JanSport, Inc.

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JanSport, Inc.

N850 County Road CB
Appleton, Wisconsin 54912-1817
U.S.A.

Telephone: (920) 734-5708
Fax: (920) 831-7779
Web site: http://www.jansport.com

Wholly Owned Subsidiary of VF Corporation
Founded: 1967
Employees: 800 (est.)
Sales: $300 million (2004 est.)
NAIC: 315999 Other Apparel Accessories and Other Apparel Manufacturing

JanSport, Inc., is the leading designer and maker of backpacks, shoulder bags, luggage, and laptop bags. The company is a subsidiary of VF Corporation, better known for its blue jeans lines, including Lee, Rustler, Wrangler, and Rider. JanSport also offers apparel, designed by another VF subsidiary, San Francisco-based The North Face. The lines of traditional and snowsports outerwear and accessories were launched in the fall of 2004, with plans to add sleeping bags and tents.

Company's Founding in the Late 1960s

JanSport grew out of a design contest sponsored by the Alcoa aluminum company. Seattle native Murray Pletz won the competition with his design for an aluminum flexible-frame backpack. Using his winnings, he joined forces with his cousin, Skip Yowell, to launch a company to make backpacks. Although they managed to find a temporary home for the business above the Seattle transmission shop owned by Pletz's father, the young entrepreneurs faced an additional problem. Neither one knew how to sew. Pletz appealed for help from his girlfriend, Jan Lewis, who knew how to sew, and made an unusual offer to induce her to join the fledgling business. Not only would he name the company after her, Pletz promised to marry Lewis. As a result the new backpack company took the name JanSport, and two of the company's three founders were wed. The marriage would end in the 1970s, but the company carried on, with Pletz leaving and Lewis and Yowell staying to help JanSport to grow into a very successful company.

Early on JanSport made its mark with a panel-loading daypack, offering a different approach to traditional top-loading packs. The company received its first patent on this design in 1970. A year later Yowell further demonstrated his creative abilities by applying the concept of the Eskimo Igloo to create the first dome tent, a revolutionary design concept that unfortunately he did not patent. Another major innovation credited to the company during this period was the 1972 introduction of the first D-2 technical pack, designed for a Himalayas' expedition, featuring an adjustable hip arm. It was also in 1972 that the ownership of JanSport changed hands for the first time, with the business sold to ski-maker K2 Corporation.

K2 was launched in 1967 by brothers William and Don Kirschner and grew out of a Seattle company started by their father, Kirschner Manufacturing, which in the years following World War II was involved in making fiberglass animal splints and, later, chew-proof fiberglass dog crates. In the late 1950s William Kirschner decided to use fiberglass to make skis, which only recently had graduated from hickory wood as a raw material. Kirschner owed a debt of gratitude to a failed-writer-turned-aircraft engineer named Howard Head, who gave skiing a try in the mid-1940s. Faring poorly, Head blamed his wooden skis, which he concluded too easily lost their shape and resulted in an unstable ride. He decided to develop his own skis using metal and aircraft manufacturing techniques, resulting in the first composite ski, combining two layers of aluminum bonded to plywood sidewalls. By the mid-1950s Head was the leading brand of skis in the United States and Europe, and within a few more years Hickory skis were all but forgotten. Kirschner revolutionized the industry further with the introduction of fiberglass skis, which Kirschner Manufacturing first offered in 1964. The demand for the product was so strong that the Kirschner brothers formed a separate company devoted to skis, K2, named for the founding brothers as well as the second largest mountain in the world. In 1970 the company was sold to Indiana-based Cummins Engine Company, which at the time was branching out in a number of directions, including leisure goods. JanSport was one of its acquisitions in this category. Six years later, however, William Kirschner and some partners regained control of K2 Corporation, and along with it JanSport. But when disappointing snowfalls in the early 1980s hurt business, K2's ski business suffered, forcing the company to sell off noncore assets, eventually leading to the sale of K2 to Anthony Industries.

