The downturn in the licensed apparel business from its peak two years ago appears to be stabilizing a bit as the market settles into the realities of a more fan-based business. The NFL and MLB businesses have shown remarkable resiliency despite the urban consumers move away from jerseys as a fashion item, while headwear for the two leagues maintains a leading position in both fashion and fan appeal. The NHL fan has apparently forgiven and forgotten after the lost season of a year ago, but the biggest disappointment looks to be the NBA, which has little appeal as a fashion item these days and clearly lacks any new marquee names in the rookie ranks.
At retail, The Finish Line said that licensed apparel comps for the most recent quarter through November were still down, but not to the extent of recent past quarters. The retailer said they sold more apparel units, but a 15% decrease in average selling prices offset the unit gain. The trend can be tracked to a shift in product mix, rather than a decrease in ASP for any particular category, like jerseys.
Hibbett Sporting Goods said declines came as expected in MLB and NBA apparel in their third quarter through October, but said the NFL was unexpectedly “performing very well,” comping up in single-digits. The overall licensed apparel business at HIBB continued to be a drag, comping down in double-digits, which would indicate a very soft NBA business since NFL was up and college was flat for the period.
According to the most recent SportsScanINFO data, the NFL business represents roughly 32% of licensed merchandise sales at retail this year-to-date. Headwear is up 35% for the year so far, while T-shirts are running 83% ahead and Jerseys are back up 18% after a sharp fall off last fall. Ben Roethlisberger dominated the charts last year as the top-selling jersey (no truth to the rumor you had to buy two jerseys to get the whole name), and he is joined this year by Peyton Manning and Michael Vick. Philadelphia Eagles problem child Terrell Owens also has two jersey styles in the top 10 for the year.
This years big “newcomer” to the top of the charts is Chad Johnson, wide receiver for the Cincinnati Bengals. Year-to-date, the top teams in overall market share are the Eagles, Steelers, Patriots, Colts, and Giants, but a more recent look at sales reveals the Bengals moving into the third spot after the Steelers and Colts, thanks in large part to Johnson. The ability to react to these changes would be a real challenge for any vendor, but Reebok, which holds the exclusive for jersey sales, appears to be reacting well to the shifting winds of the league and keeping the pipeline full. In the companys most recent conference call with analysts, Reebok CFO Ken Watchmaker said they changed their booking programs in licensed to “create more of a chase business” in an effort to “reduce cancellation and improve retail performance.”
The year has not been as kind to the NBA in terms of licensed product sales. According to the SSI data, NBA licensed merchandise sales are off 43% for the YTD period, with Headwear (-47%), Tees (-45%), and Jerseys (-34%) all down for the year. One curious note is the relative weakness of the Swingman Jersey product under the Reebok umbrella as compared to the strength of the category under Nike. Reeboks Watchmaker indicated that the market was still working through the older Nike inventory.
Matt Powell, senior retail analyst for SportsOneSource, pointed out that Nike still has a 17% share in NBA jerseys for the YTD period, even though they stopped selling them a year ago. The company dumped a lot of product into the market at the end, and much of it is still working its way through the pipeline. Another key change to this years numbers is the fact that the Lakers Kobe Bryant only has one style of Jersey on the top 50 best sellers.
Major League Baseball, like the NFL, is enjoying a good year in 2005, with licensed merchandise revenues up almost 23% for the year, despite a sharp downturn in jersey sales. Headwear is up nearly 51%, Tees are up 11%, but jersey sales are down 35% for the year. The Yankees once again dominated jersey sales, but the Washington Nationals benefited from their move from Montreal. The Boston Red Sox again had jerseys in the top 10, along with this years World Series champion Chicago White Sox and the Cubs. The top 5 in terms of total market share for MLB is the Yankees, Red Sox, White Sox, Cubs, and the Cardinals.
Doug Morton, chairman and CEO of The Sports Authority, said their third quarter got a surprise lift in licensed apparel. In MLB, the appearance and quick win by the White Sox was seen as “pretty much a wash” versus the Red Sox win last year. TSA Management said the BoSox drove more sales volume per store, but the ChiSox drove sales at more stores, thanks to TSAs heavy concentration in the Chicagoland market with the SportMart stores.
Its a bit tough to get a handle on the status of the NHL with respect to licensed product sales. With their lost season last year, sales of their licensed merchandise came to a virtual standstill. For the YTD period, the NHL is down 52% from 2004 according to SSI, but the league clearly gained momentum once play started. In fact, the business is up 300% for the last month versus the same period past year when they werent playing.
The Philadelphia Flyers and the NY Rangers are at the top of the best selling charts for the year in terms of jersey sales. Jeremy Roenick is the top selling player jersey and NHL newcomer and rookie phenom Sidney Crosby is also in the top 25 best sellers. The Flyers, Penguins, Red Wings, Rangers, and Avalanche lead in market share. Looks like Detroit, which usually rules the charts, has a fight on its hands for the claim to be “Hockeytown, USA”?
>>> Well, licensed as a business is certainly not over, but its a very different animal these days. Gone are the somewhat predictable trends in urban fashion, replaced by trends that more closely resemble the performance of your fantasy league picks each week
