'This will be our biggest year of growth': Legends CEO Scott Hochstadt on building an athleticwear brand with the help of sports pros

0:03Hello, everyone, and welcome to the Modern Retail Podcast.

0:30But we'll get into all of that soon. Scott, how are you doing? Thanks for joining. I'm doing great. Thanks for having me. Absolutely. So first, tell me a little bit about yourself. How did you get into the athletic apparel space? I got involved in the athletic apparel space back when I was in fifth grade. My dad was with Champion for 17 years, basically my youth, middle school through high school. And even before that, he was running the Mid-Atlantic. He was a sales rep for the brand as they were getting started. And, you know, in the 80s, they were one of the early 90s, one of the hot streetwear kind of lifestyle brands.

1:09And my dad was, again, he wasn't an owner. He was just a rep. And he kind of brought me along in summers when I was off school or, you know, holiday breaks. We would just cruise around and go to sneaker stores in Georgetown, the D.C. area, all the way to Northern Virginia, Baltimore. It was really a DMV territory, and I just kind of learned the ropes through him. And I was a young, dyslexic, ADHD kid. So sports. Yeah, yeah. I was great. I was an athlete. My dad was an athlete, an All-American lacrosse player at Maryland, and he got this job, a sales job right out of college. And, you know, I was an artist.

1:58Art came natural to me and branding and design. And I was like submitting sneaker designs and apparel designs to Champion in the early days when I was a kid. And my dad would say they took my designs. Here's five bucks. And I would make money from designing. And I don't know if it ever made it to the headquarters, but I thought I was like a designer as a kid. And it gave me the confidence to continue to build brands, products, apparel all the way to now. You know, in I guess it was I don't even know. I don't want to date myself, but it was it was it was the 80s for sure. And and I was, you know, one of the top ranked lacrosse players in high school.

2:44And I went off to University of Maryland and got a graph design and art degree. And, you know, my dad went there. So that was cool. Ended up because I was a three time All-American lacrosse player. My teammate at the time started Under Armour out of our athletic department. So it was Kip Falks and Kevin Plank were athletes and they were like older, big brother types. And I just kind of saw what they did and I followed their lead. And they were selling T-shirts out of the trunk of their car, these Under Armour shirts. And we went cross country. Kip and I met in Vail, Colorado, and there was a big lacrosse event, and that's where Under Armour was really seen in that sports world outside of football, which Kevin Plank ran.

3:36And yeah, so I was a freshman. I was getting my art degree. And being an athlete, I really focused on sports and art. And my senior project was a brand called Adrenaline, which was a big lacrosse kind of lifestyle brand. So I graduated school. I got drafted to play in professional lacrosse and I drove cross country and brought the sport of lacrosse out west at the kind of competitive elite club event level. There was little pockets, you know, getting started out west, but I was literally on the road from, you know, San Diego up to Seattle growing the sport. And I had a couple shoe and equipment brands paying me to kind of fly around and travel.

4:24I had$400 to my name. Long story there, but I ended up, you know, kind of building the sport and training kids. And then next thing you know, we're selling our brand into Dick's Sporting Goods. And we had 11 retail stores. And we were growing the sport. So sold my equity in that business. Had a couple partners that still run the company, and it's a great company in the sport. And I started Legends. So I could give you a little more background on that. It's a whole other story, but that's my background leading up to this point. Wow. So from being the child of a champion sales rep to bringing La Crosse West Coast and then selling that and being like, now we're going to get into similar but different areas.

5:11So what was the idea behind Legends? How did that start? Did you know that you wanted to stay in apparel and just branch out beyond one specific area? Yeah, that's a good question. So I always knew that I wanted to do something bigger. You know, lacrosse was my kind of, you know, lane into getting into sports apparel and doing something I know best. But over those years, it was about 13 years, I built a network of being in LA, I, you know, a network of athletes, you know, we got, I was working in entertainment. And as I was in lacrosse, I was still – I was dabbling into like directing scenes, sports scenes for movies and commercials.

5:54So I was getting to know the entertainment world, actors, artists. And I would live in – I was involved in a reality TV – one of the first reality TV shows the girl I was dating was on The Hills. So I was – it was an MTV show. I don't know if you remember that. So you're an early The Hills star? I was actually, I held out as long as I could until the last season. And I'm like, I got to use this as a platform to get, you know, my name out there, the brand out there, which was, which was adrenaline at the time and help bring lacrosse to the mainstream. So I, I, I saw what was happening and I saw how I could make an impact in, in the sports world and not just in lacrosse.

