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Speaker 1: This is Bloomberg Business of Sports. The world changing and

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Speaker 1: what are things we can do to transform our business

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Speaker 1: and engage our fans globally in different ways. People are

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Speaker 1: using their name and likeness to create more opportunities, more

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Speaker 1: stakes and companies. In order to turn the organization around,

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Speaker 1: we had to turn it around not only dis on

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Speaker 1: baseball operations side, but other business operations side well and

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Speaker 1: any other sport is very difficult, but I like to

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Speaker 1: blot my horizons and be able to expand. Sports need

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Speaker 1: to be consumed a lot and not to the big

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Speaker 1: competitive advantage for in artual property holders of sports content

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Speaker 1: in the media landscape. Bloomberg Business of Sports from Bloomberg Radio.

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Speaker 1: Hi everyone, I'm Jason Kelly and I'm Mike Lynch. Welcome

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Speaker 1: to the Bloomberg Business of Sports. Myself, Mike Lynch and

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Speaker 1: Michael Barr. We're gonna take you through what's happening in

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Speaker 1: the world of business and sports, talking to some of

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Speaker 1: the biggest names in the industry throughout to have with

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Speaker 1: us this week. Tom Ripley, he is the CEO of

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Speaker 1: LID Sports Group. He's also a partner and a co

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Speaker 1: founder at a private equ The firm Ames Watson. They

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Speaker 1: are the parent company of Lids. This is all the

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Speaker 1: things I love, guys, coming together in one package. So

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Speaker 1: Tom tell us sort of the state of Lids at

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Speaker 1: this point, because it's a store, a brand, and a

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Speaker 1: product that we all know if we've ever been into

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Speaker 1: a model where you've ever seen a hat, for God's sakes, Uh,

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Speaker 1: this is a really fascinating time. Tell us about it, guys,

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Speaker 1: thrill to be with you. Thanks for the opportunity to

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Speaker 1: talk about Lidge and our team. Lidge has gone through

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Speaker 1: just a remarkable uh you know, a few years. We

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Speaker 1: acquired the business back in February two thousand eight, team

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Speaker 1: my partner Lawrence Burger and I uh and and we've

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Speaker 1: been on kind of an unprecedented run. Lidge will sell,

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Speaker 1: you know, globally, probably thirty million hats this year, which

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Speaker 1: is just an incredible number. We do it every year,

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Speaker 1: a year and a year out. We have just to

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Speaker 1: write out two thousand and locations between our traditional lead stores,

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Speaker 1: college bookstores, and then frankly, you know stores you probably

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Speaker 1: don't even know about, like the Dodgers clubhouses a store,

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Speaker 1: the PSG pair St. Germain Clubhouse is a lad store.

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Speaker 1: So we're really we're everywhere. We're synonymous with headwear and

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Speaker 1: licensed sports. Lads is the largest retailer on the planet

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Speaker 1: for for all of the major leagues, the NFL, NBA, NHL,

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Speaker 1: and MLB. So it's a it's a wonderful time to

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Speaker 1: be to be in sports. It's a great time to

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Speaker 1: be a part of it. This is Michael Barr over here.

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Speaker 1: I've wanted to expand on what you just said, sir,

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Speaker 1: is that sports memorabilia in general has just gone through

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Speaker 1: the roof, and you guys, obviously are a part of it.

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Speaker 1: Can you comment more on sports and how the memorabilia

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Speaker 1: market has just shot through the roof. Yes, so we're

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Speaker 1: seeing it's great questions. We're seeing two x growth in

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Speaker 1: our what we call our locker own stores, which are

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Speaker 1: effectively our memorabilia stores. It's a very expanded astorrement. So

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Speaker 1: Lids comes in three different kinds of store flavors. It's

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Speaker 1: a clubhouse like Dodgers clubhouse. I mentioned earlier, the traditional

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Speaker 1: LIDS store, which is a thousand square foot hat store,

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Speaker 1: and then these larger format square foot locker rooms, and

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Speaker 1: that's those stores have you know, everything from hats and jerseys,

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Speaker 1: the traditional stuff all the way through the kind of

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Speaker 1: signed stadium pictures and and novel day product and uh

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Speaker 1: pennants and banners and all sorts of stuff, and in

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Speaker 1: addition to that true memorabilia product, and it's it's just

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Speaker 1: been remarkable what we've seen the fan. The level of

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Speaker 1: excitement for fans um is kind of traditionally done around player, right,

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Speaker 1: So so think about that. The Fantasy League kind of

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Speaker 1: catapulted individual players where they almost eclipse their teams. The

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Speaker 1: pendulum is swinging back to to to true team fandom.

