In the mid 2000s, two companies emerged as two powerhouses in the sportswear world. Only years later, they would be sued and forced to pay customers millions of dollars because the product they sold, never worked.
Athletes all over the world would publicly endorse this product by expressing their love and gratitude for it. Athletes and celebrities like Kobe Bryant, Cristiano Ronaldo, Alex Rodriguez, Robert De Niro and even former president Bill Clinton all wore these bracelets. A 66 year old woman from Canada who said she wore the bracelet without even knowing what it was and it healed her persistent wrist pain after having two surgeries on her wrists. Every single person mentioned previously was never paid for their endorsements on these products.
The bracelets and necklaces are said to use nanotechnology at a subatomic level by using a hologram. When the hologram is in contact with your body it uses your bioelectrical energy to increase your physical strength. These claims come from many different explanations of Power Balance found on archive versions on their website spanning from 2007 to 2009. When these claims were made the company Power Balance was never even heard of from the masses. A few years later an abundance of athletes in the world were wearing these bracelets, but at this time a completely different company was dominating the market.
Phiten necklaces were a cultural phenomenon in the baseball world. The product was created in 1983 in Japan by a chiropractor named Yoshihiro Hirata. Phiten had used something in their product that was different from Power Balance. Phiten held a study which found that they could make metal titanium dissolve into water using brand new technology, called Aqua-Titanium. It was claimed that when a Phiten necklace was worn on the body it could increase a person’s health levels. From a scientific standpoint these claims were controversial.
After many years, Phiten finally had found their target market…baseball. Baseball was perfect for a product like Phiten because a sport like baseball is widely known for their ridiculous superstitions. For example, the 2009 Yankees were convinced that a gold thong could help get a player out of a hitting slump.
The idea that a necklace filled with liquid metal could make you better at baseball is less crazier than thinking that a necklace would create a multi-million dollar company. The necklace first gained popularity in Japan and moved to the United States when Randy Johnson discovered the necklaces during an All-Star trip to Japan in 2001. The 2004 Red Sox furthered the necklaces’ popularity where many players of the World Series-winning team were seen wearing them around their necks during the playoffs. The marketing for Phiten exploded in 2005 where more than 200 players were seen wearing the necklaces during games. This was a bit of luck and genius because Phiten never had these players endorse their products so Phiten never had to pay these athletes for their marketing.
Through the first month of the 2005 MLB Season, Phiten sold 3,500 necklaces in the United States and in August they had sold 24,500 necklaces. The necklaces were everywhere from sporting goods stores to school recess and many baseball diamonds around America. Phiten began selling some of their products for $160 because they claimed that they were more effective because they had the highest concentrated and strongest level of Aqua-Titanium in them.
There hasn’t been a single medical professional that isn’t connected with the company that has backed their claims of maximizing energy and strength. Many professionals were calling the product a “pseudoscience” and article after article disproved Phiten’s claims. But many normal people interviewed in these articles claimed that the product would help them by giving them more energy and making them stronger. These wild claims by Phiten were retracted when the necklaces became more popular in the United States to avoid lawsuits on false claims and advertising. The marketing manager for Phiten’s USA Sports Division even said that it is just a “cool sports item.” Since the statements were released many people began calling the product a scam, but this had no effect and it actually made the necklaces more popular. In 2009, Phiten sold more than $200 million dollars worth of product. From a business perspective Phiten had built up an amazing model but, they were held back by only being seen in the baseball realm. So a company called Power Balance took advantage of the situation.
In 2007, Power Balance created a bracelet which was not successful whatsoever. They only sold $8,000 worth of bracelets, but everything would change in 2008. In 2008, Matthew Stafford, Mark Sanchez, and Colt McCoy were all seen wearing Power Balance bracelets during their games in college and even in Sports Illustrated magazines. On the cover with Mark Sanchez and Colt McCoy if you were to zoom in on their wrist you could see them wearing the bracelets. Just like Phiten they were getting millions of dollars in free promotion and making very strong claims on their product. As the same with Phiten many scientists and medical professionals disagreed with the claims made from the company. But, there was one thing that convinced many to buy the product, the Power Balance Test,
The test had two parts, the first part would have a person balance on one foot while holding their arms out and a person would then push down their arm to make them fall off balance. The second part would be to retake the test, but the test subject would be wearing a Power Balance bracelet. The results were staggering, because almost every time the person would have significant improvement on their balance. This test spread like wildfire, with random people on the street taking the test and swearing by the results they had when they were wearing the bracelet.
This is marketing genius because not only did Power Balance have athletes and celebrities wearing and swearing by their products now they had normal, everyday people saying the same exact thing thus creating more reliable sources which generated more profits for the company. But, once again, scientists and medical professionals disproved this test because it most certainly a psychological trick. The “test” doesn’t hold up to its claims when a subject doesn’t know if they are wearing the bracelet or not but, when the subject does know that they are wearing the bracelet, the test immediately works extremely well.
However, the reactions from scientists were immediate and much greater than the reactions from Phiten. Once again, after many articles were published and studies conducted they all disproved the test calling it a placebo, a pseudoscience, and a scam. All of this backlash results in the entire industry of sports performance bracelets to crumble.
But in the meantime, it made no difference because many athletes in every sport across the world were wearing bracelets. Athletes and celebrities like David Beckham, Drew Brees, Kevin Durant, Yasiel Puig, Lindsay Lohan, and even members of the royal family were all seen wearing the bracelets. Many athletes and people didn’t even care that it didn’t “work”, they just liked the way that they looked and because of this they sold $35 million dollars worth of product in 2010.
Years later, Power Balance would change their outrageous claims to their “science” being biased behind Eastern philosophies. They most likely changed these claims to avoid lawsuits, the same as Phiten. Then, the lawsuits began to pile up. In 2010, they were sued for 300 thousand euros in Italy for not providing scientific evidence about the claims made about the bracelet. They were also investigated by the Australian Competition & Consumer Commission (ACCC) for engaging in misleading and deceptive practices in marketing which was a breach of conduct. Because of this backlash and lawsuits Power Balance was forced to make a statement saying, “We admit that there is no credible scientific evidence that supports our claims.”
Since Power Balance’s admission that there was no scientific evidence backing their claims in a few short months they had 18 pending lawsuits in federal court. Stars like Shaquille O’Neal and Lamar Odom were being sued for endorsing the product because of the company’s claims. On November 21, 2011 Power Balance had agreed to a settlement of $57 million dollars and was forced to offer refunds to customers.
Being $40-$50 million dollars in debt the company was forced to declare bankruptcy. The company was then sold for $8 million dollars to a Chinese manufacturer to which the company owed money too. In the same year, Phiten also settled for a lawsuit for $3.2 million dollars and were entitled to offer free refunds to customers as well.
This was the end for both companies as the popularity for sports performance base necklaces and bracelets began to fade away as athletes and celebrities began to stop wearing them publicly. Both of these companies started from nothing and ended with nothing.