Pledged to Greek Gear
Licensing Fees Squeeze Out Md. Store's Rivals

By Kim Hart
Washington Post Staff Writer
Monday, March 12, 2007

When a Kappa Delta needs a shirt for a new sorority sister or a Sigma Chi wants to get a shot glass engraved for his post-initiation party, they know one sure source in the Washington area.

It's the University Shop, which opened 14 years ago during the most recent heyday of sorority and fraternity recruitment. This time of year the tiny shop on Route 1 in College Park is crowded with pledges -- new recruits to the Greek system -- who come from not only the University of Maryland but Johns Hopkins, George Mason, Georgetown, George Washington and beyond, ready to plop down some serious cash for custom logo-ed sweatshirts, paddles, flasks and yoga pants. Every March, during the few weeks between rush and initiation, the shop makes more money than it does in the other 11 months combined.

In the past decade, three other stores near the College Park campus have stopped carrying Greek gear or have gone under, unable to keep up with the fickle tastes of college students, the ebb and flow of Greek coolness and the fees chapters have begun charging for the use of their trademarked letters.

But the University Shop has survived and prospered. A few campus stores and an abundance of Web sites sell a sprinkling of pre-made gifts, but this is the area's best-known retailer that is legally licensed to make specialty products for the growing Greek community.

"It's tough to be in such a niche business," store manager Derek Martino said on a recent afternoon, as a steady stream of students picked out the wooden paddles that pledges traditionally give to their newly acquired "big" sisters and brothers. "Girls come in here, spend $60 on a paddle and think this store makes tons of money, but they don't see how slow it can be the rest of the year."

And sometimes it can slow down for years at a time. The popularity of fraternities and sororities, which took a hit during the counterculture movement of the late 1960s and early '70s, came back strong and spiked in the late '80s before tapering off in the next decade after reports of hazing mishaps and rowdy parties. Since 2000, though, numbers nationwide have again been on the rise.

At the same time, national chapters of sororities and fraternities have become more aggressive in policing the use of their signature Greek letters. For decades, they had paid little attention to how retailers produced or sold Greek gear. But about four years ago, a few "entrepreneurial frat boys," as some store owners call them, realized their organizations were missing a chance to make a nice chunk of change. They helped create a system that is similar to the way universities charge clothing makers to put college logos on sweatshirts and baseball caps. Now, about 350 stores across the country are licensed to make and sell Greek gear.

For instance, a licensed store that sews AEPhi on a shirt has to pay the Alpha Epsilon Phi national chapter 8.5 percent of the shirt's sales price. Some independent shops have stopped catering to Greeks because they say the fee is too expensive.

Unique Impressions, a store that outfits many of the University of Delaware's Greek affiliates, has had to bump up its prices since it became licensed two years ago, said store owner Donna O'Dell. "Of course we have to pass that cost onto the student," she said. "It would have been easier for the organization to charge each student a little extra in the dues they pay."

Court battles have ensued when chapters clamped down on vendors selling unauthorized merchandise. Most recently, Greek101.com, a popular online retailer, was sued by 24 sororities and fraternities for selling apparel and gift items without a license. The company settled with the groups and now pays the licensing fee. In December, 33 Greek organizations filed a lawsuit against several unlicensed vendors that are "unwilling to respect and honor Greek trademark rights," said Dan Shaver, president of Affinity Marketing Consultants, a firm that has helped about 55 Greek organizations reach licensing agreements with vendors.

While unlicensed vendors still get a fair amount of business, the licensing policies have helped boost sales for some stores that were able to outlast their competition. Randy Horvath, the owner of the Greek Boutique near Texas A&M University in College Station, Tex., said the new license requirements "created quite a stir," but he now benefits as the only licensed shop in town.

"Initially you want to kick and scream because you think it's deep pockets going after small companies," he said. "But then you begin to realize you can get more business through national organizations. I can create my own product and control the margins."

Martino, a former Delta Tau Delta at the University of Virginia, said the licensing fees have made a dent in his profits, but the growth of the Greek community has helped offset that loss. At the University of Maryland's College Park campus, 600 new members joined the system last month (many local colleges have formal recruitment during the spring semester), a slight increase over last year. Several ethnic fraternities and sororities have also formed, driving a new source of business to the store.

Half of his job, Martino says, is keeping up -- via student employees -- with the clothing trends and each chapter's quirky traditions. He knows, for instance, that Alpha Delta Pi sisters often put diamonds on their paddles, and that Zeta Psi brothers print nicknames on the back of their jerseys.

For out-of-town students, making the trek to College Park has become a tradition. Jerry George, 22, a member of Sigma Alpha Mu at Johns Hopkins University, has come shopping for seven semesters in a row.

"It's really the only place to go," he said. "We make a day trip out of it."