blueseventy ltd information...
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December 2010Blueseventy ltd InformatIon memorandum
the world Is swImmIng faster In Blueseventy
DISCLAIMER
This Information Memorandum is directed to potential investors who are professional investors in respect of whom, under the laws of the jurisdiction in which they are resident, blueseventy is permitted to send this Information Memorandum.
REMEMbER ThE SwIMSuIT wAR?
You know the one where all the Olympic swimmers wore ‘super suits’ that broke all the world records, and then they all got banned?
well blueseventy started that war. undeniably we developed the first ‘super suit’ and pushed its approval through FINA.
Despite lacking the resources of the large swimwear brands with their multi million dollar budgets, for a critical period of time blueseventy took on the world’s largest swimwear brands; in the pool, in the open water, and in the hearts and minds of the swimmers.
we proved that our brand and our products were good enough to foot it with the giants and the consumers were not only willing to break from tradition, but in fact were overjoyed that another brand was entering the world of competitive swimming. They left the big brand names in droves.
Martin van der weijden typified what was happening on the ground. he defied his national swimming federation and risked everything (including being banned from the Olympics) to wear our suit. he stood on the top of the dais at beijing in his specially made blueseventy ‘Nero comp’ suit, with a gold medal around his neck.
Our innovation and approach proved to be a breath of fresh air to the stale changing rooms of competitive swimming.
40,000 high performance blueseventy Nero competition suits were sold in a year. To put this into perspective we were told at the time by Arena that they sold 8,000 high performance suits in a year, while Adidas admitted they sold less than 1,000.
Arena is a €350 million company and Adidas swimwear is a $uS100 million company. we beat them, hands down.
As a company this period gave us the opportunity to glimpse through the looking glass and know that blueseventy can compete with the big swimwear brands; and to know that we can leverage the brand equity we have in the competitive world of swimming and penetrate the fitness and recreational markets.
That we shook and decoupled the world of competitive swimming is beyond question.
what you may not know is this isn’t the first time blueseventy completely turned a sport upside down. we did it in triathlon as well. Not once, but twice.
we were there at the very beginning of triathlon, in fact it was our first performance wetsuit that revolutionized the sport of triathlon and made it accessible to millions of people worldwide.
we changed the face of the sport again in 2006, when 60% of the entire field of the hawaii Ironman (a non wetsuit swim) swam in our revolutionary PZ3 suit.
This isn’t a bad track record for a small privately-held company with limited resources.
As Director and former CEO Tim Moxey says, “we have an innate ability to take opportunities and move with speed. we are consistently at the forefront of innovation”.
So the question is, if our brand can compete and capture consumer imagination, and our products are compelling, what’s stopping us from going head to head with Speedo, Arena and Nike in total sales, not just in high performance suits?
This Information Memorandum explores this question, and invites you to be part of the answer.
we are happy to answer any questions you may have in person and hope you enjoy reading about our company.
Yours sincerely,
Lee Nicolson Trevor Nicolson Tim Moxey
Director Director Director
blueseventy blueseventy blueseventy
dear Investor,
We are swimmingWe are blueseventy
Contents. 1.0 Where we have come from 1
2.0 Where we are now 9
3.0 Where we want to go 17
4.0 How we are going to get there 27
5.0 The business opportunity 35
6.0 How much is it going cost? 39
Appendix What makes blueseventy tick? 43
We make products that empower people to achieve their personal best
1.0 where we have Come from
Swimming is the reason that we exist. Swimming is one of the few activities that is truly global and has minimal barriers to participation
1
hIstory.The history of blueseventy is one of continuous growth, innovation and above all, courage. From the start the company has always ‘punched above its weight’. blueseventy has
never let its size stop it from developing world-class products, nor has it shied away from competition. Like the world champions blueseventy has inspired and supported, blueseventy
is a company that believes you are only as good as your competition, and your competition should always drive you to achieve greater things.
blueseventy has competed against the very best in both triathlon and competitive swimming, and if you were judging purely on innovation and speed in the water, has beaten them
all. No other swimming company can lay claim to revolutionizing and changing the face of two sports, as blueseventy has done with both triathlon and competitive swimming.
hIstory of the Company prIor to 19911986 Lee Nicolson commences business as Direct Innovations specializing in sourcing and importing innovative sporting-themed giftware products, and selling direct to New Zealand consumers.
1989 Lee contracts 2001 wetsuits, a New Zealand based company, to produce neoprene products (bike and car seat covers) in New Zealand.
1990 while having a beer at 2001 wetsuits one day after work, Lee is introduced to world Triathlon Champion and one of the best swimmers in the world, New Zealander Richard (Rick) wells ObE. he talks about the new swimming wetsuit produced by 2001 wetsuits and how it will change the face of triathlon. Lee obtains the international rights to the wetsuit.
1990 Direct Innovations launches the world’s first full-length triathlon wetsuit at the Interbike trade show in the uSA, with the endorsement and support of Rick wells. The wetsuit is built for speed and ease of use; the new technology provided a 7 – 10% reduction in triathlon swim times.
1990 At The Super Show in Atlanta, Trevor approaches the world Triathlon Corporation (wTC) and is appointed the worldwide licensee for wetsuits under the Ironman brand. The company becomes Ironman wetsuits.
2
2000 Overseas orders outstrip New Zealand’s manufacturing capability and production is moved offshore. The company embarks on substantial design-based R&D to dramatically increase the quality of manufacture and design performance. The WTC, who see Ironman Wetsuits leading their brand into mass-market retail chains Costco and Walmart, push Ironman Wetsuits to develop and launch the world’s first multi-purpose hydrodynamic wetsuit, the Hybrid.
2000 Tim Moxey and Steve Nicholls commence their association with the company, first as athletes, then as employees.
2001 Ironman wetsuits are now distributed in 30 countries; the hybrid is not as successful as anticipated proving that brand extension under the Ironman name cannot extend much beyond dedicated triathletes.
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3
hIstory of the Company 1991 to 20011991 Ironman wetsuits are the first company to introduce ultra Stretch Freedom Panels, which allows a restriction-free stroke. Triathlon swim times drop even further and the new technology enables final resistance from swimming purists to be overcome. The first distributors are appointed in the uSA and Germany.
1993 Ironman wetsuits become the official wetsuit of all North American Ironman triathlon events. The triathlon range expands to include four specialized triathlon wetsuit designs. Major international brands start to copy the technology and designs.
1998 Launch of VO2 technology, which enables wetsuit swimming without restricting breathing. The VO2 Stealthsuit still remains unbeaten in any wetsuit test and is the only wetsuit ever designed under true scientific protocol.
1999 Year on year sales double. Ironman wetsuits become one of the world leaders in triathlon wetsuits due to substantial export growth, challenging the heels of the existing market leaders, American brand Quintana Roo and European brand Aquaman.
YeAR
WeT
SuIT
uN
ITS
1992 1994 1996 1998 2000
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1993 1995 1997 1999 2001
hIstory 1991 to 2001 SALeS bY uNITS
4
There is a direct correlation between the introduction of swimming wetsuits and the growth of triathlon, for wetsuits gave the non-swimmer, warmth, f loatation and above all, a feeling of security
5
hIstory of the Company 2002 to 20102002 Tim Moxey is appointed CEO. Director Trevor Nicolson takes a more active role in the company.
2003 A subsidiary office is opened in Seattle, Washington. The company takes control of its worldwide distribution network.
2004 Substantial investment in offshore marketing increases sales by 100% over the past two years. Ironman Wetsuits becomes the second largest triathlon wetsuit company in the world. There is a growing recognition of the limitations in the triathlon market and the company maps out new territories for the brand in open water swimming.
2005 The company is rebranded blueseventy (70% of the world is covered in water) as the company expands from producing strictly high performance, long distance triathlon suits and enters the open water swimming market as well as capturing the women’s, recreational and short course triathlon markets. This dramatically increases market share in the uSA, wetsuit sales hit a new high. A uK office is opened.
