Sports licensing in for tough year in 2009

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The sports licensing industry -- think T-shirts, jerseys and coffee cups covered with familiar names, logos and mascots -- registered a solid year in 2008, according to License! Global Magazine.

Global licensed sports apparel and other goods grew by $3.1 billion last year to $19.9 billion, according to the market research firm’s annual estimate.

But if the industry is to show growth, or limit the damage, during what’s likely to be a tough 2009, such athletes as Lance Armstrong, Peyton Manning and Stephon Marbury will have to carry the sector.

Sports leagues and other sports-related companies took five of the top 20 spots on the License! Global list of leading licensors. MLB registered $5.1 billion in global sales, the NFL finished with $3.4 billion, the NBA, $3 billion, Collegiate Licensing Co. (its name accurately describes its niche) finished at $2.5 billion, and NASCAR, $2 billion.

Fan interest in sports apparel and gear was evident over the Thanksgiving holiday, when the country’s big leagues all reported online sales increases.

Sports outfits hope to benefit next year from consumer interest in such attractions as Armstrong’s return to competitive cycling (including the 2009 Tour de France), next spring’s World Baseball Classic and the global run-up to soccer’s 2010 FIFA World Cup.

Licensing is based upon a simple premise -- consumers can increase their cool factor by buying stuff with a familiar brands or names. In sports that translates as big league and collegiate logos, as well as women’s apparel designed by Venus Williams and men’s gear from Laird Hamilton,Ben Wallace and Bubba Watson.

But it’s an increasingly tough market and it’s going to get tougher.

Consider Steve & Barry’s, which billed itself as the retail chain for image-conscious consumers, promised to change the way Americans shopped, a pledge that earned it the ‘2006 Retailer of the Year’ award from License! Global magazine.

The Port Washington, N.Y.-based retailer this past summer sought shelter in U.S. Bankruptcy Court and initially hoped to survive as a slimmed-down company with fewer locations. But the company that assumed control filed bankruptcy in November and a bankruptcy court judge late in November approved the company’s plan to shut down all its remaining locations.

As the global economy chills, so will consumers’ appetite for branded merchandise. ‘The categories that will do well are going to be based on entertainment properties -- movies, TV, video games,’ said Steven Ekstract, group publisher of License! Magazine. ‘And the magic price point is going to be $39.99. Anything over $40 is going to be tough to move off of the shelves.’

‘Sports is definitely going to have issues in 2009,’ Ekstract said. ‘About all people are going to be spending on are affordable luxuries. They’re not going to be buying expensive jerseys. If it’s over a certain price point, it’s not going to sell.’

As ugly as that outlook might appear, Ekstract doesn’t expect the really big leagues to retreat. ‘There’s going to be a recovery at some point and the leagues have to be looking forward to where they’re going to be in 2010 and 2011. When the recovery does come, they’re going to want to grow their business.’

-- Greg Johnson

Editor’s note: Steve and Barry’s bankruptcy plans updated at 2:07 p.m. to include its plan to close all remaining stores.