Little more than a decade ago, Top 40 firm S&S Activewear (asi/84358) was a successful Midwestern apparel supplier, thriving primarily in its heartland market. Fast-forward to 2020, however, and the Bolingbrook, IL-based business has soared beyond the regional stratosphere to become a billion-dollar company – a supplier with a long reach into every geographic market in America and Canada, too.
The sweeping push across the states, along with deeper penetration into its traditional territory, has sent sales skyrocketing. The revenue ascent includes an approximately 30% year-over-year increase that saw S&S reach an estimated $1.2 billion in total company sales in 2019 – the vast majority of which stems from business with North American promo distributors and apparel decorators.
According to the latest Counselor State of the Industry, S&S Activewear has become the third-largest supplier in the industry after posting a five-year average annual growth rate of 21.8%. Even after all that growth, executives at the firm are candid about their ambition to gain share. “There’s a ton of opportunity in the markets we’ve recently entered and the markets we’ve been strong in for a while,” says President Jim Shannon. “We’re excited to make the most of it.”
If the last decade is an indication, S&S will be well positioned to do so. Over that time, the company has done everything from vastly expand its physical footprint and leverage best practices in technology to expand its sales force 10 times over while focusing on proactive consultative selling. In this exclusive report, Counselor shines a spotlight on the strategies, execution and people that have propelled S&S’s remarkable ascent.
Jim Shannon joined S&S as controller in 1991, three years after the company’s founding. At the time, the firm operated in a “cramped” 27,000-square-foot space. “We were your basic T-shirt and fleece supplier, carrying a small number of brands,” says Shannon. The pivot to the future came in 1998 when current owners Paul Rohr and Jeff Adams bought the company. Friends since college and successful businessmen, Rohr and Adams provided capital clout. The monetary muscle was instrumental for S&S to capitalize on what the supplier foresaw as an industry-altering shift: the emergence of apparel, particularly quality stylish apparel in a variety of categories, as a huge new frontier for promo sales.
“We expanded into corporate and athletic apparel,” says Shannon. “We introduced different categories – jackets, bags, headwear. Our catalog was significantly upgraded – bigger, with more products. We started partnerships with more brands and vendors.”
"There was appetite from our vendors and customers for us to come to new geographic markets and do there what we were doing in the Midwest."Frank Myers, CFO & COO
S&S forged ahead over the next decade or so, building relationships with vendors and clients, adding product, fine-tuning processes and striving to deliver superior consultation and service. The approach transformed S&S into a powerhouse in the Midwestern market. From that elevated level, company leaders began looking past the immediate skyline to new horizons. “We took a fundamental look at the direction we wanted to take the business, and we felt there was a lot of opportunity for us in different areas of the country,” says Frank Myers, the company’s COO and CFO who joined S&S in 2009. Furthermore, “there was appetite from our vendors and customers for us to come to new geographic markets and do there what we were doing in the Midwest.”
It started with the firm acquiring California-based Americana Sportswear in 2010. A West Coast presence established, S&S looked east, purchasing EVA Sportswear in New Jersey in 2013 – a move that gave S&S a strong foothold in the heavily populated I-95 corridor that includes Boston, New York City, Philadelphia and Washington D.C.
Then, beginning in 2016, the company consolidated the three brands under the S&S umbrella. It also embarked on a significant expansion plan that included the opening of a 473,000-square-foot distribution center in Kansas City, helping relieve pressure on its Illinois facility and extending one-day shipping to Kansas, Oklahoma, Missouri and North Texas. Large distribution centers near Atlanta and in Fort Worth, TX, followed in the next two years, as did adding 187,000 square feet to its New Jersey warehouse.
S&S by the Numbers
Approximate total company revenue for 2019.
Last February, the supplier completed a move out of California to a new, bigger West Coast location in Reno, NV. The 800,000-square-foot facility is the largest wholesale apparel distribution center on the West Coast, executives say.
For its next move, S&S brought its cross-country expansion full-circle, opening a new distribution center in Lockport, IL. The 750,000-square-foot facility is packed with sustainable features, as evidenced by its silver LEED certification from the U.S. Green Building Council. In December 2019, S&S went international, expanding into Canada through the acquisition of Technosport Canada (asi/90703), a Montreal-based wholesale apparel firm that has a physical presence across Canada through distribution centers in Alberta, British Columbia, New Brunswick, Ontario and Quebec.
All told, S&S boasts 4 million square feet across all of its facilities, which executives say allow the company to reach 98% of the U.S. population within two days, and 41 states in just one day. “During our nationwide expansion, it’s been our commitment to bring the industry’s best brands as close to our customers’ end-users as possible,” says Marc Vitulli, S&S’s vice president of marketing.