Mid-1970s: A Period of Innovation

During the K2 years, JanSport, now based in Everett, Washington, made strides on a number of fronts. In 1975 the company introduced the first convertible travel pack, a concept that was ahead of its time and only found a market about a decade later. JanSport introduced its signature product, the daypack, in 1975. It became such a classic, used by countless students to transport books and binders from home to school, that the company never felt the need to change the design. Also of note during this period was the 1978 climb of K2 by mountaineer Jim Whittaker using a JanSport pack called the Alpine Phantom, which Whittaker helped to design. This endeavor was in keeping with Yowell's tradition of testing JanSport equipment in the grueling conditions of mountain climbs. In addition to backpacks, the company by this time was manufacturing tents and sleeping bags.

K2 sold JanSport to Appleton, Wisconsin-based Downers, a college sweatshirt company in April 1982. Downers was started by a high school student named Kim Vanderhyden, who made silk-screen T-shirts for friends in the basement of his parents' home. In 1967 he formed Downers—referring to another basement location for the business, this beneath an Appleton movie theater. In 1975 Dan Spalding took over running the business, which made T-shirts with school logos sold to sporting goods stores and college bookstores. Spalding began mailing a catalog and assembled a sales staff, and in just five years he improved sales from less than $200,000 to $20 million. The $5 million acquisition of JanSport represented a major step for Downers. Spalding, with his knowledge of the college market, coveted JanSports' backpacks, which he knew were highly popular with high school and college students. He dropped the tent and sleeping bag product lines and shifted the marketing focus from sporting goods stores to mass merchants. He also brought in a new advertising agency to make a concerted effort to target a younger demographic. He elected to take advantage of JanSport's brand recognition and in December 1982 Downers changed its name to JanSport, Inc.

Less than two years after Spalding took over, however, the company again changed owners, as the new JanSport was acquired by Jantzen, Inc., a swimwear subsidiary of Blue Bell, Inc., maker of Wrangler jeans, western wear, uniforms, and work clothes. The hope was that Jantzen's greater resources, both in terms of money and production capabilities, would help JanSport to accelerate its growth, but another major factor in agreeing to sell the business was that Spalding received an offer that he felt exceeded the worth of the company. In truth, Blue Bell was saddled with debt because of this and other acquisitions, and JanSport's ownership carousel continued. The company again changed hands in 1986 when Blue Bell was acquired by VF Corporation in a deal worth $775 million.

The roots of VF date back to 1899 and the founding of the Reading Glove and Mitten Manufacturing Company. In 1919 the company added undergarments to the product mix and took the name Vanity Fair Silk Mills. The company then went public in 1951, and in 1969 acquired its first jeans company, H.D. Lee Company, and also changed its name to VF Corporation. The addition of Blue Bell was important because its doubled the company's size and provided VF with a 25 percent market share in the $6 billion jeans industry. Moreover, VF achieved a level of diversification by adding the likes of Red Nap workwear, Jantzen swimwear, and JanSport backpacks.

Despite the change in ownership, Spalding stayed on to run JanSport. In 1985 the company reached a pair of milestones, selling its millionth daypack and reaching sales of $25 million for the year. Spalding stayed until 1988, when he left to take over another Wisconsin business, Valley School Supply, at the behest of his father, who was a part-owner of the failing school supply business. Spalding would achieve spectacular results, transforming Valley School Supply into School Specialty, Inc., a $1 billion company. Before leaving JanSport, Spalding organized the company under a strategic business unit model, whereby separate sales and marketing teams were created to concentrate on the apparel and backpack divisions. The company also launched a merchandising program named JS 2000, the thrust of which was to further move backpacks out of retailers' camping departments and cross-merchandise them with other products. During the Back-To-School season, for instance, JanSport urged retailers to make backpacks available where parents and children bought clothes and footwear. Moreover, the JS 2000 program also sought to make backpacks available in stores and showed retailers how to best present the product. As a result, JanSport sales began to grow at a steady clip. In 1987 the company controlled about 5.2 percent of the daypack market, a number that reached 10 percent a year later. Sales were spurred by clever use of television advertising, with spots running on MTV, ESPN, and other programming. The sale of daypacks then surged with the start of the 1990s, so that by 1994 the company controlled 27 percent of the market and had a virtual lock on the college bookstore channel.

Company Perspectives:

At JanSport, we strive to help you carry the stuff you need, where you need it, in the most functional, fashionable way possible.

