Indeed, New Era’s hoped-for success in Europe is based more on the fact that musicians like Usher, LL Cool J, and members of Limp Bizkit sport New Era hats, rather than on baseball’s particular popularity abroad (most European customers probably don’t know Alex Rodriguez from Alex Rios).

As part of its multiyear license with Major League Baseball, New Era is required to manufacture its on-field hats in the United States, pushing up its labor costs in comparison with those of its competitors, most of whom produce their hats in Asia. But New Era has managed to turn that seeming handicap into an advantage by using its U.S. factories and distribution network to quickly make small quantities of custom-designed hats, enabling it to react quickly to fashion trends. New Era is able to produce order sizes of as few as 30 pieces for retailers with one-month turnaround times, compared with the typical 300-piece minimums and three-month turnaround times for orders from factories in Asia. As a result, New Era’s bestselling Yankees caps are now available in a staggering 1,000-plus variations.

And consumers seem to be showing little or no reluctance to pay $32 for the company’s signature 59Fifty hats, which are of the same quality as those used on the field by pro players and cost as much as $10 more than the licensed souvenir caps made by New Era’s competitors (New Era even raised prices on its 59Fifty hats by $4 last year because of a change in material from wool to polyester). Indeed, many wearers leave the gold New Era sticker on their hats to prove their authenticity.

“There’s been absolutely no price resistance at all,” confirms Mitch Modell, C.E.O. of Modell’s Sporting Goods, an East Coast–based chain that sells tens of thousands of New Era hats each year.

The fact that so much of New Era’s success is tied to baseball—70 percent of its total business comes from its licensed baseball caps—has some analysts concerned about what would happen to the company if Major League Baseball decided to sell its license to another manufacturer when the current deal expires, in 2014. But Koch points out that its license has already been renewed and extended several times since New Era first received it, in 1992.

“If Nike or Adidas wanted to throw stupid money at the next deal, I guess that they could do that,” Koch says. “But they could have done that [before], and they didn’t.”

As for the present, Koch admits there isn’t a week that goes by when someone doesn’t write or call to say they’re interested in buying New Era. But Koch says he’s not interested in selling the business for now, holding out hope that his two children—daughter, Falynn, 22, and son, Neal, 21—will want to continue running the company.

 “I’m not counting them out,” says Koch.