When the fresh yards of cotton are spread out in the Jiejiang apparel factory near Shanghai, the eyes of the cut-and-sew workers open wide with delight, and they smile at the blast of colors. It’s another “Woody” creation for Loudmouth Golf, a cacophony of blue and orange, or maybe yellow, green and white.
It is an amusing break for the stitchers, who are the first to see the fabric that will make the golf apparel designed by Scott “Woody” Woodworth, Loudmouth’s founder. While seamstresses in other parts of the textile factory have much less fun handling cheerless patterns of brown and olive, the Loudmouth Golf crew smiles and gets to work making the hypnotic golf pants.
“Woody’s colors make them very happy. Everybody wants to work on this,” says Sally Cheung, Loudmouth’s manager in China. “But they wonder, who wears these? No one in China wears these.”
But judging by how fast Loudmouth Golf is growing, it could happen soon. Loudmouth pants are turning heads on golf courses in Australia, Canada, Norway, the U.S., the United Kingdom, Japan, Sweden, South Korea, New Zealand and elsewhere. Latin America is a target for 2011.
Loudmouth did $64,000 in sales in 2006, but the revenue arc heads straight up to a projected $12.5 million in 2011. That’s a five-year sales increase of almost 19,000 percent. The company that started with Woody Woodworth working out of his garage in northern California has swelled to 32 employees and 35 independent sales people spread around the world, and it has distribution depots in four countries.
It just doesn’t have a headquarters building. Anywhere. Doesn’t need one.
Loudmouth exemplifies this millennium’s new industrial revolution — one that can create jobs and opportunity anywhere, because its talent and assets come from everywhere. Give a company like Loudmouth access to a marketplace, or to a more efficient link in its supply chain, and it will create economic opportunity there.
Loudmouth Golf is the very model of a 21st century global-yet-virtual enterprise.
Three years ago, Loudmouth’s fulfillment center was a storage shed in San Mateo, Calif., where it shipped orders that came in via the web. Today, with the company’s sales force putting Loudmouth in retail outlets on six continents, the company has depots in Australia, the United Kingdom, Canada, Japan, Chile, South Africa and the Foster City, Calif., main warehouse, which is nicknamed The Vault.
The company’s talent is also spread around the world. CEO Larry Jackson splits his time between Orlando and the San Francisco Bay area. Alan Wallace, the head of sales, lives in Weston, Fla. David Suzuki, an investor, and his wife, Kay, who runs The Vault in Foster City, live near San Francisco. Janelle Speight manages distribution in Australia from Turramurra, near Sydney. Fernand Tanedo, who directs supply chain management, lives in Pittsburg, Calif. David Halldorson, a liaison with golf pros, lives in Daly City, Calif. Tracy Sanderson, the general manager for Europe, lives in Fleet, Hampshire, U.K. Rob Marklin, who directs international operations, lives in Upper Saddle River, N.J. The operations in Canada, Great Britain and Australia are basically run out of the homes of Loudmouth staff, who have leased small warehouse spaces for inventory.
And Woody, the creator, still works out of his house in Sonoma.
Business cards for Loudmouth employees include Skype addresses because international video conferencing is routine. The company functions as if it is under one roof. The only thing missing is the water cooler for employee congregation.
“Here is a rule I have because communication is so important with an operation like we have that is spread out all over the globe,” Jackson says. “You better tell me what you need to tell me so it fits on one screen of my phone. I don’t have time to read several screens. We’re moving fast.”
Wallace, Loudmouth’s Vice President for Sales, expects his staff’s Loudmouth revenue to more than quadruple in a year. He had projected that each of his independent sales people, who also sell other companies’ lines as part of their overall book of business, could each make about $5,000 to $7,000 in commissions per year thanks to Loudmouth. But today, his top sales people make $14,000 to $20,000 per year from Loudmouth goods, and he expects their commissions to grow to $25,000 to $30,000 each within the next year.
In China, Sally Cheung has a staff of four managers working with her at three factories and 100 people working on the Loudmouth line. She also employs four off-site tailors who cut and sew the custom-made Loudmouth sports coats. The Chinese garment workers are only the beginning of a fast-moving global supply chain that is spreading Loudmouth lickety-split to other parts of the world.
