Throwback brands have enjoyed a resurgence as shoppers clamor for nostalgia. This trend led Fanatics Inc. to buy a majority stake in Mitchell & Ness in a 2022 deal that valued the company at US$250 million.
-
By Nzokuhle Sabela/Bloomberg
A South African clothing start-up is cornering the global athleisure market, going from a college dorm room to partnerships with sports giants like the NBA and Manchester City in just seven years.
It all started when brothers Daniel and Stef Steinmann wanted to wear vintage-feel shirts to support their country's rugby team – the Springboks – at the Men's Rugby World Cup in 2019. When he saw that none were available, he decided to create his own, giving birth to his business – Old School.
Chief Executive Officer Daniel Steinman said, “At the time, we didn't understand intellectual property or how rights worked.” “We just put a Springbok in there, we launched the product and we sold it.”
Photo: AFP
The Springboks won the title and when the next tournament came in 2023, the old school was ready, recording team-shirt sales of 4 million rand (US$243,345) in a single day.
“It was an absolutely crazy day,” he said. “It was almost as much as we did last year, and we did it in one day.”
Old School is carving a niche for itself in the US$97 billion global sports-apparel market, according to Euromonitor.
Euromonitor said that in South Africa – where the company sells its goods – the sports and athleisure segment grew 7 percent last year, outpacing economic growth of 1.1 percent.
In particular, throwback brands have enjoyed a resurgence as shoppers clamor for nostalgia. The trend prompted sports-merchandise retailer Fanatics Inc. to buy a majority stake in Mitchell & Ness, which makes vintage-style team jerseys, in a 2022 deal that valued the company at US$250 million. Celebrity investors including basketball star LeBron James, rapper and record executive Jay-Z and actor Kevin Hart bought the rest.
Old School is trying to replicate that success in the South African market: based out of dorm rooms at Stellenbosch University just outside Cape Town, it now makes gear for major South African football clubs Kaizer Chiefs and Orlando Pirates, the national Bafana Bafana team, as well as several NBA teams and Manchester City.
The list of brands partnering with Old Skool for South African fans is growing: it recently inked a deal with Liverpool, while there are agreements with Spanish football giants Barcelona and Real Madrid – the world's most valuable club at US$6.8 billion according to Forbes – coming soon.
In March alone, Old School began selling gear celebrating Southern Guards GC, a South African team in the LIV Golf League, and added gear to its catalog for London club Tottenham Hotspur.
The company – which employs more than 250 people across its head office, warehouse and retail operations – has more than 20 standalone stores, kiosks and pop-ups in key retail locations across South Africa, with the opening of its flagship shop in Stellenbosch in 2024.
On the eve of that opening, the business almost came to a halt when the South African Rugby Union sued Old School for copyright infringement on its intellectual property (IP).
Daniel Steinman said, “We realized we can't use someone's IP if you don't pay for it.” “That was a big turning point for us.”
Avoiding court, they reached a settlement that resulted in a partnership that endured and flourished.
Bronwyn Williams, strategic foresight consultant at Flux Trends, said companies like Old School are “capitalizing on national brands and using them to create their own individual values.” “They play into the margin by making their brand close enough to the reference brand to trigger value, but without paying for the license.”
He said, with brands of national interest like the Springboks, entrepreneurs like the Steinmans are not just getting registered trademarks for specific logos and colours, but making the most of the association by understanding the nuances of the law.
In many cases, lawsuits emerge only after start-ups become profitable.
Williams said governments could consider placing these assets in a national treasury, which would enable them to make profits rather than effectively cornering those who make money off the national identity.
Sports brand deals with companies like Old Skool differ from the global kit-manufacturing rights that clubs have with sportswear giants like Nike Inc. and Puma SE.
For example, while Nike has the global rights to design and manufacture official Springboks, Liverpool and NBA kits, these retailers operate further up the value chain, focusing on the sales and distribution of these goods as well as selling now-licensed fanwear and some replica items made by start-ups.
Daniel Steinman said, “We felt we were entering a space where there was already a globally proven model of people who wanted to buy their most beloved brands.” “They don't just want to buy kit or athleisure wear – they want to wear it in a fashion piece. That's why we kept creating it.”
While brands like Nike, Adidas AG and Kappa “play on-field,” Old Skool requires “this very premium storytelling and quality authority around the brands we work with,” he said.
Extending this logic, it is working with 100 schools in South Africa, developing and creating athletic items for alumni and parents — “something they can rally behind and that creates loyalty to our brand and that ecosystem,” said Daniel Steinman.
He declined to say whether the company was making profits or losses, saying only that the money had been reinvested in the business.
Daniel Steinman won't even say where the clothes are manufactured.
The company is working to replicate its model in other jurisdictions: late last month, it announced a partnership with Schools Sports Ltd (UK), a technology company that provides software platforms for sports programs at over 1,000 educational institutions globally and in the UK, to launch a schools division in the UK.
“This is one of the more complex builds we've done and it's even been registered to operate in India,” Daniel Steinman said in a LinkedIn post.
As part of the rollout in the world's most populous country, Old School is launching a tribute series in honor of South African cricketer AB de Villiers, who played for the national Proteas team and Royal Challengers Bangalore in the Indian Premier League (IPL), a club-cricket competition with a business valuation of US$18.5 billion last year, according to the IPL.
Old Skool's mission is to “unite people with great products”, said Daniel Steinman, who is working to bring merchandise associated with the world's best sports teams to South African fans.
“We really believe that sports can unite this country,” he said. “And we thought business was a great way to do that.”