Livestrong Not Immune From Turmoil Surrounding Its Founder

Craig Staley could barely keep up with the demand for Livestrong
merchandise at Mellow Johnny's Bike Shop in Austin, Tex., in 2008,
when Lance Armstrong announced that he would return to professional
cycling after a brief retirement. Customers at the store, co-owned by
Armstrong, stocked up on yellow bracelets, T-shirts, sunglasses, hats
and water bottles bearing the name of Armstrong's foundation,
Livestrong, which had raised millions to aid cancer research and
survivors.

For customers, the merchandise stood for hope and victory.

"Maybe you call it the Lance effect," Staley, a general manager at
Mellow Johnny's, said when recalling the popularity of Livestrong
gear.

But sales of Livestrong items at Mellow Johnny's declined after
Armstrong rode in the 2009 Tour de France.

"A lot of these folks aren't flocking here to get a connection to
Lance like they used to be," he said.

Armstrong has experienced an extraordinary fall from grace in recent
months. The United States Anti-Doping Agency released a report saying
he had participated in an elaborate doping program and bullied others
to cheat with him so he could succeed. After years of adamantly
denying all allegations that he used performance-enhancing drugs,
Armstrong admitted last month that some of the accusations were true.

Now, in an effort to have his lifetime competition ban reduced, he is
talking with antidoping officials about possibly disclosing who helped
him and how he covered up his doping for nearly a decade.

With Armstrong involved in one of the biggest doping scandals in
sports history, will consumers continue to buy licensed Livestrong
merchandise?

For the Livestrong Foundation, the question is significant. Last year,
it generated more than $48 million in revenue, much of which was
received before Armstrong was stripped in October of his seven Tour de
France titles. Of that total, about a third, $16.79 million, came from
the sale of licensed Livestrong products and merchandise. Rae
Bazzarre, a Livestrong spokeswoman, said the sale of Livestrong
products was down about 17 percent since 2010.

David Reibstein, a professor of marketing at the University of
Pennsylvania, said, "I think there's no question that some people are
going to be disillusioned and therefore are not interested in
continuing their support."

He added, "But people still care about fighting cancer, so I don't
think we'll see it totally disappearing."

Organizations often rely on income generated from the sale of licensed
goods, like the Girl Scouts with boxed cookies and the World Wildlife
Federation with stuffed pandas. But Livestrong undertook one of the
most visible charity marketing campaigns by linking Armstrong's face
and personal story to its merchandise.

Some companies may want to detach themselves from Armstrong. The
bicycle maker Trek is ending its Livestrong brand-licensing agreement
and will no longer sell bikes with the Livestrong name.

"We do have some remaining inventory that we currently intend to sell
and give Livestrong its royalty per the original agreement," a Trek
spokesman, Eric Bjorling, said.

Trek began its partnership with Livestrong in the 1990s and continued
it as Armstrong's career soared.

"We are not currently in discussions with them about a renewal,"
Bjorling said. "We support many charitable organizations and will
evaluate future opportunities to support Livestrong as appropriate."

Nike, RadioShack, Giro and Oakley are among the companies that have
announced they will no longer sponsor Armstrong. However, the four
companies said they would continue to sell Livestrong merchandise.

Livestrong has also partnered with Visa; Johnson Health Tech North
America, a treadmill maker; and Thinksport, which sells sports
bottles. Those three companies also plan to continue to sell
Livestrong merchandise. They said they were proud of the foundation's
work.

No representatives interviewed from the eight companies, however,
would disclose the lengths of their licensing agreements with
Livestrong or provide recent sales figures of the products.

Bazzarre, the Livestrong spokeswoman, said the foundation's
relationships with its marketing partners were growing. She called its
merchandise approach innovative.

But David Carter, a marketing professor at the University of Southern
California, said those companies could be quietly seeking opt-out
provisions.

Carter said it was uncertain whether Livestrong merchandise in the
coming months would continue to be purchased or if it would "end up on
freeway off ramps and in third world countries."

Armstrong's fall has led to some rebranding efforts of Livestrong
merchandise by the companies that sell the gear. Nike does not use
Armstrong's image in its promotion of Livestrong merchandise, one of
many visible steps recently taken by the company to distance
Livestrong from its founder. Nike sells Livestrong T-shirts pressed
with the image of the middle-distance runner Steve Prefontaine, who
died in 1975, roughly two decades before Armstrong gained worldwide
fame.

Dick's Sporting Goods, another seller of Livestrong merchandise, has
used images of the American track star Sanya Richards-Ross to promote
the sale of Livestrong merchandise.

Among the biggest supporters of the Livestrong Foundation is
Austin-based Thinksport, a maker of sports bottles and sunscreen. The
company's founder, Kevin Brodwick, wrote in an e-mail: "Having been
around the foundation since its inception, I have seen firsthand the
amount of support and important work the foundation supplies. We are
honored to be part of this important fight."

While companies continue to sell Livestrong-branded merchandise, it is
ultimately customers who will determine the fate of those yellow
bracelets and the sale of Livestrong gear.

Staley, of Mellow Johnny's in Austin, said he was going to closely
watch the marketing of the gear in coming seasons and how the
charity's partners would position themselves.

"It will be interesting for us to see what happens," he said.

NYT