2006 Launch of the Pointzero3 swimskin at the hawaii Ironman world Championships. Eighteen professional athletes wear the pointzero3 including the winner Normann Stadler. It is acknowledged as a huge technological leap forward and the fastest swimskin on the planet, pioneering the use of leading wetsuit technology, designs and material, integrated with compressive fit and technically advanced Specialty Coating Systems (SCS) low drag coatings. blueseventy releases an open water accessory line, goggles, and the first helix wetsuit.
2007 blueseventy, the global leader in triathlon wetsuits, firmly establishes themselves as a leader in open water swimming at the Hawaii Ironman World Championships ‘blackout’ where over 600 athletes (of a total of 1,500) wear the Pointzero3 swimskin.
2007 The Pointzero3 swimskin gains approval from FINA and in doing so becomes the world’s first ‘supersuit’ and starts the ‘swim suit wars’. Geoff Matthews is contracted to spearhead blueseventy’s entrance into the swimming world.
2008 blueseventy becomes the official partner of the FINA 10km Marathon series. blueseventy expands their product ranges to include a full line of open water goggles and insightful swimming accessories for the open water swimmer.
2008 The Nero comp swimskin (fully functional pool suit) is released in May, it is the dominant suit at the World Open Water Swimming Championships, worn by the winner of the 25km World Championship. Numerous world records are set in the pool using Nero comp swimskins.
2008 At the beijing Olympics the first Olympic Gold medal in Open water Swimming is awarded to Dutch athlete Maarten Van Der weijden wearing the Nero 10K swimskin.
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the Change from Ironman wetsuIts to Blueseventy In 2006 happened so fast that the rIpple effeCt was posItIve for the Company. the Brand has grown so muCh from then. Ironman wetsuIts was just a ConstraInt on who we were; In faCt we were mIslaBeled Before. IronICally we were Blueseventy at heart, Before we renamed ourselves - TIM MOXEY“
“6
2009 blueseventy swimskin and race swimwear sales pass 40,000 units sold in only 18 months. This translates to 40,000 new customers, with 100% increase in product lines.
2009 blueseventy partners with TeamTbb, a development squad that provides hope and opportunity to many young athletes and struggling professionals.
2010 NCAA gives the thumbs up to blueseventy’s NeroTX swimskin and the new line is released for competition swimming under new FINA guidelines.
2010 blueseventy achieve another world first, releasing a carbon fibre goggle, the carbon race.
2010 The landmark ‘balanced buoyancy’ wetsuit range is released comprising the Axis and the Fusion. They are designed with a holistic approach to swimmers body position, to offset the often heavier legs of a triathlete and balance the athlete in the water to achieve faster times. The balanced wetsuit is another world first.
2010 blueseventy’s three new swimwear lines and distance triathlon apparel are released mid year, with immediate success. helix 2010 is first out of the water in the first uSA domestic race.
2010 wTC changes the rules for triathlon swimskins. blueseventy releases the new textile PZ3TX swimskin, and two new triathlon apparel lines. Feedback from professional athletes regarding the PZ3TX is outstanding.
Late 2010 blueseventy seeks new equity partners to continue aggressive expansion plans.
2010 Tim Moxey resumes as CEO of blueseventy based in Seattle, allowing Steve Nicholls to fully focus his creative talents on product development, testing and brand development.
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2008 Launch of the helix TST suit, voted the best triathlon wetsuit in the world at the 220 triathlon magazine awards held at the TCR wetsuit Expo. blueseventy becomes the uS Masters Swimming sponsor. Steve Nicholls is appointed CEO.
2009 blueseventy launches an informative and interactive website for open water swimmers, www.thewaterisopen.com.
2009 The Nero comp range is rejected by FINA along with other companies’ suits due to the arbitrary ruling that they ‘may trap air’. This results in a huge worldwide media interest following blueseventy. The exposure of ‘non scientific’ reasons for banning suits by certain FINA officials sees a reversal of the decision on all rejected blueseventy suits.
2009 FINA is forced to ban all swimskins from pool competition after some manufacturers introduce polyurethane suits.
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YeAR
CO
NSO
LID
ATe
D R
eVeN
ue
(uSD
$M)
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
hIstory 2000 to 2010 ReVeNue
unit sales 10,500
$9.0
$8.0
$7.0
$6.0
$5.0
$4.0
$3.0
$2.0
$1.0
$0.0
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8
2.0 where we are now
The beating heart of blueseventy is in open water
9
blueseventy has emerged from times of change stronger and more focused.
The brand transformation in 2005 has enabled the business to go where the Ironman name could never take it, and in five years has grown to be the global leader in it’s niche, and become one of most innovative players in swimming in general.
From a positioning perspective, blueseventy is ready to step up.
we have embarked on a strategy to leverage the brand and widen its footprint, with an extended range of race and training apparel, as well as building our accessory lines.
Simultaneously blueseventy is pushing hard to break apart the stagnant uS duopoly of Speedo and TYR in swimming. with significant recognition from elite swimmers, blueseventy is leading from the front with innovation and creative design, backed up by a focus on records and results with the athletes that legitimize the brand.
Current sItuatIon.without blueseventy leading
product innovation there
wouldn’t be the same drive
from the market in terms of
performance. the industry’s
performance and products
wouldn’t be as advanced.
- STEVE NIChOLLS
“we swIm. we Compete. we oBsess – porIng over detaIls that others have and wIll ContInue to mIss; revolutIonary detaIls that eQuate to Comfort, freedom from restrICtIon and CompetItIve advantage.”
“
“
10
We are there with the athletes running out of the water, it gives a real humility to what we do
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worldwIde swImmIng marKet.
swIm(More than 1x per week)
27 million participants
open water800,000 participants trIathlon
3.2 million participants
the world we Compete In.There are 99 million people in the world who participate in swimming. while 27 million do so more than once a week, 12 million people world wide swim three or more times a week.
The relationships between the markets show how blueseventy is able to extend and participate in a larger market. The opportunity exists for blueseventy to capture a greater share of the swim market. The established triathlon market is still growing and it is expected that the open water market will grow in a similar pattern to triathlon’s growth.
Triathlon is predicted to continue growing at 10% a year, and while open water participation is currently experiencing this similar growth, at some stage in the near future open water is set to “take off” as triathlon did in the 1980s.
we need to maximize this opportunity by getting in now, and for what could be regarded as a small investment, own the entire open water sector. while we continue our strong position in the tri market we will eventually add more products to our line and diversify into mass-market consumption.
hOw bLuESEVENTY IS POSITIONED AGAINST ITS COMPETITORS
12
Brand perCeptIon.Key CompetItors
SPeeDO Establishment. Institution. bully. Instinctive swim brand choice
FINIS Technical. Focus. Accessories. Niche brand
AquA SPHeRe budget. One trick pony. Comfort goggle brand
ZOggS Pixar. Enjoyment. Participation. Fun brand
AReNA Corporate. Contradiction. Exotic cuts. Staid. European brand
NIKe Fashionable. Not Technical. Instinctive fashion brand choice
TYR Follower. Overconfident. Elitist. Speedo alternative
ADIDAS Diving. Alternative fashion brand
2Xu Compression. upstart. Cool. Clothing. Technical brand
ORCA Clothing. broad. Technical brand
bLueSeVeNTY International. Innovator. Cool. Now. Real
Some experts believe that a brand can only be positioned against its competitors. Markets are defined by these brands. Compared to all other brands, blueseventy has captured unique brand space and position.
blueseventy images are
distinctive, and have been
consistent over a very long
period of time. they are
driven to be emotive and
capture the moment for
the person, our imagery
allows you to associate more
strongly with the brand
- STEVE NIChOLLS
“
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CompetItors’ marKet offerIng.
Speedo
TYR
Aquasphere
Zoggs
Arena
Nike
Finis
2Xu
Orca
Adidas
blueseventy
Performance Recreation Performance Recreation
swImPerformance Recreation
wetsuItsaCCessorIes KeY:
Yes
No
Partial
Future
Performance Recreation
gogglesClothIng
?
Speedo and TYR, and in
Europe Arena, grew from
having a core swimming
strength to becoming full
service swim suppliers. In
contrast, blueseventy is
leveraging its dominance
in wetsuits and triathlon to
press out into becoming a full
service swim supplier.
