Page last updated at 08:12 GMT, Tuesday, 19 August 2008 09:12 UK

Speedo makes waves at Olympics

By Clare Matheson
Business reporter, BBC News

Grant Hackett in LZR suit
The LZR suit has featured in most record breaking swims in Beijing

Speedo has been making waves at the Beijing Olympics but the swimwear brand is not just causing ripples in the Water Cube, it is also creating a stir in the world of sponsorship.

Rival brands have accused the firm of psychologically pressurising athletes to wear its latest swimsuit while coaches have attacked Speedo for sapping morale.

Meanwhile a rival company, California's TYR Sport, has even mounted legal action - taking Speedo to the US courts accusing it of false advertising and of conducting a monopoly.

TYR has also sued the US swimming team, its head coach Mark Schubert and even two-times Olympian Erik Vendt for daring to wear Speedo's latest wonder-suit when he was contracted to slip into TYR's swimwear.

Performance boost

Behind all the upset is Speedo's LZR swimsuit - a space-age outfit that many believe can significantly improve performance.

Already in Beijing it has been worn in a string of world record swims, and helped Michael Phelps to take six gold medals so far.

So it's no surprise that the outfit has sparked claims of "technological doping", triggering fierce debates about performance on the poolside.

Some athletes are so convinced of its positive effects on performance that they have ditched sponsorship agreements with rival firms to get hold of it.

PHELPS' BEIJING GOLD RECORD
Phelps in Beijing

400m Individual Medley (World Record)
4x100m Freestyle Relay (WR)
200m Freestyle (WR)
200m Butterfly (WR)
4x200m Freestyle (WR)
200m Individual medley (WR)
100m Butterfly
4x100m Relay (WR)

Kosuke Kitajima forced Japan's national team to drop its contract with Mizuno 8022 and two other firms and allow its swimmers to use the LZR.

Meanwhile, Italy's national squad - which is sponsored by Arena - has said it will allow its swimmers to wear other brands, as long as they pay a fine.

But Germany has been forced to keep its links with Adidas, refusing appeals for its athletes to don the LZR.

"There have been 39 world records, long and short course, this year and 90% of them were in Speedo," team coach Orjan Madsen told Reuters in May.

"That, of course, does something to the athletes. It's almost impossible to put yourself in a state of mind where you say it doesn't matter. Of course it matters."

Three years in the making at the group's mystery-laden Aqualab, and aided by Nasa, the next-generation swimsuit sounds - and looks - like something superheroes would wear.

Its corset-like design holds the wearer's body in the optimum position, says Speedo.

The firm claims that the water-repellent fabric and laser bonded seams cut drag while the overall design is intended to improve oxygen intake by as much as 5%.

All of this led the US swimming team's coach to declare the suits could improve performance by 2% - a vital measure in a sport where hundredths of a second can mean a new world record, or the difference between a gold medal and leaving empty-handed.

'Psychological pressure'

Mr Schubert believed in the suit so much he warned swimmers taking part in Olympic trials earlier this year that they should wear the LZR "or they may end up at home watching on NBC".

US 200m relay team Beijing
Speedo's dominance of the pool has sparked anger among its rivals

Sportswear manufacturer Arena has withdrawn from the battleground. But not without first firing some very public warning shots at Speedo accusing it of putting athletes under clearly "enormous psychological pressure".

In a recent statement Arena said the new generation of swimsuits had "clearly produced an atmosphere of anxiety, confusion and uncertainty that has been amplified and hyped by the media throughout the world".

But it said it had decided to "avoid any further, and probably fruitless, legal action" and instead would now dedicate its time to developing new and improved performance swimwear.

But perhaps Arena's decision was also prompted by the fact that the sport's governing authority - FINA - gave its blessing to the LZR after Arena demanded that it investigate whether the swimsuit gave an unfair benefit to the athletes who wore it.

Level playing field?

The furore surrounding the LZR even forced FINA to ensure the Olympics would not be a battle of haves against have-nots - particularly when the LZR has a price tag of $550 (294) - by allowing all of the major manufacturers to hand out suits to national teams.

"It will be fair because we have a rule that says the swimsuits should be available for all the swimmers. So everybody can have access to the swimsuits they want,'' FINA chief Cornel Marculescu said.

But Speedo has clearly won the battle of Beijing with more than 90% of the swimmers donning its futuristic LZR costume.

Acres of coverage have also benefited the brand - in particular the performance of US swimmer Michael Phelps and his mission to grab a record-breaking eight golds at the games.

Value for money

Joyce Julius & Associates, a US firm which measures sponsorship values, has estimated that the airtime Phelps has grabbed on American TV channel NBC alone is worth $3.6m to Speedo.

The halo effect on the brand and the rest of its swimwear is going to be massive
Rune Gustafson, Interbrand

"Truly, we've been able to leverage his popularity with all of our accounts because he has transcended swimming," said Stu Isaac, senior vice president for marketing and sales for Speedo.

"It's helping Speedo become cooler and addressing a younger market outside just that core competitive swimmer."

Speedo International's co-president Andy Long says the group now plans to capitalise on its Olympic coverage, using it to push into new beach and leisure wear markets in newer markets like China.

"In the run-up to the Olympics we focused on the elite suits, now we'll be using that Olympic recognition around the world to continue the link."

Indeed, the firm says its showing at the Olympics has sparked huge interest in its LZR suits - which won't be available to the general public until later this year.

"It's a gold medal for branding for Speedo at this Olympics," says Jasmine Montgomery of the consultants Futurebrand.

"The glamour of beautiful athletes doing incredibly well is gold for Speedo, you couldn't put a price on the publicity it's getting."

'Halo effect'

In coming months the group also plans to capitalise on its popularity, and broaden its appeal from traditional swimwear to a fashion brand - a move that will see it following in the footsteps of Adidas and Nike.

"The halo effect on the brand and the rest of its swimwear is going to be massive," says Rune Gustafson, chief executive on international branding consultancy Interbrand.

Phelps LZR Ad
Speedo is reaping the rewards of signing up record-breaker Phelps

"The strongest form of advertising is performance and word of mouth and this is what it's all about."

And Michael Phelps' record-breaking performance will have do none harm, providing free advertising worth more than "tens of millions", Mr Gustafson adds.

At present, competition swimwear makes up 60% of its sales - but the group has branched out into beach fitness and leisure gear.

With the global swimwear market estimated to be worth $13.3bn (6.6bn), Speedo's coverage at the Beijing Olympics could deliver significant gains.

But Speedo won't be the only winners.

If Phelps continues his record-breaking streak his performance could pay dividends as the manufacturer has promised him a $1m payout should he win seven golds or more.

But as Speedo's Mr Long says, it's a cheque the group will be "delighted" to sign.




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