and began selling football helmets in 2011.
Its football helmets worn by youth, high school and professional players are made at an assembly facility in Washington, Mo., and tested at Rawlings’ research and development center in O’Fallon, Mo.
Ending production won’t mean the loss of jobs, said Mike Thompson, Rawlings’ executive vice president of marketing, as the football jobs are being shifted to other operations within the company.
The move comes as Rawlings is locked in a patent infringement lawsuit with Chicago-based Riddell. The rival sports equipment company sued Rawlings in federal court in Chicago in January, alleging Rawlings’ football helmets and shoulder pads infringe on Riddell patents.
The two sides have reached an agreement on a settlement, but the terms haven’t been finalized, according to a motion filed with the court on Friday.
Thompson said the decision to stop making football helmets and shoulder pads is unrelated to the lawsuit, however. “It was not a factor,” Thompson said.
“We have made a business decision to refocus ourselves on our core product lines, which are diamond sports: baseball, fast-pitch and slow-pitch softball,” he said. “When you have limited resources to spend, you have to look at a longer runway.”
Rawlings is the top-selling baseball glove maker — and “we have to defend that position,” Thompson said.
The company, which hired Michael Zlaket as its new CEO in January, sees potential in raising its profile in bats, where it doesn’t have a leading market share position, he said.
Rawlings is readying to launch a new line of baseball bats for high school players in 2016 and is increasing sales in Japan, the world’s second-largest baseball market behind the U.S. Rawlings has 30 employees in Japan and is growing its presence there, Thompson said.
When Rawlings re-entered the football helmet market after a 20-year hiatus, the company sought to extend its brand recognition.
Founded in St. Louis in 1887, Rawlings is the official batting helmet and ball supplier for Major League Baseball.
After Boca Raton, Fla.-based Jarden Corp., bought Rawlings in 2007, the company put an emphasis on adding new products, a business strategy Jarden aggressively employs with its other products, including Coleman coolers and Mr. Coffee appliances. At Jarden, which had $8.3 billion in revenue last year, about 30 percent of sales comes from products launched in the previous three years.
At the time of its football helmet relaunch, Rawlings executives said they planned to fill a gap in their existing product portfolio that included football pads, gloves, uniforms and apparel, but not helmets. Rawlings said it will continue to make other football gear such as apparel and footballs.
A move toward diversification can dilute company’s branding power, said Joseph Goodman, an associate professor of marketing at Washington University’s Olin School of Business.
“It’s important to be known for something specific in the minds of consumers,” Goodman said. “In marketing language, brands need a clear position in the minds of consumers. While Rawlings is strong in football, they are stronger in baseball and they probably decided to focus on what consumers know about them, which is baseball.”
Not all companies have the resources to be like Nike, which succeeds across multiple sports, he added. “Nike can pull it off, but many others are struggling to compete,” he said.
One of Rawlings’ biggest competitors is in its own backyard: Litchfield, Ill.-based Schutt Sports, which manufactures football helmets 80 miles east of downtown St. Louis.
Schutt ran into its own patent battle with Riddell several years ago. After it lost a multimillion-dollar judgment, Schutt filed for bankruptcy protection in 2010, just as Rawlings was readying its football helmet launch.
Rawlings made a bid in bankruptcy court to buy Schutt, but Rawlings lost in the bidding war to Los Angeles-based private equity firm Platinum Equity, which bid $33.1 million.
Since the investment by Platinum, Schutt Sports has revved up its product development pipeline, debuting new helmets and technology, including last year becoming the first major football helmet manufacturer to offer a helmet equipped with a camera.
Despite competition from its rivals Schutt and Riddell, by 2013 Rawlings’ executives said they reached 9 percent market share, with momentum building from a slate of new products and athlete endorsements, including former San Francisco 49ers linebacker Patrick Willis.
“I felt like we were successful with it,” Thompson said, “but growth was not as fast as we’d like.”
Combined, Schutt and Riddell have 85 percent of the football helmet market.
Thompson said the timing of the launch was a disadvantage, as the number of youth football players declines.
“We were operating in a declining market, with fewer players,” he said.
Schutt Sports’ director of marketing Glenn Beckmann said participation in youth football began a noticeable drop three years ago, fueled by increased media attention on concussion-related injuries. Participation in high school and beyond remains steady, he said.
“We’re learning from a medical and scientific perspective about how to deal with concussions, and that’s making its way into the design of football helmets,” Beckmann said.