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Speaker 1: So I'm a Green Bay Packer fan, and the Packers,

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Speaker 1: you know, the title town Moniker has just been a

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Speaker 1: incredibly powerful and and and highly sought after products. And

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Speaker 1: so it's the memorability of space has been, you know,

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Speaker 1: as hot as any part of our business. Hey Tom,

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Speaker 1: it's Mike Lynch up in Boston. Following up on that.

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Speaker 1: I'm gonna guess you can tell me anything. Don't be

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Speaker 1: afraid to tell me I'm dead wrong. The number one

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Speaker 1: selling hat, I'm gonna say it's either the Yankees or

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Speaker 1: the l A Dodgers. So it's You're, You're, You're one

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Speaker 1: percent percentage point between splits the two. I'll give you

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Speaker 1: one more guests. You gotta pick one, Dallas Cowboys. Nope,

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Speaker 1: it's it's the It's the Yankees are for team percent

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Speaker 1: of our hot sales, and the Dodgers are just just

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Speaker 1: right behind them, And so it's the Yankees are you know,

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Speaker 1: those two teams have a wonderful position that their brand,

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Speaker 1: their their logo also is synonymous with that part of

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Speaker 1: the country. And so it's you know, tourists visit New

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Speaker 1: York or l A. You know, in the case the Dodgers,

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Speaker 1: they leave with an l A had whether they even

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Speaker 1: know what that that that's a baseball team, right, So

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Speaker 1: it's it's it's a remark, it's been a it's been

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Speaker 1: a the headwear culture is is that a fevered pitch

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Speaker 1: right now? And what is it about the teams? I'm

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Speaker 1: really interested to hear you talk more about this notion

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Speaker 1: of you know, shifting from from players to teams. Is

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Speaker 1: it sort of associating with certain brands, is it associating

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Speaker 1: with certain regions or cities or what is it? Do

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Speaker 1: you think? So there's a couple of answers there. So,

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Speaker 1: so there are some players that that are you know

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Speaker 1: they are number one selling jersey as Tom Brady, and

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Speaker 1: it has as you appreciate, it has nothing to do

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Speaker 1: with the team. He was a Patriots player and I

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Speaker 1: was a buccaneer, and and Tom Brady is he's a

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Speaker 1: he's a statesman, he's obviously the greatest player ever, and

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Speaker 1: he's he's just and so he transcends all messy. Is

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Speaker 1: another example, right that he was just named a Paris

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Speaker 1: Saint Germain. The day he was named, our sales in

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Speaker 1: the store in l A have gone up from he's

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Speaker 1: now six, they've increased, um And so it's because sorry,

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Speaker 1: just to clarify you guys had a PSG store before

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Speaker 1: that even happened, right, that's correct, we did. We open

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Speaker 1: did about timing. Our timing is remarkable on that one.

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Speaker 1: We opened about just under a year ago. And of

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Speaker 1: course he was named about a month ago. So it's

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Speaker 1: just been and look that happens, I mean Khalil Mack

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Speaker 1: in Chicago and happened a couple of years ago, it's

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Speaker 1: happening right now. It's justin Fields. He's he's our number

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Speaker 1: two selling jersey in the up and so it's that

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Speaker 1: that there's that play that there's that player who's a

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Speaker 1: statesman who transcends all sports, and then there's the player

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Speaker 1: fever traded player, you know, that kind of thing that happens.

