Sports-Merchandise Retailer Reaches $6.2 Billion Valuation -- WSJ
By Sebastian Herrera
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (August 14, 2020).
Sports retailer Fanatics Inc. closed a $350 million investment
round, people familiar with the matter said, a sign of investor
confidence in the combination of online shopping and official
With the funding round closing Thursday, Fanatics is now valued
at roughly $6.2 billion after raising about $1.5 billion since
2011, these people added.
This Series E round, led by Fidelity Management & Research
Co. and Thrive Capital, is expected to be the company's last
private funding before it files for an initial public offering,
these people said. The timeline for an IPO is unclear.
Other investors in the round include Franklin Templeton
Investments and Neuberger Berman Group LLC.
Previous Fanatics investors include Japanese conglomerate
SoftBank Group Corp., which led a $1 billion round in 2017 that
also included the National Football League and Major League
Even with the initial downturn startups faced because of the
pandemic, funding has remained steady and the IPO market is
rebounding. E-commerce companies have been lifted during the
pandemic, with industry analysts largely expecting online shopping
habits accelerated by the crisis to continue.
Founded in 1995, Jacksonville, Fla.-based Fanatics has grown
through its role as a seller and maker of licensed fan apparel for
professional sports leagues and teams. It is the official online
retailer of licensed merchandise for the major U.S. sports leagues
and more than 150 universities, enabling the company to sell and
manufacture sports merchandise not available elsewhere.
Fanatics is a small operation compared with the likes of
Amazon.com Inc., which reported revenue of more than $280 billion
in 2019. EBay Inc.'s revenue was $10.8 billion. Amazon's power has
grown through the pandemic, and retail analysts believe only a few
e-commerce firms will last in the long term. Although Fanatics
can't compete on size and scale with those companies, it controls
the supply chain of fan merchandise for the NFL, the MLB, the
National Basketball Association and other major sports leagues and
Even though coronavirus-related shutdowns have kept fans out of
stadiums and largely curtailed many sports seasons and reshuffled
schedules, online sales at Fanatics have increased by roughly 30%
this year compared with last year as more people buy products
online, according to the company. Fanatics, however, expects a $20
million dollar hit to its bottom line caused by store closures and
an absence of fans at sports venues, people close to the company
Fanatics made about $2.5 billion in revenue last year, compared
with about $2 billion the year before, these people said. It
expects revenue to increase by a low double-digit percentage this
year, although the pandemic has made forecasting more uncertain.
About 80% of its revenue is through direct-to-consumer sales from
Fanatics.com or the more than 300 team and league sites the company
operates, the people said.
Through its licensing agreements, most of which run through at
least 2030, Fanatics sells jerseys, T-shirts, caps and other
merchandise in the U.S. The company also has similar deals abroad
with popular teams such as the U.K.'s Chelsea Football Club, and it
has about 50 stores inside stadiums throughout the world. It
operates five manufacturing facilities in the U.S., which enable it
to produce gear on-demand.
When star quarterback Tom Brady earlier this year chose to sign
with the Tampa Bay Buccaneers, for example, within hours Fanatics
made Mr. Brady's jersey available for purchase on its site, the
NFL's site and the Buccaneers' site. This year, Fanatics began to
sell exclusive Nike Inc.-branded NFL clothing for fans.
Write to Sebastian Herrera at Sebastian.Herrera@wsj.com
Corrections & Amplifications Most of Fanatics's licensing
agreements run through at least 2030. An earlier version of this
article incorrectly said they ran until 2030. (Corrected on Aug.
(END) Dow Jones Newswires
August 14, 2020 02:47 ET (06:47 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.