Russell puts Jagged Edge on shelf … for now

Despite rumors that Jagged Edge is dead, parent company Russell Corp. said it has only shelved the brand until it finds a suitable acquisition partner.

A well-known name in the sporting goods market, Russell picked up the Jagged Edge and Jagged Edge Mountain Gear trademarks in January 2003 as part of its plan to be a bigger player in the outdoor market. Soon after, Jagged Edge showed apparel samples at the 2003 Outdoor Retailer Winter Market trade show, took orders, but never fulfilled them since the company was not manufacturing yet. Since then, not much has been heard from the company.

“We’ve stated our intent to be a bigger part of the outdoor market for some time and that has not changed. So the acquisition of Jagged Edge at that point in time was part of that strategy,” Cheryl Barre, president of the outdoor and women’s business for Russell, told SNEWS®. “We don’t feel like the brand is going to be hurt by being on the shelf for a period of time. We’re not giving up on the brand. It is on the shelf. It just gives us another brand in our portfolio to attack that market.

“The other thing that acquiring Jagged Edge did for us was help us build our expertise in the outdoor market, and it’s done that very effectively,” Barre added.

Part of that expertise comes from Margaret Quenemoen, who started Jagged Edge in the early ’90s out of street cart in Telluride, Colo., and grew it into a multiple-store retail operation with stores in Colorado and Utah. However, unsuccessful forays into web and catalog sales partly doomed it into Chapter 11 bankruptcy in May 2002. When Russell bought the trademark, Quenemoen was named general manager of the Jagged Edge brand and still works for the company. Barre said Quenemoen has been helping to build Russell’s outdoor strategy and looking at potential acquisitions.

Barre said that although Jagged Edge has great equity, shelving it for now is a financial decision because the investment to grow the brand at this point is greater than the return.

“To build awareness of the brand will take a significant investment at this point in time,” she said. “There are fixed costs that are associated with just developing the line — having someone design it and source it. In addition to the marketing costs, you have the operating costs of developing the line. At some point we may pull it off the shelf and develop a line. We’re not giving up on it. At this point in time, we have other priorities for our financial resources.”

When asked if an acquisition is on the horizon, Barre said, “We are looking at acquisitions and that’s been our stated strategy and has been for a couple years. We believe that the positioning (of Jagged Edge) is still a very relevant positioning. It’s just a matter of time. We’re in this business for the long run.”

While Russell works to figure out the future of Jagged Edge, there still remains the present situation of the 1,500-square-foot Jagged Edge retail store in Telluride. Store owner Susan Dalton was an original investor in Jagged Edge. When Russell bought the trademark, she was promised a retail licensing agreement to carry the brand in Telluride and over the Internet. Dalton’s original goal for the store was to carry Jagged Edge products only, but since no new product has been manufactured under Russell’s watch, the store has been left in limbo.

“The original goal was to make the store a showcase for Jagged Edge — a flagship store for the brand. I was counting on Russell launching a new brand and a nationwide advertising campaign to advertise it,” Dalton told SNEWS®.

Dalton also said the licensing agreement between her and Russell has never been signed by either party and has been sitting in Russell’s legal department since March 2003.

“Basically, Russell has left me a Jagged Edge store with no Jagged Edge merchandise. It’s been very difficult,” she said.

In the meantime, Dalton has added other softgoods lines, like Prana and Moonstone, and received permission to license and produce a small run of Jagged Edge branded product — fleece tops and bottoms — designed under the supervision of Quenemoen. Because of timing, she produced it domestically, which required high minimums and a lot of money.

“It came out very nice and we have sold quite a bit of it in the store and on the web. It’s certainly not the array of goods I would have had if the Russell Corporation had stepped up and followed through with their promises, which we fully expected them to do,” Dalton said.

Even though the licensing agreement wasn’t signed, Dalton said she has tried living up to the guidelines of it, such as sending copies of her advertising to Russell. But she said she has either heard nothing from the company in response or gotten a response weeks later. She has offered twice to buy back the trademark from the company — and offer that was refused both times. Russell did not return calls requesting additional comment about the retail store before deadline.

“To be fair to everyone, we thought we had an agreement, we were all excited about it, we expected to go forward on a positive footing and it’s just turned out to be very disappointing,” Dalton said.

When the store opens on May 8 after a seasonal break, Dalton said she has enough stock to carry her for four to five months, but her operation isn’t big enough to produce a line overseas that can be price competitive. She said she’s working on plans on how to move ahead.