Lantern file photo
Ohio State agreed to a 10-year, $97 million deal with two apparel and retail businesses, J. America and Fanatics Inc., to exclusively produce and sell university apparel, and some local businesses might see a cut in profits.
J. America and Fanatics will pay $23 million up front for exclusive rights for design, marketing, production, retail as well as distribution of all apparel, according to a Thursday university press release.
Jeff Kaplan, senior vice president and executive officer to the president at OSU, said the university chose J. America, which is based out of Webberville, Mich., and Fanatics, a Jacksonville, Fla.-based company, from three finalists and about 40 bids.
“J. America, Inc. is pleased to have been named along with Fanatics as The Ohio State University’s licensed apparel and retail partner under an exclusive apparel, headwear and retail model,” the company said in a statement. “This new agreement gives us an opportunity to make a larger impact on The Ohio State University, the Columbus community and fair labor enforcement around the world.”
Kaplan confirmed that Dallas Cowboys’ Silver Star Merchandising, which has come under fire from organizations like United Students Against Sweatshops for mistreating employees, was also a finalist, but “J. America offered what we thought was the better deal.” Kaplan would not name the third finalist.
Kaplan said the university’s three main factors in the decision were to “enhance the royalty revenues that support student success, continue its commitment to growing business in Ohio and demonstrate leadership in socially responsible business practices,”
The agreement will stabilize funding for hundreds of student scholarships, about 1,000 student organizations and invest in library collections, Kaplan said.
OSU’s athletic apparel agreement with Nike will not be affected.
USAS held several protests during the decision-making process, demanding that the university and President E. Gordon Gee not choose Silver Star Merchandising, which group members said used sweatshop labor to produce its apparel.
“The voices that were coming from those students and other students were heard equally with everyone else,” Kaplan said of the protestors. “We tried to factor in the information that was provided and not the way it was provided from everyone who had an interest.”
Members of USAS called the announcement to sign the agreement with J. America and Fanatics a “victory.”
“We definitely see it as a victory for students because we have been campaigning for about 540 days now and our administration did not sign with the Cowboys,” said Wilfredo Santamaria, an organizer for USAS at OSU and a fourth-year in history of art. “Our work isn’t over. We still are going to make sure the university and J. America are held accountable to the workers who are producing products for our university.”
Not everyone was happy with the news, though.
Some local businesses could be adversely affected as the university fully expects some vendors to lose their license to sell apparel.
OSU has approved about 100 licenses in the past, but under the new system, all licenses will expire at the end of the year and companies will have to reapply through J. America.
Between 30 to 50 percent of the licenses will be approved, Kaplan estimated.
“I want to be honest. Not in all cases will they be approved because one of the things this does is cut down the number of folks with whom we deal,” Kaplan said.
The agreement also cuts down the number of factories OSU has to monitor to ensure the companies are upholding “socially responsible business practices” from about 800 to 20, all of which will be controlled by J. America and Fanatics. OSU will have assistance monitoring the factories from VeritÃ©, a company that helps “ensure that powerful institutions … take responsibility for solving human rights problems,” according to its website.
The streamlined process might be good for OSU, but for some local businesses, it only adds to the concern.
“The vendors that we carry from, they are all losing their licenses and we will only have one vendor to choose from,” said Judi Cohen, a manager and co-owner at Conrads College Gifts, which sells OSU apparel on Lane Avenue. “How are they going to mass produce all the clothing for all these different stores?”
Cohen also said the new agreement essentially eliminates a store’s ability to distinguish itself from the competition.
“Sometimes we would have companies just make things exclusively for us,” she said. “Now, why would somebody come to our store when they’re closer to another store that gets the same merchandise at the same price?”
OSU contends that as a whole, the new agreement will benefit Ohio much more than it harms it.
Fanatics plans to open a distribution center in Frazeysburg, Ohio, in 2013 that will employ about 300 full-time workers and more seasonal employees, Kaplan said.
“There will be some current vendors who are eliminated,” Kaplan said. “The net though for Ohio dollars will increase. There will be a lot of winners and there will be some losers.”