Ever since news dropped last month of TapouT being sold to Authentic Brands Group, the MMA community has been buzzing with questions, comments and more regarding the acquisition, wondering where this would lead the world’s most recognizable Mixed Martial Arts apparel company. If you thought TapouT or the TapouT Crew were going anywhere, think again. Apparently the only place TapouT plans on going from here is up.
In a recent feature released on MMAJunkie.com, TapouT co-founder Dan “Punkass” Caldwell discusses the reasons for the MMA apparel giant’s decision to partner with Authentic Brands Group, along with the aspirations to ultimately take the brand to Nike’s level of success, as the sport continues to evolve and the industry keeps growing in popularity.
To listen in on Caldwell’s comments regarding the sale just days after the deal went down, check out this related feature where Punkass and Scrape discuss the sale of TapouT, courtesy of TapouT Radio. Scroll down below for the full feature that appeared on MMAJunkie.com.
TapouT co-founder Dan Caldwell says new partner could take brand to “Nike Levels”
Dan Caldwell, better known as “Punkass,” thinks TapouT still has a lot of room to grow.
And Caldwell, who co-founded the MMA apparel giant with Charles “Mask” Lewis in 1997, believes TapouT’s new parent company, Authentic Brands Group, can take it to a level of visibility associated with brands such as Nike, Reebok and Under Armour.
“We had formulated a plan in our head how we thought that would get done,” Caldwell told MMAjunkie.com (www.mmajunkie.com). “But things like that take money. So you need to bring in the right guys to take the brand to that level, and these were the guys.”
After several weeks filled with rumors of TapouT’s impending sale, the Toronto-based Authentic Brands Group announced this past month that it had acquired the company, along with MMA brands Hitman Fight Gear and Silver Star Casting Company, for an undisclosed sum.
ABG’s CEO, Jamie Salter, previously has held investments in several prominent U.S. brands, including Polaroid, Halston, Linens ‘n Things and Sharper Image, among others. The company also currently licenses the Bob Marley brand.
While the branding firm’s track record certainly elevated the profile of the sale, news of the purchase came as a shock to many observers who questioned whether the highly recognizable fight brands had hit a roadblock in the MMA marketplace and economy at large. Caldwell, however, said his company had fielded offers from several companies since its explosive rise to popularity in the mid-2000s, and ABG simply presented the best fit.
“This is regular business,” he said. “People who don’t understand business make this out to be something of an anomaly. Businesses go through this all the time, and that’s how they move forward.”
The clothing brand suffered a huge blow 19 months prior when its co-founder and CEO, the beloved Lewis, was allegedly hit by a drunk driver. He died in the car crash in Newport Beach, Calif. Caldwell and longtime TapouT partner Timothy “Skysrape” Katz decided to continue on with the company. (A jury trial for Lewis’ alleged killer, Jeffrey David Kirby, is currently set for Oct. 15 in Newport Beach.)
Caldwell, who remains president of TapouT, said he and Lewis always dreamed of making the company into a blue-chip brand and said ABG “gets” MMA.
“[ABG] believes that this is the fastest growing sport in the world, that this is going to be in line with basketball or baseball or hockey, and TapouT could be as big as a Nike or an Under Armour. We were all saying the same stuff (in negotiations), so that was exciting for us.”
Caldwell said the new TapouT plans to open offices in New York City, Los Angeles and possibly a second office on its home turf of Orange County, Calif. The company has now outsourced its sales and shipping departments to Ontario, Calif., and “streamlined” its main office in Grand Terrace, Calif., down to 30-some employees.
The company has several production factories around Southern California as well as overseas in China that employ hundreds of workers.
Entrepreneur Marc Kreiner, who joined the company in 2005 and, according to Caldwell, helped TapouT grow from $5 million to $200 million in annual sales in the past five years, left the company when the ABG deal was finalized. Caldwell said the split was amicable.
“He had other things that he saw himself doing,” Caldwell said. “Marc is an entrepreneur and a business guy. He gets into companies and brings them to a level where he feels like he can contribute, and when we got to this point, he felt like he wanted to do other things in life.
“We had a meeting with him (before the sale) and it was like, ‘This is it,'” Caldwell said. “It’s time to pass the torch, and the new business guys in town are ABG. It’s an exciting time for the business can’t help but be excited.”
Although he declined to disclose Tapout’s plan for growth, Caldwell said Tapout and ABG believe they can increase their current sales figures tenfold in the coming years. The fight brand is also working on new product lines in hopes of increasing its market share within the MMA market.
“We’re working on a new secret short that I can’t talk too much about, but it’s going to be the best fighting short ever made,” Caldwell said. “Pieces like that will separate us from everyone in the business.”
And despite TapouT’s near-ubiquitous presence in the MMA community, Caldwell said the company is just scratching the surface with everyday consumers.
“Nike does somewhere around $35 billion a year,” he said. “That’s billion with a ‘b.’ Last I checked, we did just under 200 million. So I think we have a long way to go before we hit saturation.”
Regardless of its eventual path, Caldwell said Lewis always will be a factor in TapouT’s decision-making process.
“At the end, we knew it was something that he would have wanted,” he said. “We still feel like he lives in the structure of this company, and we’ll continue to work hard to make it everything we want it to be.”