15
marKet segmentatIon.we have segmented the swimming market into this pyramid of participation, from the high performance swimmers to the mass markets comprising fashion, recreation and family
segments. The market opportunity for blueseventy is to extend into the mass-market segments. blueseventy’s intention is to make full use of its strong brand position in the high
performance area to extend through fitness and into the recreation sector.
hIghperformanCe
fItness
reCreatIon, famIly and fashIon
Blueseventy tyr arena speedo nIKe Zoggs
there is a lot of hype in sports marketing, blueseventy reminds us we all train, we all get tired, we
all get scared…we are there with athletes running out the water, it gives a real humility around
what we do. It is aspirational, because it’s real and people can believe it - TIM MOXEY“
“blueseventy has a unique perception in the marketplace, which continues to drive our success and growth in high performance swimming. Leveraging our brand perception we
have the opportunity to expand not only our product offerings, but extend beyond high performance, through the fitness market to target the recreational swimmer. The potential
for growth is undeniably massive.
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3.0 where we want to go
Leanda Cave, ITU Long Distance World Champion Ironman 70.3 World Champion
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blueseventy has grown organically over the years despite low levels of investment. The company is well positioned for a capital injection to take it to its logical conclusion – to be one of the world’s leading swimwear brands.
we believe that our brand culture can have resonance in all of the mass-market segments, as swimming is an aspirational activity.
The only thing stopping blueseventy from competing toe to toe with companies whose turnover is measured in the hundreds of millions of uS dollars, like Speedo and Arena, is human resources and capital.
FINA, by banning our suits recently has unknowingly opened up a new market sector for us, as competitive athletes are now required to wear different suits for training and for competing.
attending events
and talking to the
consumer is in reality
owning your own
media channel. By
directly coming in
contact with the
consumer you lessen
the reliance on going
through third parties.
- STEVE NIChOLLS
“
“
The market opportunity for blueseventy is to leverage the continual growth and momentum of the company by extending into the mass market segments of fitness, recreation, fashion and family.
The high-end market influences the mass market, with a trickle down effect. It is a proven strategy, implemented with varying degrees of tactical success by others.
hIghperformanCe
fItness
reCreatIon, famIly and fashIon
Blueseventy
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The SwOT analysis is one of the most
misused tools in marketing.
The value of this tool does not come
from simply listing factors in each of the
four boxes. The value is in converting
each factor into business opportunities.
Identifying how weaknesses can be
converted into strengths, strengths
into opportunities and threats into
opportunities provides insight and real
value.
trIathlon swot.STRENGThS
brand equity: cool, respected
Ownership of swim leg of triathlon
Established position as a performance leader for products we make
One of the most trusted, respected brands in triathlon
Management and employees understand the sport. we have a young, motivated, passionate team.
Strong global sales and brand
Internal ability to make great new functional products
Only supplier to offer youth product
Own uS and uK subsidaries
Global perspective not bound to one location/office
Responsive, ability to react quickly to market changes
wEAKNESSESNarrow focus of product range compared to competitors
brand is tied to water
weaker distribution networks in Eu and Asia
Need for internal process review for new product development
Product design has functional and technical focus rather than aesthetic focus, conservative compared to competitors. i.e. Ocra. This is due to lack of resource and experience
Overspec’d entry level suits- they cost too much to make and are too expensive compared to competitors
Geographically scattered management/office structure
Large volume of new product putting strain on new product development resources
OPPORTuNITIES broaden product range, all tying back to water, within triathlon
Maximize swimwear in triathlon market and swim accessories (opening more retailer doors, widen revenue base)
become default swimwear provider within triathlon
Expand sales in weaker regions. Ie. Eu, uK, Asia
Improve portfolio of sponsored athletes
Develop new products that lead in bOTh design and function
work outside traditional supply and manufacture chain of triathlon to improve margins and further position the brand as being unique (develop and own sub-materials)
Create subsidiary in Eu, Asia, to strengthen distribution and sales
Open up new distribution channels using new, broader product lines
Improve relationships with governing bodies, from the ground-up
ThREATSMajor swimwear brands coming into triathlon Eg. Nike
Over-reliance on suppliers, in terms of availability/costs
Governing body changing rules.
trI swot
A
b
C
D
e
F
g
H
I
J
K
A
b
C
D
e
F
g
H
A
b
C
D
e
F
g
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J
A
b
C
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STRENGThSbrand equity: cool, respected
Ownership of swim leg of triathlon
Established position as a performance leader for products we make
One of the most trusted, respected brands in triathlon
Management and employees understand the sport. we have a young, motivated, passionate team.
Strong global sales and brand
Internal ability to make great new functional products
Only supplier to offer youth product
Own uS and uK subsidaries
Global perspective not bound to one location/office
Responsive, ability to react quickly to market changes
wEAKNESSESNarrow focus of product range compared to competitors
brand is tied to water
weaker distribution networks in Eu and Asia
Need for internal process review for new product development
Product design has functional and technical focus rather than aesthetic focus, conservative compared to competitors. i.e. Ocra. This is due to lack of resource and experience
Overspec’d entry level suits- they cost too much to make and are too expensive compared to competitors
Geographically scattered management/office structure
Large volume of new product putting strain on new product development resources
OPPORTuNITIES broaden product range, all tying back to water, within triathlon
Maximize swimwear in triathlon market and swim accessories (opening more retailer doors, widen revenue base)
become default swimwear provider within triathlon
Expand sales in weaker regions. Ie. Eu, uK, Asia
Improve portfolio of sponsored athletes
Develop new products that lead in bOTh design and function
work outside traditional supply and manufacture chain of triathlon to improve margins and further position the brand as being unique (develop and own sub-materials)
Create subsidiary in Eu, Asia, to strengthen distribution and sales
Open up new distribution channels using new broader, product lines
Improve relationships with governing bodies, from the ground-up
ThREATSMajor swimwear brands coming into triathlon Eg. Nike
Over-reliance on suppliers, in terms of availability/costs
Governing body changing rules.
trI swot
A
b
C
D
e
F
g
H
I
J
K
A
b
C
D
e
F
g
H
A
b
C
D
e
F
g
H
I
J
A
b
C
strategIes for ConversIon.
weaKnesses to strengths
Leverage established credibility as a swim specialist to expand into related swim
product lines
• Develop category leading ‘hero’ product.• Forge key partnerships with athletes to emphasize product superiority.• Push the message of ownership of the swim leg of tri, and leverage the position
of strength in swim.
Leverage established credibility in key geographic markets, and global brand perspective to extend into new markets specifically Eu and Asia, broadening the customer base
• Focus resource to developing new markets.• Develop a licensee agreement with a Japanese partner. The key to this market is
having product made in Japan to fit Japanese sizes and physique.• Increase control over the uK retailer, they sell up to 50% of stock in Eu.• Establish key event and athlete partnerships in the new relevant markets.
Develop an internal process review for new product development so the focus for new products is spread across function, technical and aesthetic design elements
• bring this function completely in house and dedicate more resource to it. • Free up the current CEO to focus on his core skills of product development and
design.• Recruit in-house admin resource and design-led product development resource.• build a core set of contract designers to continually generate fresh ideas.• Market the core benefits of the products: superior fit, feel and function.• work with external and internal stakeholders to design unique product
pathways, using the same development path as for carbon goggles.
Develop in-house bulk sub-materials for wetsuits to increase their perceived value while substantially reducing costs
• use multiple partners to develop concept-led bulk material development. (DONE)
• Obtain sample material and cost estimates. (DONE)• Test prototypes and integrate into product lines.
Centralize brand control, use this as a platform to achieve consistency in brand delivery across multiple geographic locations
• Improve the organizational structure and assign human resource requirements for the company’s growth moving forward.
• Develop brand guidelines and master brand briefing to ensure global brand consistency.
• Establish strong leadership teams within each country/ subsidiary with full buy-in to the brand goals.
• hold regular global meetings.• use market feedback from all geographic markets to improve the brand and
achieve a truly global brand. The desired position is that the world is swimming faster in blueseventy.
• Sublicense the brand in Japan so management can focus on the big picture.
