Hyperbole? Perhaps. But that hat is everywhere these days: spotted on singer Sarah McLachlan at the Junos, on director James Cameron at the Oscars, on ice rinks and ski hills across the country. And if the hat is a symbol of Canada, it is also the best symbol of an unusual and aggressive marketing strategy that has helped make Roots an unparalleled Canadian retail success story. The company is owned by Budman and his partner, Don Green, and they carefully guard their financial data. But Green says sales "were well over $100 million" last year, and massive expansion is planned for the months ahead.
The strategy boils down to this: get famous people to wear Roots clothes. Famous people have obliged, up to now, and the sales figures speak to the plan's success. But in mass-marketing Olympic gear, Roots may have gone too far. Athletes have told Maclean's that because anyone can buy their uniform it cheapens their Olympic experience. And some retail analysts ask how long it will be before cynical consumers tire of seeing Hollywood stars shilling their favorite comfort clothes.
The Roots story has taken on the dimensions of a national myth. Two young hippies from Detroit, enthralled with Canada after summers at camp in Algonquin Park, open a shoe store in Toronto in 1973, selling something called the "negative heel shoe," with a heel lower than its toe. Within weeks, the shoe is a raging trend and the entrepreneurs expand: new stores, more products. In the early 1980s, they catch the birth of the fleece sweatshirt craze and soon the Roots beaver logo is a must-have across the country. Budman and Green keep production in Canada, and talk a lot about the company's "values" of quality and teamwork, and their love of the great outdoors. In recent years, Roots has branched out from the leather goods and athletic gear for which it has become best known, adding everything from sofas and scents to eyeglasses.
And while Olympic fever has boosted sales beyond anything Budman and Green say they ever imagined, Roots was doing just fine before. Apart from several rocky quarters during the recession of the early 1990s, Roots has grown steadily. There are more than 100 stores across Canada, in the United States and Asia. And 25 more are slated to open this year in places like Europe and New York City's Soho.
Cozying up to celebrity has helped. Bruce Philp once did Roots' advertising. Setting out to revamp the brand two years ago, Philp found consumers associated it with quality goods and "summer camp" - and also that Roots clothes were a "great leveller," worn on weekends by everyone "from bank presidents to electricians." Philp's firm created a campaign featuring celebrities, such as actor Jason Priestley and singer Robbie Robertson, photographed looking like regular folks in their Roots sweats. The ads worked, and Philp says Roots credited them with its "best-ever Christmas season" in 1996. Even so, his firm parted company with Roots shortly thereafter. But the celebrity ads continued. "When we looked at those ads," recalls Philp, "we saw 'Eliminates barriers.' When Michael and Don saw those ads, they said, 'Hey, famous people look great in our clothes.' They have a longtime, deep-rooted fascination with the famous. And their subsequent campaigns have all been about the validation they get when they see their clothes on famous people."
In fact, Roots has been an inside secret in Hollywood ever since Budman and Green made friends with the Second City comedy troupe 25 years ago, and followed pals John Candy and Dan Aykroyd to Hollywood, bringing armloads of clothes on visits. Green and Budman downplay the celebrity tie-in, saying they just know a few famous people who happen to love their clothes. Industry analysts demur. "They are consummate image marketers," says retail marketing consultant Len Kubas. "People like to identify with success, especially young people who are into who's wearing what." Good products, and the appeal to "latent Canadian nationalism," he says, have reinforced that success.
And unlike companies like Nike Inc., Roots has for the most part managed to put its products on celebrities without shelling out huge endorsement fees. "We don't pay people to wear our clothes," insists Budman. "When it's appropriate, we give clothes to people we believe represent the company well." In fact, skater Elvis Stojko and snowboarder Ross Rebagliati are paid for endorsements. But industry insiders agree that most others, including actor Matt Damon (whose Roots-clad image now graces bus shelters across the country) do the ads because they genuinely like the Roots owners - and the free clothes. Both U.S. President Bill Clinton and Prime Minister Jean Chrétien have been spotted in the leather jackets they and other Asia-Pacific leaders received from Roots at a summit in Vancouver last November.
Roots' Olympic sponsorship, negotiated in 1997, was a pricey promotional gamble nonetheless. Under the one-time deal, Roots provided the Canadian Olympic Association with five free sets of clothes for each of 400 athletes and support staff - worth, Budman estimates, "between a half million and a million dollars." In exchange for the right to market some of those same clothes, emblazoned with the Olympic logo, Roots also agreed to give the COA an undisclosed royalty from each sale.
But ambiguities in the contract have left Roots and some of the athletes it clothed at odds. COA executive director of marketing Paul Shugart says its deal with Roots did not spell out what would be sold to the public, except that the parade jacket worn during opening and closing ceremonies would not be. But several other COA members told Maclean's privately that Roots initially was to market only a red-and-black version of the Olympic jacket, with the distinctive red-and-white parade coat reserved for Olympians. Yet that jacket is now being sold in stores across the country for $598. Budman insists that Roots has kept to its contract, and was permitted to sell the replica jackets.
Those sales still irk many athletes, triple gold-medallist rower Marnie McBean, for one. Most Olympic athletes, she says, "don't win a medal, don't get sponsors. The only thing they have is the sense that they're part of something, wearing the Canadian uniform - when you devalue that, you take away the only thing they have." Said a skier who competed in Japan but did not want to be identified for fear of jeopardizing future personal sponsorships: "It upsets me. That clothing was supposed to be unique to Olympians." Adds a speed skater, who likewise would not be named: "It's disgusting. That's Olympic gear they're hawking."
But many COA members and athletes expect little protest from the organization. Budman estimates Roots has paid royalties of "well in excess of half a million" to the COA thus far. And Shugart acknowledges that the Roots deal is one of the most lucrative sponsorships the COA has ever had. Roots has now sold more than 150,000 of those hats at $39.95 each and, says Shugart, "the numbers keep going up and up. We have earned in a year [from Roots] in excess of what we would normally expect for four years."
Roots would plainly like to keep the affair alive. It has bid to supply Olympic clothes through to 2008. But Bruce Philp says Roots' aggressive Olympic marketing may backfire. "They should have let the athletes shine more," he argues, "should have kept the Roots name a little smaller." Most consumers, he says, are going to assume Roots pays for celebrity endorsements and respond with a degree of cynicism the company did not face when it was just a down-home maker of cottage clothes. But as the press clippings pile up and the phone rings off the hook in Michael Budman's office, such worries seem, well, rootless.
Maclean's April 13, 1998
Author STEPHANIE NOLEN