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Volume 21 No. 35
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Fanatics adds Kentucky Derby to retail portfolio, bets on 50 percent sales gain

Sports e-commerce specialist Fanatics continues to expand its brick-and-mortar retail footprint with the acquisition of retail rights for the Kentucky Derby.

Along with e-commerce and a majority of on-site rights for the first leg of the Triple Crown and Churchill Downs merchandise, Fanatics gets a broad apparel license as part of the deal, and will operate the store. Fanatics’ experience servicing hot market demand should help the Derby expand that program.

“We’re projecting first-year sales increases of 50 percent,” said Brian Swallow, Fanatics senior vice president, strategy and business development. “We’ll do 90 percent of the business in April and May, before the race, but we’re looking to expand the selling season not just ahead of the race, but afterwards.”

Also packaged with the deal are rights for Kentucky Derby/Churchill Downs collectibles and memorabilia, to be serviced by Fanatics Authentic.

As retail moves to a multichannel shopping experience, Fanatics has expanded its brick-and-mortar offerings recently to include the Pittsburgh Pirates store at PNC Park, the NBA Store in New York City, and NASCAR’s trackside merchandise sales.

In securing Churchill Downs’ rights, Fanatics replaces a combination of The Game, which was a licensee and operated retail at the track since 2005, and MainGate, the incumbent e-commerce provider.

There will be some on-site retail space not part of the Fanatics deal, such as the Kentucky Derby Museum store. However, Swallow said Fanatics will grow on-site retail options, improve service with better technology, and add a retail tent during race week at the nearby University of Louisville Papa John’s Cardinal Stadium, to service tailgaters.

Fermata Partners signed on as Churchill Downs’ licensing agency last year. Fermata’s Kit Walsh said the program has around 45 licensees. Since mint juleps are inseparable from the Derby, glassware is the biggest license. Those rights were recently awarded to Pasabahce. Vineyard Vines, a sponsor and licensee, has a high-end apparel license and has two retail tents at the track. Swallow said Fanatics hopes to expand its high-end licensed product offerings.