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strengths to opportunItIes
Leverage ownership of the swim leg in triathlon to launch new related products
• Target related product lines, with a technical focus, that match the brand space - swimwear, tri apparel, training accessories i.e. goggles.
• hire key uS sales staff, and look to drive independent rep bookings. • have flexibility to hold larger stock and inventory.• Implement concentrated marketing campaigns around new product lines, with media
placements.• Implement terms for stores to stock product where required.• hire an internal designer for POS (cost uS$20K plus existing contractor expense).• hire global marketing manager (cost uS$120K) to oversee the marketing strategy integration.
Reinforce current market leadership position in triathlon wetsuits by taking ownership of balanced buoyancy
• bring product development in house. • Recruit new human resources in design and in sales. Move the existing CEO into a product
development position, tie campaign with new marketing manager.
build on staff and company ability to relate to the end-consumers through direct interaction
• Truly integrate social media with a focus on brand interaction.• build a strong localized base around event representation. • Ensure staff have brand buy in.
utilize brand perception as the performance leader to build market share with the customer base with existing and related product
• New product launches in related swim categories. I.e. Swimwear, tri apparel, swim training and swim coaching.
• Restructure resources internally to allow a better focus on this area by relevant personnel.
• Educate the sales team in the desired brand position and target multiple SKu’s into existing accounts. Then as new products become established in the market (2011-2012) open up new retailers.
• Ensure cross product brand consistency and brand ID.• Launch an all-encompassing marketing program, leveraging the “swim faster” message into
new categories. • Launch a global marketing program, implemented by a new global marketing manager. • hire additional uS sales staff that reflect the brand and care about the end consumer and can
relate to them. The sales focus will be on new product bookings through independent reps. • have flexibility to hold larger stock and inventory, over multiple SKus. • Possibly extend terms for stores to stock product where required.• Increase sponsorship with focus on clothing and using athletes in ITu and IM events to
highlight the new product lines.
First to market with a youth product offering, own this new sector
• Complete a profitability analysis of the youth triathlon market before making any further steps.• being first to market with a youth product offering allows a platform for growth if the market
conditions allow.
Leverage ability to react quickly to market changes, to take industry leadership position to market changes
• Leverage relationships to have a better understanding of changes before they occur. • have a higher-level strategic focus with greater resource, less focus on doing, and more on
relationship building (potentially hire a new CEO).• use relationships to be able to pitch for new business to companies like wiggle/
Challengetriathon/IMG. There is the potential for an additional 10,000 units.• Partner with key brands in tri where possible. E.g. K-SwISS clothing team wear; Nike or Adidas
to supply clothing/wetsuits for their athletes and remove their need to dabble in tri.
21
threats to opportunItIes
Create own sub-material to reduce reliance on external suppliers
• use multiple partners to develop concept-led bulk material development. (DONE)• Obtain sample material and cost estimates. (DONE)• Test prototypes and integrate into product lines.
Reinforce leadership position
• bring product development in house. • Recruit new human resources in design and in sales. Move the existing CEO into a product
development position, tie campaign with new marketing manager.
Responsive to changes from governing bodies
• Leverage relationships to have a better understanding of changes before they occur. • higher level strategic focus with greater resource, less focus on doing, and more on
relationship building (potential key hire new CEO).• use relationships to be able to pitch e new business to companies like wiggle/
Challengetriathlon/IMG. Potential for additional units of 10,000.
we understand what It Is lIKe to Be a trIathlete or a swImmer and that Is what our produCts are aBout, helpIng you to Be a Better trIathlete or swImmer. our Culture Is looKIng anywhere for InnovatIon and BeIng aBle to relate to the Customer.
- STEVE NIChOLLS
“
“
22
We need to own open water
23
swIm swot.STRENGThS
brand position
Strong brand awareness key influencing markets; uS, and Australia
Product credibility
Cultural heritage as leader in open water
Strong relationships with key dealers in uS and Australia
Large volume of new product in development
Cross platform trends into swim
Open minded - take from a range of disciplines and influences
wEAKNESSESLimited product lines, athletes, sales force and distribution
weak presence in Eu and uK
Inexperience in swim channel
Limited presence at events and in advertising because of lack of capital
Lack of capital to fund development
OPPORTuNITIES Expand product line, distribution network
build presence to become a significant global player
Steal market share from Speedo and TYR because of negative brand perceptions towards these brands
Develop manufacture and supply chain (as per TRI SwOT)
Move more into broader “fitness” swim market segment
Open up wider brand visibility with high profile marketing through sponsorship and advertising avenues
Completley own open water
Penetrate adult “learn to swim” market using open water influence
Service safety events
ThREATSFINA changing the rules
Speedo playing political games
Over-reliance on suppliers (as per TRI SwOT)
swImswot
A
b
C
D
e
F
g
H
A
b
C
D
e
A
b
C
D
e
F
g
H
I
A
b
C
24
weaKnesses to strengths
Gain credibility from performance swim products to leverage and move into broader fitness swim market segment. Increase sales force, distribution and athlete sponsorship in line with this objective
• Increase distribution throughout uS and uK.• Offer a full product line by increasing SKus in swimwear to include a variety of prints,
styles and colors.• The ability to influence the market by utilizing branding and team sponsorship will open
more retail doors.• Increase sales staff and have a more aggressive sales focus.• Strategic purchase of an existing swim manufacturer. Maru are already targeted as a
possible solution.• hire an internal design and product development resource. Capital investment to fast
track product development, hold inventory, and develop marketing around new lines. • Medium-term (2-3 years) strategy is to enter retail sporting chain stores and aim towards
targeting mass market.
Market growth in Eu, Japan and uK will utilize global brand awareness and key influencing markets of uS and Australia. License brand in Japan and target subsidiary markets after strong base develops. Expand further into other markets
• License brand in Japan, target subsidiary markets after strong base develops. Expand further into other markets.
• Engage a partner in Japan. This partner has already been identified and is underway (September 2010).
• build base in global swim influencers (Australia and uS). Aim for market share and target resource and marketing spend in these areas for the first 2-3 years.
• Increase push in uK market (high performance segment is growing with sports spend associated with London 2012).
• A resource is needed to customize product ranges for each market. • Investigate a swim subsidiary in Eu, or control from uK.
Leverage related knowledge from swim leg of triathlon to cross platform trends in the swim market, staying ahead of the game
• hire relevant experience, but use the position as outsider to our advantage.• Retain “difference” in the market. use the non corporate and end customer relationships
to build a different brand feel/ touch point across swim and open water.• Take advantage of the general negative perception of mainstream brands (notably Speedo
and TYR in the uS market). Remain accessible and listen to customers and end consumers.• Take ownership of other sporting trends by being the brand that brings them in to swim.
Swim compression’s development is already underway for a November 2010 launch.
build the brand to become a significant global player, increasing presence in the market and increasing sponsorship, advertising and marketing
• Increase team, country, individual and event sponsorship. • Sponsor swimmers in leading markets that have strong market awareness and sales teams
such as uS, uK and Australia, while maintaining a global blend.• hire of key swim personalities. we are a cool brand who sponsor cool swimmers.• Increase advertising, presence at events and social media avenues to build brand
awareness.
STRENGThSbrand position
Strong brand awareness key influencing markets; uS, and Australia
Product credibility
Cultural heritage as leader in open water
Strong relationships with key dealers in uS and Australia
Large volume of new product in development
Cross platform trends into swim
Open minded - take from a range of disciplines and influences
wEAKNESSESLimited product lines, athletes, sales force and distribution
weak presence in Eu and uK
Inexperience in swim channel
Limited presence at events and in advertising because of lack of capital
Lack of capital to fund development
OPPORTuNITIES Expand product line, distribution network
build presence to become a significant global player
Steal market share from Speedo and TYR because of negative brand perceptions towards these brands
Develop manufacture and supply chain (as per TRI SwOT)
Move more into broader “fitness” swim market segmetnt
Open up wider brand visibility with high profile marketing through sponsorship and advertising avenues
Completley own open water
Penetrate adult “learn to swim” market using open water influence
Service safety events
ThREATSFINA changing the rules
Speedo playing political games
Over-reliance on suppliers (as per TRI SwOT)
swImswot
A
b
C
D
e
F
g
H
A
b
C
D
e
A
b
C
D
e
F
g
H
I
A
b
C
strategIes for ConversIon.