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Speaker 1: And then you know, we have the ability to make

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Speaker 1: virtually every jersey, and so there's there's you know a

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Speaker 1: lot of people like that, that kind of that that

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Speaker 1: lineman or maybe that you know, that kicker or something

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Speaker 1: like that. So there's there's a little bit of that

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Speaker 1: quirkiness to it too. When I also ask about Aimes

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Speaker 1: Watson because what what that has done for you guys,

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Speaker 1: and that partnership has been huge for lids. Can can

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Speaker 1: you tell us more about that? Yeah, So my partner,

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Speaker 1: Lawrence and I we met at a prior private equity

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Speaker 1: fund and when we re reunited in December of two

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Speaker 1: thousand seventeen, UM, he had just left his his firm.

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Speaker 1: I had already been out on my own, and you know,

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Speaker 1: the two of us really designed aims to be everything

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Speaker 1: that we had that we aspire to be and what

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Speaker 1: frankly we didn't like about our other places we had worked.

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Speaker 1: And so Aimes is a committed capital private equity firm.

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Speaker 1: We we um we are highly engaged on the assets

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Speaker 1: that we own. Uh, Lawrence and I both worked every

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Speaker 1: hour of every day in our businesses. We took a

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Speaker 1: business like Liz that frankly was a broken sale by

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Speaker 1: janesco Um publicly traded company, and they had they had

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Speaker 1: kind of a failed auction. We stepped in and purchased

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Speaker 1: the business in February two thousand and eighteen and have

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Speaker 1: the first year doubled doubled profitability and kind of the

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Speaker 1: classic private equity steps. Reduced headcount, cleaned up the balance sheet,

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Speaker 1: cleaned up inventory, kind of set a discipline and rigidity

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Speaker 1: to the team. And then as times marched on, we've

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Speaker 1: we've added a decimal point of profitability. Just to be

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Speaker 1: to be blunt about it, we've we've eclipsed a billion

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Speaker 1: dollars in sales and and and it's and it's truly

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Speaker 1: because of I think, finding great people on our team

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Speaker 1: and moving them forward, clearing off the kind of stagnant

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Speaker 1: layer that typically sits in big you know, in either

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Speaker 1: corporate orphans are large publicly traded companies, and and empowering

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Speaker 1: that next generation of people to kind of take off

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Speaker 1: and run. And so aims project itself on really doing

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Speaker 1: the diligence and working the data very hard. We have

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Speaker 1: a wonderful team and based in Colombia, and you know,

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Speaker 1: we've gotten a place now where if there's a retail

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Speaker 1: business for sale, it really doesn't matter the size. We're

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Speaker 1: one of the first phone calls. We've we've got a

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Speaker 1: we've got a proven track record for turning retail businesses around,

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Speaker 1: cleaning them up, and so we are we're we're very,

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Speaker 1: very busy looking at lots of opportunities, Tom, can you

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Speaker 1: break down stadium sales, brick and mortar sales, and these

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Speaker 1: clubhouse sales and these locker room sales. Yeah. So, so

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Speaker 1: the lids business, just as a is primarily a mall

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Speaker 1: based business. So seven hundred of our of our of

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Speaker 1: our um total store locations are going to be in malls.

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Speaker 1: And so that's that is going to be your traditional

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Speaker 1: lids business. And frankly, that's that's the lion chair of

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Speaker 1: the business. We we don't do a lot of inn

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Speaker 1: venue sales. And you know, with the exception of a

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Speaker 1: handful of baseball teams, the Vedu business is difficult because

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Speaker 1: imagine football, you only have eight days a year to

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Speaker 1: to generate sales and so oftentimes a lot of the

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Speaker 1: teams will run those in venue sales. We do have

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Speaker 1: many successful near venue sales. So imagine a city stadium

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Speaker 1: like Wrigleyville. We have we have three stores in in

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Speaker 1: Wrigleyville within walking distance. One of them faces the outfield.

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Speaker 1: Those are multimillion dollar stores. Um. But but they but

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Speaker 1: they are They're not technically in the venue, they're kind

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Speaker 1: of near venue. Uh. And then you have these clubhouses.

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Speaker 1: The clubhouses are are are if you walked in it,

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Speaker 1: you would feel as if you're in the Dodgers clubhouse.

