Fanatics’ Rubin sets sights on ‘marketplaces’
As a follow-up to Fanatics’ recent and much talked-about distribution agreement with Walmart.com, Chairman and Founder Michael Rubin said he has two similar deals signed, which will put Fanatics “marketplaces” on two large retail sites, based offshore. As was the case with the Walmart.com deal, they are both 10-year pacts. He would not name the companies.
These “marketplaces” are a new strategy through which Fanatics can cut into Amazon’s enormous advantage in web traffic. Amazon attracts more than 197 million monthly unique viewers, while Walmart.com draws 127 million.
“Marketplaces represent a huge portion of e-commerce, especially offshore,” Rubin said, adding that the Walmart.com deal took a year to complete. “So it’s a massive growth opportunity. We need to do it in a disciplined way, but with our assortment of a million products, we hope to put [them online] everywhere. Everyone is asking how to grow the industry, this is a way to do that.”
Rubin is projecting an increase in overall company revenue from $2.3 billion to $2.7 billion this year “and when I look at our growth over the next decade, marketplaces will be a big chunk of that growth.”
Marketplace deals generally require a commission of 7 percent to 15 percent paid to the site. Rubin said he won’t do any marketplace deal without exclusive rights and ensuring it’s in a “brand right environment.”
For years, sports properties and their top-tier licensees shunned Walmart and other mass merchandisers as being undesirable “downstairs” distribution, largely competing on price. Fanatics’ size and scale has apparently changed that perception, as top-shelf on-field licensees, like Nike and New Era, will be included in the Walmart.com assortment.
Many licensors “are right not to be selling in [mass merch] stores, but online, the [Walmart.com] presentation is better or as good as anyone,” Rubin said. “Leagues and teams want their licensed products distributed everywhere — here’s a way to do just that and in places without counterfeits and a brand presentation that works.”
Rubin said the integration of the Majestic brand, purchased from VF in 2017, along with associated distribution and manufacturing capabilities, is 90 percent done. Rumors abound that Majestic will eventually be the leading downstairs brand for Fanatics, but Rubin would not comment.
As for Fanatics’ long-rumored IPO? “Years away,” Rubin insisted. “In 2019 and 2020, we’re integrating giant businesses, moving the NFL business that had been with Nike to us and moving the [MLB] baseball business to us and Nike. For the next few years we’ll be focused on integrating those.”