The cross-region physical presence was a crucially important factor in S&S’s North American 2018 promo sales increasing nearly 49% over 2017 – the fastest annual growth rate of the industry’s top five suppliers, all with greater than $600 million in revenue. Company executives credit Myers, a Northwestern University graduate who formerly worked in investment banking and private equity, with spearheading the national expansion. “The nationwide expansion has given us the foundation for continued growth,” says Myers, who was quick to call the success in new markets a collective effort. “The next steps are optimization and growing penetration within the network through sales and marketing.”
Of course, all the apparel doesn’t just sell itself. Amid that rapid expansion, S&S has grown its sales force from 30 associates to 80 in the last three years. Over the last decade, the force has grown 10 times over. Matt O’Connor, a 20-year industry veteran and vice president of sales, said throughout the hiring process “we were looking for people who were not only dedicated, knowledgeable and driven, but people who truly thrive on relationship building. Recognizing the key role that aspect of S&S’s culture had played in the company’s success to that point, we were very mindful of maintaining that core value as we grew the team.”
The growth of the sales team included outside and inside salespeople in regions where the company expanded its distribution footprint, but also more staff in areas where S&S’s business is long established and heavily concentrated. The S&S sales team focuses on consultative selling – an important growth driver. “People like to work with people they like, trust and respect,” says Keith Shannon, the company’s chief revenue officer and an S&S pro since 1993. (He and Jim are brothers and have been a key leadership tandem at S&S over the years.) “We don’t want to be transactional; we want our salespeople to understand their clients and what the end-customers’ needs and wants are.”
“We don’t want to be transactional; we want our salespeople to understand their clients and what the end-customers’ needs and wants are.”Keith Shannon, Chief Revenue Officer
With approximately 80,000 customers having purchased from S&S in a recent 18-month span, providing customized proactive service means investing in more boots-on-the-ground in the various markets in which the supplier is active. Wherever possible, associates work closely with clients to plan initiatives in advance rather than being reactionary. Additionally, S&S leverages its sales force to develop sound strategies to grow already lucrative client relationships in ways that are mutually beneficial. “There are so many options with apparel, and our customers rely on our salespeople to help them come up with the best solutions,” says Keith Shannon. “When that happens, our customers grow, which means we grow.”
S&S by the Numbers
Five-year average annual promo sales growth rate through 2018.
S&S’s fast-rising revenue streams suggest there’s a clear benefit to the supplier’s approach. “When S&S Activewear made a big push to enter our market several years ago, they chose great, well-respected reps who had lots of knowledge about our industry and clothing,” says Audrey Devenport, president of Houston-area distributorship Trademarks Promotional Products (asi/346070). “Just recently, their rep went on a client call with one of my account managers. The S&S rep had all of the answers for the client.”
S&S’s long-standing customers, such as Illinois-headquartered Top 40 distributor HALO Branded Solutions (asi/356000), sing similar praises. “We have been fortunate to have strong sales representation from S&S, both on a national account level and through S&S field reps across the country who make personal visits to our account executives to show new brands, new styles and new trends,” says Terry McGuire, HALO’s senior vice president of vendor relations. “Their service is excellent.”
To complement its sales efforts, S&S has continued to enhance the marketing resources distributors and decorators can draw on: custom print and e-catalogs, websites built with S&S templates and access to the supplier’s professional product imagery. “It helps every customer, no matter their size, create the impression that they’re backed by deep inventory and a deep supply chain,” says Jim Shannon, all of which helps drive success for S&S’s clients – and the supplier itself. “S&S has always been an invaluable source of information in helping us stay on trend in the ever-changing fashion world,” says Rick Daignault, executive vice president of sales at distributor Midwest Promotional Group (asi/270800).
Building a robust network of distribution centers and salespeople is a manifestation of S&S’s core philosophy: Be the optimum partner and service provider. An essential element of that philosophy is a commitment to not compete with vendors or customers.
In practice, that means S&S doesn’t manufacture any apparel, nor does it screen print, embroider or otherwise embellish wearables; this has helped the company create trust and allowed it to be agile in bringing the most relevant product to market. “Since we don’t produce any of our own product, we are able to rely on our brand partners to drive merchandising leadership and innovation, and we invest in that relationship instead of our own machines,” says Vitulli, who joined S&S in 2017 following a career as an e-commerce and digital marketing consultant/entrepreneur. “We like to say that instead of having one merchandising team in-house, we have 30 teams that we partner with.”
S&S by the Numbers
Total facility square footage.
