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Volume 20 No. 42
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Plugged In: Raphael Peck, Fanatics

Fanatics continues to roil the sports licensed-product market with a collection of important rights, retail operations across teams and venues, and a vertical model often discussed, but rarely implemented. Raphael Peck, a veteran of Oakley and Under Armour, heads manufacturing and all other aspects of the company’s in-house merchandise division.

We like to think of ourselves as a serial acquirer of [licensing] rights. Then we apply our vertical and omnichannel model to them, hitting a wide range of consumers.

On Fanatics’ approach: We’ve developed a disruptive model that started in e-commerce and continued as we added manufacturing capabilities, Majestic’s operational excellence, and our own Fanatics branded, based on verticality. When you put all those together, it’s a pretty transformative model. The Holy Grail to make all that work is hyper-agility and de-risking our supply chain, so we’re not as dependent on the ups and downs created by wins, losses and player trades.

On launching NBA and NHL replica jerseys this season: It’s been 16 or 17 years since any brand (Reebok) tried to launch two different league jerseys at once. From a logistics and a vertical integration perspective, it has been challenging. By no means have we been perfect. We’re getting units out there slower than we had hoped, but the sell-through has been positive. … We’re fully focused now on getting caught up with demand and moving through the vertical integration pain of launching two jerseys and two companies at once.

Any interest in manufacturing non-apparel-licensed products? I will never say never to (licensed) hard goods, but we have bitten off more than enough with the vertical integration of Majestic. Looking at the challenges for next year, we want to focus on getting our executional issues fixed, before we consider vertical manufacturing in any other categories.

On the growth prospects in sports licensing: We’ll do better in assortment, supply chain and our ability to service hot markets and overall execution. 2018 could be a pivotal year for us, with new and exclusive rights for the Stanley Cup, Super Bowl and with MLS. We’re going from 550,000 square feet of manufacturing to well over a million. Think about that when it comes to our ability to scale.

On the acquisition of Majestic Athletic and domestic production capabilities: We bought a manufacturing engine in Majestic which gives us the ability to do 45 million to 50 million additional (screen-printed) impressions a year. Owning that has added tremendous speed and scale to service hot markets, where you have to finish and ship the majority of your products within three days.

On manufacturing might: A lot of our holiday sales is chase business. We see what the customer wants and really rev up the manufacturing engine to go after that. Around 60-65 percent of everything (Fanatics labeled) next year will be manufactured or finished by us. We’re continuing to move our model more toward unfinished products, where we can add speed and agility to the post-embellishment process.

                                                                                                                            — Terry Lefton