6:36So yeah. So early, early, uh, reality show days. Did that, did that work? Did it have the impact you wanted? It did. It was, it was like brought press and eyeballs to the sport. Cause I, we would, I was dating a girl and then I would bring him on a double, you know, one of my partners on a double date with her friend. And then next thing you know, lacrosse is in like people's magazine. Right. And we were like, we were, we were getting mainstream press for a game that was really an East coast sport. And I wanted to bring it to the, to the masses. So I think, I think it worked and it was, it was a great learning experience.

7:10We, you know, I broke up with the girl and I'm married now to someone else. But it was, it was, we had some, I saw a lot, like, you know, the whole Hollywood life was, it was, it was cool. And I saw, I saw how fake a lot of it was like product placement, right. And how like they would get paid the real, the real stars, not me would get paid to like hold a toothpaste bottle, walking out of a CVS and getting paparazzi to crest paying them 10 grand to walk out of a, you know, a store with products. So I'm like, okay, I think I can figure that out. I'm pretty creative. So I learned that. And I also, you know, there was a couple guys I was working with, some of the bigger brands.

7:55I had a non-compete in apparel for a few years and events, which I ran a lot of activations. So I worked with a couple of the bigger sneaker brands to work with their athletes and help tell their stories and do creative for them. And then I said, you know what, it's time to really go big. We have, I have the network. Um, lacrosse was, was great for me because there was a lot of, um, executives was at the agencies that had kids playing lacrosse, like CAA Wasserman. Um, the guy who's head of Fox at the time, Fox, uh, Fox films, you know, I just, they, they gave me the confidence to say, Hey Scott, like, look what you did.

8:35You built this sport from scratch out West, what can you do with a brand with some people, like some real people behind you? And that's, that was, we, I have about 50 of those kinds of guys that really mentored me over the years. Some of them invested with the athletes when we first got Legends off the ground, which we could get into, but I'm very fortunate to, to kind of get my MBA on the fly and learn business being an artist and, you know, a brand builder. So what was the initial idea and value prop of Legends? So we, a partner of mine, Chad Faulkner, he had a, it was called Sports Academy, a big sports science center in Thousand Oaks, which Kobe came in as another partner and it was called the Mamba Sports Academy.

9:25You know, right when that moment hit, we said, all right we have the biggest athletes in the world training with us in this spot and i have the factories and i have the design capabilities to build products for these guys there's there's obviously the big the big guys like new nike and under armor and adidas out there but then there's these like micro brands popping up and then there's some established athleisure wear brands like lululemon you hear viore roan and i said well viore is more lifestyle yoga you know So Lulu is your wife's brand that, you know, makes men's products now. And they're like a yoga brand that's trying to get into these sports.

10:07And, you know, there was, I guess one of the, it was Rone that we saw. We're like, that just looks like they're trying to make a men's version of Lulu. So there's no real sport. There's no real sportswear brand like owned by athletes, developed by athletes with like the credibility there, the authenticity there. So it was really behind the scenes for a couple of years developing fabrics and fits and cuts for these guys and seeing what they liked about their streetwear brands and their athleisure brands and kind of blending the two. So we saw like Kith was a brand that we looked up to and we said, hey, they're really clean, elevated.

10:46You know, they have they even have legends doing, you know, content with them, you know, whether it was an athlete, an actor. and then we saw what, you know, what a viewer he was doing and how they were scaling out their business. I said, let's, um, let's kind of blend the two and, you know, Lulu's got really good quality products. Let's blend the two and see, see where it goes. And it connected immediately with these athletes. And they're like, I want to mess with something that I could actually be a part of that I could own. Um, and they, these guys started investing, you know, so we have To date, we have about 30 NFL, MLB, and NBA guys in the cap table, along with some podcast personalities.