“People walk up to me and say, ‘Those are cool pants. Where are they made?’” Woody says. “I say, ‘China,’ and they go, ‘Oh, that’s too bad.’
“But they don’t get it,” he says. “We have created a lot of jobs here and in other countries with this product. These are sales jobs, I.T. jobs, well-paid opportunities.”
The Birth of Loudmouth
Jackson, the CEO, helped grow three technology businesses in Silicon Valley and sold them off. He was one of Woody’s earliest customers in 2003 when Woody worked in his garage, designing patterns and even sewing some of the pants himself. Jackson started having trouble finding his size in Loudmouth pants, so he called Woodworth looking for an explanation.
What Jackson found was a visionary exasperated by the tasks of running a business. Woody was a graphic artist, an Ivy League grad from Brown who knew design but did not know operations. They got together for a round of golf at the Lake Merced Golf Club, and the spigot of despair opened:
Jackson: “How much did you sell last year?
Woody: “Pants or dollars?”
Jackson: “Either one.”
Woody: “I don’t know.”
Jackson: “How about the year before?”
Woody: “I don’t know.”
Jackson: “What are you selling pants for?”
Woody: “60 bucks.”
Jackson: “What’s your margin on those?”
Woody: “I don’t know.”
“While he is trying to tell me about his business, he topped three tee shots because he knows his business is a mess,” Jackson says. “The questions are basic for me, brutal for him.
“Finally, on the fourth hole, he turns to me and says, ‘You know I don’t know what I’m doing with this business, don’t you? Last week I bounced a check for the first time in my life.’”
Jackson, trolling for new businesses to nurture, heard the ding-ding-ding in his head that rallies entrepreneurs. Here was a business that could hum, recession or not.
“The real secret sauce was telling Woody, ‘If you can put it on your computer screen, we can turn it into pants,’” Jackson says. “I told him, ‘Go back to what you’re good at. Stop all the stuff you are not good at.’ He was making $200 an hour as a graphic artist on the side and $15 an hour selling pants.”
Why Loudmouth Works
Loudmouth targets a different kind of golfer, the ones who care more about the revelry of the afternoon than the scores they mark on their card. They want the game to lose some of its intensity, and that is the essence of Loudmouth: The width of the smile is more important than the length of the tee shot.
The Loudmouth culture is spreading to golfers and on to retailers, whose lines of golf apparel have never been more fun.
Alan Wallace, who has worked in the apparel industry for 30 years, including stints with Lacoste and Perry Ellis, says the Loudmouth line was in six of the PGA Tour Superstores in airports in early 2010. In less than six months, it was in 29 airport locations.
“They have orders with us every six weeks from the first of the year through June,” Wallace says. “They will have six new styles on their floor. That’s how quick they turn it.”
It’s a supply chain that depends on speed. Dan Mullally, Senior Vice President, Sales, FedEx Services, says speed has taken on even more of a premium in global supply chains since the economic downturn. Financial conditions demanded that business leaders scour their operations, looking for every way possible to lower costs while still grabbing every opportunity to make sales. Many have concluded that a speedy supply chain can drop or even eliminate the cost of carrying inventory while ensuring that the needed finished goods arrive in time to be sold.
“The world is becoming smaller and quicker. Everything is. So it’s all about speed to market,” Mullally says. “Speed to market allows people to sell Prada, Louis Vuitton or Loudmouth Golf pants anywhere you want. If you couldn’t get it to market fast and price it accordingly, you would reduce your market size dramatically.”
Speed doesn’t just matter to Loudmouth executives and sales people. It matters to retailers, who are enjoying stronger sales thanks to Loudmouth’s creative designs. In tough times, Loudmouth has brought them economic ballast and opportunity.
In Sarasota, Fla., Jack Peffley, the owner of Taffy’s Menswear, says Loudmouth sales shepherded him through the worst part of the recession in late 2009 and 2010. He has a large display window in his store, a third of it devoted to the newest Loudmouth designs.
“I’ve been in apparel in Sarasota for 30 years. I have never seen a product sell like Loudmouth Golf has,” Peffley says. “It absolutely helped me in tough times.”
