Editor’s note: Today, Jeff Brunelle shares some very interesting news with the worldwide lacrosse community. Adrenaline, an LAS Partner, recently pivoted away from lacrosse retail through the sale of its entire retail division to Lacrosse Unlimited. Brunelle gives you an inside look at how the deal went down. We hope you enjoy![mks_separator style=”solid” height=”4″]
In what may be the most significant inner-industry transaction of our time, Lacrosse Unlimited finalized its acquisition of Adrenaline’s retail division, commonly known as South Swell Sports, at the end of September for an undisclosed sum.
“Where do we want to be when we grow up?” is the pivotal question Adrenaline Lacrosse CEO Alex Cade and his partners asked themselves nearly a year and a half ago during an ownership meeting. The company was at its crux. For over a decade, Cade and his team had melded a trifecta of business entities – lacrosse apparel, lacrosse retail, and lacrosse events – with success unmatched in the microcosm of lacrosse.
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Yet, in business, its not unusual for more focus to lead to more success, and the Adrenaline ownership group knew that. They recognized that, in order to achieve its goals, the company needed to focus on what its people were most passionate about. While retail had always been an core component of Adrenaline’s operations, the bulk of the leadership’s enthusiasm had transcended toward other channels.
“Retail is something we lost our passion for over time. I’ve always been of the school of thought that if you’re not passionate about what you’re doing, you’re not going to be good at it. You’re just signing yourself up for long term stagnance,” Cade explained to me on a phone call last Friday.
By February of 2014, Cade had found a buyer in Lacrosse Unlimited (LU), the largest lacrosse-only equipment retailer in the United States. In essence, the two companies had been competitors in the retail segment for years, but Cade knew what expansion West could mean for LU and he quickly gained CEO Joe DeSimone’s interest.
“We’d always admired Adrenaline for their marketing prowess and the way they’ve helped grow the sport in California,” explained DeSimone on a recent phone conversation. “You can tell how passionate they are about what they do, and that’s an area where we can really relate. My partner Mike [DeSimone, unrelated] led the deal from our end, and we are very, very happy with it.”
Founded in 2001 by Cade and Steve Sepeta, both graduates of the University of Notre Dame (’98 and ’99, respectively), Adrenaline Lacrosse diversified its revenue channels slowly over its first few years in existence. Leveraging a significant first-mover advantage on the West Coast, the company opened eight “South Swell Sports” retail stores — six in California and two in Texas — and positioned Adrenaline as arguably the most popular lacrosse apparel brand in the world, all while establishing a highly regarded lacrosse tournament circuit and network of boys club lacrosse teams throughout the United States.
According to Sepeta, president of Adrenaline, “the past 13 years have been a pretty amazing ride. Our growth has been rapid, but it’s been authentic and organic, the only way we have known. I look forward to what the next 13 years will bring. It’s a special thing to be able to get out of bed every day, do something that you love and work with a bunch of really great people.”
The sell of its retail division, which includes the South Swell Sports ecommerce website and team sales division in addition to the eight brick-and-mortar store locations, better positions Adrenaline for long-term growth surrounding its events and apparel. It also significantly downsizes the company’s overhead and payroll expenditures, cutting Adrenaline’s total number of employees in half.
Entering negotiations with LU, Cade and Sepeta were adamant about job security for Adrenaline’s retail staff. LU was open to the prospect, which could help to create a seamless transition West, and added interviews with Adrenaline employees into the due diligence process. The result is that nearly 35 people, all of whom are hardcore lacrosse enthusiasts, will retain their jobs and now be employed by LU. Most notable are the transitions of Rob Warner, team sales director, and Ryan Muise, a graphic artist specializing in team wear, who will bring additional firepower to Lacrosse Unlimited’s team sales initiatives.
According to Rob Rimmer, creative director at LU, permanent signage will be added at each store location in the coming weeks. The month of September has been all about allocating product to the new stores and integrating the team sales divisions in preparation.
As part of the deal, Lacrosse Unlimited and Adrenaline also came to a substantial distribution agreement. Assuming both entities hold up to their ends of the bargain, one can expect Adrenaline apparel to be showcased front-and-center at all LU retail locations for years to come.
“LU taking over their retail business empowers both of us to focus on what we do best, while opening up the door to much greater brand awareness for both parties. We’re a specialty sporting goods retailer with 52 stores now. For us, it will continue to be all about customer service and spreading our ‘always custom’ philosophy,” explained LU’s Joe DeSimone.
The Adrenaline organization is now positioned to fine-tune its focus and boost the effectiveness of its relationships outside of the retail sector. The company will be able to dive further into its development of performance apparel and wholesaling, while managing and growing its events business. On the events side, Cade and his team aim to explore more ways in which Adrenaline can have a positive impact on the ground for club operators in markets nationwide.
“Lacrosse is a land of collaboration and cooperation, not polarization. Ten years from now, we want Adrenaline to be way more impactful than it is today,” explained Cade. “As the lacrosse community continues to grow in number of players and fans, we believe Adrenaline can be the driving force for a consistent 6-degrees of separation in our sport.”