York Athletics: A family business in three acts

By Dave Donelson

The first business prospered for 30 years before succumbing to foreign competition. The second became a New Hampshire institution now considering a path to the future. The third launched in 2016 with a business plan to vie with some of the largest competitors in the world.

York Athletics sprang from a little guilt, a storied history and the entrepreneurial spirit of five brothers who came together to compete with some of the most iconic brands in the world. While its roots go back three generations, the Boston-based lifestyle footwear company is a brand new family business whose first product, an understated sneaker, reached the marketplace in 2016.

"Most family business stories are about passing the keys to the kingdom to the next generation," says Kyle York, one of the five brothers. "We're not doing that. It's three successive generations of self-made individuals. We didn't take the family money and reinvest it in the business. We all went out and earned our own money and are now investing it in a new family business."

The brothers—Travis, Evan, Kyle, Tyler and Dylan York—put their heads and their wallets together to create a venture to carry the family legacy into the future. Their story features three separate companies interwoven by family ownership. It begins in 1946 with the founding of Indian Head Shoe Company of Manchester, N.H., makers of iconic high-top cleats for football legend Johnny Unitas and ice skates for Olympic champion Peggy Fleming. The York brothers' grandfather, Henry Spaulding, and his brother-in-law, John Danos, founded that company, which went out of business in the 1970s.

Before the shoe company folded, however, it spawned an outlet store that was purchased and transformed into Indian Head Athletics by Henry's daughter, Gail, and her husband, Don York. The two were high school sweethearts; Don was a local football star. Don and Gail created a successful retail store based on knowledgeable customer service and carefully cultivated relationships with local schools and teams. They also raised five sons who worked in the store growing up but went their separate ways, at their parents' insistence, as they entered the workforce.

"None of us went down the path to take over Indian Head Athletics," says Tyler York. "When we were growing up, Dad always said he wanted something better for us. If any of us had insisted on it, he would have opened the door and taught us everything he knew. But without him, I don't know that the company would have lasted that long."

The five brothers created the third company, York Athletics, to keep the family's entrepreneurial spirit alive. "I've always been interested in the history and heritage of our family. I was also long interested in establishing a fashion brand. About three years ago, those interests collided," explains the eldest brother, Travis York. He gathered his siblings to talk about it in 2013. "There was a general agreement right out of the gate that doing something as a family business made sense. All of us felt a little guilty that we weren't taking on the sporting goods store, but the reality is a brick-and-mortar retail sporting goods store isn't the most relevant business for the future."

What they founded instead, York Athletics, is an Internet-based, direct-to-consumer company selling uniquely styled athletic shoes that aren't slathered with logos. They're moderately priced at $100 to $120 per pair and designed to give the wearer a natural feel underfoot. The first model was dubbed "the Henry" in honor of their grandfather, and the style number is the Zip code for Manchester, home of his factory. A thousand pairs were sold in the first six months. That might not have sent tremors through the halls of Nike or Adidas, but it pleased the five brothers.

"We are five boys and our parents owned a sporting goods store, so obviously sports and competition were a big part of growing up," says Travis. "But we've always been more 'five brothers against everybody else' rather than competing among ourselves."

That take-on-all-comers attitude came directly from their father, Don, 65, a jocular, hard-working, old-school retailer who watches the new venture with paternal pride. "I was concerned because of the nature of the business," he says. "I had seen what imports had done to their grandfather, and it was a huge risk. Their answer to me was, 'You've always told us, if you don't take risks in life, you'll be kind of boring.' "

The original business, Indian Head Shoe Company, lasted 30 years before it drowned in a tidal wave of foreign competition. According to U.S. census data, imports' share of the athletic shoe market increased from 39% to 68% between 1970 and 1976, the year the company declared bankruptcy. At its peak, Indian Head was producing 1,000 pairs of injection-molded shoes a day as a supplier to Hyde Athletic Industries. One of its biggest sellers at the time was the O.J. Simpson "Juice Mobile." Hyde bought the assets of the company out of bankruptcy and was itself eventually merged out of existence.

Travis and his brothers are well aware of the dangers of competing against global conglomerates, but they structured York Athletics to navigate the pitfalls by hiring a non-family CEO with extensive industry experience to run the new company. Mark McGarry, 38, was formerly head of the lifestyle footwear business at Puma and had been contemplating starting his own fashion brand with his wife, Elizabeth, who designed shoes for Nike and Reebok.

"We want to maintain control over the brand and the company," McGarry says. "That's a very important driver for the future, and we have to figure that out from a financial standpoint."

Other outside partners were brought in as well. Kyle met Jay Bush of baked-bean company Bush Brothers & Co. at the Transitions East conference in 2014. The two discovered several areas of mutual interest. Bush joined the York Athletics board and became a lead investor in the new company. The other board members are McGarry and Travis and Kyle York.

Financing of the new venture was carefully thought out. "There was an original 'friends and family' round of funding when we didn't even know what the company was going to be," Kyle explains. That group, which consists of the five brothers, evolved into the largest shareholder in York Athletics. "After that, we did an official York Athletics round, during which several angel investors like Jay Bush and Mark McGarry came in," Kyle says.

As the company's financial needs grow, the brothers are adamant about how they will be met. "We will not raise institutional private equity or venture capital, because we don't want Harvard MBAs on our board reading spreadsheets and telling us how we're doing," Kyle says. "We're funding this with like-minded individuals and family offices. We don't want the dynamics of the family business to change."

One of the new company's competitive advantages is the bench strength contributed by the York brothers. They have all been successful on their own, which gives McGarry and his team a solid group of engaged owners. "Travis and Kyle have been amazing partners," McGarry says. "They come to the table with their strengths, and they also know what ours are. There is a lot of trust going both ways."

