In announcing recently that it would “seek strategic alternatives” for its licensed sports apparel, parent VF Corp. did everything but affix a “For Sale” sign to the front of Majestic Athletic headquarters.
While few would comment on the record, the talk across the sports licensing industry centers on who will buy VF’s licensed sportswear business, which has annual sales of around $500 million. Under Armour and Fanatics were the two names most often mentioned by industry insiders.
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VF is seeking options for its licensed sportswear business.
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Majestic is coming off a healthy sales year, so many industry sources suggested the sale was opportunity-based rather than one of desperation.
“Leagues are healthy and so is the business, so my guess is they are trying to get an auction going,” said one baseball insider who requested anonymity because he works with Majestic.
VF’s other brands include Wrangler jeans and North Face outerwear.
Licenses never transfer automatically when an incumbent is sold, so MLB will have considerable influence on the potential sale. In addition to MLB jersey rights, VF has fanwear rights — off-field items like fleece, T-shirts and hoodies — from the NFL, NBA and NHL, largely for mid-tier retailers such as Kohl’s and “downstairs” distribution, including Target and Wal-Mart.
Under Armour, which has limited MLB licensing rights now, could use the authentication and TV exposure that an on-field uniform rights deal would provide.
“VF is a gem of a company. Under Armour would be a great fit, and Under Armour’s brand strength, especially to the younger consumer that baseball wants, is so impressive that all the leagues would support that move,” said Howard Smith, the former head of consumer products at MLB, who now serves as a consultant to companies including Learfield and Steiner Sports.
Licensed sports e-commerce specialist Fanatics has long-term deals with MLB and almost every large property, which include some manufacturing rights. However, it’s well-capitalized and its appetite for acquisition and hunger for jersey rights — the crown jewel in the licensed sports apparel business — made it another company cited by licensing experts when asked about likely buyers.
International companies might also take a long look at Majestic, assuming that would pass muster with MLB.
“I can see Chinese interests taking a hard look at this as a way to enter the U.S. market,” said former MLB Properties President Rick White, now president of the Atlantic League. “Domestically, Under Armour values baseball more than most people realize.”
Other companies cited as possibilities include MLB cap licensee New Era, footwear brand New Balance, which has been making some noise in baseball recently, and Outerstuff, which has kids licensed apparel rights across sports.
