Legends makes leap in retail with MainGate purchase
Legends’ pending deal to buy event retail and merchandise company MainGate is aimed at growing the company’s private-label merchandising business on a global scale, rather than a desire to go head-to-head with potential competitors such as online retailer behemoth Fanatics, said Legends President and CEO Shervin Mirhashemi.
“We really don’t look at what anyone else in the industry is doing,” Mirhashemi said. “If what we do means we compete with somebody, so be it.”
The wrapup was also driven by both companies’ embrace of data, an entrepreneurial mindset and a proactive approach to operating their merchandising businesses, Mirhashemi said.
“This full-service vertical platform, including design, production, e-commerce, brand marketing, analytics, large-scale live event, venue and flagship store retail operations, is built for the global stage, with base operations domestically as well as internationally,” he added.
While Mirhashemi downplayed competition, the deal instantly makes Legends a player in a retail market dominated by Fanatics but filled with other firms aiming to carve out their own space. Those include Aramark, Levy’s Rank + Rally, and Dyehard.
Said one senior licensing industry source: “Adding MainGate gives Legends a more complete alternative as it competes with Fanatics. And MainGate’s warehouse and production facilities will allow Legends to compete more evenly on vertically integrated deals, which is more and more what Fanatics is doing.”
A source close to the deal said Legends will be acquiring a company with annual revenue of $75 million. Legends and MainGate’s combined platform will likely have $200 million in annual merchandise revenue, the source added.
Legends will gain many new clients with the acquisition; the only overlap is the NFL’s Tennessee Titans. Legends handles food and beverage concessions for the Titans, while MainGate operates the team’s e-commerce and custom merchandise business.
Terms of the deal were not disclosed. MainGate will retain its name and continue to operate out of Indianapolis as it integrates into Legends’ hospitality division, which manages U.S. Soccer’s and UFC’s e-commerce businesses. Legends’ domestic merchandising business will operate out of MainGate’s Indianapolis distribution hub, and MainGate President and CEO Dave Moroknek will run the combined merchandising businesses.
Legends expects to close the deal within 30 days.
“We’re not done, certainly within this space, and we’re looking for unique fits from an acquisition standpoint,” Mirhashemi added.