Serial entrepreneur Michael J. Restuccia sifted through thousands of acquisition targets before picking his latest venture. He wanted something profitable, cash flow positive and, most of all, easy to explain in an elevator pitch.
He found it in the form of VOmax, a Northampton-based maker of cycling apparel. When Restuccia bought the business for $3.25 million in 2006, the company had carved out a niche in the custom business, designing jerseys and shorts for cycling clubs and teams and their corporate sponsors. Now the company is leaping into the retail world on the back of licensing deals with Major League Baseball, the National Basketball Association and the National Hockey League.
The custom marketplace is price-driven with little loyalty, said Restuccia, VOmax’s president and CEO. To grow the company, he needed to find a way to gain repeat customers, which meant a retail model. But there were too many competitors to try to sell VOmax-branded apparel to the 4,500 bike shops around the country.
“I needed a differentiator,” he said. That turned out to be licensed products. His pitch to the leagues was simple, he said. He had a sales engine in place to go after the thousands of independent bike shops and a proven track record. The fact that the U.S. cycling market is estimated to be as high as 45 million riders didn’t hurt either.
“The reception was very, very positive at all three leagues. I signed the contracts within 30 days,” said Restuccia, who commutes between his Lincoln home and the company’s 10,500-square-foot leased facility in Northampton.
VOmax did a soft launch of the licensed apparel, consisting of jerseys, shorts and arm warmers, in July. Prices range from $35 to $100. It beefed up its Web site to allow online shopping and provided the line to about a dozen independent shops. VOmax will show off the licensed wares next month at the Interbike trade show in Las Vegas. Restuccia also has deals with Amazon and GSI Commerce Inc., the back-end sales engine for league sites and online sporting goods stores, which he hopes to start this fall. He still is pursuing a deal with the NFL. VOmax will continue its custom business with about 1,000 active customers.
Howard Smith, senior vice president of licensing for Major League Baseball in New York, said his organization is bombarded with pitches hawking the next great idea, but most have already been done. But in Restuccia the organization found a truly novel idea, he said.
“Everything we do is predicated on our fans and giving them ways to connect to baseball and their team in ways unique to them,” Smith said. “This was just another one of those ideas. Obviously biking has grown in popularity over the last several years. It sort of was a natural.”
Smith asked Restuccia to make a pair of Colorado Rockies jerseys for his sister-in-law and her husband to wear in a recent charity ride. The response was phenomenal, he said.
“It’s a small business, but everybody who has seen the product, touched the product, felt the product, loves the product,” Smith said.
The crisp, colorful garments are made using a dye sublimation process, enabling the apparel to be decorated without affecting wicking (which removes sweat away from a cyclist’s body) or compression (which boosts performance).
Cyclist Vince O’Connell launched VOmax in 1982, after his homemade Lycra shorts gained attention from fellow cyclists. While also O’Connell’s initials, the name came from VO2 max, the amount of oxygen an individual’s body consumes at peak athletic output.
“Vince perfected the art of dye sublimation,” Restuccia said. “Although it seems like a very simple process it’s very much an intersection of art and science.”
O’Connell brought the company to a little more than $1 million in revenue before selling in 2005. Businessman Ronald Koester owned it for a year before selling to Restuccia. Restuccia grew the company to $2.35 million in revenue in 2009. He projects $2.5 million in sales for this year with 50 percent growth for 2011, based on the new line. He expects to expand his staff from 21 to 30 employees this year.
“We were undercapitalized at the beginning,” said Restuccia, who is married with three sons. “I had to put a lot of my own money in. I literally put all my chips into the center of the table to make this acquisition happen.”
Restuccia turned to the Waltham-based Smaller Business Association of New England for help bringing in advisers and capital. Through the group’s CEO Dialog Program he met Jerry Socol, the former CEO of Filene’s who now runs the Boston-based consulting firm the Socol Group. He credits Socol and Dan Touhey, a former vice president of marketing for Spalding, with helping him devise his retail and licensing strategy.
“Michael is a hard-working, energetic, charismatic kind of a guy,” Socol said. He credits Restuccia’s enthusiasm and attitude for how quickly he was able to make deals. “I think he’s really onto something here. It’s a huge market.”
Originally from Reading, Restuccia graduated from Northeastern University in 1982 with a bachelor’s degree in engineering. He worked for 15 years in sales for high-tech firms. In the late 1990s he wanted to put his market analysis and sales skills to use for himself. He launched real estate ventures as well as a software startup. Some were successful, some were not, he said.
VOmax may have put an end to the 50-year-old’s startup yen as he sees numerous growth avenues for the company. As proof, he signed a deal with King Features to make both cycling gear and women’s fitness apparel featuring original artwork by pop artist Romero Britto.
“I’d love to see this company become a fashion apparel company, using and leveraging our expertise in dye sublimation,” he said.
Read more: The big leagues: Bike-apparel business eyes growth through license deals | Boston Business Journal
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