25
strengths to opportunItIes
Leverage our cultural heritage as the open water leader and low investment opportunity to own open water
• Look to own key open water events globally. • Partner with people trying to do the extreme. I.e. Swim the English Channel, free-diving
and extreme swim challenges.• hire Steve Munatones to instigate an open water specific coaching program with the aim
to market in 12 months. • utilize sponsored athlete Maarten Van der weijden (Olympic 10km gold medalist) as a
brand ambassador.• Continue to use inspirational style imagery and the brand position associated with this. • Sponsor key open water swimmers.
utilize strong relationships with key dealers and brand awareness in uSA and Australia to launch new product into the market
• Package products into a bulk buy in, incorporating existing product with new product for immediate sale.
• work to involve dealers in the process, so they have a stronger or closer relationship with the brand.
• Create a full team program and tie in with a dealer package, to further broaden related product take up.
Leverage related knowledge from the swim leg of triathlon to cross platform trends in swim market, staying ahead of the game
• hire relevant experience, but use our position as outsider to our advantage. • Retain “difference” in the market. use the non corporate and end customer relationships
to build a different brand feel/touch point across swim and open water.• Take advantage of the general negative perception of mainstream brand (notably Speedo
and TYR in uS market). Remain accessible and listen to customers and end consumers.• Take ownership of other sporting trends by being the brand that brings them into swim.
Swim compression’s development is already underway for a November 2011 launch.
utilize the large volume of product in design to establish new product lines in the performance market.
• Invest in sales and marketing channels to increase product awareness.• Once awareness is built up, broaden product lines and distribution networks further to
expand into broader “fitness” swim market.
threats to opportunItIes
Responsive to changes from FINA and political games played by competitors
• Leverage relationships to have a better understanding of changes before they occur. • have a higher level strategic focus with greater resource, less focus on doing, and more on
relationship building (potentially hire a new CEO).• use relationships to be able to pitch for new business to companies like wiggle/
Challengetriathlon/IMG. There is the potential for an additional 10,000 units.
Create own sub-material to reduce reliance on external suppliers
• use multiple partners to develop concept-led bulk material development. • Obtain sample material and cost estimates.• Test prototypes and integrate into product lines.
we have a hands on approaCh at events and CoaChIng and we need to apply that on a gloBal sCale through the new medIa pathways that are avaIlaBle. - STEVE NIChOLLS
““
26
4.0 how we are goIng to get there
We need to be a one-stop shop for swimwear and expand our appeal to the mass market
27
growth matrIX.MARKET PENETRATION
• Sponsor triathletes and increase marketing and promotional presence at events in established markets (uS, uK)
PRODuCT DEVELOPMENT
• 3 new ranges of triathon apparel• 3 new ranges of triathlon clothing • Carbon fibre racing goggles and accessories• 5 new swimwear lines
MARKET DEVELOPMENT
• Extend into emerging markets including Eu, Asia and Australia
DIVERSIFICATION• 5 new swimwear lines (see Product Development)• New products developed for non-competitive athletes• Coaching and training tools I.e. “The water Is Open”
growthstrategIes
eXIstIn
gn
ew
eXIstIng new
blueseventy’s strategy for growth encompasses
all four sectors of Ansoff’s Growth Matrix.
Companies that pursue all four directions of
growth concurrently are ambitious. blueseventy is
ambitious.
The key is to coherently bring together the growth
strategies from each matrix corner as one singular
strategic direction for the company.
The market overlay that exists in the worldwide
swimming market shown in the diagram on page
12 coupled with the market segmentation pyramid
on page 16 proves that a direction growth strategy
is achievable.
Our culture has always been “athlete first”. we
have successfully brought this culture into the
open water field and the triathlon field and going
forward, we will use this same athlete-led model
into the pool.
28
29
marKet penetratIon
Triathlon has been the mainstay of blueseventy. The triathlon market continues to grow
and while we are the market leader, we see room for improvement in our performance
and market share. by increasing marketing and promotional activity, attendance and brand
presence at events, and taking on wider sponsorship roles of events, triathletes and teams
(a proven marketing strategy), we believe gaining 20% market share of the competitive
triathlon market globally is easily achievable.
Increasing promotional activity in the triathlon area has the added benefit of crossing over
to reach new customers in the open water and pool markets.
“the objective is to extend the market leader position in these segments and remain the ‘innovator’, keeping the range tight and pricing products at the best in their class.”
marKet development
Global reach is key to increasing global sales and the opportunity for growth is substantial.
Key geographic markets targeted for blueseventy’s growth are Europe, Asia and Australia.
Entry requires the establishment of market specific sales and distribution channels,
supported by marketing and promotional activity including sponsoring athletes and
presence at events.
As the brand becomes established in each market, the full product range including
accessories will be released in each region, with swimwear being released internationally in
2011.
A key component to successful entry into these regions is ensuring we understand the
markets requirements; this will be achieved through hiring key staff in each region to
overcome any language barriers and other region specific variations, which includes
modifying product design to suit each market.
There are possible acquisitions that may aid our swift entry into these markets.
produCt development
blueseventy has a proven track record of innovative and continual new product
development, it is an area that blueseventy excels in. The development and launch of new
and modified products will be the main focus for growth going forward.
The vision is that a wider portfolio of products will enable blueseventy’s ability to enter and
penetrate new markets, market segments, and customer groups. New investment in this
area will focus around developing new design and product development competencies, and
include hiring in-house designers.
TriaThlonTwo new ranges of triathlon apparel are being developed for international launch in 2011
to cover both long and short distance triathlons. A third range will be added in 2012
depending on demand.
accessoriesThe launch of accessory and goggle lines will utilize a brand leverage strategy that
capitalizes on customer loyalty and a strong brand name. we expect a large uptake of these
new products, which will outstrip the number of units of current core products sold. This
has been identified as a major opportunity to invest in higher returning sales channels.
swimmingFive new swimwear lines will be launched; these comprise swim-skins and swimsuits
developed to cover open water and pool swimming. They are aimed at the differing needs
of the swimmer when training and competing.
The training product range has limited SKus, prints runs and designs, involving lower
product development costs. Distribution of this range in the uS will be via dealers, who
predominately target whole swim teams. It is a competitive market, but a low risk option.
The lines will compliment our triathlon textile products.
The performance ranges have limited runs in selected countries and premium pricing. Elite
swimmers in the uS (and eventually internationally) will be sponsored to legitimize the
brand and allow blueseventy to establish credibility in design, innovation and execution in
this segment.
dIversIfICatIon
A feasible and logical diversification strategy for blueseventy is to extend the brand’s reach
to target non-competitive swimmers with a targeted strategy.
As the charts on page 12 and 16 show the size of the mass market is vast and can be
segmented into fitness swimmers, recreation, family and fashion.
New product ranges (and sizings) will have to be introduced and blueseventy has a strategy
for developing a franchise based coaching system for triathlon, open water, pool and learn
to swim programmes.
There is a distinct market opportunity for blueseventy to take a leadership position in open
water (we are currently the only player in this fledgling market) from developing coaching
systems, to event director safety protocol, and creating a privately owned governing
body for open water. The Ironman Corporation has done this successfully with Ironman
Triathlons, and there is potential for open water to become a bigger mass participation
sport than triathlon.
30
Our focus has always been on being at events and talking to customers directly
31
organIZatIonal struCture.
Critical to achieving the growth strategies
and projections for the company is
investment in human resources. Currently
blueseventy’s key employees are stretched
across more than one role. To grow we need
to make key appointments in new roles for
the areas we lack skills and experience in.
blueseventy has and needs to maintain
a very global perspective to enter new
geographical markets. however the biggest
market is the uS and this needs special
attention and in-depth understanding. The
CEO and head of Global Marketing need to
be based in the uS.
blueseventy is a small
company with a lot of
knowledge built up in the
top line staff, but we need
to ensure as we grow this
is shared throughout the
organization. we are still
small enough for experts to
be involved right through
the chain of the company.
