March 21, 2014
In a reversal of a deal made two years ago, Ohio State has chosen Indianapolis-based Lids Sports Group to be the university’s official retail partner.
The contract, worth $12 million over the deal’s 10-year span, reverses an agreement that the university made in November 2012 with retailer Fanatics Inc. of Jacksonville, Fla., which originally won the bidding to sell OSU-licensed apparel online and in campus retail outlets.
But university officials said in January that the deal with Fanatics had not been completed — and that the role that Fanatics had been expected to play had been taken over by Lids in July 2013.
Lids is owner of Buckeye Corner stores, Lids, HatWorld and Sports Fan-Attic.
University officials said in January that the retail deal took so long to nail down because there had been “no models or precedents to look at,” said OSU spokesman Gary Lewis. “A deal of this magnitude and term includes a lot of moving parts.”
Ohio State athletic director Gene Smith said in a statement that the Lids partnership is innovative.
“This will offer an opportunity for our fans to share in the university experience, both virtually and in a retail presence,” by buying licensed apparel with a name they know, Smith said.
The contract with Lids guarantees the university a minimum of $1.2 million a year from retail sales at campus outlets such as the team shop at Schottenstein Center and Ohio Stadium, and from the official website. That was well above the university’s previous yearly revenue from those sales of about $250,000.
Lids will operate the official e-commerce shop (shop.ohiostatebuckeyes.com), on-campus retail locations, all arena/stadium retail locations and all game-day concessions.
University officials declined to say why the original agreement with Fanatics was not completed. The deal with Lids does not prevent other retailers from selling Ohio State apparel and other merchandise.
The retail deal is part of a trend toward “the big getting bigger,” said Rob Cohen, co-owner of Buckeye-themed retailer Conrads College Gifts.
“It’s all big business now,” Cohen said. “It’s coming down to where the mom-and-pop stores are going by the wayside.”
At the same time, Cohen said that his family didn’t think the deal would have a big impact on Conrads.
Buckeye Corner shops “are good competitors,” Cohen said. “We haven’t had any problems with them, so I guess it doesn’t really affect us.”
When Ohio State originally announced that Fanatics had been selected as its retail partner, it was part of a combined bid with apparel producer J. America Sportswear.
J. America, a Webberville, Mich., producer of collegiate, high-school and corporate apparel, has been working with retailers since 2012, university officials said.
The contract with J. America is worth $85 million over 10 years, with $20 million guaranteed upfront; the revenue is more than double the university’s previous annual royalty income of about $4 million.