Lots of Sock--With a Clink : Easton Sits Atop the Standings as Metal Bat Maker

When Jas. D. Easton Inc. introduced aluminum baseball and softball bats in 1970, the maker of the famous Louisville Slugger wood bat dismissed the innovation as a passing fad.

But the durable bat now dominates the market and has forced Hillerich & Bradsby into adding its own aluminum line to avoid losing an entire generation that never swung the wood bats.

The aluminum bat is just one example of the innovations that have come out of Van Nuys-based Easton, a fast-growing private concern that continues to dominate markets with its growing list of sporting equipment made from aluminum and composite materials.

Easton, which began a sporting goods revolution nearly 50 years ago with the first aluminum arrow, was also the first to make an aluminum hockey stick approved by the National Hockey League. More than a decade later, about 20 NHL stars, led by Los Angeles Kings superstar Wayne Gretzky, use Easton sticks.

Perhaps this fascination with high-technology explains Easton’s somewhat confusing dual identity as an aluminum company and a sporting goods manufacturer. James L. Easton, president and chief executive, said the company founded by his father in 1922 as a manufacturer of cedar arrows, is both.

It was James Doug Easton’s quest for the perfect arrow and his fascination with aluminum that led to the 1946 archery innovation. Easton’s arrows--which dominate 85% of the world archery market--account for one-third of the company’s sales.

“We’ve used aluminum to keep on the leading edge of new technology, making sure we’re not just an aluminum company but a sporting goods company too. We’re also working with a new generation of composite materials for sporting equipment,” said James Easton, 58.

Easton said he expects sales to reach about $200 million this year. Sales have increased an average of 15% annually over the past five years, and Easton forecast earnings for the year in the range of 5% to 10% of sales.

“Jim Easton is living an entrepreneur’s dream,” said Lloyd Greif, president of Greif & Co., a Los Angeles-based investment banking firm. “Easton is a well-run company that keeps getting better.”

Over the years, Easton’s reputation for quality and as a sporting goods trendsetter has prompted even its competitors to praise the company and the man who heads it.

“They’re a formidable competitor, and Jim Easton is one of the giants in the sporting goods industry,” said Bill Williams, spokesman for Hillerich & Bradsby. That company’s Louisville Slugger is Easton’s biggest competitor in the aluminum bat market, but Easton still makes almost six times as many bats overall.

Louisville Slugger, which recently launched an intensive marketing campaign to try to catch up with Easton in the aluminum segment, remains dominant in the smaller wood bat market. (The Louisville Slugger is a staple of the professional leagues, where aluminum bats are banned.)

Easton’s $65-million-a-year aluminum bat business accounts for half the aluminum bat market worldwide.

In the aluminum hockey stick market, Easton pulled off a major coup in 1990 when it signed Gretzky to endorse the stick.

Easton declined to say how much the company pays Gretzky to use an Easton stick, but the guessing is that Gretzky is the company’s highest-paid hockey endorser and pulls down about $100,000 a year. Easton said the company has “between 20 and 30” professional athletes on contract to use and endorse Easton products, many compensated solely with free equipment, while a handful of athletes are paid between $5,000 and $100,000 per year in endorsement fees.

These are paltry sums by industry standards, because Easton relies heavily on its reputation for quality to market its products. The company’s advertising budget for 1993 is only $5 million, mostly to promote its baseball and hockey products.

When the company introduced the aluminum stick, several competitors that manufacture the traditional wood sticks tried to get Easton sticks outlawed, arguing that they could be used as a dangerous weapon in a sport known for its violence.

But Fred Scalera, vice president of licensing for the NHL, said the aluminum stick is here to stay.

“The aluminum stick tends to last longer than the wooden shaft . . . and is reliable, and when you have a player like Wayne (Gretzky) endorsing it” that helps, said Scalera.

He added: “More and more of the younger guys have grown up playing with an aluminum shaft stick. Whether it be in high school or college, they’ve gotten used to the feel of the aluminum stick.”

Easton credits the company’s success to the ingenuity of his 20 or so engineers, many of whom are weekend athletes, and the company’s reputation for making quality products.

But Easton’s quality sometimes comes at a steep price. At the Iceoplex’s sporting goods store in Van Nuys, which specializes in hockey equipment, an Easton aluminum stick for adult play costs $130, compared to a similar stick costing only $45 manufactured by Koho, a Canadian company.

Easton said his company is always looking for new markets and has been trying to perfect an aluminum field hockey stick for the past 11 years. They have not yet developed an aluminum product that Easton feels is up to the company’s quality standards. Easton has hired an Australian field hockey star to advise the company’s engineers.

“The main problem is attaching a wood head to a metal shaft and making it perform to the satisfaction of the world’s top players,” Easton said.

Add to this the fact that the best field hockey stick heads are made of mulberry wood found in India and Pakistan and the Indians’ and Pakistanis’ refusal to export it, and Easton is faced with a tough challenge.

Easton tried to negotiate a deal with mulberry suppliers in those countries. However, making field hockey sticks is somewhat of a cottage industry in India and Pakistan, and getting them to supply Easton with quality wood was next to impossible.

“I can’t blame them. They’re protecting their industry. Those people have been carving wood field hockey sticks for generations,” Easton said. Currently, the company is experimenting with a head made from laminated and impregnated wood supplied by a company in the Netherlands.

Over the years, Easton has been approached by investment bankers who wanted to buy the company or take it public. However, James Easton said he is not interested and is looking forward to turning the company over to his 29-year-old son, Gregory, who now heads European operations, in about 10 years.

“I do plan to retire, but I also want to keep my finger in new product development,” Easton said.