Sports Insight

IN THE MARKET L ate in 2018, nearly 10 months after formally putting its Lids Sports Group business on the block, Lids' parent company Genesco sold the business for $100 million in cash — approximately 40 percent less than Genesco had paid for the Lids business in 2004. Lids was sold to Ames Watson Capital, LLC, a firm founded in 2003 by former Blackstreet Capital chief investment offi- cer Lawrence Berger. Ames Watson also owns the 120-store Fanzz retail chain that was founded in 1987 by former Utah Jazz co-owner Larry H. Miller. Fanatics Inc., at one time considered the frontrunner for the Lids' business, which consists of more than 1100 brick-and-mor- tar locations. including 119 Locker Room by Lids locations inside Macy's stores, will make a minority investment in the acquiring company, FanzzLids Holdings. It bears watching how a new national licensed retailer might emerge under Ames Watson's financial guidance and Fanatics' influence. Before the announced Lids' acquisition, Fanzz had 89 retail stores pri- marily located in the western U.S., Texas and Chicago. But the banner has no presence along the densely populated Eastern Seaboard. One possible scenario has new ownership retaining the best-performing Lids' stores throughout the U.S., filling in key markets where Fanzz stores are not represented, and striking some sort of Buy Online, Pick-Up In Store relationship with Fanatics, which has tight relationships with all of the professional sports leagues and the majority of all online sports licensed consumer purchases. Lids Sports Group has not been a strong contributor to Genesco's top or bottom lines for some time, a factor that Genesco President and CEO Bob Dennis has blamed on the "lack of a clear trend driver" in the segment and a shift to lifestyle and away from a sports league-driven headwear business. For the nine months ended Nov. 3, Lids Sports Group reported an operating loss of nearly $4.6 million and a 7.4 percent decline in year-over-year revenues to $498.9 million. n What the Lids Sale Means for Licensed Retail B Y B O B M C G E E A new national licensed retailer might emerge. A s we move forward in 2019, key trends shaping the retail industry overall are becoming clearer. Jon Beck, CEO of niche retail consulting firm Columbus Consulting, offers up a few ideas on what to expect in the coming year: 1. The rate of change will accelerate. Look for consumers to continue to demand higher and higher levels of service and a seamless experience, whether online, in-store or on devices, says Beck, who adds that retailers "must rapidly, and continuously, innovate to stay up to speed." This is particularly true when it comes to fulfillment; one-day delivery is now less of a differentiator and is becoming the basic entry level. Retailers need to get product out of their stores and DCs and into the hands of customers faster than ever before. 2. Private label brands will prolif- erate. The industry has seen private label growth in the past few years and Beck sees this trend increasing in multiple verticals, including apparel. 3. Social media is the new normal as a sales tool. In 2019, more and more retailers will get hip to using social media as a sales channel. Beck advises that retailers build a social media department within their busi- ness to not only make these sales, but also provide measurable customer engagement results. He notes, "This will no longer be a 'nice to have,' but rather the 'price of admission' for successful retailers." n RETAIL TRENDS TO WATCH IN 2019 sportsinsightmag.com January/February 2019 Sports Insight • 7

• Cover