Travis, 38, is the owner and CEO of GYK Antler, a marketing agency with 100 employees and $20 million in annual billings. Evan, 36, is vice president of data analytics for GYK Antler, while Tyler, 28, serves as a video producer for the agency.

Kyle, 33, is chief strategy officer at Dyn, a $100 million Internet performance company. (On Nov. 21, 2016, Oracle announced that it would acquire Dyn, which had been the target of a massive distributed denial of service attack in October 2016. Kyle led the deal from Dyn's side and was the company spokesman after the acquisition was announced. He plans to stay on after the transaction closes.)

The youngest York brother, 22-year-old Dylan, is a senior at the University of New Hampshire who interned as a project manager at York Athletics when it opened.

"Of the brothers, Kyle and I are the most entrepreneurial by nature," Travis explains. "Historically, I haven't been involved with true startups, whereas he has, especially on the tech side. Kyle is financing-focused. I am more marketing- and branding-focused. Our brother Evan is on the research and analysis side. Our brother Tyler is a storyteller/filmmaker. Our youngest brother, Dylan, is kind of our grunt," he adds with a laugh. "That's what youngest brothers are for, aren't they?"

Dylan also laughs when told how his brother describes his role. "I don't mind," he says. "I've been working at Travis's marketing agency for the last three summers, so I'm really into business now. I don't know what I'm going to do after graduation. Travis suggested I try to expand my repertoire of experience a little bit by working elsewhere for a while. Eventually, I'd love to work closely with York Athletics."

"I was very touched that our children recognized the value of their heritage," Gail York says. "I valued what my parents did. They were very honorable and involved in the community. Don and I tried to instill the value of family in the boys. You never know with kids what they get and what they don't get, so when I first heard about the idea it really hit a nerve."

"There was a method to Gail's and my madness," Don says. "It was family first, business second, and it was not going to be compromised. The boys are doing that with their families, and we're very proud of that." The three eldest brothers, Travis, Evan and Kyle, have seven children between them.

The official launch of the new company was marked on Jan. 4, 2014, which would have been Henry Spaulding's 100th birthday. Don and Gail, their five sons with their wives and kids, and the McGarrys and their two children gathered in a private room at a local restaurant. "It was almost like a giant group therapy session," Tyler recalls. "We all spoke about our relationships in a very open way." The discussion, Tyler says, helped the McGarrys "to understand us and our relationship with our grandfather and our parents and each other. It was very emotional."

"In the beginning, knowing this was a family legacy, we went through the archives and looked at some of the original manufactured footwear and picked up some styling and design cues," Elizabeth McGarry says. "We knew we wanted to design a sneaker that is timeless yet still performs on the field."

Will the family history matter to York Athletics' customers? "I honestly don't care," Tyler asserts. "It matters to us."

The York legacy is being given a bigger role in the brand's marketing efforts. "When we first launched the brand," Travis says, "the family story was very much behind the scenes. When we brought that forward, we started seeing positive results." He adds that nostalgia is not the only reason. "In all honesty, we're all businesspeople. If the family story had to go into the background to make the brand successful, we'd be totally fine with that."

The new company has been launched and the original one relegated to the history books, but what about the second York family business, Indian Head Athletics? "Gail and I are in the planning stages now," Don says. They're in no particular hurry to make a move. "Our fifth son will finish college this spring," Don says, "and we don't know if we will sell it or liquidate it."

All eyes now are on York Athletics. Travis believes the future of the new company is essentially limitless.

"We will evolve beyond footwear," he says, "although it will always be a focus." Apparel is a given, he says. "I can also imagine us having handfuls of mom-and-pop retail locations in key markets and even expanding internationally where our mindset resonates," he adds. "I can also imagine us taking on a strategic partner."

"I don't care if it's the next billion-dollar company with worldwide recognition," Tyler says. "All I care is that the legacy of the family brand lives on."

Dave Donelson is a business writer in West Harrison, N.Y., and the author of the Dynamic Manager Guides and Handbooks.


A Seven-Story Legacy

In addition to starting York Athletics, the five York brothers made another investment in their family's business heritage in 2015 by purchasing the historic building in Manchester that once housed both the original shoe manufacturing company and the outlet store that became their parents' business. The 55,000-square-foot building known as the 7-20-4 Cigar Factory Building was originally home to a cigar maker that went out of business when Cuban tobacco could no longer be imported after Fidel Castro came to power. The Indian Head Shoe Company bought the building in the early 1960s but lost it along with the other assets in the bankruptcy.

"My dad actually got evicted from that building when the shoe manufacturing company went bankrupt and the building was sold," Kyle York says. Don and Gail York's retail operation moved to its current location in Manchester across the street from a local hockey arena.

Travis York's marketing agency, GYK Antler, moved into the building not long after the brothers purchased it. They also devoted part of the building to a mini-museum housing some of the footwear and ice skates manufactured by the shoe company, along with a trove of old photographs and advertising material.

CEO Mark McGarry and his wife, designer Elizabeth McGarry, live in Boston, so York Athletics is currently headquartered there instead of in Manchester. But relocation might be a possibility in the long term. "We own the building, we all live nearby, the [relatively lower] cost of talent is exceptional," Kyle says, "so it would be really excellent if at some point it became the headquarters." — D.D.

Copyright 2017 by Family Business Magazine. This article may not be posted online or reproduced in any form, including photocopy, without permission from the publisher. For reprint information, contact bwenger@familybusinessmagazine.com.
 

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January/February 2017

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