Small Memphis Firm Has Big Stake in Cheerleading
JEFF WEBB, president of Varsity Spirit Corp., is attending summer camp for cheerleaders.
During July and August this former high school and college cheerleader tours some of the 223 cheerleader and dance team camps established by Varsity Spirit Corp., the company he started with family members and $85,000 in 1975.
Mr. Webb has guided his $41-million business toward a successful three-legged strategy: organizing summer training camps, manufacturing uniforms, and catering to special events.
"Intuitively, I could sense there was something out there," says Webb of his early days conducting summer training camps. Enthusiastic youngsters blossomed as they learned teamwork and discipline, he says.
Registration numbers have gone from 4,000 in 1975 to 115,000 this year. The camps are operated by the Universal Cheerleaders Association (UCA) and the Universal Dance Association (UDA), both organizations set up by Varsity.
With that expansion grew the need for uniforms, and so Varsity Spirit's second division was formed in 1979. It accounts for 65 percent of company revenue - more than a quarter of a million uniforms annually - and includes arrangements with Nike and Converse for shoes and accessories.
To develop the off-season months Varsity turned to special events. By 1984, ESPN, the sports channel, began televising the UCA and UDA national competitions, pulling in 60 million viewers, Webb estimates. Some of those viewers are in Japan where five years ago investors called Varsity Spirit wanting to buy a foreign license for its training camps. Now there are 2,000 Japanese cheerleaders, Webb says. They order about $700,000 of uniforms yearly. "It's a unique American export," he adds.
Along the way, Varsity Spirit engineered a leveraged buy-out in order to eliminate a $9-million debt and fund future growth. The company began trading shares on NASDAQ in January 1991. By the end of March this year, Varsity's profit had reached $2.4 million, four times its 1991 earnings.