With the departure of Spalding, JanSport was headed by President Dan Delorey, who had become friends with Vanderhyden in 1977. A psychology major, Delorey had no ambitions for a business career, although he had worked in a bookstore at Eastern Michigan University. Vanderhyden eventually convinced Delorey to come to work for Downers, and he accepted, taking charge of assembling the company's first college sales force. He successfully carried out what Spalding had begun, although the company suffered a misstep in 1990 when it had to discontinue an apparel line that got off to a poor start. But a year later the company launched JanSport Apparel, offering pants, jeans, sweatshirts, jackets, and other products in keeping with a rugged outdoor image. Aside from daypacks, JanSport also was enjoying strong growth in the backpack and briefcase divisions, leading to expansions in the company's production and distribution capabilities. In December 1993 the company moved its international headquarters from Everett, Wisconsin, to a new 212,000-square-foot facility near Appleton, twice as large as the former Downers plant.

Shift in Strategy in the Mid-1990s

For years JanSport successfully sold daypacks into the mass merchants, full-line, and specialty channels, but by the mid-1990s the company had to revisit its distribution policy, which had been tilted too much in favor of selling to mass merchants. It also faced increased competition from Wolverine and The North Face, both of which made strong bids in the daypack category. To protect the value of its brand, JanSport in 1995 launched a replacement brand for the mass merchandise market, Wolf Creek, and began to restrict which retailers would be able to carry the JanSport lines. The company also entered the rugged footwear business in 1995, but the timing proved poor. The market for such products was soft, and JanSport decided that despite having a quality product to sell it was better served by making a quick exit from the business and not devoting resources to an area that required a long-term commitment.

In the second half of the 1990s JanSport added to its lines of packs, or what the company referred to as "convenience bags," as sales grew to the $150 million to $200 million range. In 1996 it introduced waterproof rubber-bottom packs. A year later it brought out a technical equipment line, offering specialty packs suited for laptop computers and CD players, as well as bags designed for biking, hiking, skating, and skateboarding. In 1999 JanSport invented the innovative Airlift and Loadlift backpacks. The company also began to offer transparent packs in response to the shootings at Columbine High School and violence on other school campuses.

Innovation continued into the new century. In 2002 JanSport introduced a collection of business casual luggage, as well as the Lifestyle line of shoulder bags and crossover packs. A year later the company brought out its first technical product designed with women in mind. Also in 2002 it added an Active travel line of bags. Aside from internal growth, JanSport grew by way of acquisitions. In 2000 it bought its largest competitor, Eastpak, which had a 6 percent market share, doing about $90 million in sales, mostly in Europe. The company was formed in the 1960s as Eastern Canvas Products, maker of duffel bags and backpacks for the U.S. Army. In 1977 it entered the daypack market under the Eastpak label, selling into the college market.

At the end of 2001 Delorey, who was just 50, chose to retire, citing a desire to spend more time with his family and to pursue volunteer work after countless long hours working for JanSport. He was replaced as president by Michael P. Cisler, a 24-year veteran of the company who had spearheaded the Eastpak acquisition and was well familiar with virtually the entire operation, having held positions in operations, information systems, marketing, finance, and strategic planning. During his two-year tenure as president, Cisler oversaw the launch of a line of outerwear and accessories, to be designed by a recent VF acquisition, The North Face. VF brought the supply chain expertise and other resources. JanSport also looked to bring back some of its original products, tents and sleeping bags, and possibly make another attempt at footwear. In the fall of 2004 JanSport decided to move its equipment division to The North Face facilities in San Francisco, leaving the customer apparel business—the licensed clothing business created by Downers for the college bookstore and sporting goods stores—to remain in Appleton. A few weeks later, Cisler left JanSport, replaced by Mike Corvino, the vice-president of sales and merchandising at VF Imagewear.

Principal Divisions

Eastpak.

Principal Competitors

L.L. Bean, Inc.; Samsonite Corporation; The Timberland Company.

Key Dates:

1967:: The company is founded.
1972:: K2 Corporation acquires JanSport.
1975:: The daypack is introduced.
1982:: Downers acquires the company and assumes the JanSport name.
1986:: VF Corporation acquires JanSport.
2000:: Eastpak is acquired.
2004:: JanSport moves its equipment division to The North Face facilities in San Francisco.