11:33You know, there's some guys, you know, Big Cat from Barstool and Ryan Rosillo. They bring a different look, but we've really built a lifestyle on the ground. And we've, you know, you'll probably drill me with some questions about like the D to C side and the numbers. Like we really kept things tight and we protected the brand for a long time and we didn't really sell out with running too many ads. Like we were a D2C brand selling on Legends.com, but we didn't really push the limits on what we could do. Like this is the first year we're really kind of opening it up and using our athletes to shoot our advertising and create content that connects with a buyer, not just like someone who wants to like follow what we're doing from a lifestyle perspective.

12:20Got it. Got it. Correct me if I'm wrong, but I have a few names down. You have like Steve Nash as an investor. Yep. Baker Mayfield's an investor. Quavo's an investor? Quavo, yeah. That's awesome. I mean, Quavo was really like, I wanted to find a guy and Chip Neff, who from the Neff brand, he's one of our kind of early founding partners. You know, he said like, we built this Neff brand, but the cool factor always came from like an artist on the lifestyle side. The athlete was just like bringing credibility. So I led with Quavo. Steve Nash was just like an entrepreneur, business guy, creative legend in sports.

12:57But he's like, Scott, I'm not the guy that's going to be the face of this thing. You know, like I'm not cool like the younger NBA guy. So Baker Mayfield at the time was the number one draft pick in the NFL, won the Heisman. And Quavo was at the top of the rap game, you know, and still is a very relevant figure in hip hop. So Quavo and I got together and said, let's a way I've gotten in with these guys. Every one of these guys has a community initiative. and whether it's charity, give back, helping with kids. So Cuevo wanted to start his AU program in North Atlanta out of his high school where he went, Berkmar High School.

13:39So I said, listen, I had 350 youth lacrosse teams I was running. I know how to do this, and I know how to brand the kids and make them feel cool and create something different. So we built Team Honcho, which then led to, in basketball, which led to Team Honcho's seven-on-seven football. And we just started, you know, building a friendship, right? And once the friendship's there, then the business comes. So months later, we said, let's, you know, Kobe just launched the Mamba Sports Foundation at the time. This was July 2019. And we said, let's run, let's create a celebrity charity basketball game at Mamba, benefiting the Mamba Sports Foundation.

14:23So we brought Quavo and 2 Chainz in as the captains and they selected their teams. And one team had Snoop. The other team had Floyd Mayweather, Odell Beckham, Kylie Jenner. All these people just started coming to this thing. And we just filled these rosters. Even Jake and Logan Paul, like the, you know, I don't have to get into the personalities, the YouTubers, which they become entrepreneurs. But like we just blended, you know, mainstream sports, entertainment and influence in on one court. And this event really blew up and it got picked up by every every media outlet was there. We raised money for the foundation and everybody left with legends on their shirt.

15:12People got hoodies. It was going to be like a private underground thing, but 3 ,000 people ended up in the building. And the list goes on of who was there. And we just said, all right, I think we're on to something. And we doubled down on our next PO with our factory. And we said, let's go big. This is July. We're like, let's get ready for holiday. And that's when things took off. So we put us to us in a spot where we ended up. I think it was October of that year. A few months later, we went with the Lakers and the Nets over to China for the China games. And we produced all the the merch and the kind of gifts for the players over there.

15:57And again, those guys left, came back to the States wearing the stuff. So some of the biggest athletes, again, they saw where the brand was born. They saw the authenticity and they're like, I'd rather wear, I'm getting paid by some of the bigger brands, but I want to wear something that's really like athlete owned. So that's where we are. We're going to take a quick break and we'll be right back. So I wanted to ask you before, I want to get into all those DDC questions, but when you have so many celebrities, influencers, personalities on the cap table, how much, I feel like it's a very big trend right now that there are a lot of influencers and celebrities who are trying to get involved in businesses.

16:35Some are co-founders, some are investors. How involved are they with the business? And how are you able to manage it such that it's still your vision, but you still have these people repring it? What is the interplay with them? Yeah, I mean, we've created a platform throughout the year. We run events. We bring everybody together. So we just got back from Atlanta and Hunter Day, and we had a bunch of our investors there. We go to NBA Summer League in Vegas with the Wynn Hotel. And we kind of created like a, it's a network, it's a family. So it's really been family and network first, and then business second.

