Aluminum Sporting Goods Still a Gold Mine for Easton : Equipment: Valley firm started a revolution in 1946 with its arrow. It has gained international acclaim for quality products.

VAN NUYS —  Almost 50 years after Jas. D. Easton Inc. began a revolution in the sporting goods industry by manufacturing the first aluminum arrow, the company continues to dominate new markets with its growing list of sporting equipment made from aluminum and composite materials.

Easton introduced the aluminum arrow in 1946 and today has 85% of the world archery market. In 1970, the company began to manufacture aluminum baseball and softball bats. Hillerich & Bradsby, makers of Louisville Slugger bats, the dominant wooden baseball bat maker back to Babe Ruth’s time, concedes that it erred early on by dismissing aluminum bats as “a passing fad.”

The consequences were almost catastrophic for Hillerich & Bradsby. The company almost lost an entire generation of baseball players, read consumers, who never used a wood bat and instead grew up swinging Easton aluminum bats from Little League to college. Thanks to the durability of aluminum, Easton now has about half of the aluminum bat market.

Easton was also the first company out of the starting blocks in 1982 when it built the first aluminum hockey stick approved by the National Hockey League. Today, about 20 NHL stars, led by Los Angeles Kings superstar Wayne Gretzky, use Easton sticks, and Easton is the biggest aluminum stick maker.

For more than a decade, the company has been perfecting a field hockey stick that it hopes will eventually dominate in the sport worldwide.

Perhaps this fascination with high tech explains Easton’s somewhat confusing dual identity as an aluminum company and a sporting goods manufacturer. James L. Easton will tell you that the company founded by his father, James Doug Easton, in 1922 as a manufacturer of cedar arrows, is both.

It was Doug Easton’s quest for the perfect arrow and his fascination with aluminum that led to the aluminum arrow. Easton’s arrows not only dominate the world archery market but account for one-third of the company’s sales.

James Easton, 58, president and chief executive officer of Easton, looks at aluminum with the passion that some people look at a great work of art. “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.”

The company is privately owned, but 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 “in the 5% to 10% range” in 1993.

Industry analysts estimate that the company could fetch about $250 million if it were sold.

“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. The company has grown by leaps and bounds under Jim Easton’s leadership. He has an intuitive feel for what the market wants and how to get it there.”

Over the years, Easton has earned such a solid reputation for quality and as a sporting goods trendsetter that even its competitors have good things to say about 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, parent company of Louisville Slugger, which makes aluminum bats in addition to the wooden ones. 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 remains dominant in the smaller wood bat market. Williams said the company expects to make 1.2 million wood bats by the end of the fiscal year, and of these about 190,000 will be used by players in the professional leagues, where aluminum bats are banned. Easton does not make wooden bats.

But Easton now controls about 50% of the aluminum bat market worldwide, and its bats account for about one-third of the company’s sales, or about $65 million a year. Louisville Slugger, Japan’s Mizuno, and other smaller companies compete for a share of the rest of the aluminum bat market.

Louisville Slugger recently launched an intensive marketing campaign to catch up but still has a long way to go. For the past 10 years, 98% of the bats used in the College World Series were Easton models. That changed in 1993, when four of the eight teams in the series used Louisville Slugger aluminum bats exclusively.

Easton estimated that his company manufactures about 16 million aluminum bats each year. Williams said Louisville Slugger expects to manufacture about 1.5 million aluminum bats by the end of the company’s fiscal year on June 30.

In the aluminum hockey stick market, Easton pulled off a major coup in 1990 when it signed Gretzky to endorse the stick. Brett Hull, another NHL star with the St. Louis Blues, also uses an Easton 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.

Hockey sticks now account for about $40 million, or 20% of the company’s sales, Easton said. When the company introduced the aluminum stick, several competitors who 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. However, neither the NHL nor the NHL Players’ Assn. knows how many players prefer aluminum sticks over wood.

“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.

Although the Easton shaft is made of aluminum, hockey stick blades are made from laminated hardwood, fiberglass or graphite and are replaceable. “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,” said Scalera.

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.

“Easton products have always been quality products. It’s a credit to Easton that they were such a tough nut for us to crack,” said Williams of Hillerich & Bradsby, which also manufactures wood and aluminum hockey sticks under the Louisville brand.

Easton now has facilities in the Netherlands, Australia and Canada to market and distribute its products. In addition, Easton owns a facility in Tijuana, where the company manufactures the composite materials used in some of its products. Employees number about 1,000 worldwide.

But like most good things, 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.

“We stay on the leading edge of technology and build products that give better performance,” said Easton. “We keep growing by dominating in each market and not giving up that dominance. And, we’re always looking for new markets.”

New markets include Europe, Asia and Australia, where field hockey is immensely popular. Easton engineers have been working on an aluminum field hockey stick for the past 11 years. They have not yet developed a 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 make it perform to the satisfaction of the world’s top players,” said Easton.

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 wood 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,” said Easton. Currently, the company is experimenting with a head made from laminated and impregnated wood supplied by a company in the Netherlands.

Easton’s son Gregory Easton, 29, heads the company’s European operations. At the moment the younger Easton is trying to sign up foreign hockey teams to use Easton aluminum sticks in the 1994 Winter Olympics.

Over the years, James Easton has been approached by investment bankers offering to buy the company or take it public. However, he said he is not interested and is looking forward to turning the company over to his son in about 10 years, when he hopes to retire.

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