- STEVE NIChOLLS
CeO(Tim Moxey)
CFO (Alan brown)
Accounts
Admin
HR
VP Sales & Marketing
(Dean Jackson)
global Marketing
Web
Sponsorship
gM uK/eu
uK/eu Marketing
Swim Tri
gM uSA (eric Montiel)
uS Marketing
Swim
Tri
VP Product (Steve Nicholls)
Design
Product Dev
Production (bFg)
Current Staff
Outsourced
To be Filled
“
“32
ENVIRONMENTAL SCAN
Planning for future growth encompasses not only economic and social forecasting but building into future plans “what
if” scenarios.
The Environmental Risk Scan assesses the likelihood of occurrence and the potential impact of significant external
factors on blueseventy’s future growth. These forces can result from within the industry, the frontier of discovery as well
as the evolution of society.
The external forces and events charted cannot be avoided so must be anticipated and contingency plans considered so
events that are likely to occur and have potentially adverse events can be mitigated and potentially constructive events
can be exploited. Similarly, energy is not expended planning for events that have little likelihood of occurring and
would have little impact on the company.
The scan shows that the swimming industry, compared to many other industries, is not highly affected by
environmental factors but is positively affected by the growing lifestyle trend favoring exercise including swimming.
blueseventy is well placed in terms of its location, customer base and market positioning to respond to any “what if”
scenarios that could affect the swimming market.
polItICal Cultural shift in pool funding
Free trade
Global increase in “learn to swim” funding
eConomIC Escalating manufacturing costs
Second economic recession
soCIal Increasing fitness trend in adults
Child labor
Labor conditions
Carbon footprint
Scandal in sport
Drugs in sport
Displacement of sports
teChnologICal Major technological revolution
envIronmental water pollution
Global warming
water borne diseases
rIsK analysIs.
we are very good at reacting to situations
and dealing with what is put in front of us.
- TIM MOXEY“ “
33
proBaBIlIty of events oCCurIng
utopIa
increasing fitness trend
in adults
Child labor
Carbon footprint
Escalating manufacturing costs
Labor conditions
Global increase in learn to swim programs
New competitors entering market
Global warming Scandal in sport
Drugs in sport
Second recession
neutral
Free trade
Catastrophe
Major technological revolution
water pollution
water borne diseases
Displacement of sports
Global decrease in learn to swim programs
Cultural shift in pool funding
ImpaCt of events
dIsappoIntments to Be watChed
100%
50%
0%
eXCellent IndIfferent dIsastrous
34
blueseventy is strategic in thought, opportunistic in action….
5.0 the BusIness opportunIty
35
Customers trust us
because we genuinely
care about them.
some of the other
brands have lost this
touch point with the
consumers because of
their size. one of our
biggest challenges as
we grow is to remain
loyal to the consumers.
- STEVE NIChOLLS
““
the opportunIty.bLuESEVENTY LIMITED is a Registered NZ Limited company incorporated on the 8th November 1984.
The company has three Directors, Tim Moxey, Lee Nicolson and Trevor Nicolson.
bLuESEVENTY LIMITED own their own subsidiaries in the uK; bLuESEVENTY EuROPE LIMITED and in the uSA; bLuESEVENTY uSA LLC.
the offer
The Offer is available only to potential investors who satisfy blueseventy that they are professional investors in respect of whom, under the laws of the jurisdiction in which they are resident, blueseventy is permitted to make the Offer.
The board of bLuESEVENTY LIMITED are offering a new share issue of X shares at a price of uS$X per share which will amount to X% of the company (after issue). This is an equity injection of $uSX million.
Existing shares can also be purchased from shareholders at $X per share, up to X%, to increase the investor’s shareholder to X% of the company. At which point, the new investors will gain half the board seats on an enlarged board of six members.
bLuESEVENTY LIMITED would require security for a uS$X million bank facility.
The board has used the sale of Arena as a basis for their valuation of the company at 2x revenue.
Revenue for the last financial year (January 1st to year ended December 2009) was uS$X = a valuation of uS$X.
alternatIve offers
The board will consider alternative offers of more than X% of the company, on a case-by-case basis.
It is envisaged, by both Trevor and Lee, that over time they will reduce their shareholding either by dilution or purchase to around X% and they will become silent partners.
struCture
The company has been structured so that the two subsidiaries are operated at ‘breakeven’ point and all profits consolidated into the New Zealand company.
36
Current shareholdIng.Blueseventy lImIted Current shareholdIng
Lee Nicolson (2 entities)
Trevor Nicolson (2 entities)
Tim Moxey
bLuESEVENTY LIMITED: Company Number 254478
bLuESEVENTY EuROPE LIMITED: Company Number 05057239
bLuESEVENTY uSA LLC: unified business ID number 602 260 909
http://www.business.govt.nz/companies/app/ui/pages/companies/254478/shareholdings
100%usa subsidiaryblueseventy limited
100%uK subsidiaryblueseventy limited
52%31%
17%
37
aCCountant
bruce Sheppard
Partner
gilligan Sheppard Ltd
PO box 6310, Wellesley Street,
Auckland, New Zealand
www.gilshep.co.nz
lawyer
David Jones
Partner
Jones Young
P O box 189, Shortland Street
Auckland, New Zealand
www.jonesyoung.co.nz
fInanCIal InstItutIon
The National bank of New Zealand
Level 16, 209 queen St,
Auckland, New Zealand
proposed shareholdIng.Blueseventy lImIted proposed shareholdIng after CapItal raIsIng
26%
16%50%
8%
Lee Nicolson (2 entities)
Trevor Nicolson (2 entities)
Tim Moxey
New Shareholder(s)
38
Our culture has always been “athlete first”. we have successfully brought this culture into the open water field and the triathlon field and going forward, we will use this same athlete-led model into the pool.
6.0 how muCh Is It goIng to Cost?
39
how we are goIng to spend It.
In the following pages we have projected a capital input of uS$X million.
Over the first year this will initially be used to reduce the credit facility, after which the one-off capital injection will have moved the company into a position to be able to self fund growth pursuing the four growth strategies areas outlined in the previous sections.
we have graphed consolidated debt at year end, page 41, we have separately shown the maximum credit facility required during each financial year page 42.
The current credit line facility we have in New Zealand is an expensive finance option for the company. we would be seeking to move that credit facility to the uS, at a much lower interest rate level.
Full current financials and projected spreadsheets are available on request.
Market Development
Product Development
Market Penetration
Diversification
growth strategyalloCatIon of funds 2010-2011 us$m
40
what Is Blueseventy’s Brand leadershIp domaIn?
The leadership domain globally is in the swim leg of triathlon. As well as in open water goggles. we are slowly establishing our leadership in the swim market for high performance innovative products.
blueseventy inspires and appeals to the swimmer themselves through the products, it’s imagery and action, to show the beauty of what we are doing, and the reason for why we swim. It celebrates what they want to do…it is a true and honest athlete driven brand.
what Is the Brand’s Core-ConneCtIng message?
we were there; real, alive and honest. while our imagery is always beautiful, it is used as if we are there, live from the event. It’s not posed.
blueseventy can help you swim faster. It doesn’t matter who you are or what you’re doing, or where you are doing it, we can help you swim faster.
what maKes Blueseventy tICK?
steve:
tIm:
tIm:
steve:
“brand Consultant Geoff Matthews, who spearheaded blueseventy’s entrance into
swimming, interviews the former and current CEO’s respectively, Steve Nicholls and
Tim Moxey.
It is an open and honest discussion and it gives the reader a real insight into what
makes blueseventy tick, and even the dynamic tensions that exist between passionate
people with strong opinions who have all worked together for blueseventy over a long
period of time.
brand Chartering (Chris Macrae, 1994) was used as a framework to this discussion.
The beating heart of blueseventy is in open water
41
what would people mIss If the Brand dId not eXIst?
There is a lot of hype in sports marketing, blueseventy reminds us we all train, we all get tired, we all get scared; people would miss the honest perspective. we are there with athletes running out the water, it gives a real humility around what we do. It is aspirational, because it’s real and people can believe it.
we have driven competition within products and innovation for both the triathlon and swim markets. without blueseventy leading product innovation there wouldn’t be the same drive from the market in terms of performance. The industry’s performance and products wouldn’t be as advanced. Swimskins as a category would never have gotten off the ground either.
steve:
tIm:
what Inventory of Consumer Codes Is Invested In the Brand?