17:09And now this is the first year we're going to start activating them and using them in, instead of hiring a model to do a photo shoot, it's going to be one of our investors in a photo shoot. And they want to contribute. There's like a percentage of sales that will go back to their charities as part of their campaigns. And some guys will say, Hey, no, I want it to, I want to take that money and invest it in something else. But a lot of them are really part of that give back feel. And I spend day, you know, every day I'm talking to a different one of our athletes, they're pitching me an idea or a new fabric or a new event, or, you know, Hey, what do you think about getting into this business and investing in this with me?

17:49And I just, we look at it and we've, we've, it's been, it's been straight family first. And now, you know, we hope we know that there's an end game and we're going to build towards that, but it's a lot of the guys invested, they're making millions of dollars and they put enough money into, you know, this is like a fun thing for them. And we've, you know, it's taken a little bit of that pressure off, but there's always going to be, what is the return, you know, on that investment. And that's what I work towards every day. To make sure I understand. So you said you're going to be using the athletes this year For those first two years when you were fully in business, was it mostly just activation by activation?

18:26Yeah, it was brand moments. It was really like, let's focus on building the brand. Like if everybody's leaving with legends on, we're winning. Like we're building the communities. We built the grassroots. That's what's allowed us to do cool partnerships with the Vegas Summer League with Wynn Hotels because we have these athletes. And we kind of blend the lifestyle and entertainment together. And yeah, it hasn't been a real revenue play. It's been a brand play. Super Bowl parties, things like that. Has the business been growing as a result of that? Or like what are you measuring success-wise? Yeah, it's been authentic and organic growth.

19:04We saw a nice spike. In 2019, we did a few million dollars. And then in 2020, it went to$10 million. And we didn't really do anything different. So it was really authentic, organic growth. Yeah, so it was really what can we pull out of these activations from a brand building perspective? And now this year is when we're going to take those guys instead of having a highlight reel of them at an event or doing something cool or hanging with cool people. It's like, let's shoot them and get commercial use out of the content, you know, and advertising use out of the content. Why did you wait so long to use them for the content?

19:46Was it just so that you could establish the brand? Yeah, I wanted to establish the brand. I wanted to build the right relationships with guys. I wanted to have the right internal team that knew what they were doing from a scaling perspective. You could lose a lot of money on paid advertising, and you've got to have the right team in place to execute that. So we spent a couple years just building out the team, building out the products, and building out the brand. Now the team is in place, and this will be our biggest growth year. You said your second year was over 10 million. Did you grow the second year as well?

20:20Yeah, we grew. We definitely hit, you know, we grew, you know, I think we did like 16 million, you know, something like that. So it wasn't like, it was solid, but you're, you know, we were looking at some of these other brands that don't have a true identity and brand. It's very basic. And they're like, they're going from 20 million to 50 million to 50 million to 60 million, you know, 70 million. And we're like, well, why aren't we doing that? It's because we didn't really have – that wasn't our goal. But we're at a point where we've built the brand and we are in a business. It's not like all fun and games.

20:58So these guys are ready to kind of accelerate things and scale it out. And everybody wants to roll up their sleeves and get us there as a team. So you have been DTC only through your website up until now, right? Well, yeah. So we've been, I would say, 90 % D to C. We've had these opportunities to do activations with the Nets in the Barclays Center. We had a pop-up there. That was our first kind of off-site, offline activation. We have, you know, we're selling in the Wynn hotels. We're selling in SoFi. We're selling to, I think we have about 12 NBA teams and NFL teams. So they're brand of choice.

21:42You have to wear Nike on court. That's the sponsor of the league, whether it's NFL and NBA. I think MLB's fanatics, but these teams will buy from us for their travel gear, lifestyle gear, and then there's a few of them that are buying currently for their retail shops in Arena. Got it. What are you hoping in terms of expansion? Is this the right play? Are you going to be focusing on DTC? You have Champion in your blood, which is wholesale, so I imagine that's something. Yeah, there is some wholesale, low-hanging fruit in wholesale. You're absolutely right. And I think there's definitely, you know, D to C is where you can kind of control the most.

22:24You control the data, the margins, et cetera. But there's definitely going to be some plays. I mean, we would like to be, if we are going into retail in every arena in the U.S., like, let's make it the coolest collabs. We don't want to be the mass produced. it's more like these brand moments where this is for example in in la with the rams it was like this is a cool local brand that's owned by some of our athletes um you know and and it's kind of curated that way and and not the the rams and the seattle seahawks aren't going to have the same logo on the left chest it's going to be a different fabric a different print a different color etc so we want to stay yeah true to the brand that way makes sense is the product line changing now that it's focused on growth?

