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SBi Picks Up Where MarchFirst Left Off--Adidas

Adidas watches as MarchFirst's time passes; then signs SBi for new Kobe Bryant shoe.
The final buzzer may have sounded for E-service provider MarchFirst, but the game must go on for its former clients and employees. Adidas America in particular is looking to rebound from MarchFirst's ejection from the services market by preparing a new online marketing campaign for the fall debut of a new Kobe Bryant basketball shoe.

The launch is the athletic footwear and apparel maker's most ambitious online marketing campaign to date, topping the hoopla that surrounded Bryant's first shoe. Hoping the campaign hits 12 to 24 year olds--its target market--like a Magic Johnson dish to James Worthy, Adidas has turned the project over to SBi Inc. Since April, SBi has hired more than 300 former MarchFirst employees from the now-defunct E-service firm.

"We knew MarchFirst had the engineering and process expertise to launch whatever we designed, and this was the most significant product launch for Adidas basketball shoes ever," says Will Villota, Internet marketing manager for the U.S. subsidiary. But soon after signing MarchFirst, the E-service firms woes became apparent to Adidas.

SBi jumped at the chance to add MarchFirst employees to its staff and Adidas America to its clientele. SBi CEO Ned Stringham began speaking with MarchFirst in February regarding the acquisition of certain assets. "We mulled the move over for a while," Stringham says. "But then we realized, how often does a billion-dollar services company decide to liquidate its assets? It was once-in-a-career opportunity."

The move was equally fortuitous for Adidas America, which had shown considerable faith in MarchFirst. "We wiped our brow when Microsoft helped bail out MarchFirst [with an interest-free $12 million loan last November]." Villota says Adidas wasn't worried enough to pull its business from MarchFirst. As 2001 rolled on and it became obvious that MarchFirst wouldn't survive, the company met with Adidas America frequently to go over contingency plans for its Web site. One option, according to Villota, was for MarchFirst to spin off its Portland, Ore., office as a separate entity.

By February, Adidas felt it had invested too much time and money in MarchFirst to switch to another service provider. Even though it is now an SBi client, it's still working with many of the same Web developers and consultants from MarchFirst. SBi's expertise has been in the integration of back-end systems to the front-end user interface, rather than the development of the latter. But the service firm's plan for integrating MarchFirst's employees made sense to Villota. "We were assured that funding and financing wouldn't be an issue moving forward with SBi because they were profitable, and this removed a lot of stress," he says. MarchFirst, meanwhile, never achieved profitability and collapsed under the weight of its own unrealized ambitions.

Adidas' objective with the new line of footwear is to generate sales leads through its Web site, either through direct purchase or a retailer finder. Villota says that every style of footwear has a story, particularly those endorsed by star athletes, and it's these stories that sell the shoes to buyers.

While Villota wouldn't disclose how much of Bryant's Adidas footwear is sold online, he did say one of three visitors to the Bryant portion of the Adidas America site demonstrated purchase intent by clicking through to the store or to the retail finder.

The newest version of Bryant's footwear hits the street Nov. 1, coinciding with the start of the 2001-2002 NBA season. While Adidas America won't comment on the new site's features, citing competitive pressure, Villota says it is Adidas America's most ambitious integration of Web content and electronic marketing.

SBi wasn't the only service provider to see the value of MarchFirst's consulting assets. In April, Divine Inc. bought MarchFirst's central-region business unit as well as some offices, and about 1,200 employees. The deal is expected to cost Divine as much as $125 million over the next five years.