Sports Merchandising Fancy, but No Fad : Marketing: It has become a boutique business, and it’s growing with no apparent limit. After all, the Rams will outlast the Teen-age Ninja Turtles.
Merchandise licensed by professional sports leagues and universities has found an ever-broadening range of outlets. Where once the only places to buy a Lakers’ T-shirt or a Kings’ jersey may have been the Forum or a sporting goods store, such products are now being sold through specialty fan-shop chains, discounters, department stores, mass-merchandisers and mail-order catalogues.
Of course, all seek the upside that comes from the success of a local team or the guaranteed popularity of a team with broad national appeal.
The biggest growth in the past decade has come from the fan-shop sector--stores such as Pro Images, Spectathlete, Foot Locker, Merle Harmon’s Fan Fare and The Scoreboard--small, mall-based boutiques crammed with licensed wares.
It is a business believed to have been created by the late Ken DeRoy, founder of the four Scoreboard stores in the Southland. DeRoy, who opened his first store in Studio City in 1973, sold NBA and NFL merchandise wholesale, then found that no retailers sold the goods year-round. He built his mini-chain into six stores before closing two. His son, Scott, now runs the business.
DeRoy, like other fan-store entrepreneurs, discovered the effect of postseason success. In an interview shortly before his death last month, he said that the early departure of the Lakers and Kings from the NBA and NHL playoffs, respectively, will hurt sales until next season. “Two years ago,” he said, “the increase for June, when the Lakers went all the way, was $100,000.”
DeRoy eschewed large-scale expansion and franchising, while other fan-store chains grew at a rapid pace. But large and small retailers alike acknowledge that selling licensed goods is becoming a major apparel-novelty business that feeds symbiotically off the still-widening interest in sports and the desire to identify with teams.
“It’s a very stable business,” said Bob Carr, editor of Sporting Goods Business magazine. “The Los Angeles Rams will be around for quite a while, while the (Teen-age) Ninja Turtles will be yesterday’s news.”
Retailers point to increased varieties of goods, better fabrics and the advent of authentic licensed products--identical to what players wear--as the primary engines of the market’s growth. And the licensors’ aggressiveness can’t be discounted, said Carr, who added: “The leagues want more money.”
Oshman’s, the Houston-based sporting goods chain with 42 stores in Southern California, concentrates its licensed retailing on the higher-end authentic merchandise--a far cry in styling, fabric and color from the old days of drab, gray T-shirts and baggy sweatpants. “The pro logo business is our largest business next to running and skiing,” said Vice President Steven Nagata. “We push away from the run-of-the-mill, chain-oriented types of retail programs. We feel this strategy separates us from other sporting goods chains.”
J.C. Penney, viewed as an innovator among mass merchandisers, expects to outfit 500 of its stores with Simply for Sports specialty shops by year’s end, with 30% of its space devoted to licensed apparel.
“The industry has been going so crazy in the past 18 months that everything has gone out real fast,” said Greg Visconti, Penney’s licensed team-apparel buyer, from Dallas. “Anything with Michael Jordan’s picture on it goes out faster than anything else. Gretzky’s been terrific. Here in Texas, we’ll sell a lot more as Nolan Ryan closes in on his 300th victory.”
Sales are almost surely going to continue climbing in the fan shops, the only outlets devoted strictly to licensed goods. Major League Baseball estimates that 23% of its sales come from the fan shops, the largest percentage among all its distribution outlets. Their growth and popularity spurred MLB two years ago to launch its own Major League Clubhouse chain, a joint venture with W.C. Bradley, owner of the Sports Fantasy chain. Each of the six Clubhouse stores carries the local team’s name; in addition, numerous teams, including the San Francisco Giants, the Cleveland Indians, the Toronto Blue Jays and the Montreal Expos, own their own stores.
“Fan shops have grown the most quickly in the past five years,” said MLB Properties president Rick White, “but there’s a saturation point because most of them are in malls, and there’s only so much available space.”
The Fan Fare chain, founded by sportscaster Merle Harmon, started in 1977 and has grown to 131 stores, including six in Los Angeles. Like most fan shops, it jams an increasingly varied range of products into a generally about 1,000 square feet.
“Our displays keep going higher and higher,” said Keith Harmon, the chain’s vice president of marketing. “We feel we’re competing for sportswear dollars. If someone buys a sweatshirt, we’d rather sell something that fashion-conscious people want. We’re selling garments whose quality has improved dramatically. People have a choice of jackets for $100 or $1,000.”
With some licensees complaining that too many companies are licensed to produce league-authorized goods, and as more stores commit to the business, there is a possibility of an eventual shakeout. Said Harmon: “We have to keep reviewing our inventory to carry goods you can’t get anywhere else.”
As long as fans crave a bonding with their favorite teams, the business has an inherent strength, but whether the market will fully survive the continued addition of new retail outlets is questionable.
Said Tom Sitek, managing editor of Sporting Goods Dealer: “Sales are growing, but it’s a matter of how the pieces of the pie will be sliced up.”