The logo, the blue and orange colors and the imagery, as well as the visual representation of the suit from afar; the suit’s cut and design.
I agree, you can tell an athlete in a blueseventy suit, even without the logo. The suits design is distinctive to blueseventy.
the design is flattering to the athlete, not just the 6ft 2” athletes; the suits are flattering no matter the athlete.
we develop products that are for the athlete and the suits are designed to flatter. This is what makes blueseventy suits distinctive from a line up of suits, even without the logo. however the logo, the blue and orange colors and the swirl shape are all distinctive and highly associated with the brand. The pattern on the side of the swimskin has brand equity growing with it.
we have great color recognition from afar, just with the flash of the blue and orange, and it is a really big deal to have ownership over these colors. Orca, have a very clear code and well done to them. The colors used to always be blue and orange and that is what they should be.
tIm:
steve:
geoff: tIm:
tIm:
The suit’s are f lattering no matter the athlete
42
how Is eaCh Code aCtually BeIng leveraged?
On a universal level I think we have been very good at leveraging our codes. Accessories reinforce our color schemes, and we have a very recognizable suite of products. we should be leveraging distinct suit design and cuts into other swim products; such as our togs and goggles.
I think the carbon fibre goggles are blueseventy in their look. For example I look at them and think they would be fast in the water and they look beautiful. Those two features are the commonality of blueseventy design for me.
wherever possible we are trying to maintain the orange and blue and the logo in the product. The apparel and wetsuit design is creating consistencies within the brand. The 2012 range will be much more distinctive to blueseventy. we are cross-referencing technologies and designs in our products to filter through into other arenas.
whICh Codes unIQuely remInd people of the Brand?
Pattern system for suits, going from helix through to swimskins with the blue color builds consistency. Seeing the blue through the water means that’s blueseventy.
As well as the blue and orange colors and the logo, the imagery of blueseventy remind people of the brand. For example, TYR is elitist and posed. Compared to them, our imagery is extremist, in every arena. blueseventy images are distinctive, and have been consistent over a very long period of time. they are driven to be emotive and capture the moment for the person, our imagery allows you to associate more strongly with the brand.
when it comes to imagery I believe you have captured a very unique space. Tim’s photography should be credited here, as there was a time when he would have been in the top three triathlon photographers in the world and his style really set the template for blueseventy. It is also why it will be so hard for people to copy.
steve:
tIm:
geoff:
tIm:
steve:
geoff:
43
what do we need to “do now” to Keep Brand newsworthy and fIt for CompetIng In future BusIness envIronments and what sorts of produCts/servICes wIll the Brand Be In fIve years tIme? In three years tIme? neXt year?
Continue to be there fitting suits on beaches.
Continue to strengthen our communication pathway from product development through the sales team to the end consumer. Part of the brand is developing product that is functionally better or different from everyone else’s; it comes down to having a different feel or a different result, our consumers need to clearly understand this is what our brand stands for.
we need to become a one-stop shop for swimwear, expand our race suits line to appeal to the mass market as well as the elite end and still be the best for that market. we are going to release our initial offerings of tri apparel as well as pre and post apparel late this year. we could offer services including event safety protocols. Event and coaching knowledge is something I would love to look at to reinforce brand positioning.
we need to own open water. open water is starting to take off and I believe it will mirror how triathlon grew; we need to position the brand to be taking advantage of this. It might mean an information service or a coaching service, and the relation back to the product through that message. It might mean starting up an open water governing body.
I think blueseventy could go out now and own open water around the world without it costing a lot of money. If open water is to grow, a leadership position with somebody like blueseventy, is essential. It may be that blueseventy develops a health and safety event guide, and if events are run under that guide you are able to do blanket sponsorship insurance for them, or prop up the world governing body.
what CarrIes over from yesterday’s relatIonshIps wIth Consumers, whICh eXplaIns why we are who we are and what effeCt does past Culture have on the future?
The relationship with the customer, that we have built up from being at the start line, with customers, fitting them into suits, and also the imagery. The change from Ironman wetsuits to blueseventy in 2006 happened so fast that there was almost no ripple effect, and only a positive effect. The brand has grown so much from then. Ironman wetsuits was just a constraint on who we were; in fact we were mislabelled before. Ironically we were blueseventy before we renamed ourselves, even though we anchored ourselves around the Ironman name, a lot of people didn’t buy our suits because they were Ironman and they didn’t see us as Ironman.
Our focus has always been being at events and talking to consumers directly, rather than relying on third party or abstract communication. There is a strong perception of us relating to the consumer. That naturally follows through with our imagery and brand perception and strap lines. we understand what it is like to be a triathlete or a swimmer and that is what our products are about, helping you be a better triathlete or swimmer.
Our culture is looking anywhere for innovation and being able to relate to the customer.
Yes, it is about being at events and being on the beach. A lot of big brands don’t do that and consequently they don’t build those relationships. You used the same strategy for swim and open water. For a person who has gotten involved with blueseventy what I did in swimming was to exactly follow your footsteps and go to all the races. I didn’t know how to fit an athlete so I said to send me some people who are world champs and know how to fit these suits and it worked really well.
blueseventy built up from nothing and in six months were the dominant suit at the world champs because they went to those events. None of the big brands were even on the beach. They would send one of their heads of departments, I think Speedo sent the head of finance to drink gin and tonics in the VIP tent while blueseventy dominated the world open water swim champs by being with the athletes.
steve:
tIm:
geoff:
tIm: steve:
geoff:
44
as new medIa prolIferate, how do we ensure ConsIstently effICIent IntegratIon of ContrIButIons from all our CreatIve agenCIes?
The flat structure of the company hasn’t necessitated the need for the master briefing. As the company grows this will need to be addressed.
we have a brand map, that forms the basis of the master briefing and it will need to evolve as the company grows.
what dIstInCtIve joBs are dIfferent types of medIa doIng for the Brand?
basically, you have triathlon nailed at this time, as you are coming into swimming how are you going to ensure that your brand extends over into these areas?
by appointing a full time person to handle media, and appointing a head of marketing to handle brand communications.
It is a hole that blueseventy has, and have actually done terribly well to fill it until now, but as you expand you have to take on new staff and head of marketing is an area of need. while the brand is global and 70% of the earth is covered in water, 71% of your market comes from the uSA; the head of marketing needs to understand the uSA marketplace and have a global perspective. blueseventy need to bring in people smarter than they are for the areas they do not have the skills and experience in.
I completely agree. unless you are trying to export the Kiwi lifestyle, such as Icebreaker have done, you can’t have people from New Zealand trying to understand the uSA market. The epicentre of blueseventy needs to be in the uSA to facilitate the brand’s expansion.
Attending events and talking to the consumer is in reality owning your own media channel. by directly coming in contact with the consumer you lessen the reliance on going through third parties. Do you have a media strategy across the business?
It is something we have identified and need. we are laying out a strategy of how we are going to hit more coaches next year and local clubs and teams.
Social media is an important channel for us; we have a facebook page, a twitter page and a blog. It is our global contribution, so that we are globally inclusive. The integration of these media resources to this global strategy is something that we are really looking to focus on. It means that the end consumer can relate to our staff and to our athletes, but on a global perspective, rather than having to be at the event. we have a hands on approach at events and coaching and we will apply that on a global scale through the new media pathways that are available. Our media strategy is constantly being refined as it envolves.
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Can you truly say that your Brands motIvate employees to wIn for Consumers?
To me this is more about fitting suits on beaches than it is financial bonus structures. It is getting the feedback directly from the consumers to the employees. Do you motivate your employees to fit competitors with the right suit and make sure they fit correctly?
You have to trust your staff and believe in the job they do. historically we have motivated employees to fit the right suits for the right people.
