SBD/November 10, 2010/Marketing And Sponsorships

NBA Store Leaving Current Location; Adidas To Operate New Setup

NBA Store Attracted Around 1.4 Million Visitors A Year At Current Location
The NBA Store, which has been occupying some of the priciest real estate in America across Fifth Avenue from the NBA’s league N.Y. HQs since '98, is leaving its original location in February amid a changing business model. When the store reopens, it will be under the aegis of adidas, the NBA’s largest licensee, which produces 65% of the merchandise in the store. The move reflects the deepening of the adidas/NBA relationship. The NBA Store on Fifth Avenue, which has 175-200 employees, has attracted around 1.4 million visitors a year and is coming off its best year ever. The NBA hopes to open another operation in a midtown location by this fall at the latest (Terry Lefton, THE DAILY). NBA Exec VP/Global Merchandising Group Sal LaRocca said that the NBA is "looking at pop-up store locations, places that can be rented by the month instead of the year, so that the league can bridge the gap between having a permanent location and when the current NBA store closes." He emphasized that the move "had nothing to do with NBA merchandise sales." A source said that the leasing agent for the NBA Store "was asking for at least five times the amount for a yearly lease as the NBA currently pays for its 35,000 square feet." CNBC.com's Darren Rovell noted prices were "thrown out of whack when Japanese clothing retailer Uniqlo agreed in April to pay a reported record $300 million over 15 years to lease a space in the same building as the league's store" (CNBC.com, 11/9). LaRocca said, "The amount of dollars the landlord is requiring from the next tenant, we couldn't find a way to make it work. The asking price is well over $2,000 a square foot." He added, "We haven't secured another spot yet. We're looking into a combination of temporary and permanent space. But those things are still a work in progress" (AP, 11/9).
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