The approach has borne fruit. Today, S&S carries a diverse range of apparel and related accessory categories from more than 60 brands. “We work closely with our partners to ensure we have in place the right products at the right inventory levels for the right markets,” says Jim Shannon.
Part of nailing the correct equation has included S&S accurately anticipating the industry’s growing predilection for retail-quality, fashion-forward brands along with retail brands themselves. Clients know, executives say, they can get such goods fast and at competitive prices from S&S.
“We bet on the brands concept and we did it early,” says Vitulli. “We have always pushed the envelope by bringing in retail-inspired brands and trends, such as our addition of Bella+Canvas, our exclusive relationship with Adidas and the super-funky sock brand SOCCO.”
To help catalyze cross-country growth, S&S knew it would have to stay a couple steps ahead on technology. S&S Chief Technology Officer Brian Beale and his team have taken that strategy initiative and transformed it into reality. “Our goal is to always provide the best and easiest technology for our customers and our teams to use,” says Beale, who’s been with S&S for 11 years.
“During our nationwide expansion, it’s been our commitment to bring the industry’s best brands as close to our customers’ end-users as possible.”Marc Vitulli, Vice President of Marketing
About a decade ago, S&S developed an enterprise resource planning system that was 100% web-based at a time when others were yet to make the progression. “Being a leader in that regard has allowed us to be nimble,” says Beale. “Our technology naturally improved as browsers evolved.”
Meanwhile, Beale and co. have poured reservoirs of energy into building a robust website that company executives maintain has one of the fastest load times in the promo industry. “We’ve got best-in-class layout and usability,” says Beale. “We’ve made sure our site delivers with speed.”
S&S’s web home is about more than just fast load times, though. Customer-pleasing features include an inventory display grid and a simple-to-use e-commerce platform. The site also integrates with S&S’s mills, allowing for the creation of a drop-ship program through which S&S can double the amount of products it offers through its site.
Further enhancing tech-fueled customer service on the website is a “freight optimizer” – a smart function that calculates the most efficient options for shipping the product once an order is placed. The options are then suggested to customers.
S&S by the Numbers
Number of states reached with one-day shipping.
“The next big initiative we’ve put a lot of effort into is automated content creation so we can have a Spanish language version of the website,” says Beale, noting other languages could one day be added.
Beyond the website, top-notch customer-facing tech includes a proprietary application programming interface (API) that empowers customers to integrate their systems in days. “It facilitates ordering, especially accuracy. Because it’s two computers talking, no mistakes are made,” says Beale.
The technology innovations also apply in-house, such as the supplier’s algorithm-driven purchasing models that help ensure capital and products are properly allocated through S&S’s six distribution centers. There’s also a system of standardized metrics that gives managers and employees real-time stats that can be used to help spur operational improvements at warehouses. “Everything we do is focused on executing in a way so that every order is correct and delivered on time,” says Beale.
While technology is an indispensably essential tool in ensuring accuracy and efficiency, the crucial determinative work lies in the hands of S&S’s nearly 1,900 employees. That’s why S&S has prioritized creating an empowering, lively and fun working environment that seeks to inspire and provide employees with clear paths for advancement. Says Jim Shannon: “Our main goal is to be a good partner to our vendors, our customers and our employees.”
The Duo Behind S&S
When Paul Rohr and Jeff Adams first met as teenage students at the University of Illinois, they didn’t know that they’d go on to become life-long friends and the owners of a billion-dollar wholesale apparel company. But that’s exactly what they became.
Roommates and fraternity brothers in college, Rohr and Adams kept their friendship kindled during their adult years, standing at each other’s weddings and also doing business together. Both experienced success in their careers, which centered on banking and distribution. When Rohr had the opportunity to buy a portfolio company, S&S Activewear, he turned to his good pal to see if he wanted in on the adventure. Adams did, and after a period of due diligence, the pair purchased S&S Activewear in 1998, setting the stage for the now 22-year-long evolution that saw the company ascend the ranks of the promotional products industry.
“To be where we are, with the number of employees we have, and the customers we serve, and the reputation we have, it has very far exceeded what I thought could happen,” says Adams.
While their careers had been white collar, Rohr and Adams weren’t afraid to get down in the trenches and do the dirty work during the early days of their ownership, when S&S still operated out of what the owners described as a “dark and dingy” location. The owners picked orders, stacked inventory, loaded trucks and more. “We had to learn every single job,” says Adams.
The work ethic and commitment to coming through for customers continues to permeate S&S.
“Jeff Adams and Paul Rohr are the foundation of the culture and core values that our success has been built on,” says President Jim Shannon. “They are the ones who invested in people and relationships early on, which set the platform for where we’ve gotten to today.”