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Speaker 1: You are in the Dodgers clubhouse. And those are in

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Speaker 1: city promenade, city centers, places where a high tourist traffic.

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Speaker 1: And that's probably that's gonna be. So, so go back

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Speaker 1: to the question small based is going to be city street,

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Speaker 1: city center, and then ten percent is going to be

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Speaker 1: near venue, near venue sales. So, Tom, you know, you

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Speaker 1: mentioned how Ames Watson is getting a lot of inbound

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Speaker 1: calls from presumably bankers and other folks who are interested

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Speaker 1: in retail. And you guys obviously have been very successful

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Speaker 1: in when it comes to lids. But generally one of

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Speaker 1: the reasons you may be getting these calls and I'm

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Speaker 1: only being slightly live here is because everybody else is

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Speaker 1: running away from retail. That's not that's not seen, especially

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Speaker 1: brick and mortar as as something that people are super

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Speaker 1: enthusiastic about, especially given what we've seen in the last

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Speaker 1: couple of years. So how do you and and maybe

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Speaker 1: using list as an example, how do you assess a

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Speaker 1: retail opportunity and say, all right, actually there is something here,

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Speaker 1: whereas there might not be something in another concept. Yeah,

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Speaker 1: that's that's a that's a great question. So we the

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Speaker 1: way we the first of the penultimate question is does

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Speaker 1: the business have a have a reason to exist? I

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Speaker 1: know that sounds flipping, but Amazon has trained everyone two

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Speaker 1: for convenience transactional sales, paper towels, you know, bath soap.

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Speaker 1: You just go online and it shows up the next

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Speaker 1: day and there's no thought involved, and there's just it's simplified.

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Speaker 1: And but but they had or other ex of projects

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Speaker 1: we're looking at, and that's a fundamentally fitted item and

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Speaker 1: it's something that fits you differently than it fits me.

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Speaker 1: And so plus it's a relatively low price point and frankly,

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Speaker 1: you want to go and there is an enjoyable experience

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Speaker 1: of browsing and going in and looking at the product

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Speaker 1: and feeling it and seeing how it fits and maybe

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Speaker 1: selecting this one or that one. And so when there

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Speaker 1: is this shop ability component and this component that is

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Speaker 1: a enjoyment experience, the experiential retail, that's where we see

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Speaker 1: lots of success in retail. It is a form of entertainment.

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Speaker 1: It is something that is fun. It's something that is iconic. Uh.

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Speaker 1: You know, every kid in America has been on the

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Speaker 1: lids and bought a hat, right, and so it's it's

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Speaker 1: it's there's an iconic aspect to that. We love those

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Speaker 1: kinds of retail experiences and there are many there are

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Speaker 1: many others out there that are that are exactly like that.

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Speaker 1: And so you know, people are I think are running

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Speaker 1: from retail for for a number of reasons. Maybe just

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Speaker 1: give you two thoughts on that. One is everyone is

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Speaker 1: trying to be everything to everybody and that's just doesn't

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Speaker 1: work right. So so they're they're they're overly focused on

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Speaker 1: endless aisle and omni channel and those kinds of things.

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Speaker 1: I have. The way we've structured Lids is I partnered

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Speaker 1: with Fanatics when we acquired it, and Fanatics runs our

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Speaker 1: online experience. I spend zero mind share thinking about about,

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Speaker 1: you know, email optimization and website conversion. My partners at

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Speaker 1: Fanacs are the biggest online license sports retailer on the planet.

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Speaker 1: They're wonderful at it. They do it for MLB dot

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Speaker 1: com and NFL dot com and everybody else. They run

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Speaker 1: that and they do a wonderful job at it, and

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Speaker 1: that that liberates me to focus on my in store experience,

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Speaker 1: which which my team has done, and they've just done

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Speaker 1: a wonderful job at it. So let's say I am

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Speaker 1: playing Jason Lynchy and me and we're all in the

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Speaker 1: board game Monopoly, and I kicked the living daylights out

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Speaker 1: of them, And now I want to name likeness and

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Speaker 1: image of myself on a hat. So do you have

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Speaker 1: any n I L deals and who do you deal with?

