6 minute read
Business
hot property
USPA Properties is contributing millions of dollars to American polo through its range of branded clothing, reports Herbert Spencer
1
The Mogul conquests of the late 15th century onwards first brought the ancient game of polo from its birthplace in Persia into India, but it would be almost four centuries before the sport reached the USA. It seems historically incongruous, therefore, that men and women of the rapidly rising and aspiring middle class in modern India will soon be wearing clothing adorned not with some symbol of Indian polo but rather the name and logos of the much younger US Polo Association (USPA).
Nothing could better illustrate the global success of USPA Properties Inc (USPAP), the marketing subsidiary of the American polo association that is responsible for licensing the USPA name and symbols for use in manufacturing and merchandising products. Not only are USPAP’s commercial activities making the brand ‘US Polo Assn – Since 1890’ known throughout the world but, more importantly, they are contributing millions of dollars in royalties to USPA coffers to develop and grow the sport at home.
‘We signed a licensing agreement with Arvind Mills Ltd, the big Indian textiles and fashion group, just last autumn,’ says David Cummings, President/CEO of USPAP, ‘and they are launching their first line of US Polo Assn-branded men’s clothing [later to be expanded to ladies and youth] this autumn. We are pleased with their progress and designs. Their apparel will be priced somewhere below Polo Ralph Lauren and Tommy Hilfiger when it hits the shops on the Indian sub-continent.’
Just one week after announcing the Arvind Mills contract last October, Cummings heralded another new licensing agreement, this time for Europe, with the Italian firm Incom SPA. Incom’s clothing, with USPAthemed polo motifs from USPAP, is due to go on sale in Italy, Spain and Portugal in the autumn, with plans to expand the market into other countries on the Continent and possibly the UK as well.
Now, with other licensees in New York, Panama City, Istanbul, Shanghai, and Goteborg, Sweden, USPAP’s commercial activities extend through North and South America, the Caribbean, Europe, and Asia, with retail potential in more than a hundred countries. ‘We are currently looking for licensees in Africa and Australasia, which would complete the global picture,’ says Cummings.
While apparel is common to all of the USPAP’s partners, other product categories licensed to various firms include the likes of shoes, accessories, bath products, luggage, home furnishings – a wide range of branded goods like their competitors, Polo Ralph Lauren (PRL). Products with the US Polo Assn brand can be found in store and online with chains such as Sears and JC Penney in the US, but also in some 35 stand-alone shops built by licensees in shopping streets or big malls from Orlando, Florida, to Istanbul, Turkey.
The USPAP has deliberately chosen not to go head-to-head with PRL at the top of
the designer sportswear ladder. ‘We look for companies that will manufacture and market products of good quality at more affordable prices,’ explains Cummings.
‘The big difference between us and PRL,’ says Cummings, ‘is that Ralph Lauren never had anything to do with the sport itself, whereas we are from polo, of polo and exist for the benefit of the sport.’ Only in the past year, after decades of capitalising upon the image of polo, has PRL started to venture into sponsorship of the sport with a team at Bridgehampton Polo Club, Long Island, and plans for another team in Argentina. The USPA’s income from its licensing activities would have been even greater had the association not had to spend vast sums on lawyers’ fees over the past two decades and more to deal with legal challenges from PRL.
The American fashion giant built his empire on the image of polo and the luxury lifestyle of its adherents. PRL has registered a dozen or more trade names with the word ‘polo’, along with its famous logo of a mounted polo player, and has challenged those, including polo clubs, who tried to use the P word or images of the sport in more than the most modest of merchandising activities. More often than not, PRL’s won in the patent offices of various countries where the sport and the fashion house have come into conflict.
Soon after the USPA first began its marketing operations in the 1980s, PRL issued its first legal challenge to the association that had governed the sport in America since it was formed in 1890. The court ruled then that both entities had the right to commercial exploitation of the word ‘polo’ and to use images of the sport in merchandising products – in effect, a legal stand-off. The USPA attempted to move the relationship to one of compromise, but with limited success.
To avoid confusion with PRL’s ‘one-player’ symbol, the USPAP devised a logo showing one player challenging another with a hook (the image came from a watercolour by Irish artist and polo manager Eddie Kennedy). The USPAP claimed that PRL had agreed to its new logos, but PRL denied this and in 2000, after products from USPAP licensee Jordache were already in the shops, sued he polo association and Jordache in a New York federal court.
The jury ruled that three of the four versions of the two-player logos would create no confusion in consumers’ minds – a landmark victory for the USPA. PRL appealed, but in March this year their appeal was denied.
Just how important to American polo are the profits the USPA receives from its marketing subsidiary? Association accounts for 2007 show that a large proportion of the governing body’s total revenue for the year came from royalties paid by the USPAP – a huge $3.4 million, according to Cummings. While much of this goes in the association’s ‘rainy day’ endowment fund, hundreds of thousands of dollars have been earmarked for such activities as the association’s youth training and professional umpiring and for meeting deficits in its administrative budget. Over the years, royalties from the USPAP has enabled the national association – the richest in the world – to hold costs of members’ subscriptions and fees to a minimum.
Despite the continuing downturn in the US economy and the American retail sales sector (from which a large portion of the USPAP’s profits have come), Cummings remains upbeat about future income: ‘With global expansion our licensees should be grossing one billion dollars in retail by 2012.’
Cummings, who was manager of California’s Santa Barbara Polo & Racquet Club and then executive director of the USPA before moving to concentrate on his job at USPAP, estimates he now spends ‘about 35 per cent’ of his time away from the company’s headquarters in Lexington, Kentucky. He racks up thousands of air miles a year, criss-crossing the globe to seek new licensees and coordinate the efforts of existing partners.
Over the past couple of years, Cummings has changed the company’s approach to licensing, preferring to contract direct with firms in specific markets rather than with big, regionl master licensees. (‘This way we cut out the middleman and benefit from royalties.’) The USPAP has also developed a ‘style book’ as guidance for its licensees, ‘to ensure a consistency of image, if you like, the DNA of our products, in the global marketplace. Our partners seem to appreciate this and we try to encourage a common approach to advertising.’
When, this autumn, some aspiring fan at Calcutta Polo Club, the world’s oldest, dons an Arvind Mills polo shirt or sweatshirt with ‘US Polo Assn’ emblazoned across its front, Cummings will know, only too well, that 8,000 miles away in the USA, some aspect of American polo will be benefiting from its sale and the royalties paid by the Indian licensee. A satisfying scenario for an astute businessman who has devoted his life to the sport.
2
1 USPAP has become a familiar feature of the malls of the world 2 President/CEO David Cummings
