Winning strategy: it's a year-long season for Northridge Sports Memorabilia Company which scored points by moving exclusively to online and mail order sales.

Most USC fans spent the days following the football team's loss to the Texas Longhorns worrying about how to replace star players like Reggie Bush and Matt Leinart, but Greg Gubner was probably thinking about how the loss would affect fans' desire for Trojan T-shirts, mugs and checkbooks.

Sports memorabilia has been a central theme in Gubner's life. In 1964, his parents opened clothing stores in Los Angeles. They added a sports section in each store, but found within a few years that sports clothing was outselling the regular men's department by a wide margin.

His parents changed their business model, selling sports merchandise exclusively. Eventually, they decided they could make more money as a mail-order company.

After 18 years in business, Sports Section mailed its first catalog in 1982. It now sends over 5 million of them every year. In 1997 the company launched its first Web site. At one point, Gubner's parents operated five stores in the area, but that number started to drop as the direct-ordering became more profitable.

"We went mail order and also online exclusively because the catalog and the online business was dwarfing the retail side of the business, so it just became a business decision at that point," said Gubner. "It's less overhead, and people can shop 24 hours a day."

Gubner, along with his two brothers, worked in his parents' stores throughout his childhood. In their adulthood, however, his brothers both got law degrees and went into private practice. Gubner worked as a computer network specialist for 12 years before returning to take over Northridge-based Sports Section. He said he's never regretted his decision to return to helm the family business.

"It's a lot of fun. The business is really a lot of fun to run," said Gubner. "We're very gift-oriented now, and there's always some occasion around the comer. There's Father's Day, Mother's Day, there's Christmas. Back to school is a very big gift-giving time."

Technology driven

Through improving efficiency at Sports Section and upgrading its Web site, Gubner said he's been able to turn a modestly successful company into a booming business.

"I'm into technology, I come from a technology background," said Gubner. "The business has evolved into something where it's a fun regular sports business and also, if you're technically savvy and the folks at Warp 9 are helping us quite a bit with that, you can really do a tremendous amount of business."

Because of his technology background, Gubner made improving Sports Section's Web site a priority when he returned. To redesign SportsSection.com, he turned to Warp 9 Inc., a Santa Barbara subsidiary of Roaming Messenger Inc.

"They put in a lot of the great features we have now like 'refer a friend,' 'add to wishlist.' A person could create a bunch of items on their wish list, send it to their grandparents or to somebody who's going to be buying a gift for them, and it has all the items listed right there that they want," said Gubner. "They also just launched a virtual catalog system for us. We have a big mail order push every year, we push out 5 to 6 million catalogs to households throughout the United States. What Warp 9 has just launched for us is a virtual catalog with actual page turning, you feel like you're looking right at the catalog.... it's kind of a next step for catalogers."

Since closing Sports Section's last retail store a few years ago and putting more resources into the company's Web site and catalogs, Gubner has seen revenues jump from $5.7 million in 2003 to $8.4 million in 2005, an increase of over 47 percent. Gubner has been able to expand without hiring many extra employees, but has to implement more efficient business practices. He rearranged the inventory at the company's 15,000-square-foot warehouse space so that employees could work faster and invested in high-tech packaging equipment.

Sports Section uses its catalogs, of which there are 18 editions every year, as its primary advertising vehicle, although Gubner said he plans to put more money into Internet advertising in the coming years. Still, much of the company's future business depends on the national economy and what position sports holds in the country's consciousness.

"If the economy is strong and consumer confidence is higher, we do better," said Gubner. "The other driver is the excitement of sports. The Red Sox winning the World Series was very exciting for a lot of people. We shipped Red Sox merchandise throughout the country, not only to the New England area, because there are fans all over. You know, I think there's something to be said for watching sports, and being into sports is really cool right now. It's a good thing, and there are so many other distractions that kids can get into that. I think parents are excited when they show an interest in sports."

Success driven

Although the Red Sox victory made headlines beyond newspapers' sports sections, Gubner said that any time well-known teams are successful, it's good for business.

"USC is big, it's an awesome franchise. We grew up rooting for SC and that (team) is definitely a big deal. Having teams like the Pittsburgh Steelers do well, the Dallas Cowboys and the Redskins do well, it helps business, but I really believe that the general population is happier," said Gubner. "When the Red Sox won the World Series, there were tons of commentators mentioning that it was great for anyone in the sports business, no question. But it was also good for insurance salesmen, in the New England area, because people were happier and the economy was better because this huge weight had been lifted. We have a number of customers who were Red Sox fans, and their parents were Red Sox fans, and people were buying Red Sox paraphernalia, no kidding, to take to the grave site, to say 'Hey dad, we did it,' because their parents didn't see the Red Sox win in their lifetimes."

David Carter, a professor of sports business at the USC Marshall School of Business, agrees that as sports contests become larger events, merchandise sales benefit from the extra attention.

"Like the saying goes, 'unless you buy a T-shirt, no one can tell where you've been.' I was at the Rose Bowl the other day and they were selling merchandise at pretty amazing prices," said Carter. "The hardcore fans want to have the most contemporary and up-to-date stuff, especially when you're talking about the success of teams locally. As sport events become much larger events, I think then you have another market for casual fans."

Spotlight

Sports Section

Year Founded: 1964

Employees: 2003: 19

Employees: 2005: 21

Revenues: 2003: $5.7 million

Revenues: 2005: $8.4 million

Driving Force: The general economy, and the excitment that sports generates across the country.