On a Friday in the fall of 2010, he sent an order worth $2,000 to Wallace. Two days later, Peffley sent another order for $2,800. Wallace called and asked Peffley if he’d made a mistake ordering so close together.
“Alan,” Peffley said, “you should have seen what I sold Saturday. It’s not a mistake.”
A Collapse, Then a Boom
In 2007, the fulfillment center for Loudmouth Golf was a 5-by-8-foot storage facility in San Mateo, Calif. Pants were stacked in open boxes, so the crew could pick pants to be shipped.
One afternoon, David Halldorson, an investor and Loudmouth’s liaison with the PGA, along with David and Kay Suzuki and their 4-year-old daughter Rina, were stacking pants just arrived from China.
Suddenly, the flimsy boxes started to tumble from the weight of the pants.
Underneath the pile of pants and cardboard was the little girl, unhurt. Recognizing the avalanche of cotton as a meaningful sign of growth, Loudmouth soon moved into a more legitimate fulfillment center in a Foster City warehouse. That 1,300 square feet of space (at $1 a square foot) soon became a 2,600-square-foot Loudmouth warehouse: A nail-salon supply company next to Loudmouth went out of business, and the delighted landlord made a hole in a wall for an archway to expand Loudmouth’s space.
A year later, Loudmouth took another 1,300 square feet in the same warehouse. It was another benchmark because the company was having credible economic impact on the local community. Jackson says Loudmouth is shipping 300 packages a day out of the U.S., 50 a day from Canada, 50 from the United Kingdom and 25 from Australia.
Loudmouth started producing in China in 2008 and did $751,000 in business, which was all through internet sales. A year later, sales included wholesale orders for the first time, which, coupled with web sales, sent revenue up to $2.4 million. In 2010, business went to $7 million, a third straight triple. Sales for 2011 are projected at $12.5 million.
Kay Suzuki has anywhere from four to nine workers she can call each week to fill orders at the Foster City warehouse, depending on the volume of business. They are housewives, she says, who work 9 a.m. to 5 p.m.
Loudmouth could get busy enough that it has to spread its manufacturing beyond China. Technology companies are hiring workers away from the apparel factories, and the apparel factories are starting to pay a higher wage, which allows other countries to compete. Plus, there are benefits to expanding production for a company as busy as Loudmouth.
“Think about this: The factories in China close down for the Chinese New Year, but we may not want that break in the supply chain,” says Tanedo, the supply manager. “So we might go pay that little bit extra per hour in another country to make our product. It will be worth it so we don’t lose sales.”
The Road From Here
Woody’s designs have become so popular that Jackson, the CEO, is building a licensing empire that will include makers of handbags, shoes, swimwear, sweaters for dogs, luggage and other goods. There seems to be no cap on his imagination and the possibilities.
Loudmouth Golf could become Loudmouth Everything.
Loudmouth’s burgeoning licensing business means it is starting to become an incubator for other companies. Jackson says Loudmouth is throwing up an intellectual property fence around Woody’s designs and has 11 licensing deals in the works. He’s already licensed the designs to a manufacturer of sunglasses.
“The sunglasses guy’s first order was $10,000 because of the Loudmouth design,” Jackson says.
As the licensing deals get signed, more companies will build their own businesses with Woody’s designs — and create their own opportunities for people in their communities.
Customers were two-deep at the Loudmouth booth at the PGA Merchandise Show in Orlando, Fla., in January, waiting to talk to Jackson, Woody, Wallace or another sales rep. It wasn’t always to order clothes. One manufacturer wanted to discuss a deal with his hat company, further proof Loudmouth has tentacles that reach beyond golf. The company is no longer the bearded lady at the PGA Show, a booth that attracts gawkers because of how the staff is dressed. It attracts orders.
“Will our customers buy it? As long as the colors look reasonable and somewhat stylish, we will do patterns nobody else is willing to do. That is what’s keeping us ahead of the competition,” Jackson says. “We’re at a point if somebody does something like us, people are going to call it Loudmouth and say they are copying Loudmouth. It’s a tipping point.”
Wallace gets up from his chair to greet another buyer. He turns around and makes a final point.
“This is streetwear, this is clubwear, this is everyday,” he says. “Golf is what brought us to the dance, but it’s not just golf.”