Merchandise: ‘A no-brainer’

The market for sports merchandise extends beyond avid supporters, giving retailers the opportunity to rack up healthy sales through ‘franchise fans’, so the supply chain delivering everything from nodding dogs to garden gnomes tells David Pittman.

The market for sports merchandise is a bustling one, at least if the companies SGB Sports spoke to are anything to go by.

Take Homewin for instance, the self-proclaimed home of football merchandise, where managing director Paul Hodgson says 6.3 million units were sold in 2010. “In a country of 63 million people, that means a big percentage of people bought something that can be tracked back to us last year.

“There is ever-growing demand for football-related products as people want them as gifts and spontaneous purchases.”

Harry Rai, managing director of football merchandise distributor Spot On Gifts, says this is as the UK is a football-mad nation, with the sport having year-round appeal. Spot On Gifts carries products from some 25 clubs covering the Premier League, Scottish Premier League and top European leagues, such as AC Milan and Juventus from Italy and Barcelona from Spain. It holds stock of some 3,500 products, with shipments made across the UK, as well as to European markets like Sweden and France.

“We are lucky to operate in this country and to support the Premier League as the popularity of football in the UK means the branding and marketing is done for us,” Rai says. “Football teams are global brands and the UK is football mad.

“This makes the decision by sports retailers to stock football merchandise a no-brainer for me. It’s still a largely untapped market for them, but there is massive potential for strong sales.”

Rai says Spot On Gifts offers a low minimum order value, while products can be bought as single

items meaning there is no requirement for sports retailers to buy stock in bulk. Moreover, he says 90 per cent of the items it stocks come with a retail price of under £10 and offer 50 per cent margins. “Selling big brands at a low price is a big benefit.”

Hodgson says novelty items, like nodding dogs and garden gnomes, offer even better margins as there is no history behind them so no-one is completely sure what the RRP should be. This creates a window of opportunity for retailers to achieve a strong margin from them and capitalise on market demand for themed products.

Novelty items are a big focus for Homewin, with new lines being developed by its in-house research and development team, as is growing beyond football through sports such as golf and rugby union, as well as American football.

Both Hodgson and Rai note that American sports are proving to be increasingly popular with UK consumers. “TV coverage is helping to increase interest in football in the US, and likewise American sports in the UK,” says Rai. Hodgson says: “NFL was a phenomenon in the 1990s and is coming back, which provides retailers with a tremendous opportunity.”

For more see the August issue of SGB Sports