By Thomas J. Ryan
“The first priority for Varsity Brands, bar none, is the health and safety of our people,” Adam Blumenfeld, CEO, tells SGB Executive in the first of a series of interviews with industry executives exploring how businesses are coping with the coronavirus pandemic.
Blumenfeld has been CEO of Varsity Brands, the parent of Varsity Spirit, Herff Jones and BSN Sports, since April 2017. Previously, he served as CEO of the BSN Sports division for the prior ten years. Over that period, he led BSN Sports to its current position as the nation’s largest provider of team uniforms and sporting goods to schools, leagues and municipalities.
Here, Blumenfeld details how the COVID-19 has impacted Varsity Brands, the company’s recovery strategy and how calls for social distancing may be changing consumer behavior.
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How has the coronavirus impacted the Varsity Brands family? The first priority for Varsity Brands, bar none, is the health and safety of our people. This trumps all else. The vast majority of our focus has been making sure plants and offices, where our people reside, are safe and that our policies and procedures keep them that way. I’ve been inspired personally by seeing how 10,000 teammates across the country have come together, both at home and in places of work, to help each other, keep each other safe and continue to care for our customers as best as possible.
What’s your recovery strategy? Recovery planning at Varsity Brands comes in several phases. First, it’s about making prudent decisions to manage the business efficiently in the near term. We’ve done that. Second, it’s about transitioning to methods of work conducive to the current state of play. Thankfully, our investment in technology with our customers and employees has been a saving grace here. We are positioned to conduct communication and commerce in a way we couldn’t have imagined five years ago. And third, it’s about preparing for a crush of demand when the recovery begins. If demand returns and you can’t deliver then it’s all for not. So intensive supply chain preparation and redundant solutions really matter. Finally, having the bandwidth and capital to prepare for these eventualities is essential. It’s times like these when frankly I feel fortunate to have Bain Capital as our partner. Like everyone else, we will be playing necessary defense and managing operations carefully. Bain Capital, however, gives us the comfort and confidence to also be thinking “offense” related to how we best return to the market and not just survive but truly thrive — for the benefit of our employees and customers. We also get to tap their extensive strategic and commercial resources which are invaluable in times like these.
What were some of the easy decisions versus the harder ones that Varsity Brands has faced so far as its dealt with the pandemic? One of the great things about our business and people is that they literally started coming to us with solutions before we even issued guidelines. I’m working for free. So are many other top-level Varsity Brands executives across the country. It’s the right thing to do. And it’s voluntary. We’ve had many others do the same. More broadly we’ve enacted responsible spending measures across the platform and safety guidelines nationwide. I’m pleased that the federal government has provided a backstop, particularly for lower-wage earners. Our job is to effectively balance demand and productivity with staffing. So far, I’m very pleased to see how our teams are handling that challenge.
How has the pandemic impacted the supply chain? I don’t think there’s any question that this fall — if the world returns to relative normalcy — will be one of the toughest delivery seasons in history. Fortunately, a lot of our business is booked earlier in the cycle so we are grateful to have a solid demand pipeline and significant on-hand product right now — team uniforms and equipment. That said, there’s no avoiding the at-once rush. To mitigate this we have been in constant contact with our vendor partners and factories internationally. Unknown to some, we’ve also moved a meaningful percentage of our decorating needs to internal production in the last 12 months so we can control our own destiny better. This, combined with redundant sourcing and a still sizable external decoration network, should put us in the best position possible to address market demand and the needs of our customers.
What’s your message to employees? Two basic messages to our employees. The first is that their safety and security are the most important thing for us. Period. Full stop. We are doing literally everything we can for our employees and their families. The second is giving them comfort that they are part of an entity positioned to exit this crisis with health and strength. I cannot overstate enough the value of Bain Capital to us, and what the fortitude of a sponsor with $100 billion in managed capital means to a business like ours and our people. It’s not just a financial backstop, it’s a strategic partner to help position the company not just for the next 90 days but the next 5 to 10 years.
What’s your message to the schools you work with? Our message to the thousands of schools we serve is to hang in there, stay safe, and we are literally with you for anything you need. It doesn’t have to be products or services. It may be a shoulder to lean on. Or advice. Varsity Brands invests heavily in content and curriculum for teachers, administrators, athletic directors and coaches. In times like these, we are providing this curriculum around the country via webinar and other digital avenues to make sure school leadership has compelling ways to engage with their student communities.
Two unique sports-related aspects are the shutdown of spectator sports and organized sports. First, what do you think of the impact of the suspension of major sports leagues and the loss of March Madness, the Olympics and other sporting events? Varsity Brands, in particular, doesn’t see a direct impact or correlation with the shutdown of professional sports and professional spectator activities. On a personal level, I hate to see this occur. Whether we are former athletes or high school heroes, we all love to participate in sports through these incredible athletes that perform at the highest level. More than anything, I think the absence of an entire season of pro play will leave us all hungry and yearning for high-level competition in the months and years to come.
How about the suspension of Little League and other organized sports? The loss of organized sports really distresses me. Not just because kids are losing a chance to play their final game or final year in high school or college (and this is a really big deal), but because the benefits of team sports are being missed by millions of youth participants across the country. As we all know, team sports inherently teach integrity, heart, teamwork resourcefulness, and the value of doing the right thing. These are key tenants of our mission here at Varsity Brands but also vitally important lessons that team activities teach all of our kids. Being contained in our homes isolates us from the human connection we crave. Zoom technology and Webex cannot replace a pat on the back or high five. Hopefully this time away from team sports, like pro sports, will make us yearn for the day they return and galvanize a generation of kids addicted to their iPhones and video games to get out there and play.
Social distancing is changing shopping behavior with more people shopping online and using curbside pickup, etc. Do you see this changing how Varsity Brands operates or how the team sports side works? I completely agree that this pause in the nation’s normal economy will change the way we shop and behave forever. Digital communication and commerce have become ubiquitous with how we perform our lives now. Companies like Amazon and Netflix and Zoom don’t have to convince anyone of the importance of using their respective mediums or services anymore. It’s imperative. Team sports will be no different. Face-to-face relationships will remain the backbone of how team business is conducted, but the utilization of digital tools both in-person and remotely will become a necessity, not just a ‘nice to have.’ We’ve been investing at Varsity Brands and our BSN Sports, Varsity Spirit and Herff Jones divisions, in this kind of technology for years. Now, I think, the adoption of it will be put on hyper-drive.
Do you see some silver linings coming out of the current challenges? I do see some silver linings coming from this crisis although there are days when that’s harder to sense than others. Any time your organization goes through a genuine crisis, you can either fall apart or come together as one. One silver lining is that this pandemic has brought us even closer together within the Varsity Brands family. It’s personal for all of us. Another is the quick adoption of technology that I think will become the way of the future — by teammates and customers. The grit, will and sheer determination of our people have been on full display these last several weeks. These traits and attributes have existed all along. But now everyone’s peers can see it. I think it generates great hope when you see your brothers and sisters next to you rising to the challenge and serving others before serving themselves. It’s heartwarming. It goes beyond business. And it gives me a lot of hope for the future.
Photo courtesy Varsity Brands