23:11Talk to me about that. Yeah, that's a good question. We've been, you know, for the first couple of years, it was definitely an elevated workout kind of lifestyle year with a real heavy street inspo and look and feel to it. We're seeing that there's a lot of, you know, I would call them uniform buyers that like our black Luca short and our black Enzo tee. And they're not really interested in a tie-dye cotton sweatshirt that the NBA guys are wearing. So there is this customer that likes the product and the quality. So we're going to be scaling out a lot of our inline kind of core products to hit that audience for scale, but also keeping our brand identity with our culture drops, which we call them, which is different collabs that we do with athletes, artists, teams, and things like that.

24:09But we have, there's a demand for our basics. So we're going to kind of, we're going to go deeper with that. But it's not going to distract who we are as a brand. Can you talk a little bit more about those drops? It sounds like it's with those activations that you were doing earlier, but is it that every time you have a new partnership or you have new something, you make a line of clothing and then you have a certain amount and then you, yeah. Yeah. Yeah. There's, there's limited drops. Um, you know, our culture drops, we usually don't go too deep in, we want to sell them out, um, because it's not for everybody, but like we just did a big charity hoodie for, um, the takeoff and the rocket foundation, which was Quavo's, uh, cousin that, that passed last year.

24:55So we did a, you know, So it was a very street heavy inspired, you know, product that sold, you know, sold out pretty quickly or, you know, it sold out in a week. And then we we ordered more to to kind of seed his family and friends that missed it. But we were you know, that's a piece that we we stand behind. And, you know, there's all the smoke, which is Matt Barnes, one of our investors. you know we did we did so the difference the last year at nba summer league we had a legends suite and we had all the smoke legends pieces that just went to athletes and vips that came through our our lounge at the win uh this year we'll be dropping an official collab on our site with them and you know it's it's a special dye on our on our cotton fabrics a green for their all the smoke green colorway and with, you know, just different tips and trims that, you know, that we don't use for other product, you know, in our in our inline products, core products.

25:55So, you know, we just, you know, using these guys, they're going to push it their way. But yeah, the drops will continue and the culture drops are like a big part of what we do. Let's talk a little bit about marketing. You've hinted at this a little bit, but you have not spent a lot, if any, it sounds like on any digital marketing for the first two years in business or first three years in business, and you're planning on doing that now. How much are you thinking about spending? It seems like you're a master of earned media, given who's backing you. So what are you planning on and how is it shifting?

26:28Yeah, we did test things out for a couple of years. We just didn't go all in on the spend because a couple of things, you know, the world changed a little bit with Facebook, you know, and Instagram, which you probably heard from a lot of your, uh, your guests. Um, so we didn't, we kind of pulled back on that and we said, why are we just going to burn money when we could, you know, just build this team and platform to, um, to use our, our, the influence of our, you know, cap table and our athletes. And now, you know, that's just going to be, you know, I guess fuel in the fire when we, when we start hitting, hitting our stride with some of these guys, the way they're marketing and using them, just throwing the ad spend on that will just help.

27:14Again, I have a new growth team. We have new marketing guys across the board. So they feel like they could take what we built and scale it out. Where am I going to see Legends now? Is it going to become a ubiquitous brand by Q4 of this year? What is your big vision in terms of this 2023 being the big push? I just think we're going to diversify. Like it's not just going to be sports and Quavo. It's going to be other influential people, actors. It could be like that, the cool micro-influencer gym guy that connects with our brand that is involved in the community and, you know, aligns with our core values.

27:57So I think more people are going to see it because we're just getting outside of just on-field team kind of sport, if that makes sense. So it'll be a digital push. We've, you know, we're just naturally, we're getting more press just with the people that we're, you know, collaborating with or doing, you know, more content with, you know, these guys, you know, they want to tell their stories. And when you tell great stories, it gets shared, you know, it could go viral, it could get shared amongst friends. And, you know, we're going to start scaling that out as well. Got it. Well, we're just about running out of time, but I want to just ask what your big, it sounds like your big goals are predominantly to grow the brand and make it beyond the event, not event-based, but activation-based brand that it's been thus far.