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Speaker 1: And so will you pursue anyone? We're probably not going

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Speaker 1: to do a Monopoly, but I'm sorry to disapoint it.

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Speaker 1: We had to. We we show that on the on

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Speaker 1: the n I L landscape. First of all, it's a

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Speaker 1: bit of a wild wild West when the when the

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Speaker 1: n double A announced their their change in position on

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Speaker 1: the topic. We had four thousand people direct messages to

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Speaker 1: our Instagram handle. It's you know, four thousand college athletes

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Speaker 1: love love that they reach out, right, I mean, there's

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Speaker 1: there's something wonderful about that, that that entrepreneurial spirit. Um,

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Speaker 1: we have the way we have found kind of clarity

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Speaker 1: on this tope. But we already deal with the players

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Speaker 1: associations for all the major leagues. And it's a it's

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Speaker 1: a we do a thing called an embroider graph, So

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Speaker 1: if you want to Khalil max signature, we can stitch

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Speaker 1: his actual signature into a side of a Bears hat, right. Uh.

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Speaker 1: And so it's it's been a really popular thing on

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Speaker 1: MLB jerseys and and that sort of thing. And so, um,

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Speaker 1: we already deal with the players associations for that. And

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Speaker 1: I think what's going to happen in the in the

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Speaker 1: on the college landscape, maybe not on the monopoly landscape,

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Speaker 1: but on the college landscape. They're also going to have

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Speaker 1: a players association and that will be the way that

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Speaker 1: I think commercial enterprises access access. Uh. You know, and

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Speaker 1: I l wow, talk tell me about the international deal

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Speaker 1: you have with the NBA. So we just opened up

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Speaker 1: London about three months ago. London store will be a

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Speaker 1: six million US dollar four point eight million pound store

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Speaker 1: this year. It's just been absolutely on fire. The reception

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Speaker 1: has been fantastic by the London fan. It's not it's

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Speaker 1: you know and and and so well. You'll probably see

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Speaker 1: four to five more stores like that open up in Australia, Paris,

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Speaker 1: Mexico City, uh, you know, Germany, all over kind of

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Speaker 1: the European market. It's been a great partnership at the NBA.

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Speaker 1: We we worked with them very closely designed the store

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Speaker 1: and make sure that the product suite was correct, that

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Speaker 1: the messaging was on point. It's a street level city

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Speaker 1: center store and it's been it's been just fantastic. It's

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Speaker 1: kind of on fire. The candidly, the biggest challenge we're

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Speaker 1: having is kind of keeping keeping the inventory levels where

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Speaker 1: where we want them to be. Um. That's a combination

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Speaker 1: of both you know, new store in London and combination

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Speaker 1: of the supply line issues that I think everybody's dealing

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Speaker 1: right now and so but it's it's been a very

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Speaker 1: exciting partnership. I would not be surprised if there are

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Speaker 1: forty to fifty like stores uh lids type enterprises in

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Speaker 1: Europe next year. Wow, it's probably our number one initiative.

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Speaker 1: So interesting, so interesting. Well, Tom Ripley, thank you so much,

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Speaker 1: CEO of lid's Sports Group, partner co founder over at

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Speaker 1: Ames Watson, which is the parent company of lid's. Good

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Speaker 1: private equity story for you here on the Bloomberg Business

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Speaker 1: of Sports. We really appreciate the time, good luck. Eager

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Speaker 1: to see what happens next with you guys. Thank you

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Speaker 1: very much. Guys, have a great day. Thanks, Thank you

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Speaker 1: very much. Tom. You've been listening to the Bloomberg Business

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Speaker 1: of Sports podcast and you can catch all our Apple

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Speaker 1: podcast on Monday's, Wednesdays and Thursdays. Follow me on Twitter

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Speaker 1: at Big Bar Sports. I think I'm gonna get a

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Speaker 1: Dodgers happen right now. You can follow me at Lynch

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Speaker 1: WB it said, maybe a Mookie Bets jersey. I'm Jason Kelly.

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Speaker 1: Follow me at Jason Kelly News. You're listening to Bloomberg

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Speaker 1: Business of Sports on Bloomberg Radio four four