At the time of S&S Activewear’s acquisition of alphabroder – made official last week – both companies ranked in the top five of PPAI 100 suppliers. Based on alphabroder’s 2023 reported revenue, the merger could put S&S Activewear’s revenue this year over $4 billion, which would challenge SanMar as the industry’s largest supplier.

By just about any standard, the move has the potential to reshape the promotional products landscape with far-reaching ripples. As the two companies move forward as one, distributors are anticipating any potential change to the way they do business. Some understandably speculate on what such a massive acquisition might mean for the future of the industry.

“The acquisition by S&S of alphabroder is by far the largest we have seen in the industry, and it will have an impact on the apparel supply chain,” says Tom Goos, president of Image Source. “What that impact will be is hard to determine.”

There’s no denying the sort of presence that S&S Activewear now makes up in promo, and distributors will be looking at it to reflect the sum of its parts going forward.

“Both S&S Activewear and alphabroder have strong, rich histories in this industry,” says Todd Sachs, senior director of operations at BAMKO. “With their combined leadership and extensive product portfolio in both retail brands and core industry brands, S&S Activewear will be a formidable player.”

A Top-Heavy Supplier Market…

Jeremy Picker, founder and CEO of Denver-based distributor AMB3R, admits to initially reacting to news of the acquisition with skepticism and disappointment but has tempered pessimism before seeing results. He understands that mergers and acquisitions are a natural part of the industry, claiming that AMB3R has considered accepting acquisitions twice in the past five years.

“Becoming stronger as a bigger organization is awesome for those two in the deal,” says Picker. “Not necessarily for all their clients and vendors. New reps, new process, new order management system; all of that can set a lot of businesses back in productivity and the bottom line.”

What’s difficult for most to fully put their finger on is the proper balance between the inevitability of mergers in promo and the scale at which they are now happening compared to past years. Is it becoming the era of supplier behemoths? And if so, what does that mean?

“With SanMar and S&S, we will have two suppliers who will make up at least a third of all spend in the industry, a staggering statistic,” says Goos. “If you look back to five years ago, the top 10 suppliers combined made for a third of the spend in the industry. That is quite a change.”

…And How That Might Affect Pricing

The most immediate fear that can arise whenever two large companies in any industry merge is an eventual price increase due to a lack of competition.

  • In this case, there seems to be two sides of the same coin. On one hand, S&S Activewear is now exponentially bigger than many of its competitors.

“I am concerned with my pricing structure,” Picker says of his business with the supplier. “Less competitors and more control over price regulation takes out a lot of competitive advantage.”

  • On the other hand, a new competition may emerge between it and SanMar at the top of the supplier market.

“I personally think it will be positive,” Goos says. “I see the head-to-head competition of these two giants making them better at serving the market. I don’t believe we have to be concerned about a lack of competition or increased pricing from this acquisition. The industry has plenty of apparel options that add value if a distributor is looking for an alternative source.”

Howard Schwartz, founder and CEO of HDS Marketing, is similarly envisioning positives coming out of the acquisition.

“While we acknowledge the potential for this merger to increase pricing on certain commodity products, we are optimistic that the resulting consolidation will foster greater competition and provide access to enhanced value-added resources,” Schwartz says. “This, in turn, should enable distributors to better serve their clients.”

Sachs echoes that sentiment, suggesting that there will be a standard that distributor partners will expect coming from the experience of working with both S&S Activewear and alphabroder.

“This competition will force all apparel and soft goods suppliers to elevate their offerings, service and innovation to stand out and meet the rising expectations of distributors,” says Sachs.

Practical Changes

S&S Activewear has also announced that it will gradually exit the apparel decorating business – a service that alphabroder offers – with the expectation that this will be completed by the end of March 2025. 

  • Hard goods decoration will remain an important offering for the alphabroder brand, and customers can continue to access those products and services through their existing channels.
  • Going forward, S&S Activewear plans to create a standalone hard goods decoration business division that will be led by a general manager and supported by a dedicated sales and service team.

Picker sees this as a positive development and an example of enhanced resources hopefully improving the overall offering.

“The announcement that it will be splitting off its decoration and promo side of things is good news for all distributors,” Picker says.

If and how it shapes staffing in the future will likely be a point of importance of many distributors.

“My reps at [alphabroder] are awesome, and I hope they stay on,” Picker says. “We’ve built a great relationship over many years.”