MAJOR MEDIA WANTS TO KNOW ABOUT HATS AND HAT COMPANIES

We’re noticing more articles are being written about Hat Companies. This is good for business and great for the manufacturer being profiled. It would also be great if more of you had your hats photographed for these stories. It gives the consumer a visual image of your product and promotes your brand. The Buffalo News just profiled New Era Cap Company and mentions that they will be moving into a new corporate headquarters.

If more hat companies solicited major newspapers many of you would be able to get favorable stories written about your brand and your company. This article is wonderful….we didn’t call New Era Cap Co., but we assume they are tickled pink. If you are so inclined read on, we re-printed the entire article that ran last week.

In custom hats, New Era fills the bill

The Buffalo News
Sales by the corporate success story grew dramatically to 30 million a year after director Spike Lee gave the company a big boost almost a decade ago

By MICHELLE KEARNS
News Business Reporter
4/14/2006

One of Buffalo's rising corporate success stories got a big boost almost a decade ago when movie director Spike Lee called.

He ordered the first custom hat - a Yankees cap in red, not the regular navy - and the New Era Cap Company has grown ever since. It went from making 8 million regular caps a year in the late 1990s, to 30 million today, with too many rhinestones, diamond-studded, camouflage versions for the company to track.

The surging popularity of the baseball caps in traditional team colors and in plaids and satins has led CEO Chris Koch, 45, to pay $5 million for the old Federal Reserve Bank in downtown Buffalo for the company headquarters.

When the renovation that could cost $7 million is complete, the building at 160 Delaware Ave. will have room for 250 employees, including 50 more administrators, designers of hats and a new line of clothing, marketers, and number crunchers than are working now in offices at the factory in Derby.

To capitalize on the public interest in New Era and the celebrities who routinely wear the brand's big seller, the fitted and sized style - the 59 Fifty - Koch's renovations will include a museum and store. It will have room for 700 kinds of hats and, as Koch put it, "all the really cool headwear stuff that we do that you never really see."

When the new headquarters opens by year's end - sometime before or after the hat-making frenzy of the World Series - it will be blocks away from the new headquarters of Righteous Babe records, City Hall and the Buffalo Bisons baseball stadium. From there, Koch intends to start making a bigger deal out of Buffalo as the home of the baseball cap.

"We want people to be proud," he said.

Humble beginnings
The company has grown without fanfare since it began in 1920 on Genesee Street with a staff of 14 making newsboy style caps to match men's suits. Koch's great-grandfather, a German immigrant, Ehrhardt, worked at another hat company before he decided the only way he would ever advance was to borrow $5,000 from his aunt and open his own place. Once the suit-matching hat fashion faded in the 1930s, the company switched to another trend, making some 5,000 baseball hats a year. The Yankees were a client from the start.

While the company has long made caps for most, but not all of the pros, by 1994, it made a formal deal with Major League Baseball to become the exclusive cap maker for all 30 teams.

A few years after that, the company made another deal with two-thirds of the ballparks, putting its blue waving flag logo in the dugouts for TV game exposure.

While New Era's 1,500 staffers include workers in offices in Toronto, England, Germany, Paris, Tokyo and contract factories in Asia, the baseball caps seen on the fields are all made in the United States - in Derby or one of the three Alabama factories.

"They're clearly one of the most important partnerships that we have," said Howard Smith, senior vice president for major league baseball licensing. "For all intents and purposes they are a baseball company."

The company grew steadily for decades, but by sometime in the late 1990s things changed with the call from Spike Lee. Within a few years, Lee, who now commissions hats as presents for film staff at the end of every production, was making national TV ads for the company with Chris Webber, now a forward with the NBA Philadelphia 76ers.

"New Era has basically, organically developed into a brand in the past decade," said Crystal Howard, company spokeswoman. While cap color offerings expanded and sales went up, the company's marketing stayed low key.

"They really weren't marketing the company at all," said Howard.

Even the delivery trucks didn't have logos until the late 1990s when caps started to get flag logos sewn for people to see on the outside.

While New Era makes knits and visors, the 59 Fifty, which comes in traditional hat sizes, became a surprise top seller helped by the affection rappers and athletes had for it.

For the last two years or so, the 59 Fifty has been hot. "Crazy hot," according to Howard.

R&B singer Usher helped by wearing his Atlanta Braves 59 Fifty in a dark blue denim with white embroidery for his latest album, "Confessions."

As the cachet has grown, so has the marketing. Within the past few years the company has bought print ad space in magazines for hip-hop music, sports, skate and snow boarders and the soft porn pages of Maxim.

Some 4,000 U.S. retailers, from fashion boutiques to Dick's sporting goods, now sell New Era. While the wilder, glittery styles are made in Asia, variations on the traditional make their way through Derby sewing machines, top-button stampers, and the 460 degree curved brim steamer.

After a union battle and 11-month strike in 2002, the Derby local has become one of the company's most productive. Bins of the local cap makers' work dotted the factory floor one recent morning. A stack of red tartan caps with gold thread was piled in one. Others, with the gold flaming basketball logos of the Miami Heat on a silky black dragon material, were in another. Hats with such out-of-the-ordinary pizzazz, done in custom-ordered varieties, make up 70 percent of the 59 Fifty sales.

"We don't even have a handle on how many variations there are," said Howard. "It's exponential. It's enormous."

Creating "want"
New Era last year began to expand its fashion boundaries by adding a new line of hats called "EK." Named in tribute to the company founder, Koch's great-grandfather, its tweed, cashmere and seersucker looks include the snap-brim Gatsby or "newsboy" hats of the kind Ehrhardt Koch started making in 1920.

This time the company didn't wait for celebrities to call. Howard went to the Sundance Film Festival in Utah in January to create celebrity buzz by giving away 400 hats to such actors as Robert Downey Jr. and Terrence Howard.

Next month the cap company will go for more glamour by opening its first boutique store in Greenwich Village.

Curious about what makes people buy New Era's hats, Koch questioned a young man he spotted in Florida wearing a 59 Fifty in "pixilated" camouflage.

The man said he bought a couple of new caps a week because the athletes and rap stars he liked wore them and there was always something new.

"Nobody needs another cap," said Koch. "We have to create want."

For New York City based retail analyst Burt Flickinger III, New Era's interest in developing a line of clothing, as its designers are working on now for a 2007 debutis savvy. It is one to way to beat out the other famous brands that have made a business of making licensed sporting goods and sportswear.

Relying too heavily on licensing is a mistake: Fees shrink profit margins. There's more room for money in clothes that can be marked up to three times cost, said Flickinger.

"New Era, in many ways, is far ahead," he said.

New designs created by seven fashion divisions help keep New Era ahead. By the time the knockoffs come out, the company has moved on. Tim Talley, director of urban design and business, made the point by dumping a pile of caps, not yet in stores, on a table. There were paint splatter patterns, jagged elephant skin markings and shimmery weaves of magenta and yellow.

"Reebok would love to see this right now," said Talley. Koch said he wants to chronicle the changing fashions and the sweep of the baseball cap business in a museum near what is now the marble-paneled foyer of the old federal bank. To find the hats he needs to tell the story, Koch intends to ask for His family was always too busy trying to sell every last hat to think about saving any, he said. "I don't think they ever thought that 86 years later, we'd be where we are right now."