Top down management of the company is about going to the dealers, going to the events, and ensuring that the culture is brought through. we are really passionate about getting the fit of these suits right. we need to be going to more races and sending employees from all levels of the company. we are going to encourage feedback in the design process from a broader range of people now we have broadened our markets so that we are continuously asking the right questions, asking what people think of the suits, and listening. There is no point standing alongside them, fitting suits on them, if we don’t listen.
There needs to be a feedback mechanism. There needs to be someone employed to continually monitor this and encourage feedback. Modern companies utilize social media. The ability of social media is not to push out; it is about the ability to receive messages undiluted directly from the consumer.
The head of sales in a company is in the best position to be doing this, if they say that a certain feature is not working, you trust your head of sales.
You need balance between quality and value. Your brand is about speed, it is about quality and improvement, you have designed the fastest suits in the marketplace, and this motivates employees as you are delivering the best product into the marketplace. To be honest, blueseventy‘s brand struggles when you try to get low priced suits into the marketplace, as a value proposition it doesn’t fit well with your employees.
we are adjusting to making lower-end suits. It is a fine line in finding an entry-level product that helps them go faster but still delivers a product of value in our eyes.
There are plenty of examples of brands that have flagship models that showcase innovation and these features will trickle down to lesser models over time. blueseventy needs to understand how innovations today can trickle down over time to cheaper models, without diluting your brand.
It is totally associating the aspirational aspect of the brand with function.
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we are growing into it. we are trying and getting this more and more as we grow.
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are eXperts sharIng theIr top lIne Know-how on proCess opportunItIes and rIsKs?
This is about the sharing of sales knowledge and brand knowledge. For a small company you have a lot of knowledge that has built up.
This brings us back to the very start of the discussion, how our brand should be positioned, it should be about being alongside the athletes, celebrating what we do and being what we say we are.
I see that there is a geographical spread problem and fundamentally there is a problem with the current organizational structure, but what we can show is how the use of capital can be used to create a better organizational chart. There is a solution to this problem. You need to succession plan now for a different structure, that will move the company forward. I know it’s a cliché but at the moment the CEO is working in the business, not on the business.
blueseventy is a small company, with a lot of knowledge built up in top line staff, but moving forward we need to ensure as we grow this is shared throughout the organization.
we are still small enough for experts to be involved right through the chain of the company.
who wIll Be our CompetItors and who our partners?
Nike could be a partner, with an alliance with running shoes for the triathlon market; they could also be a competitor. TYR, Speedo, Arena would be competitors.
what about Maru, or Dolfin as a partner? would they add much to the brand or perhaps a compression company?
I am not sure they would add much to the brand. we need to buy design, as well as pattern makers but have them focus on new lines or design patterns intuitive to blueseventy. Current manufacturers would be partners and thewaterisopen.com would be a partner, as well as FINA, you have to have governing bodies as partners as would swimwear chains and distribution places.
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what are our Core CompetenCIes?
Legitimate, very honest, as a company the employees get what we are trying to do, it is in our blood. we are very good at reacting to situations and dealing with what is put in front of us. The changes in swimskins will show you that, we can morph very quickly.
Relating the product to the consumer expectations, meeting the brand with that expectation, and delivery of value. Relating to the athletes, great wetsuits, logistics, infrastructure for delivery of products, and production of product. we are a strong brand with relatively consistent brand presentation.
To further build our core competencies we need to build on the ground sales knowledge for swimming, and within new sales channels in the uSA, as well as general sales experience. we need a resource for making high-level partnerships and a marketing person in the office to drive this part of the business.
Do your core competencies and brand architecture match: a) now, b) for the leadership roles you foresee as yours in 5 years time?
You have got to move brands slowly and we are used to moving at the speed of lightening. There is a real gap there and I think this opens a real opportunity. we do need to balance being opportunistic and being prepared.
we also need to network and communicate across the levels a lot more so information is distributed throughout the company easily
Yes, you need to match this functionally through the organizational chart and additional human resources. It may be through acquisition like bolting on a business like Maru, or moving into compression.
what are the CrItICal suCCess faCtors to sustaIned value addIng In our sphere of BusIness?
Never losing touch with our core consumer and always creating products for them, rather than us. we need to be looking at what they need.
Yes, relevance for the consumer is of critical success to sustaining our value.
I would also say, leading edge design and development, independent of the big swim brands. head office in the uSA again and a high level marketing person based in the uSA but able to market blueseventy on a global scale. blueseventy has taken a very global and international perspective, you shouldn’t change that, but the biggest market is uSA and it needs special care.
are our Company’s people learnIng to Improve ourselves on these faCtors at the same tIme as they do theIr day-to-day joBs?
Yes, we are moving that way, there are people learning how to improve on factors throughout the chain.
Yes, but there is always room to improvement. we need to continue to empower our staff.
It is all about leadership from the top, encouraging creativity and innovation by getting people to give their best.
I completely agree there are things we need to be doing. You learn from doing. For example, in going out and talking to buyers you learn much about where you are heading from what they do and say. we have to take these elements into consideration to empower staff and ensure relevance to the consumer.
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are departments/eXperts organIZed In a proCess, whICh Is seamless from the Customer’s vIewpoInt?
From a customer perspective, yes, we are, the only thing is we need to up our presence at races. Again this requires human resource, with a head of marketing and events, and a regional marketing and events support person for North California and South California, Austin and Dallas. we need one person to coordinate this, as we are not in the field enough.
From a customer perspective the entire company is pretty accessible. Although, geographic isolation separates the offices, a year ago this would have been one of our biggest problems. while we were previously fragmented in views and perspective through this geographical isolation, with more travel and communication between the offices, more input into other people’s processes and a structured management chain we have achieved a more cohesive result, and a better communication pathway.
One of the major restrictions is the current organizational structure, with one person doing multiple jobs in the company, and also the location of the head office or the CEO in Napier, and lack of capital. Steve needs to be free to do what he is good at, which is the design.
blueseventy has gotten too big for the CEO to be doing a job in the company; instead the CEO needs to be focused on running all the management, and the people. Steve is one of the best designers in the world, he needs to be concentrating on that.
we have a product- led culture at the moment, instead we need to move towards having a sales-driven culture.
I think you need to be brand-led.
Yes Geoff, we need to be a brand-led company that relies on performance to be one of the key-leading attributes.
Is acquisition a faster way to grow?
The tri clothing we can handle internally, the swimwear is important, this is the area for acquisition. Compression is also an opportunity. It will be a big opportunity; to align with or acquire a compression arm would be advantageous. In the long-term, coaching, we need to leverage the brand as a knowledge base, for a learn how to swim, open water swimming is really starting to boom now, and coaching with our knowledge base is one of the best ways to go.
do we set the rIght performanCe goals for BrandIng to Keep Control of the added value ChaIn?
blueseventy is an added value business, you take rubber and add value to it all the way through to the consumer. It is from when you take raw material to when you fit a suit to the consumer before a race, that whole chain is the added value chain. how can you take your perception of the brand all the way through to the consumer, do you have the right performance goals; to keep control of the value added chain?
Yes we do.
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Never losing touch with the core consumer and creating products for them
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how do you maKe the Brand’s purpose so motIvatIng and well understood that everyone In the BusIness team urgently senses what to “do now”?
Educating the sales team about the brand vision and mission statement - the world is swimming faster in blueseventy - and focusing the entire team to this.
Firstly through micro-elements of the brand and then at the macro-elements. what we are trying to do with our range, which consumers we are trying to reach and how we see ourselves in tri, in open water and in swim.
If your Corporate amBItIon Is to lead the value added of a sphere of BusIness, why should e.g. Customers trust you to delIver more value added to theIr lIves than any other relatIonshIp they Could Choose?
The purpose behind blueseventy is the way in which the brand relates to the consumer. Our relationship is different, it is more intimate, and is why social media is so important to the brand; it is a touch point to the consumer at a very intimate level. In a lot of ways it is because we might have been athletes ourselves in some way previously. Customers trust us because we genuinely care about them. Some of the other brands have lost this touch point with the consumers because of their size. One of our biggest challenges as we grow is to remain loyal to the consumers.
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Our customer is not a retail store; our customer
is the person who buys our product
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www.blueseventy.com
the world Is swImmIng faster In Blueseventy.
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